Lendlease Sells UK Assets Into Crown Estate JV, Bags $770M Mandate From NPS

Lendlease on Monday announced the sale of six UK development assets into a joint venture between the Aussie builder and a property firm owned by the British monarch, as the ASX-listed group continues to pare back its global operations in favour of domestic growth.

The deal will see Lendlease sell half-stakes in the assets for more than A$300 million ($193 million) to form a 50:50 JV with Crown Estate, which is owned by King Charles III but managed for the benefit of the United Kingdom as a nation. Lendlease anticipates a profit in the range of A$10 million to A$30 million on the sale while halving its future funding commitments for the JV projects to A$125 million, the Sydney-based developer said in a release.

The disclosure came as the group revealed the commencement of a A$1.2 billion ($770 million) investment mandate on behalf of South Korea’s National Pension Service for the management of Aurora Place, a Lendlease-built Sydney office tower owned by NPS. The fresh mandate with an existing Asian partner follows Lendlease’s recent introduction of two new Japanese investors into the 21 Moorfields office development in London.

CEO Tony Lombardo said the tie-up with Crown Estate demonstrated progress in simplifying Lendlease, reducing its risk profile and recycling capital to be a more focused organisation.

“While we have completed or announced A$2.5 billion of capital recycling initiatives, achieved our cost out target and exited international construction, we have also grown our network of global capital partners,” Lombardo said. “The group is well positioned for future performance and growth for our securityholders.”

Tale of Two Cities

The asset sale includes Lendlease’s Stratford Cross land holdings in East London and the land management agreements for Euston Station, Silvertown, Birmingham Smithfield, High Road West and Thamesmead Waterfront, the builder said. The deal excludes Elephant Park, the Turing Building at Stratford Cross, Deptford Landings and residual inventory.

The JV projects, spanning several London boroughs and Birmingham, are expected to provide 26,000 homes and over 900,000 square metres (9.7 million square feet) of office and life sciences space. Lendlease retains asset management rights for any vertical developments in which it maintains a co-investment interest, with the potential for up to A$24 billion in new investment products to be created from the JV’s development portfolio.

Crown Estate has more than A$30 billion in land and asset holdings across Britain and returns its profits to the UK government. The transaction is subject to the consent of certain public authorities and is expected to close during Lendlease’s fiscal 2026, which runs to the end of June 2026.

Crown Estate CEO Dan Labbad, an Australia native who previously spent 16 years at Lendlease, said he looked forward to working with his old firm to realise the projects’ potential to create jobs and stimulate growth while generating income for the UK.

“This joint venture is an example of how the Crown Estate is harnessing its mandate to act in the UK’s long-term national interest, supported by new investment powers, and stepping up its ambition to support inclusive growth for the nation,” Labbad said.

Fund Management Boost

The mandate to manage Aurora Place for NPS boosts Lendlease’s funds under management in Australia office assets to A$20 billion, the group said. The $827 billion Korean pension fund purchased the 44-storey office tower overlooking Sydney Harbour in 2010 from Commonwealth Property Investment Trust for A$685 million.

In 2021, NPS acquired the Melbourne Quarter Tower project from Lendlease for a reported A$1.2 billion, with the 34-storey office building finishing construction last year.

Lendlease’s A$2.5 billion in capital recycling initiatives during fiscal 2025 have included the sale of its Capella Capital infrastructure arm to Japan’s Sojitz Corporation for A$235 million, the disposal of a A$170 million half-stake in its Asia life sciences unit to private equity giant Warburg Pincus in a deal closed last July, and a A$516 million exit from its US military housing business.