Lendlease boss Tony Lombardo slammed UK government legislation on building defects that forced it to take a $200 million provision in its half-yearly earnings, saying it increased sovereign risk and could prompt investors to seek higher returns in that country.

As the diversified developer, investor and landlord reported its net result for the six months to December had narrowed to a $141 million loss, Mr Lombardo said the UK’s defective buildings provision requiring developers to extend the defects liability period on residential buildings from six to 30 years would alter investment decisions.