Lendlease chief McCann exits with Asia chief Lombardo to step up

Steve McCann’s looming replacement by Tony Lombardo comes at a pivotal time for Lendlease.

Steve McCann has been CEO at Lendlease for 12 years. Picture: Britta Campion

Veteran Lendlease chief executive Steve McCann is to retire, with Asia head Tony Lombardo to take over in June at a pivotal moment for the global development and construction major.

Mr McCann will retire from Lendlease at the end of May following a 16-year career with the company, including 12 years as chief executive.

His exit will mark the end of an expansionist era in which he pushed offshore. But Lendlease was also weighed down by a local move into engineering, which prompted heavy losses and which the company has now exited.

The appointment of Mr Lombardo, who won the internal race to succeed Mr McCann against local head Kylie Rampa and US boss Denis Hickey, as well as outside candidates, is likely to see Lendlease stick to its new, revamped strategy rather than make further changes.

Kylie Rampa was in the mix to take over as CEO. Picture: Jonathan Ng

However Mr Lombardo will be under pressure from investors to accelerate the development of the company‘s $113bn pipeline and seek to bring in major funds as partners.

The market reacted to the news by driving the company’s shares down by 3.7 per cent

to touch $11.65 in early trade as the market sought clarity, but later recovered to trade just 3c below Tuesday’s close of $12.10.

Lendlease has been crunched by the coronavirus crisis and raised $1.15bn as the pandemic struck and its business came under pressure.

But it has since rallied after a strategy reset, when it said it would step up the use of partnerships to fund its planned increase in development activity to around $8bn a year.

Lendlease is betting that major urbanisation projects will kick off in the major cities it is focused on globally as governments try to stimulate economies in the wake of the coronavirus-induced recession.

The company has brought forward the launch of a luxury residential tower at Sydney‘s Barangaroo and is working with Google to jointly deliver $20bn worth of new mixed-use neighbourhoods in the San Francisco Bay Area.

Lendlease chairman Michael Ullmer said that Mr McCann had been “instrumental” in spearheading Lendlease’s transformation, focusing on its integrated business model in targeted global gateway cities.

The company‘s global development pipeline has grown to more than $110bn including twenty-two major urbanisation projects across ten global capitals, including London, Milan and New York.

Mr Ullmer said the onset of COVID-19 had delayed Mr MCann’s planned retirement as he led the company‘s response to the pandemic.

Mr Lombardo would start as Lendlease pursues its revised strategy focusing on leveraging its competitive edge in the development and delivery of large-scale, mixed-use urbanisation projects and growing the investments platform., Mr Ullmer said.

Mr Lombardo‘s time as CEO Asia, as well as prior roles including Group CFO, meant the company veteran was well-placed to make internal changes to the group.