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Lendlease's Steve McCann tops Australia's most powerful in property in 2016; Underpaid at $7.5m per year
Topic Started: 30 Sep 2016, 09:03 AM (1,262 Views)
Bardon
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The movers and shakers of the local property scene as judged by the AFR.

These are the people folks.


Lendlease's Steve McCann tops Australia's most powerful in property in 2016

The AFR Magazine's hotly anticipated annual Power issue includes lists of the key players across five different industry sectors. Here, the top five from property.


As the property boom rolls on wealth in the industry grows; so too does concern about an end-of-boom reckoning. Among the big beneficiaries of the extended good times have been Frank Lowy and his family, the value of whose investments in Westfield Corp and Scentre Group have soared since the empire was split in 2014. For the first time Lowy is not on this list because at 85, though still chairman of the internationally focused Westfield Corp, he has stepped down from all formal roles in Australian property. His place is hard to fill. The industry is well supplied with ambitious billionaires, from James Packer and John Gandel to Lang Walker and China's richest man, Wanda founder Wang Jianlin, as well as powerful chief executives. But ultimately it's a very diffuse sector. The real levers of property are in the hands of the bankers, the regulators and the state and local government planners.

1. Steve McCann

The Lendlease chief executive has taken his group back to the pinnacle of Australian property with interests that ripple out from Sydney's Barangaroo to include new office towers, thousands of new homes and retirement units, and some of the nation's largest infrastructure projects, such as the $2.6 billion twin tunnels on Sydney's NorthConnex​. Of course no one wins them all and Lendlease looks to have missed out on bids for the development of Sydney's Central Barangaroo and White Bay Power Station.

2. Harry Triguboff


Australia's richest man, who is the founder and chairman of Meriton, is riding the apartment boom in Sydney, Brisbane and the Gold Coast. This year he launched his largest project ever, the 3000-unit Pagewood Green in Sydney's east. At 83, he is still lobbying hard on issues from foreign investment to the folly of voluntary planning agreements with local government.

3. Peter Allen

The Scentre Group chief executive has taken the reins of the local Westfield empire in a role that touches more than 11,600 retail outlets and nearly 100,000 investors. With the support of the Lowy family, he is refining the portfolio, selling non-core assets and boosting the flagship malls with redevelopment, new technology and, in the case of Westfield Sydney, the purchase of the David Jones Market Street store. Allen is also taking a broader industry role as chairman of peak body the Shopping Centre Council of Australia.

4. Peter Davidson

The head of Property Securities at BT Investment Management, Davidson has emerged as a kingmaker in the Real Estate Investment Trust sector. He ensured the success of the Westfield reconstruction in 2014 with a dramatic intervention at the shareholders' meeting and this year he strongly, and successfully, opposed the takeover of the Investa Office Fund. Davidson's is the voice investment bankers want onside as they plan their next raid or raising.

5. Lucy Turnbull

The inaugural chief commissioner of the Greater Sydney Commission has a metropolitan-wide planning responsibility to co-ordinate the NSW government's economic, infrastructure and housing ambitions with the aspirations of local government and residents. The commission's powers extend from the broad to the detailed – backed by the Baird government – and with her own connections in Canberra, Turnbull has a rare opportunity to shape Australia's international city. Later this year, when the commission releases its first real proposals, the extent of Turnbull's ambition will become more clear.



Read more: http://www.afr.com/brand/afr-magazine/lendleases-steve-mccann-tops-australias-most-powerful-in-property-in-2016-20160812-gqrgdb#ixzz4LgWNGf2P
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Edited by Bardon, 30 Sep 2016, 09:06 AM.
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$10bn windfall as Lendlease rides city boom

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Global development and construction company Lendlease is riding the global urbanisation boom, having won $10 billion worth of construction work since the end of June.

The latest developments include a $7bn London project it locked in last month, backing up strong results announced by the company yesterday.

Lendlease is chasing more mega-projects across infrastructure and real estate as fiscally constrained governments around the world turn to their real estate holdings to spark activity in major cities such as London, Sydney and Melbourne.

Lendlease chief executive Steve McCann yesterday highlighted the company’s expansion into infrastructure amid a “significant” plan to win work in international gateway cities.

The company is rebalancing its focus away from Australia, which accounts for about 70 per cent of its work, down to a target of about 60 per cent as it chases more projects in Asia, the US and Europe.

It is also pushing into new areas, including US telecommunications towers and build-to-rent apartments, which it sees as a “potential new asset class”. Lendlease has 850 units under construction in the US and more sites identified in London.

While the company is pursuing build-to-rent schemes offshore, it said the Australian sector would require more collaboration with governments to overcome factors that crimped returns.

Australia is expected to remain the dominant region, partly as the group rolls out a series of luxury apartment towers, but Mr McCann cautioned that the market was slowing in some areas.

“We’re obviously somewhere around the peak of the cycle,” Mr McCann told The Australian. “Things are slowing a little bit.”

Residential development was a highlight last year with a 20 per cent rise in completions to 5769, driven by the delivery of 2533 apartments. “We have settled approximately 90 per cent of these apartments to date, with a default rate of less than 1 per cent,” Mr McCann said.

Melbourne’s apartment market had been hit by oversupply concerns, but Mr McCann said a number of mooted projects were now unlikely to go ahead.

“We actually see supply has pulled back quite a bit and will stabilise over the next couple of years,” he said. “We think there will be a bit more of a balanced market emerge over the next 12 to 18 months.” He said Sydney’s inner urban areas were strong, while Brisbane was quiet. The company’s housing lots were performing well amid growing employment and low interest rates.

The company reported a 9 per cent lift in operating profit to $758.6 million, which was in line with numbers accidentally published on the internet this month.

Lendlease shares added 1c to close at $16.55 as the company said it was “well placed for the future and remained focused on delivering strong performance for securityholders”.

Macquarie analysts said the outlook commentary remained positive, although the company did not provide explicit guidance for this financial year.

“The near-term earnings outlook and ultimately cash flow outlook for the business remain solid factoring in a high proportion of pre-sold product and an Australian construction business improving from a low base,” Macquarie analysts said.

Citi analysts said the result was in line with the pre-release, but noted that the company’s cash flow “looks disappointing” with operating cash flows at $146m against $853m last year.

Macquarie analysts said this issue was well flagged by Lendlease and it was a “good result”.

“The Australian development business is booming and US development appears to have turned a corner,” Macquarie said, flagging that settlement risk would remain a focus.

http://www.theaustralian.com.au/business/property/10bn-windfall-as-lendlease-rides-city-boom/news-story/1a1787ec138b79cc92680cf427cdbf02
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Lendlease maps out global build-to-rent strategy

Global construction and development giant Lendlease has got the jump on local players trying to enter the build-to-rent sector and is close to striking a deal to secure £1 billion ($1.64bn) worth of finance from the Canada Pension Plan Investment Board for its schemes in Britain.

The group is flexing its muscles to press ahead with build-to-rent apartments in London and key US cities, while local players, led by Mirvac, look to get started in Australia, despite taxation and regulatory hurdles.

Others groups with global operations are also diving into the sector. Mall giant Westfield last week revealed it was teaming up with specialist apartment operator Greystar to launch its first residential tower in San Diego.

That was its first move in the build-to-rent sector where it is planning about 8000 units worldwide.

Lendlease has been reported as close to winning the backing of the Canada pension fund for its London-based build-to-rent platform by British journal Property Week.

The company is undertaking the mixed-use International Quarter London scheme in the Stratford district where it will have 333 homes.

As Mirvac is doing locally, Lendlease would set up its own rental brand and its properties, with four projects to seed the platform and access to Lendlease’s residential pipeline being granted to the Canadian fund.


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The company has won a series of major urban redevelopment schemes across the British capital and many are suited to build-to-rent schemes.

Lendlease has been cautious about the local sector but told investors last month the build-to-rent market was a lot more developed in the US and Britain.

The company’s head of international operations and Europe, Dan Labbad, said Lendlease was also building product for build-to-rent in Chicago and Boston.

He said capital partners could be brought in either during development or once the projects were completed. The US sector presented the opportunity to pursue either course, he said. “I think you can expect over the next 12 to 18 months capital partners coming into the US,” he said.

Britain was not a mature build-to-rent market but Mr Labbad said with the company’s development pipeline in London there was an opportunity to undertake build-to-rent given other pressures, including Brexit, on the market.

Mr Labbad said the company was positioning its residential products, in particular the Elephant and Castle redevelopment in London, to accommodate build-to-rent product.

“We expect to look to bring in capital partners there over the next 12 to 18 months,” he told investors, but the company declined to comment yesterday.

Lendlease chief executive Steve McCann said there was strong demand for a local product but there were some tax barriers “that make it a little bit more difficult in Australia to get to the right sort of return profile”.

“Our view is it requires a collaborative effort by business and government to try and make sure that that market is in a shape to meet the demand that is growing out there and we, along with others, will continue to look at whether they can stack up,” he said.

http://www.theaustralian.com.au/business/property/lendlease-maps-out-global-buildtorent-strategy/news-story/209976d2e9a6f6afa3a60b3520a95512
Edited by Bardon, 12 Sep 2017, 01:09 PM.
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Lendlease leads race to acquire $260m Sydney CBD site

Development and construction giant Lendlease is edging closer to extending its grip over a key block in Sydney’s central business district as it eyes the purchase of a tower being sold by Cen­turia Capital’s unlisted property arm.

The group, potentially with a partner in tow, is heading the field to buy the building at 10 Spring Street, which is set to change hands for about $260 million. While the transaction is yet to be finalised, the company is favoured to buy the building after a race including an Asian party and the listed Dexus Property Group.

The property could form the basis of the Sydney CBD’s next supersite, making it particularly attractive to Lendlease as its Barangaroo South precinct is completed and it stocks up on sites for the city’s next cycle.

Lendlease is busy elsewhere in Sydney and last December won the support of China’s Ping An Real Estate and Japan’s Mitsubishi Estate Asia for its proposed $1.5 billion Circular Quay Tower, that is being pitched as Sydney’s tallest office building.

An unlisted Centuria fund bought 10 Spring St from John Swire & Sons in 2013 for $91.64m and investors stand to reap a significant uplift as the firm also repositioned the building so it produces attractive rents.

The 13,871sq m property, known as Swire House, will also benefit from Sydney’s rising rents. About 53 per cent of leases come up for renewal in the next two years when city rents are forecast to surge.

Josh Cullen and Rick Butler of Inc Real Estate and Simon Fenn, Graeme Russell and Ben Azar of Savills are handling the sale. The agents and parties did not return calls.

Lendlease hopes the site be combined with surrounding properties to form the site for a 300m tower.

http://www.theaustralian.com.au/business/property/lenlease-leads-race-to-acquire-260m-sydney-cbd-site/news-story/6748f78ecf9103b94e54c8d685ebd610
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