Stockland tight lipped over any plan to buy $1b Lendlease Communities

One of the country’s leading residential developers has emerged as a likely contender to buy Lendlease’s $1 billion Communities business which includes housing estates across southeast Queensland.

Lendlease chief executive Tony Lombardo has launched a global five-year turnaround plan.

Stockland, one of the country’s leading residential developers, has emerged as a likely contender to buy property developer 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 the communities portfolio.

The Communities business, which generated $142 million last financial year, is on offer through investment bank Macquarie Capital.

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

Reports this week in The Australian newspaper said Lendlease “was on track to meet the lower end of its return on equity target for the 2024 fiscal year.”

In July, Lendlease chief executive Tony Lombardo announced 740 jobs would be axed globally as part of a five-year turnaround plan to deliver a more sustainable performance for the company.

Results published this month showed the Communities business included 42,100 lots worth $16 billion along with some projects which are development management contracts.

Work has started on a sewerage treatment plant at Redland Bay on the Logan River. Picture: Judith Kerr

Lendlease started construction works on a sewerage treatment plant to service its Shoreline estate and other estates in Redland Bay in July.

In a statement, a Lendlease spokesperson said a process was underway to find a capital partner for the Lendlease Communities business in Australia.

“This is a business-wide initiative that will recycle capital, in line with Lendlease’s strategy, and help grow the Communities business,” the statement from the spokesperson said.

“The restructure announced in July was in relation to a 10 per cent reduction in our global workforce (740 jobs in total).

“Only five per cent of the Australian business is impacted.

“The headcount reduction has no impact at a project level and will not impact Lendlease’s project delivery.”

The spokesperson said the Shoreline waste water treatment plant was fully funded by Lendlease, with early works underway and major works to begin after the finalisation of an Infrastructure Agreement with Redland City Council.

Stockland, which owns communities across the nation and in Queensland at Gold Coast, Sunshine Coast, Ipswich, and Greater Brisbane, has not denied it is considering a buyout.

A Stockland spokesperson said: “We do not comment on market speculation.”

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