Lendlease taps ex-Bunnings boss John Gillam as chairman

The property developer has signalled it wants to refocus on Australia with the appointment of the man who drove the growth of the popular hardware chain.

Lendlease has formed a partnership with Nippon Steel Kowa Real Estate to develop a $500m build-to-rent apartment development in Melbourne.

Developer Lendlease has tapped former Bunnings chief John Gillam as chairman and is making strides on selling off its international empire as it seeks to exit unwanted investments in areas ranging from retirement living to properties in Asia.

Mr Gillam, who was famed for the dramatic expansion of Bunnings when he was at the helm, will join Lendlease’s board immediately and take over on November 15 after the company’s annual meeting and retirement of current chairman, Michael Ullmer.

Mr Ullmer’s tenure was marked by the developer’s expansion offshore but the company abruptly reversed course under pressure from activist investors unhappy about the developer’s poor performance and they had pushed for his exit.

Lendlease shares dropped 8.5c to $6.88 in morning trade as investors digested news of the new chairman.

While the former banker bowed to pressure to leave and the board searched for an external appointee to take the helm he held out against the pressure for a more rapid exit. Lendlease in May unveiled a strategy to sell off the bulk of its international developments and building units and return about $4.5bn of capital to its main operations.

Mr Ullmer said that the board had “ been mindful of the skills and experience required to guide Lendlease through a critical period of change and to maintain its execution momentum”.

“John is a highly experienced chairman who brings deep strategic and commercial acumen and a strong track record of operational delivery and execution in both executive and non-executive roles working for some of Australia’s largest companies,” he said.

Lendlease’s retiring chairman Michael Ullmer and his successor John Gillam. Picture: Aaron Francis

He cited Mr Gillam’s leadership of Bunnings via its formative expansion, which “demonstrates his absolute focus on instilling the right culture to deliver bottom line outcomes and drive securityholder returns”.

Mr Gillam formerly chaired CSR, which followed his two decade stint with Wesfarmers. He is currently chair of Nufarm, the VetPartners Group and BlueFit Pty Limited, and is also on the board of the Clontarf Foundation.

Like Lendlease, Wesfarmers made a costly acquisition in Britain, buying Homebase, then Britain’s second biggest hardware group, for $704m, in 2016, when Mr Gillam headed Bunnings. He stepped down later that year after 12 years at the helm of the retailer and by mid-2018 Wesfarmers had sold out the troubled Homebase hardware chain after it cost shareholders more than $1.5bn.

Mr Gillam said it was a privilege to be appointed Lendlease chairman at “such a pivotal time in its history”.

The company in May committed to recycling $4.5bn of net capital, with $2.8bn targeted by June 2025. The company cited its progress in selling off 12 housing estates to a Stockland venture and its exit from US construction. It has sold its US military housing business and struck up a joint venture with Warburg Pincus to build a life sciences business in Asia.

Lendlease said that multiple parties were engaged in the sale of its British construction business and it is working on selling assets including a stake in a retirement living business in Australia and the Ardor Gardens senior living project in China, TRX in Malaysia. It is also looking for ways to speed up selling out of its international development portfolio with some assets being readied for sale.

The company has been growing locally. It set up a new joint venture with Mitsubishi Estate Asia to secure One Darling Point in Sydney for a $500m residential-led mixed-use scheme and is chasing more luxury projects. It also struck a partnership with Nippon Steel Kowa Real Estate to develop a $500m build-to-rent apartment development in Melbourne.

A Lendlease-backed consortium has also been named as preferred proponent on the new Melton Hospital project valued at more than $900m.

Originally published as Lendlease taps ex-Bunnings boss John Gillam as chairman