San Francisco and its Golden Gate Bridge (Bernard Gagnon/Wikimedia Commons)

Companies

Australia’s Lend Lease plots big US expansion

31 October 2014 | By David Rogers | 0 Comments

Australian developer Lend Lease is planning to expand its presence in the US market, with an initial emphasis on urban regeneration projects and residential, office and mixed-used developments in major “gateway” cities such as Dallas and San Francisco (pictured).

The firm told investors earlier this month that the equity value of these schemes would amount to between $200m and $300m.

The Sydney-based company has worked in the US for more than 35 years, and has established itself in certain niche areas, such as military housing, where it manages some 40,000 units for the department of defence, but its overall presence is relatively small compared with Asia Pacific and the UK. 

Its profile was raised in the aftermath of the 9/11 attacks, when its Bovis Lend Lease subsidiary (now absorbed into the group) was appointed to clear away the wreckage and construct a memorial. Its main presence has been on the east coast and Chicago, with projects such as the $138m Museum for African Art in New York, where it acting as construction manager, and smaller schemes elsewhere, such as a $40m office block in Charlotte, North Carolina. 

It was also the recipient of unwelcome publicity two years ago, when Bovis was fined $56m for overbilling, and the firm’s director, James Abdie, was prosecuted for fraud. Mr Abdie was faced with the prospect of 20 years in prison, but in the end was let off with 750 hours of community service.

Part of the new plan, revealed to investors on 9 October, is to push into the Mid-West from its base in Chicago, and it has just appointed Tom Weeks, a former executive of contractor Clayco, to manage its office in that city. The firm is already working on the Northwest Memorial outpatients centre, the West Wacker apartment block and a “greenscraper” office tower called 340 on the Park.

Lend Lease’s $2.4bn Elephant & Castle regeneration scheme in south London included almost 3,000 new homes

It will also focus on “gateway cities” such as Dallas, Los Angeles, San Francisco, and Boston, as “these are the deepest, most diverse markets and have strong urban regeneration drivers”. 

The overall strategy is being managed by Dan Labbad, the chief executive of Lend Lease International, and Denis Hickey, the head of Lend Lease USA. 

The firm has had extensive experience with successful regeneration projects elsewhere in the world, such as the Elephant & Castle scheme in south London (pictured), which was the largest in Europe. It has also been redeveloping the $5.3bn Barangaroo development inSydney and the similarly-sized Victoria Harbour scheme in the Melbourne Docklands.

Lend Lease also picked up a $7.3bn contract to build the East-West Link in Melbourne. This experience may help to position it to bid for infrastructure work in the US. 

The American Chamber of Commerce published a report last year that estimated that $2.9 trillion would have to be spent on renewing the country’s transport system in the period leading up to 2030, so this promises to be a growth area.