Lendlease taps Gresham for sell-off of retirement living stake

Lendlease is looking to sell its retirement living business stake, which would mark its exit from the sector.

Lendlease is understood to have tapped advisory firm Gresham for the sale of its retirement living business stake, which would mark an exit from the sector for the $5bn listed real estate investor and developer.

Most are pointing to its joint venture partner, Dutch pension fund manager APG Asset Management, as it already owns a quarter.

The Australian flagged the sale of the 25 per cent interest in the business by Lendlease in April, when Lendlease reported that it had hired Macquarie Capital to sell a stake in its Communities business.

The retirement living operation comprises 76 villages across Australia and is tipped to have a value of about $2bn.

The remainder of the unit is owned by Aware Super, with Lendlease selling down to both parties over time.

APG purchased a 25 per cent stake in Lendlease’s retirement business in 2017, paying $425m, while Aware Super bought a 25 per cent interest in 2021 for $460m.

In March last year, Aware Super bought an additional 24.9 per cent interest in the Lendlease retirement business for $490m. The business comprises a combination of new developments, established villages, luxury residences and serviced apartments. Gresham has been a close adviser to Lendlease for some time.

A sale of the 25 per cent interest could net Lendlease about $500m at a time when the company is under close watch by its investors, nervous about its ability to fund its future development pipeline amid a slowing economy. Several other Lendlease assets have also hit the block as the company, run by Tony Lombardo, has fended off suggestions it will need to raise equity.

There has been chatter that Stockland, run by former Lendlease boss Tarun Gupta, has been running the ruler over the Lendlease Communities business, but the understanding is that Stockland, the nation’s largest developer, is only a keen suitor if it can acquire the unit as a whole.

Meanwhile, GPT is yet to give the market any update on the progress made towards finding a new chief executive to replace outgoing boss Bob Johnston, months after it announced he was leaving the company.

DataRoom understands that the nation’s oldest property trust that was once part of Lendlease has changed its executive search firm after earlier working with Russell Reynolds.

Sources say that ex Dexus executive Kevin George is out of the running while current executive Anastasia Clarke is conducting a strategy presentation to the board next week and is up against about three external candidates.