Lendlease is an Australian property company listed on the Australian Stock Exchange, with over 60 years of history both in Australia and globally. Lendlease operates in three core areas: investment management, development, and construction. Headquartered in Sydney, Lendlease has significant operations in Europe as well as in Asia. In the United States, it focuses on gateway cities such as New York, Boston, Chicago, San Francisco, and LA.
Lendlease has been selling a number of its assets in the U.S. Why have you been making these strategic decisions?
In the U.S., we currently own and manage 2,200 multifamily units, with another 1,100 in production. While we remain committed to our international markets, we have made a strategic decision to rebalance our efforts, particularly in light of our responsibilities to Australian investors and our competitive advantage in our home market. This does not mean we are exiting other markets; rather, we are refocusing our activities to areas where we can achieve competitive advantage and scale. In the U.S., this means focusing on growing our investment management platform and leveraging our development assets, especially in the multifamily rental housing sector, where we see significant opportunities for growth.
We have spent 40 years understanding the U.S. landscape and have been successful by focusing on high-quality real estate, often near waterfronts with a strong placemaking component. However, the market is vast, and our approach has been to focus on fewer but higher-performing projects in key gateway cities like LA, New York, and Boston. These projects are long-term, high-quality developments that are deeply integrated into their communities. We believe this focused approach will allow us to better serve our investment management growth in the U.S. while maintaining our commitment to quality and sustainability.
Why are you shifting US$4.5 billion back into your Australian operations?
The decision to redirect capital back into Australia is driven by our ability to execute efficiently in our home market, where we have scale and a deep understanding of market dynamics. The Australian market, while different from the U.S., presents significant opportunities, particularly in the emerging built-to-rent or multifamily sector. Unlike the U.S., where multifamily properties are well-established, Australia is seeing this as a new growth area, and we believe our experience in the U.S. can be leveraged to accelerate product development in Australia.
What characterizes the high-quality assets Lendlease is focusing on in the U.S.?
We are focused on developing multifamily rental products in high-quality locations that are proximate to cities and accessible via transport. We aim to create housing that not only meets market demand but also integrates affordability into the product. For example, our projects in Boston and New York are well-connected to the city centers, offering residents easy access to urban amenities while maintaining a significant portion of affordable units. We are committed to ensuring that whether a product is affordable or market-rate, the experience for residents remains consistent in terms of access to community resources, public transport, and overall quality of life. This philosophy extends across our global projects, including those in London and Sydney. By incorporating these elements into our developments, we are not just building homes; we are creating communities that enhance the quality of life for all residents, regardless of their income level.
What are the key trends and challenges in the U.S. housing market that Lendlease is currently navigating?
The U.S. housing market is diverse, with each city presenting its own unique challenges and opportunities. One of the key lessons we have learned is that while global principles are important, their application is highly nuanced and specific to each city. Development is truly local, and understanding the distinct characteristics of each market is crucial. In the post-pandemic world, we are witnessing an evolution in how cities and living spaces are designed. Historically, pandemics have driven significant changes in urban planning, and we believe COVID-19 will be no different. Cities remain the epicenter of opportunity, providing access to education, resources, and culture. However, attracting people back to cities post-pandemic, especially to work in essential sectors, is a significant challenge.
Moreover, the design of living spaces must adapt to new realities, with a focus on improving air quality, access to natural light, and the overall living environment. We see this as an opportunity to rethink and improve urban living, integrating technology to predict and respond to environmental needs. Cities are indispensable, and as we move forward, we must solve these challenges to ensure they continue to thrive as vibrant, livable spaces.
When it comes to a benchmark of success for city development, is there a current golden standard?
When looking at successful cities, there is not one definitive answer because cities are unique in their context, culture, and geography. Take Melbourne, for instance—it is often rated as one of the most livable cities in the world, despite its challenging weather. What makes Melbourne stand out is its accessibility, transport, services, and amenities, which all contribute to a vibrant, thriving urban experience. But this does not make it a universal model. The key is understanding that what works for one city may not work for another due to the nuanced needs of each urban environment. What consistently leads to successful urban development, however, is collaboration. Cities that excel often do so because there is a concerted effort from various stakeholders—government, private sector, philanthropy, and the community—working together to solve complex problems. For example, San Francisco and Sydney have a sister city relationship that allows them to share insights and strategies, such as Sydney’s world-class waterfronts influencing redevelopment projects in Boston. Collaboration, both within and across cities, is essential to achieving the best outcomes in urban development.
Which cities in the U.S. are getting it right and why?
Cities like San Francisco, New York, and Boston are making impressive strides in addressing urban challenges, particularly in a post-pandemic context. San Francisco, for instance, is a beautiful city with its own set of challenges, but what stands out is the city’s willingness to engage in meaningful conversations across all sectors to solve problems collectively. This includes incentivizing green credentials, social impact investing, and creating a dialogue that facilitates productive change. New York is also noteworthy, particularly with its 421A tax incentives that have been pivotal in enabling affordable housing developments. Our project in Greenpoint, New York, benefits from these incentives, allowing us to develop high-quality, accessible housing with a significant portion dedicated to affordability.
What is the future strategy for Lendlease in the U.S.?
Moving forward, our emphasis will be on investment management and development, particularly in the multifamily and life sciences sectors. This strategic refocus does not mean we are leaving the U.S.; rather, we are narrowing our efforts to where we can have the most impact. We are proud of our world-class capabilities in both investment management and development and plan to export our expertise in multifamily housing to other parts, while also attracting capital into the U.S. to fuel these developments. It’s about staying, adapting, and evolving our presence in line with the next phase of city development.
