Lendlease chief Tony Lombardo backs vaccine passports to drive border openings

Lendlease chief executive Tony Lombardo is backing global cities making a big return in the wake of the coronavirus pandemic.

Lendlease chief executive Tony Lombardo, at Barangaroo in Sydney, says governments must make sure workers can afford to live in cities. Picture: John Feder

Lendlease chief executive Tony Lombardo is headed to a business summit at No. 10 Downing Street as British prime minister Boris Johnson throws off the shackles of coronavirus restrictions and chases ideas from big companies about kickstarting the country’s economy.

Speaking to the Australian as he passed 100 days in the top job, Mr Lombardo said he was in favour of vaccine passports if they helped open up borders and backed the road map to reopening the local economy.

“Their government’s talking about how do we get the economy moving? What are the things we need to do? They want to talk to big business to get a level of confidence and I think that’s great,” he said.

The development boss also backed prime minister Scott Morrison’s plans to re-open international borders once the country hits vaccination targets and backed passports.

“We should have vaccination passports, if that’s what it needs us to have, let’s do it. If it means opening the borders up and having confidence that people have taken the right health steps, I think that’s important,” he said.

Mr Lombardo said Australia wanted to be part of global markets and it was crucial to start opening back up, including a return to net migrations levels of about 200,000 people per annum.

“I think it’s important to start to see that road map. Maybe it’s not going to be a catch up for the last few years that we’ve had,” he said. “[But] you want to start to see that progress over the next 12-24 months back to those levels because I think there’s a positive outcome for the country.”

Lendlease is backing a big comeback in Australia’s currently locked down capitals.

“Cities are where the action is and that’s where things thrive,” Mr Lombardo said. “When you look at a city environment, we’ve made so much infrastructure investment, and it’s actually the best place to really grow back from.”

While new areas like last mile logistics may become part of developments he said that urban centres were the most efficient places to be. “It‘s also more cost effective for governments to leverage that infrastructure,” he said.

Mr Lombardo endorsed calls for a solution to local housing affordability problems.

“We have to make sure that key workers can afford to live in cities,” he said. Mechanisms could include using land prices and allowing developers to do public private partnership type schemes.

“I think we’ve got to start making sure we’re delivering those things structurally, to make sure the city thrives and that it’s got the right diversity of people in it,” he said.

“We don’t just want all expensive products – we’ve got to get the balance right for the whole community to be represented in the city.”

Lendlease is also pioneering build to rent around the world and will look to bring more focus to Australia, which will form part of its $25bn worth of plans in the emerging sector.

Mr Lombardo called out the opportunities in the local arena, which has lagged offshore markets.

The developer is chasing projects in Queensland and Victoria. “It’s very much a state by state proposition – you can’t do things in a consistent approach whereas you can do that in other markets around the world.”

All up the company has built up a project pipeline of about $114bn, including an entire precinct for Google in the San Francisco Bay Area, and it is a strong believer that cities will bounce back in the wake of the coronavirus crisis.

It is one of London’s large developers with projects across the British capital but also turning its attention to winning more work in Australia and Asia.

Lendlease sees multiple opportunities to expand on the way out of the crisis and believes that it is well-positioned to grow after a decade of sluggish performance when it stumbled in engineering.

It is focused on getting to $8bn of worth of projects per annum, with the step up to be supported by it becoming more of a funds management and investment house, rather than just a builder.

Mr Lombardo has already made big steps in taking the company deeper into data centres, where it has an $800m project in Tokyo underway, and in life sciences, where developments are starting in the US.

“We’re now very, very focused on hitting the $8bn of production consistently; there is a really good pathway for us to achieve that in 2024 and beyond,” he said.

Expect a swing back into local markets.

“What also happens is we’re not building it in our home market – people aren’t seeing the next Barangaroo – so it’s important for us to always have great showcase projects happening in each of our core cities,” he said.

“We need to prioritise some origination in Australia; we‘re going to finish some of those bigger projects so the team is very focused over the next 12 months,” he said.

But the key focus overall globally is to get to a consistent $8bn of production. “We’ve made a lot of progress in developing and keep building up this track record around executing these large urban sites,” he said.

Lendlease is also amplifying its environmental credentials that go back decades to when Dick Dusseldorp founded the company.

“I think investors are taking note of companies that have really delivered in that space and it’s becoming more and more important,” Mr Lombardo said.

For now, he is optimistic the world is coming out of the pandemic. “I think there is enough green shoots emerging for us to really be more positive on where the future is going to go to,” Mr Lombardo said.