ACCC lists concerns over Stockland takeover at four Lendlease estates

The country’s consumer watchdog says it has concerns about a proposed takeover of developer Lendlease’s communities portfolio at Ipswich and Moreton Bay, particularly the potential impact on competition and housing lot supply.

Lendlease’s Shoreline estate at Redland Bay was not mentioned in the ACCC Statement of Issues.

The Australian Competition and Consumer Commission has listed concerns about development giant Stockland-Supalai’s takeover of 12 masterplanned communities, including one at Ipswich and another at Moreton Bay.

ACCC Commissioner Liza Carver said there were issues with the proposed acquisition at four estates including two in Queensland and two in NSW.

The communities at Yarrabilba and Shoreline at Redland Bay were not mentioned as being of concern in a statement on July 4.

“We are concerned that the proposed acquisition would remove one of Stockland’s closest and largest competitors in the supply of residential masterplanned community housing lots in four regions – the Illawarra, North West Perth, Ipswich, and Moreton Bay,” Ms Carver said.

“The ACCC is concerned that the proposed acquisition may increase Stockland’s incentive to raise the price, delay the supply, or reduce the quality of housing lots in these regions, to the detriment of prospective homeowners.

“We are concerned that other developers of masterplanned community projects may not be able to compete sufficiently with Stockland after the acquisition in some regions.

“These preliminary concerns are strongest in the Illawarra region of NSW where the proposed acquisition would bring together the two largest masterplanned community projects in an already highly concentrated market.”

Lendlease was approached for comment.

Lendlease’s Yarrabilba estate is one of the 12 communities in the proposed takeover. Picture: Lendlease

The ACC statement said in Moreton, alternate developers would potentially not be able to sufficiently constrain Stockland as the proposed acquisition would join developers with the largest housing offerings in the region - Lendlease’s Kinma Valley and Stockland’s future Caboolture West.

But the statement also said its preliminary view was that the proposed acquisition was not likely to lessen competition in the supply of residential housing in the seven local areas of Redlands and Logan in Queensland and South-West Sydney, Melton, Whittlesea, Casey/Cardinia, and Wyndham in NSW.

Stockland, one of the country’s leading residential developers, along with developer Supalai, are contenders to buy Lendlease’s $1 billion Communities business which includes housing estates at Ipswich, Logan, Morayfield and Redland.

Yarrabilba in Logan, Shoreline at Redland Bay and Kinma Valley at Morayfield are some of the Lendlease housing estates in its communities portfolio.

The competition watchdog started assessing the takeover plans late last year.

Lendlease results published last year showed the communities business included 42,100 lots worth $16 billion, along with some projects which were development management contracts.

The Lendlease communities business, which generated $142 million in the 2023 financial year, was originally on offer through investment bank Macquarie Capital.

Plans to sell the communities business were revealed when the group posted a loss after tax of $232 million on June 30, 2023, which compared to a $99 million loss in the 2022 financial year.

Stockland already owns communities across the nation and in Queensland at the Gold Coast, Sunshine Coast, Ipswich and Greater Brisbane.

It built its first residential estate in 1952 and now has 64 residential communities across Australia including 10 in Queensland.

The ACCC said it was also considering whether the proposed Lendlease acquisition would increase the risk of anti-competitive co-ordination by developers in relation to the pricing, supply and/or quality of masterplanned community projects.

However, the watchdog said it had not yet reached a conclusion and it had invited submissions from interested groups to be made before July 18.

Masterplanned community projects are residential property developments on greenfield land which are typically delivered in phases over multiple years.

They are characterised by access to amenities with a focus on “community living”, such as open spaces, recreational facilities, education and community hubs, as well as commercial or retail centres.