Lendlease 2024
Annual
Report
Front cover:
Melbourne
Melbourne
Quarter Tower
This page:
Sydney
Victoria Cross
Station
All financial amounts in this report are in
Australian dollars unless otherwise specified.
Lendlease Corporation Limited
ABN 32 000 226 228
Incorporated in NSW Australia
Lendlease Responsible Entity Limited
ABN 72 122 883 185 | AFS Licence 308983
as responsible entity for Lendlease Trust
ABN 39 944 184 773 | ARSN 128 052 595
1
Contents
Year in Review
4
Chairman’s Report
6
Group Chief Executive Officer’s Report
8
FY24 snapshot
10
Our Business
12
Our business
14
Our strategy
15
Investments
16
Development
18
Construction
20
Managing and measuring value
22
Our focus areas
24
Health and safety
26
Financial
28
Our customers
30
Our people
32
Sustainability
34
Risk and Climate- Related Resilience
40
Risk governance and management
42
Climate-related strategic resilience
46
Performance and Outlook
48
Group performance
50
Investments segment
52
Development segment
53
Construction segment
54
Financial position and cash flow movements
55
Governance
56
Board of Directors’ information and profiles
58
Governance in action
63
Remuneration Report
68
Directors’ Report
92
Lead Auditor’s Independence Declaration
94
Financial Statements
95
Other Information
186
Corporate directory
188
Securityholder information
189
Glossary
192
2
Lendlease Annual Report 2024
About this Report
The 2024 Lendlease Annual Report has been prepared with reference
to the Integrated Reporting Framework that encourages businesses to
consider what creates value for them and how this value contributes to
long term sustainable returns for securityholders.
Materiality
A matter is considered material if senior
management and those charged with
governance believe it could significantly
impact the value created and delivered
in the short, medium and long term. We
identify and capture material matters in
the following ways:
•
Project Control Groups (PCGs), which
include key internal stakeholders and
represent the governance structure
for overseeing the completion of the
Annual Report
•
Capturing feedback from key
external stakeholders, including
securityholders, analysts and other
relevant groups
•
Engagement with the Board
•
Confirming the strategy is consistent
and relevant.
The outcome of these processes are the
material issues noted on pages 24 and 25
in Managing and Measuring Value and in
Our Business on pages 12 to 21.
Directors’ Report and Operating
and Financial Review (OFR)
The required elements of the Directors’
Report, including the OFR, are featured
on pages 4 to 94 of this Report
and include the sections: Year in
Review; Our Business; Managing and
Measuring Value; Risk and Climate-
Related Resilience; Performance and
Outlook; and Governance.
The OFR is covered specifically on pages
4 to 55. All non financial metrics
included in the Directors’ Report on pages
4 to 47 have been verified through
Lendlease's internal verification process.
The Remuneration Report on pages 68
to 90 and the Financial Statements on
pages 95 to 175 have been audited
by KPMG.
Reporting suite
Our reporting suite provides information
about the organisation and its key
financial and operational achievements
and includes:
•
The Annual Report
Information about Lendlease,
our strategy, integrated financial
and operational performance,
corporate governance, Directors’
Report, Remuneration Report and
Financial Statements
•
Biannual Results Presentation
The current reporting period’s
financial results, detailed segment
information, investment portfolio
and pipeline
•
www.lendlease.com
Additional information on
sustainability reporting, corporate
governance, tax compliance and
historical financial information.
Our focus areas
Five focus areas underpin our ability to create safe, resilient, economic
and sustainable outcomes. Our success is measured by the value we create
in these areas. Icons linking our activities to this value creation are used
throughout this Report.
Health and
safety
Everyone has the right
to go home safely.
We remain committed
to the health and
safety of our people,
and all those who
interact with a
Lendlease place.
Financial
A strong balance
sheet and access to
third party capital
enables us to fund
the execution of our
pipeline and deliver
quality earnings for
our securityholders.
Our
customers
Understanding our
customers and their
evolving needs is
critical as we
partner, collaborate
and innovate to create
places people love.
Our
people
Our people bring
Lendlease, our purpose
and our culture to life.
Creating places where
communities thrive.
Sustainability
Sustainability is core
to our planning and
clear in our outcomes.
We have a proud
history of emphasising
environmental, social
and economic impacts.
Acknowledgement of Country
We acknowledge the Traditional Custodians
of the land and pay our respect to them and
their Elders past and present.
As a business that works across many locations, we have a
responsibility to listen, learn and walk alongside First Nations
peoples so that our activities support their ongoing connection
to their lands, waters, cultures, languages and traditions.
We value their custodianship of 65,000 years.
The Lendlease Elevate Reconciliation Action Plan (RAP) is one way
we demonstrate our operational performance on human rights,
and specifically the rights of First Nations peoples.
Our Australian retail business collaborated with
Gudanji/Wakaja artist Ryhia Dank (Nardurna) to create the
artwork featured here for NAIDOC Week 2024.
About this Report
3
Kuala Lumpur
The Exchange TRX
Year in
Review
4
Lendlease Annual Report 2024
Year in Review
5
6
Lendlease Annual Report 2024
Chairman’s
Report
The past year was another period of
significant change for Lendlease.
Our operating landscape was
characterised by continued pressure
on property markets – stemming
from ongoing interest rate uncertainty,
contributing to a difficult macro-
economic outlook in the four regions in
which Lendlease operates.
As a developer of large urban projects,
Lendlease’s bottom line performance
is reliant on our ability to work
in partnership with capital partners
in order to create value from our
development products.
However, the commencement of new
developments over the past year was
once again impacted by slower markets
and the reluctance of capital partners
to commit to transactions in an
uncertain environment.
Even with that challenging backdrop,
there were significant achievements
across the core business which
demonstrated the strength of our people
and assets, including the delivery of
$8.2b of development completions and
the creation of $3.4b of new funds under
management (FUM) product.
Notwithstanding these achievements
and our response to these challenges,
including business simplification, cost
reduction and reduced headcount, the
prolonged property cycle downturn, and
its impact on Lendlease’s operating
earnings and security price, necessitated
a fundamental review of our five-year
Reset; Create; Thrive strategy.
Strategic refresh
Following extensive deliberation over
the last year, including with external
stakeholders, the Board endorsed a
comprehensive update of the Group’s
strategy. This was triggered by the
structural and prolonged cyclical changes
that have impacted the global property
sector post pandemic.
In summary, the strategy prioritises
the liberation and return of capital
to securityholders; investing in the
high performing Australian business,
which has historically demonstrated
strong performance through-the-cycle;
the exit of international construction
operations; and the accelerated release
of capital from long dated international
development projects.
While this is a fundamental change
for the business, the decisions taken
recognise the need for significant action
at an accelerated pace to deliver value
for securityholders.
These decisions leverage Lendlease’s
competitive strengths and simplify
the company to become a leading
integrated real estate business in
Australia with an international investment
management platform.
Management have already delivered
a number of significant milestones
that were initiated over the last 12
months as the strategic refresh was
under development. These include the
simplification of our US operations
by realising value from the sale of
our Military Housing business and the
divestment of our Construction business;
the establishment of a real estate
investment platform with Warburg Pincus
that realises the value we have created
in our life sciences, construction and
development businesses in Asia; and
processes underway for the sale of a
further c.$0.9b of assets.
Financial outcomes
As a result of the costs associated
with implementing the strategy, largely
relating to impairments and restructuring
charges, the Group recorded a
substantial Statutory Loss. I recognise
this is a disappointing outcome for
securityholders. However, it is imperative
we make these changes to set Lendlease
up for future success.
The full year distribution and dividend
payment of 16 cents per security was
maintained and reflects a payout ratio of
42 per cent of Core Operating Earnings.
Securityholder engagement
As representatives of the company, it is
important to maintain an active program
of engagement with securityholders. In
my capacity as Chair, I regularly meet
with investors, government, customers
and other key stakeholders to listen to
their views and gather feedback.
This year, stakeholder engagement
included receiving input as the refreshed
strategy was developed, and on Chair
succession and executive reward, with
more than 30 meetings held.
Chair and Board renewal
As announced in May, I will retire as Chair
following the conclusion of the 2024
Annual General Meeting (AGM). It has
been a privilege to serve on the Lendlease
Board as a Non Executive Director since
2011 and as Chair since 2018.
I am working with my fellow directors on
Chair succession which is well underway.
A market announcement will be made
once we have completed that process.
Nicola Wakefield Evans will also be
retiring from the Board at the 2024
AGM. On behalf of the Board, I thank
Nicola for her contribution to Lendlease
since her appointment in September 2013.
Nicola has been Chair of the Board
Sustainability Committee since 2019 and
a member of the Board Audit Committee
and Board Risk Committee. The Board has
appreciated her counsel and insights on a
broad range of matters.
We also welcomed Barbara Knoflach
as a Non Executive Director. Barbara
is an outstanding addition to the
Board, and her background in real
estate, asset management and investment
management supports our objective
to grow our international Investments
platform. She brings relevant sector
insights and her appointment, together
with the appointments of Bob Welanetz,
Nick Collishaw and Margaret Lui in recent
years, reflects a disciplined approach
toward Board renewal focussing on
Lendlease’s core sectors of real estate
and investment management.
Nick Collishaw will be standing for re-
election at the AGM this year. Nick’s
re-election is unanimously supported by
the Board; he is an experienced property
executive with more than 40 years’
expertise gained across Investments,
Development and Construction.
Year in Review
7
Remuneration outcomes
In response to the ‘first strike’ received on
the 2023 Remuneration Report, I, along
with our People and Culture Committee
Chair, Elizabeth Proust, met with many of
Lendlease’s key stakeholders to listen to
and understand the reasons for the strike.
This reinforced our view of the need to
demonstrate strong alignment between
remuneration outcomes for executive
management and the experience of
our securityholders.
Accordingly, given the poor financial
outcomes for securityholders, the CEO
and his leadership team will not receive
a Short Term Award for FY24.
Further information on our approach is
detailed in the Remuneration Report on
page 68.
Reflection on the past, looking to
the future
This is my final year as your Chair
and, as I reflect on my six years
in the role, it has been characterised
by significant challenge for Lendlease,
both strategically and in the operating
environment we have faced.
My first term as Chair commenced
shortly after the announcement of the
problems in our Engineering business,
which led to a strategic review and
decision to exit the business – a
significant undertaking given the scale
and complexity of the operations. This
was followed by the onset of the global
pandemic and leading the Board’s support
of management as we dealt with the
incredibly challenging task of maintaining
our global construction and development
activities in the face of an unprecedented
operating environment. I am immensely
proud of how our teams around the
world responded.
My second term has been characterised
by the strategic challenges posed
by significant structural changes and
a prolonged cyclical downturn post
pandemic. During this period, I led the
appointment of a new CEO, and am
delighted at how Tony has transitioned
into the role. Through this period there
has been a substantial refinement of our
strategic focus, extensive restructuring
of our operations, and the delivery of
significant operating efficiencies.
The culture of Lendlease is a special
and resilient one. The diligence and
commitment of our people across the
business has been truly remarkable,
and the achievements and outcomes
for our clients around the world during
this time deserve to be recognised
and commended.
There has been constant Board renewal
throughout my Chairmanship which has
focussed on increasing the depth of real
estate and investment experience around
the Board table.
During my time on the Board I have
been immensely proud of the continual
improvement in the health and safety
outcomes for our people through a
relentless focus by management on
this critical area. I am also proud of
our industry leadership in all aspects
of sustainability – with bold actions
to respond to climate change, and
continuing our founder’s commitment to
maintaining a social licence to operate.
Lendlease is at a critical juncture in
its history. The Board and management
have thought very carefully about the
necessary strategic actions and taken
some tough decisions.
I am confident we have the right team
and commitment to realise the value
inherent in our business on behalf of
securityholders. And I am determined to
dedicate my final months with this great
company to achieving a smooth transition
to the Board's new leadership.
I thank my fellow Directors and
the entire Lendlease team for their
ongoing dedication to repositioning
the organisation for sustainable
future growth.
M J Ullmer, AO
Chairman
I am confident
we have the right
strategy, team and
commitment to
realise the inherent
value in our
business on behalf
of securityholders.
8
Lendlease Annual Report 2024
Group Chief Executive
Officer’s Report
Transforming our company into one that
delivers sustainable financial returns to
securityholders has been my priority since
becoming CEO three years ago.
And while we made substantial
inroads delivering against the five-year
turnaround plan announced in FY22, a
prolonged market downturn combined
with a high proportion of capital allocated
to long dated developments in offshore
businesses has impacted returns and has
necessitated substantial further action.
In May 2024, we announced a refreshed
strategy to position Lendlease for
financial success. A strategy that leans
into our proven core strengths and
competitive advantages.
Its key elements are:
•
Simplify our organisational structure
and achieve further cost reductions
•
Focus on our market-leading
Australian business and international
Investments platform
•
Divest international Construction
•
Recycle $4.5b of capital by
completing divestment transactions
and accelerating capital release
from offshore development projects
and assets.
Strategy in action
The business has moved quickly
to implement the changes we
believe are required to become the
leading integrated real estate business
in Australia with an international
Investments platform.
Central to the strategy is the
establishment of the Capital Release
Unit (CRU) designed to liberate more
than $4.5b of capital from the business,
including $2.8b from the divestment
of on-market assets; the divesting of
international Construction operations; and
the release of $1.7b of capital primarily
from international Development.
Of the $2.8b of assets on market targeted
to be divested in FY25, more than half
of the transactions have already been
announced. These include the sale of our
integrated life sciences interests in Asia
into a new joint venture; the sale of 12
Australian master-planned Communities
projects; and the sale of our US Military
Housing business.
In parallel, we are realising a further
$125m of pre-tax cost savings across the
business as we simplify our management
structure and move to being a leaner and
more focussed organisation.
From a capital allocation perspective, our
priorities are to strengthen the balance
sheet, return up to $500m of capital
to securityholders and invest in our
high return Australian operations. We’ll
also continue to build on our Australian
development pipeline to support future
earnings and focus on profitable growth
within our Investments platform.
By reshaping our business to concentrate
on our core competencies in markets
where we have proven capabilities and
a strong competitive advantage, the
financial and operational risk profile is
expected to be lower, and the quality
of our earnings ultimately higher and
more sustainable.
Financial and
operating performance
Reflecting impairments and restructuring
charges primarily associated with the
divesting of international construction
and the capital release from offshore
development projects, the Group
recorded a Statutory Loss after Tax
of $1,502m.
Core Operating Profit after Tax was
modestly higher at $263m, compared
with $257m in the prior year.
The completion of Residences One,
Barangaroo and The Exchange TRX in
Kuala Lumpur, as well as consideration
received for value created at the San
Francisco Bay Area project, contributed
to the result.
Investments
Our funds under management (FUM)
ended the year at $47.3b. Despite
ongoing challenging market conditions
resulting in negative revaluations, several
developments were completed that
support future FUM growth.
Boosting our sustainable workplace
portfolio, Melbourne Quarter Tower was
completed. We also added a build to
rent asset in Chicago and the first
phase of our data centre project in
Tokyo. Contributing to assets under
management, The Exchange TRX opened
in Kuala Lumpur, and is exceeding
performance expectations.
There are currently eight international
projects underway with key capital
partners that are expected to add
more than $6b in FUM over coming
years, enhancing our existing international
platform of more than $19b of FUM and
Australian platform of $28b.
Development
Development activity increased, with
$8.2b of completions and $1.9b
of commencements.
Residential buildings in Sydney, New York
and Kuala Lumpur were completed, along
with various products contributing to
FUM, listed in the Investments section of
this Report.
Leveraging our placemaking capability
and supporting the replenishment of
our Australian development pipeline,
we secured the $1.3b Gurrowa Place
project at the Queen Victoria Market site
in Melbourne.
Construction
In our Construction segment, a
disciplined approach to cost management
has been a priority. We took steps in
the US by winding down West Coast
and Central operations, and recently
agreed terms for the sale of the East
Coast operations.
As we transition to focus on our
Australian business, which has a backlog
of $3.9b and a strong preferred book,
we’ll look to build upon our strong
capabilities in the defence, social
infrastructure and workplace (including
life sciences) sectors.
Focussing on the things that set
Lendlease apart
Physical safety and wellbeing
The health and safety of our people, our
subcontractors and those who interact
with the places we create and manage is
our highest priority. We have continued
to embed a culture of care across
the organisation, which encompasses
physical and product risks as well as
psychological safety.
Across more than 400 operations
encompassing more than 80 million
hours worked, this year there were
no fatalities recorded, which is an
outstanding effort from our people and
supply chain partners.
Year in Review
9
A performance culture
As we undergo significant organisational
change, our focus has been to strengthen
our performance culture, retain key talent
and support our people.
Our recent global engagement survey
had an 85 per cent participation rate
and resulted in a modest one-point
decrease. This is a pleasing result in light
of the transformation underway across
the business.
Leadership and learning and development
programs have been prioritised,
in addition to wellbeing and
mental health initiatives. More than
400 leaders participated in global
leadership programs.
I thank all our teams around the world for
their resilience and ongoing commitment
to delivering exceptional outcomes for
our customers.
Customer centric ethos
Our customer centric approach remains
steadfast. To remain focussed, each year
we undertake a broad range of customer
listening and insights research.
Pleasingly, there is a continued strong
level of repeat business. This includes
repeat purchasers across our luxury
Sydney apartment developments; strong
tenancy renewals at our office buildings
at Barangaroo South; capital partners
with multiple investments across asset
classes and geographies; and government
and corporate clients trusting us
with their project management and
construction requirements.
Leadership in sustainability
Since launching our industry-leading
Mission Zero targets, we are on track
to achieve our 2025 milestone of Net
Zero Carbon for Scope 1 and 2 emissions.
We are also approaching our target
of creating $250m of social value by
2025, having generated $222m of social
value through shared value partnerships,
including $36m in FY24.
These business imperatives are firmly
embedded into the organisation across all
business segments and are fundamental
to how we create long term
value. Further, industry leadership in
sustainability, whether it be environmental
or social, is valued by a high proportion
of our stakeholders, including customers,
capital partners and employees, helping
us attract and retain talent.
Outlook
As we enter the new financial year, our
refreshed strategy is underway.
Our Australian business is market leading
and unique in the breadth and strength
of its integrated capability and services.
The opportunities to grow remain
significant, with a project pipeline that
plays to our core competitive strengths,
especially in urban regeneration. Our
valued relationships with major global
capital partners presents an appealing
long term growth pathway to extend our
international funds platform.
Our immediate priorities are to strengthen
our balance sheet, return capital to
securityholders and invest in our
high return Australian operations, while
continuing to build on our Australian
development pipeline to support future
earnings growth.
I believe that through the decisive actions
announced in May, we have outlined
a clear path for our people, customers
and securityholders.
My thanks to our Board, particularly
our Chairman who is retiring at the
AGM in November. I have greatly
valued his counsel and support. I
also thank my Management Team and
the people of Lendlease for their
unwavering dedication.
Finally, to our securityholders – I
restate our commitment to restore
securityholder returns.
Tony Lombardo
Group Chief Executive Officer
We’re making real
progress to create
a new Lendlease –
a company that’s
less complex,
more focussed
and, ultimately,
more profitable.
FY24
Snapshot
Chicago
The Reed
Southbank
10
Lendlease Annual Report 2024
Year in Review
11
$(1,502)m
Statutory
Loss after Tax
$263m
Core Operating
Profit after Tax
Stable
financial position
$47.3b
Funds
under management
$14.5b
Development
Work in Progress
$7.6b
External construction
backlog revenue
GRESB
2023
12 Global and 14 Regional
Sector Leader awards
Uplift
in customer satisfaction
(CSAT) and net promoter
(NPS) scores
Embedding
Physical; product; and
psychological safety
$1.9b1
Announced
transactions
$3.6b
Co-investment
portfolio
Focus
on retention
of key talent
1. Includes $1.3b Communities transaction, including $239m for certain land parcels in respect of which the right to buy is now an agreement to negotiate due to the passage of
time and in respect of which various conditions to the creation of those land parcels continue.
Melbourne
Regatta, Collins Wharf
Victoria Harbour
Artist’s impression
Our
Business
12
Lendlease Annual Report 2024
Our Business
13
14
Lendlease Annual Report 2024
Our business
Lendlease is a leading integrated real estate business with an
international Investments platform.
We leverage our investment management and asset creation skills, as well as development
and construction capability, to deliver city shaping projects and create strong and
connected communities.
For more than 65 years, we have created award-winning urban precincts and delivered
essential civic and social infrastructure, and we manage funds and assets for some of the
world’s largest real estate investors.
Our key differentiator is our end-to-end capability across real estate from concept and
planning to design and delivery, through to capital partnering and investment management.
This is the essence of our integrated model.
In partnership with stakeholders, we aim to create social, environmental and economic
value for cities, communities, partners and securityholders.
Guiding our behaviours and underpinning our Code of Conduct are our core values which
support the success of our business.
Our core values
Investments
The segment comprises international
fund and asset management platforms
and the Group’s real estate
co-investment portfolio.
Capability
Our expertise spans unlisted and listed
real estate funds and mandates.
We offer deep investment capability
supported by active asset management
and leadership in sustainability.
Our competitive edge lies in our
integrated product creation capability.
This is complemented by our capacity
to assess and convert on-market
opportunities at any stage of a
project lifecycle.
Our Australian development pipeline is
expected to provide a key source of
growth for the Investments segment, as
is our ability to source select international
opportunities to match with capital
partner preferences and demand.
Platform
•
$47.3b funds under management
•
$33.8b assets under management
•
$3.6b co-investment portfolio
Development
The segment is focussed on the
creation of mixed-use precincts
in Australia, including sustainable
workplaces, apartments for rent and
select luxury apartments for sale.
Capability
We manage the entire development
process – from securing land
or management rights, achieving
entitlements through planning approvals,
creating masterplans and consulting with
communities and authorities, through to
project management, sales and leasing.
Placemaking is core to our Development
strategy and competitive position.
We create places that resonate with
people and contribute to the quality
and liveability of our cities by
working in partnership with governments,
institutions, landowners, investors and
the community.
We design inclusive and climate-resilient
buildings and precincts, targeting top tier
sustainability ratings.
Platform
•
$14.5b Work in Progress (WIP)
•
$11.8b Australian urban
development pipeline
•
>$6b of potential investment product
in WIP
Construction
The segment focusses on Australia and
provides external project management,
design and construction services,
predominantly in the defence, social
infrastructure and commercial sectors.
Capability
Our capability is showcased in the
places and structures we create for
government and corporate clients,
including sustainable workplaces for
some of the world’s largest organisations,
hospitals and other buildings of
civic and social importance, defence
housing and infrastructure, data centres
and complex projects such as over
station developments.
This best practice capability is a key
differentiator for the business and is
leveraged in the delivery of our major
urban integrated projects.
Our customer relationships and deep
capability is also leveraged for
origination opportunities.
Platform
•
$7.6b backlog revenue
•
$3.9b Australian backlog revenue
•
$10.6b preferred projects (Australia)
Our Business
15
Our strategy
In May 2024, we announced a refreshed strategy to improve
securityholder value and position the Group for profitable future growth.
Lendlease is underpinned by an ethos that
long term value creation is maximised
by achieving social, environmental
and economic outcomes. This involves
collaborating with customers, investment
and development partners, governments
and the communities within which
we operate.
Following a prolonged downturn in
the property cycle and an uncertain
interest rate environment, third party
capital commitments for projects have
been subdued. As a result, our
economic outcomes have been adversely
affected, particularly for our offshore
development operations.
Notwithstanding the reset of the
organisation in FY22 and the subsequent
actions undertaken to address business
complexity and profitability, substantial
further action was required.
Simplification and refocus
In May 2024, we announced a refreshed
strategy to improve securityholder value
and position the Group for profitable
future growth.
We have a market leading integrated
Australian business that delivers strong
through-the-cycle returns.
However, approximately two thirds of the
company’s capital is currently deployed
in offshore projects and assets. These
projects have excellent fundamentals but
they are long dated and their expected
returns are too far into the future.
We are therefore taking necessary and
significant steps to simplify the Group
and release more than $4.5b of capital,
while refocussing our efforts towards
our high returning integrated Australian
business and our international investment
management capabilities.
Strategic priorities
The new structures and processes that
support the strategy took effect from
1 July 2024 and execution of the
strategy is anticipated to be substantially
progressed by the end of FY25.
The key strategic actions supporting the
strategy are:
•
Restructure the organisation and
reduce costs
•
Divest $2.8b of assets on-market and
target the return of up to $500m of
capital to securityholders
•
Divest international
Construction operations
•
Release $1.7b of capital from
international Development, net of
liabilities and other offsets.
A Capital Release Unit (CRU) has been
established to maximise embedded value
from $2.8b of on-market assets, the
divestment of international Construction
operations, and the release of $1.7b of
capital from international Development.
Strong progress on
strategy execution
Significant work has already been
undertaken and we are well advanced on
several fronts, including:
•
Removing our regional management
structures and introducing segment
focussed Chief Executives to
drive performance
•
Announcing the sale of our integrated
life sciences interests in Asia
into a new joint venture with
Warburg Pincus
•
Announcing the sale of 12 Australian
master-planned Communities projects
•
Announcing the sale of our US
Military Housing business
•
Divesting US Construction following
the agreed heads of terms for the
sale of the East Coast operations
and wind down of West Coast and
Central operations.
There are ongoing processes for the sale
of the remaining 25 per cent investment
in the Keyton retirement living business,
our senior living asset in China, and our
interest in The Exchange TRX commercial
assets in Kuala Lumpur.
Competitive advantage and
growth prospects
A key differentiator from other industry
participants is our end-to-end capability
across real estate from concept and
planning to design and delivery, through
to capital partnering and investment
management. This is the essence of our
integrated model.
There are significant growth opportunities
in Australia, with a current addressable
market of approximately $40b in urban
regeneration projects that play to our
competitive strengths.
Our international Investments platform
has deep relationships with global capital
partners, and we intend to leverage our
existing scale and improve performance
through active portfolio management,
together with introducing new products.
Future growth will be underpinned by the
investment grade product we expect to
create from our development pipeline,
in addition to our global capability
to launch new products alongside
investment partners.
Simplifying
the organisation and
reducing costs
Further information about the
strategic initiatives can be found in
the Investments, Development and
Construction segments on pages
16, 18 and 20 of this Report.
16
Lendlease Annual Report 2024
Investments
Our Investments segment earnings are derived from funds and
assets under management and contributions from our directly held co-
investment portfolio.
$47.3b
Funds
under management
Funds management
For decades, we have managed funds and
assets for some of the world’s largest real
estate investors. We currently manage
$47.3b of funds on behalf of more than
70 capital partners, many of which are
invested with us across multiple products
and regions. They include large sovereign
wealth funds, superannuation funds and
insurance companies.
We have existing scale investment
platforms in Australia and Asia, and
over recent periods have invested in
strengthening our teams in the UK
and US. Approximately 60 per cent of
our funds under management (FUM)
is currently derived from Australia,
with 40 per cent from offshore. Our
product offering comprises 44 funds and
mandates and is well diversified across
asset classes and geographies.
Asset creation
Our develop-to-core products, created
from our development pipeline, typically
contribute to FUM growth.
This year, there were a number of
development completions supporting
our combined funds and assets under
management including:
Workplace
Melbourne Quarter Tower, the third
and final commercial asset at Melbourne
Quarter, was completed. The building was
sold to the National Pension Service of
Korea (NPS) in 2021, with the investment
being managed by Lendlease.
Chicago: The Reed
Southbank
Our Business
17
Build to rent (residential)
Chicago joint venture project, The Reed
at Southbank, reached completion in the
first half of the financial year.
Comprising 224 apartments for rent, as
well as luxury condominiums, the building
is the second residential tower at the
precinct and the fifth build to rent asset
completed in the US.
Further offshore build to rent assets
are already underway alongside capital
partners, including Park & Sayer in the
UK, which is located at the Elephant
Park mixed-use project and expected to
complete in early FY25.
Additional buildings in Los Angeles and
New York are expected to complete
in FY26.
Retail
The Exchange TRX in Kuala Lumpur was
completed in November 2023. Currently
leased to 98 per cent, the asset is valued
at approximately $1.5b.
Following a successful opening and
supported by strong operating metrics
as the asset becomes established, our
60 per cent ownership stake is being
marketed for sale and forms part of
the Group’s asset recycling program, as
referenced in the 'Our strategy' section on
page 15 of this Report.
Data centre and Life sciences
In Japan, Phase 1 of our data centre
project in Tokyo and a 24,000sqm life
sciences asset in Yokohama were both
completed. The projects have a combined
end value of $0.7b.
We see data centres as a key growth area
across the Asia Pacific and will look to
leverage our existing US$1b Data Centre
Partnership. Our integrated capability is
well placed to execute on the expected
growth in this sector.
$33.8b
Assets
under management
Asset management
Our asset management businesses have
$33.8b under management across key
asset classes.
We manage $16.3b of residential assets,
which includes US Military Housing and
our apartments for rent in the UK.
In the retail sector, our $12.6b
portfolio comprises assets across the
Asia Pacific, including the recently
completed Exchange TRX in Kuala
Lumpur, Singapore’s 313@somerset and a
portfolio of retail assets in Australia.
This year, we announced the
sale of our remaining US Military
Housing business, including the
operating platform along with the
associated management rights for asset,
property, development and construction
management, which includes $14.4b of
assets under management.
The sale, which is expected to complete
in FY25, crystallises the value we
have created in the portfolio and
represents a further step towards
simplifying the Group. In line with
the strategy update announced in May
2024, it facilitates the release of capital
and intended redeployment into the
Australian business or select investment
management opportunities.
Our capabilities, including placemaking
and the ongoing curation of the assets
we manage for our capital partners, are
complementary to our funds management
expertise and derive an annuity-style
income stream.
Investments portfolio
Our co-investment portfolio is valued
at $3.6b and includes positions in our
managed funds and a 25 per cent equity
interest in Keyton (retirement living).
The portfolio is diversified across a
range of sectors, including workplace
($1.0b), residential ($0.6b), retail ($1.0b),
retirement ($0.5b) and industrial ($0.3b).
This is expected to reweight over time
post the targeted divestment of the final
25 per cent interest in Keyton (retirement
living) that will move into the Capital
Release Unit in FY25.
Optimisation of the portfolio and
capital redeployment opportunities are
continually being assessed.
Leading sustainability targets
and credentials
Our commitment to leading industry
transformation in decarbonisation is
demonstrated in our Mission Zero targets
- some of the most ambitious in the real
estate sector.
We have delivered some of the
world's most sustainable real estate,
which attracts capital partners and
quality tenants, as well as contributing
to investment performance and our
competitive edge.
Our projects and assets consistently
achieve the highest sustainability ratings,
and we maintain leading positions
on ESG assessments and benchmarks,
including WELL and GRESB. Our recent
achievements are highlighted on page 36
of this Report.
Strategic direction
Investments segment operations are not
impacted by the recently announced
strategy update; however, a dedicated
Investments segment Chief Executive
Officer will replace the regional
management model and will focus
on the segment’s performance and
be accountable for driving stronger
alignment with securityholder outcomes.
We’ll continue to expand our
Investments platform to achieve greater
scale while remaining focussed on
our capital partners and prioritising
profitable growth.
There are eight international projects
underway with key capital partners that
are expected to add more than $6b in
FUM over coming years, adding to an
existing international platform of $19.3b of
FUM and Australian platform of $28b.
While the origination of develop-to-core
investment product will be focussed
on Australia, we'll continue to support
capital partners to selectively develop
investment product offshore via mandates
where we have capability and where we
see opportunity.
Priorities for the segment include:
•
Focussing on performance, earnings
and profitability
•
Strengthening existing, and adding
new, capital partnerships
•
Expanding beyond traditional
develop-to-core product offerings.
18
Lendlease Annual Report 2024
Development
Through our development capability, we create quality assets for our
investment partners, as well as delivering improved liveability, amenity
and wellbeing for the people that live, work and play in our projects.
Urban regeneration
Our urban regeneration capability,
including placemaking, sets us apart and
presents a unique opportunity to generate
lasting and positive value for a city and
its communities through the way people
connect, work and live.
During the year, this was showcased
in the projects we completed including
residential apartments, workplaces
and retail.
Residential
We completed several projects, including
build to sell apartments at Residences
One, One Sydney Harbour; Claremont
Hall in New York; TRX Residences in Kuala
Lumpur; The Reed in Chicago; and Park &
Sayer in London. The Reed also comprises
224 build to rent apartments which are 92
per cent leased.
Residences One, the first of three
luxury residential buildings at One Sydney
Harbour, welcomed residents earlier this
year. The 315-apartment tower holds
the Australian record for the most
expensive apartment, with the two-storey
penthouse selling for more than $140m
in 2019.
In New York, Claremont Hall comprises
166 apartments for sale, ranging from
one to four bedrooms. The residences
feature sweeping views of the Hudson
River, Central Park and Lower Manhattan.
The residential component of The
Exchange TRX precinct, TRX Residences,
marked the completion of Tower
1 and 2. The high rise homes
feature innovations that elevate industry
standards, delivering world-class homes
in an integrated precinct.
Going forward, we are targeting
select build to sell luxury residential
opportunities in Australia where we can
further leverage our experience and
client list to secure funding and pre-
commitments to appropriately derisk
projects early. Testament to this is our
$3.1b One Circular Quay development in
Sydney, with the residential component
already 70 per cent sold by value, with
completion expected in FY27.
Sydney: Residences One
One Sydney Harbour
Our Business
19
Workplace
Comprising 75,000sqm across 34 levels,
Melbourne Quarter Tower (MQT), a
major workplace development, was
completed. MQT tenants currently
include Medibank, Beca and the
Seven Network.
As we begin to emerge from a
subdued leasing environment, there
has been activity across the portfolio,
including Victoria Cross Over Station
development and Blue & William in
North Sydney and Town Hall Place
in Melbourne.
We see opportunity in the sector for well
located, next-generation assets, with first
class sustainability credentials and we
are extremely well positioned to leverage
our integrated development capabilities in
this sector.
Retail
Part of the 17-acre lifestyle quarter of
TRX, The Exchange TRX is strategically
located in Kuala Lumpur’s first dedicated
international financial district. The
project has more than 400 retailers
across 1.3 million sqft of net lettable
area and was the first retail asset
in Malaysia to achieve LEED Gold
certification, highlighting a commitment
to sustainability.
Data centres
Located 30km north of central Tokyo in
Saitama, the first phase of one of Japan’s
largest data centres was completed.
Phase 1 of the project is a six-storey, 48
MW facility which has been purpose built
for Princeton Digital Group.
Delivering the pipeline
Our development pipeline is categorised
in three phases: In Conversion; Master
planned; and Work in Progress (WIP).
•
In Conversion represents the earliest
stage of development when a project
is secured but yet to achieve master
plan approval. For larger projects, this
can take up to three years from the
date a project is secured, though for
smaller projects the conversion period
may be shorter.
•
The Master planned phase provides
security of overall entitlements
with development approvals being
obtained. This phase allows us
to develop, invest, sell down or
proceed in phases, accelerate or
pause development depending on
prevailing market conditions and
business priorities.
•
Once a project begins construction,
known as ‘commencement’, it moves
into active delivery, progressing to the
Work in Progress phase and through
to completion.
FY24 Development activity
includes:
Completions
•
Residences One,
Barangaroo, Sydney
•
Claremont Hall, New York
•
The Reed, Southbank, Chicago
•
Park & Sayer, London
•
Melbourne Quarter Tower
•
The Exchange TRX,
Kuala Lumpur
•
Data centre, Tokyo
•
Innovation centre, Yokohama
Commencements
•
Build to sell apartments at
Elephant Park and Silvertown,
each in London
•
Luxury build to sell apartments,
Victoria Harbour, Melbourne
Capital-efficient
partnership approach
Our Development strategy will be
facilitated by a more capital efficient
development model.
We aim to introduce capital partners
early to manage our capital position. This
allows us to diversify execution risk and
capital allocation for the Group while
sharing in project returns.
This includes a greater emphasis on
joint venture partnerships, managing
Lendlease's economic interest per
project and providing opportunities for
origination, development, performance
and long term funds management fees.
Communities sale
In December 2023, we announced
the sale of 12 of our Australian
Communities projects.
The sale will be a key step in simplifying
the Group, allowing the Development
segment to focus on urban regeneration.
The transaction, which is due to complete
in FY25, forms part of the $2.8b of assets
being marketed for sale, as referenced in
the 'Our strategy' section on page 15 of
this Report.
Strategic direction
With the objective of deploying more
capital into our high return Australian
business, we are targeting the release of a
further $1.7b of net capital primarily from
our international development projects.
We aim to achieve this in three ways:
•
Selling land and inventory held on our
balance sheet
•
Progressing land management
agreement projects through additional
planning and entitlement and working
with our existing partners to introduce
new partners or sell land to third
parties to develop
•
Completing the eight joint venture
projects that are already underway
with capital partners and, once
complete, transferring them to FUM
in the Investments segment and
reducing our co-investment position
when stabilised.
The Development segment will be led
by a dedicated Chief Executive who will
focus on the following strategic areas:
•
Expanding the development pipeline
in Australia
•
Increasing capital partnering with a
focus on productivity and returns
•
Originating product aligned to capital
partner preferences.
Replenishing the pipeline
In March 2024, the Gurrowa Place
redevelopment project in Melbourne
was secured. Part of the Queen
Victoria Market precinct, the project
has an estimated end development
value of $1.3b and is set to comprise
a sustainable workplace; build to
rent apartments; $0.4b of student
accommodation (alongside student
accommodation partner, Scape); and a
large public park.
Our Australian development pipeline has
an estimated end value of approximately
$12b, including Gurrowa Place. We are in
the advanced stages of securing up to
$13b of opportunities across five projects,
where we are either “one of two” or
in exclusive discussions, and are in the
early stages on a further $27b of new
opportunities which are concentrated on
the east coast of Australia and play to our
strengths in urban regeneration.
Australia’s significant transport
infrastructure investment offers the
opportunity to unlock prime city locations
and deliver highly connected precincts,
particularly across the Sydney and
Melbourne Metro lines. Lendlease has
core capability in this regard, including
current integrated development projects
at Victoria Cross and Martin Place
stations in Sydney and Town Hall Place
in Melbourne.
20
Lendlease Annual Report 2024
Construction
Our construction capability delivers superior design and project
management outcomes for government and corporate customers and
is an important component of our integrated business model.
Construction partner of choice
We are recognised for our market
leading project management, design and
construction services, as well as our
safety focus. Clients choose us because
we can drive delivery outcomes, offer
strategic and long term value and
create innovative solutions. A significant
proportion of our customer base is repeat
business, which is testament to being a
trusted and strategic partner.
Completed projects
Several projects for customers reached
completion during the year, including:
•
Pathway to 144 Mental Health Beds
•
Tweed Heads Valley Hospital
•
Sydney Metro Martin Place Integrated
Station Development
•
Sydney Metro Victoria Cross
Integrated Station Development
•
Defence project (NSW)
•
Prince of Wales Hospital - Acute
Services Building
New work secured
We are targeting a focussed external
portfolio, which includes projects for
government and corporate partners
across several key sectors including
defence, social infrastructure, workplace,
life sciences and data centres.
Projects secured during the year include:
•
Melbourne Arts Precinct
Transformation North (Basement)
•
Curtin University B316
Sciences Building
•
Defence projects (WA and NSW)
The Curtin University B316 Sciences
Building is the third project in partnership
with Curtin University, demonstrating the
strength of the relationship.
Delivery partner for the
integrated model
Our construction capability remains a
key component and differentiator of
our integrated business model and
the delivery of urban projects. Our
experience in large integrated precincts
positions us as a partner of choice for
external customers.
Several key integrated projects were
completed, including:
Residences One, One Sydney
Harbour, Sydney
At 250 metres, Residences One is the
tallest of the three residential towers at
One Sydney Harbour. Spanning 72 levels,
it took more than 3.5 years to construct,
with almost three million construction
hours worked on the project.
Sydney: 1 Elizabeth, Martin Place
Integrated Station Development
Our Business
21
Melbourne Quarter Tower, Melbourne
Comprising 75,000sqm across 34 levels,
the building commenced in April 2021
and recorded a peak workforce onsite of
450 people.
The Exchange TRX
With more than 400 of the world's
leading retailers, The Exchange TRX
blends an immersive retail journey with
the beauty of nature through the 10-acre
TRX City Park.
Sydney Metro stations
After more than five years,
two world-class integrated Metro
stations at Martin Place and Victoria
Cross were completed, marking a
significant milestone in Australia’s
biggest public transport project.
The integrated transport precincts
exemplify our commitment
to excellence, innovation and
transformation, requiring expertise
from all disciplines, including
development, design, construction
and project management.
Our teams worked together to solve
the challenges on these projects,
ensuring every aspect of both
precincts were delivered to the
highest standard.
Managing logistical challenges,
including materials handling
and workforce management in
confined, heavily trafficked areas,
demanded meticulous planning and
innovative construction methods.
Ensuring safety and accessibility
for both workers and the public
was paramount.
The successful delivery of these
precincts highlights the exceptional
talent and capability within our
organisation and demonstrates why
we remain a trusted partner
for government, client partners
and investors.
Fossil fuel free construction
Eliminating the use of fossil fuels in
construction is an essential step in
tackling climate change and reaching our
Mission Zero targets.
Our project teams, in collaboration with
our customers and suppliers, continue
to move towards our goal of fossil fuel
free construction.
For further information about the
initiatives underway, refer to the
Sustainability section on page 34 of
this Report.
Risk management
Our risk management approach
begins with disciplined origination
that incorporates thorough
market assessments.
Prior to the commencement
of construction, detailed project
management plans are formed and a team
with the optimal skill set for the project
is chosen.
The delivery phase comprises
construction management, production
and program controls, functional reviews
and reporting. Post construction, a
rigorous commissioning process is
undertaken ahead of transitioning to
the customer.
From a pricing and risk management
perspective, our design management
capability, deep supplier relationships and
buying power across the supply chain
provide high confidence in the price-
setting process.
Supply chain
We counteract disruption in the
supply chain by working directly
with manufacturers and implementing
agreements with strategic partners.
Our key areas of focus include:
•
Maintaining deep relationships
with our suppliers to proactively
manage risk
•
Establishing the right trading
partnerships to introduce low
embodied carbon materials
•
Building a more connected
supply chain via the use of
digital technologies.
Strategic direction
As part of our refocussed strategy and
simplification of the business announced
in May 2024, we are exiting international
construction via the divestment of our
construction operations in the US, the UK
and Asia.
Significant progress has already been
made in Asia with the announcement
of a newly established life sciences
platform with Warburg Pincus, which
will see the transfer of our current
life sciences construction, development
and investment capabilities to the new
joint venture.
We also announced the sale of our US
East Coast Construction operations. This
follows earlier decisions to wind down
construction operations on the West
Coast and Central US.
In the UK, we are in the early stages of
preparing the business for sale.
Going forward, as with Investments and
Development, the Construction segment
will be led by a dedicated Chief
Executive, focussed on the following
strategic areas:
•
Remaining a partner of choice for
governments and other key clients
•
Delivery capability for the integrated
model in Australia
•
Maintaining efficiency and
risk management.
Sydney: Victoria Cross Station
Maroochydore
Sunshine Plaza
Managing and
Measuring Value
22
Lendlease Annual Report 2024
Managing and measuring value
23
24
Lendlease Annual Report 2024
Our focus areas
We measure our success by the positive outcomes we generate over the long term
through five focus areas.
They underpin our ability to create safe, sustainable and economic outcomes for our customers, partners, securityholders and the
community. While we approach these focus areas with an innovative mindset, our decisions are supported by disciplined governance
and risk management.
Area of focus
Material issues
How we deliver value
Health and safety
Operating safely across our operations and projects.
Maintaining the health and wellbeing of our employees
and those who engage with our assets and sites.
We are committed to the safety of our people and
those who interact with our assets and sites. Through
our Global Minimum Requirements (GMRs), we apply a
consistent standard across all operations. These GMRs
extend to physical safety and people’s mental health
and wellbeing.
Financial
Delivering securityholder returns. Maintaining a strong
financial position to support ongoing investment in our
future pipeline.
We deliver returns to our securityholders and adopt
a prudent approach to capital management, with a
view to maintaining a strong balance sheet throughout
market cycles.
Our customers
Understanding our customers and responding to market
dynamics. Designing and delivering innovative, customer-
driven solutions to grow our Investments, Development
and Construction platforms.
Embedding a process of continuous improvement
based on customer insights and actions identified
through market research. This approach also consistently
measures customer satisfaction and advocacy.
Our people
Attracting, developing and retaining diverse talent with
the capabilities needed to deliver our strategy. Ensuring
we have the right capability across the organisation to
deliver results for all stakeholders.
We attract, develop and retain diverse talent by building
a performance culture that is inclusive and enables
continuous learning. Successes are recognised and
people are rewarded for results. We invest in developing
inclusive leaders and capabilities to drive our success.
Sustainability
Designing, delivering and operating buildings and
precincts that respond to the immediate challenge of
reducing carbon emissions while creating social value.
Meeting the increasing expectations of key stakeholders
for climate-resilient assets that support human health and
value natural capital.
As a signatory of the United Nations Global Compact, we
are committed to operating responsibly, in alignment with
universal sustainability principles, and reporting annually
on our progress.
We integrate strategies to mitigate the impact of
climate change across our Investments, Development and
Construction segments.
Managing and measuring value
25
Value created
How we measure value
Operating safely helps people feel valued
and cared for and fundamentally makes
us more consistent, reliable and efficient
in everything we do.
Percentage of projects with no critical incidents: an event that has the potential to
cause death or permanent disability. This is an indicator unique to Lendlease.
Critical Incident Frequency Rate: a Lendlease indicator measuring the rate of
critical incidents.
Lost Time Injury Frequency Rate: an indicator and industry standard measuring a
workplace injury which prevents a worker from returning to duties the next day.
Margins, fees and equity returns across
Investments, Development and Construction.
Core Operating Return on Equity: the annual Core Operating Profit after Tax
attributable to average securityholders’ equity throughout the year.
Core Operating Earnings per Security: Core Operating Profit after Tax attributable to
securityholders divided by the average number of securities on issue during the year.
Evolves our ability to improve the customer
experience, building our brand and reputation,
enabling us to win more work and grow
our business. Customer feedback also provides
greater insight into product development and
innovation opportunities.
Customer satisfaction and advocacy tracked: measured at the regional and business
unit level and reported regularly to our Global Leadership Team and the Board. Action
plans are developed to drive continuous improvement in the customer experience
– supporting the delivery and growth of FUM, our development pipeline and
construction backlog.
Capable and motivated people committed to
the long term success of our business. Effective
succession planning and leadership transitions
support business continuity and can reduce risks.
Diversity supports innovation, knowledge sharing
and better decision making.
Retention of key talent: the organisation benefits from its investment in leaders and
key workforce capabilities.
Succession strength: demonstrates the depth of capable talent ready to progress into
leadership roles.
Leadership positions held by diverse talent: demonstrates our broader commitment to
diversity and inclusion and our objective of increasing diverse representation across
our business.
Employee engagement: provides the organisation with insights to help provide the
right environment for our employees to perform at their best.
Recognised leadership in sustainability enhances
our brand and is a competitive differentiator. It
also provides more opportunities to partner with
governments, investors and the private sector
who are placing increasing importance around
ESG matters.
Measurement of and reporting on our progress towards our sustainability targets, and
tangible examples of the way we are addressing our sustainability imperatives.
Carbon Targets: we are a 1.5ºC aligned company:
•
Net Zero Carbon by 2025 (Scopes 1 and 2 emissions)
•
Absolute Zero Carbon by 2040 (Scope 1, 2 & 3 emissions, within the Lendlease
defined boundaries and without the use of offsets)
Social Value Target: create $250m through the work of our shared value partners
funded by the Lendlease Foundation.
26
Lendlease Annual Report 2024
Health and safety
The health, safety and wellbeing of our people continues to be our
highest priority.
Safety approach
We have continued to embed our
3Ps safety strategy to address the
following elements:
•
Physical safety: Risk of incidents
across the work activities we oversee
•
Product safety: Risk of failure on the
products we provide
•
Psychological safety: Risk of a work
environment that does not allow our
people to thrive.
We highlighted two physical safety focus
areas dedicated to addressing recurring
critical incident events during the year.
The first was a campaign to successfully
reduce the number of electrical incidents
occurring across the portfolio in the first
half of the year.
In the second half of the year, we
deployed a ‘Stop the Drops’ campaign,
which drove a decrease in the number of
incidents relating to the fall of materials.
On product safety, we undertook an
analysis of historical incident data across
the products we have delivered. This
informed a dedicated focus on enhancing
our risk management approach across
key potential exposures relating to our
end products. The ongoing focus on
influencing improved outcomes across
the design, planning and delivery phases
of our projects is aimed at improving
the safety, quality and integrity of the
products we create.
Our focus on psychological safety
included a global rollout of Psychological
Safety workshops across all regions.
The 49 workshops conducted by Group
Environmental Health and Safety (EHS)
Teams and People and Culture Teams
also included training of facilitators to
continue the roll out of the program
by local resources. The focus group
feedback, survey results and analysis
of key themes will form part of the
dedicated focus on psychological safety
to be provided in support of Lendlease's
refreshed strategy.
Safety performance
In line with our steadfast commitment
that every worker should return home
safely each day, no fatal incidents were
recorded across our portfolio for the
financial year where we have operational
control. Our supply chain also maintained
a fatality-free operational environment
during FY24.
We acknowledge the focus and
dedication of our people and supply chain
partners in achieving a fatality-free year,
encompassing more than 80 million hours
worked across more than 400 operations
where health and safety outcomes were
measured across our portfolio this year.
Notwithstanding the accomplishment of
a fatality-free year, our Critical Incident
Frequency Rate (CIFR) and Lost Time
Injury Frequency Rate (LTIFR) outcomes
represent minor increases compared to
the best on record outcomes recorded
in FY23.
Percentage of operations without
a critical incident1
93%
93%
94%
94%
FY24
FY23
1. An event that caused or had the potential to cause
death or permanent disability. This is an indicator
unique to Lendlease.
Critical Incident Frequency Rate1
0.57
0.57
0.46
0.46
FY24
FY23
1. Calculated to provide a rate of instances per
1,000,000 hours worked.
Lost Time Injury Frequency Rate1
1.57
1.57
1.36
1.36
FY24
FY23
1. Calculated to provide a rate of instances per
1,000,000 hours worked.
Excellence in innovation
The Sanofi project in Singapore
won Lendlease's Global Employee
Excellence Award for Safety Excellence &
Innovation (Team).
The project has also won Safety
and Health Award Recognition for
Projects (SHARP) with the Singapore
Government, which is a recognition of
their excellent safety performance and
innovations implemented.
Future focus
As our safety culture continues to mature,
and our organisational direction changes
into FY25, we are adopting some key
adjustments to our safety approach:
•
Measuring safety performance: We
will include a wider range of
lead and lag indicators to provide
a more rounded representation of
safety performance. A combination
of these indicators will be used to
create a safety index to monitor
performance across our business
internally. While we will continue
to report on lag EH&S metrics
(such as fatalities, critical incidents
and lost time injuries), we will
also monitor additional indicators
to identify consistency across a
range of assurance-related items
to demonstrate our focus on the
identification and management of risk
to prevent incidents from occurring.
•
2025 EH&S Global Minimum
Requirements (GMRs): The next
iteration of our GMRs will
be developed and launched in
FY25 to simplify our approach
to EH&S management. This
approach will be supplemented
with revised standard operating
procedures for the origination,
planning and delivery phases of the
operational lifecycle for each of
our Investments, Development, and
Construction entities.
London: The Turing Building
Stratford Cross
Managing and measuring value
27
28
Lendlease Annual Report 2024
Financial
Refining our business model to provide improved risk adjusted returns
for securityholders.
Financial strategy
Following the strategy update in May
2024, new financial metrics have been
adopted which replace the existing
Portfolio Management Framework.
Consistent with the strategic direction
taken to refocus on the high performing
Australian business and international
Investments platform, there will be a
material reweighting of Group capital
to Australia over time to more than 75
per cent.
Segment allocation of invested capital
between Investments and Development is
intended to be greater than 60 per cent
for Investments as the Group transitions
to more sustainable, recurring earnings.
Following the wind down of the Capital
Release Unit (CRU), approximately half of
the Group's earnings are expected to be
derived from the Investments segment,
with 35 per cent from Development and
15 per cent from Construction.
The Group's target gearing range will
reduce to 5-15 per cent, reflecting the
lower expected risk profile of the Group.
The shift to a higher proportion of
investment earnings and lower business
risk is expected to support an improved
investment grade credit rating over time.
The distribution payout ratio remains
unchanged at 30-50 per cent of
Operating Profit after Tax.
Measuring performance
Reflecting the Group’s refocussed
strategy, evolving market conditions and a
continued focus on securityholder
returns, external market guidance will
focus on Earnings Per Share (EPS) from
FY25.
Group Return on Equity (Group ROE1) will
continue to be the Group's primary long
term measure of return for
securityholders. The Group aims to
deliver through-the-cycle returns for
securityholders, over and above the
Group's cost of equity.
Strategy update - financial targets2
1. Target return
Group ROE > Cost of equity
2. Group EBITDA mix1
Investments
50%
Development
35%
Construction
15%
3. Invested capital mix2
Investments
>60%
Development
<40%
Australia
>75%
International
<25%
4. Capital structure2
Gearing3 (end FY26)
5-15%
Investment grade credit rating
5. Distribution policy
Distribution payout ratio4
30-50%
1. Excludes corporate costs and excludes
investment property revaluations in the
Investments segment.
2. Through-the-cycle target.
3. Net debt to total tangible assets, less cash.
4. Based on Statutory Profit after Tax excluding
investment property revaluations in the
Investments segment and other exceptional
items as determined by the Board.
Sustainable financing
Lendlease is one of the leaders in
sustainable financing in Australia. Of the
Group’s total financing facilities, more
than 70 per cent or $4.1b are green
or sustainability-linked.
Accessing green and sustainability-linked
borrowings has allowed us to facilitate the
following outcomes:
•
Lengthen the maturity profile
•
Diversify funding
•
Support the execution of the Group’s
sustainability strategy
•
Improve lender engagement
•
Provide good access to markets while
achieving competitive funding costs
Capital Allocation Framework
A new Capital Allocation Framework has
been developed, setting out a transparent
hierarchy for capital deployment.
Excess cash generated by the Group will
be allocated to debt reduction, capital
returns to securityholders and growth. In
the short to medium term, debt reduction
and capital returns to securityholders will
be prioritised over growth.
By the end of FY26, we are aiming to
reach our revised target gearing level of
5-15 per cent. In addition we will look
to return up to $500m of capital to
securityholders as capital is released from
the $2.8b of assets that are currently on-
market, subject to the following:
•
Completion of the previously
announced Communities transaction
•
Forecast gearing reaching target 5-15
per cent level by the end of FY26
•
Maintaining existing credit ratings
•
Buy-backs being accretive to EPS
Going forward, we'll continue to
assess the merits of debt reduction,
investing for growth and returning capital
to securityholders.
1. Calculated as Operating Profit after Tax (OPAT) divided by average equity. OPAT for FY24 is calculated as Statutory Profit excluding investment property revaluations in the
Investments segment and excluding other exceptional items. From FY25, OPAT will only exclude investment property revaluations in the Investments segment.
2. Announced on 27 May 2024. Represents through-the-cycle targets post simplification.
Detailed financial performance
For detailed information on our
FY24 financial performance, refer
to the Performance and Outlook
section on page 48 and the
Financial Statements on page 95.
Opposite: Sydney: Residences One
One Sydney Harbour
Managing and measuring value
29
Capital Allocation Framework
1. Based on Statutory Profit after Tax excluding investment property revaluations in the Investments segment and other exceptional items as determined by the Board.
2. Net debt to total tangible assets, less cash.
30
Lendlease Annual Report 2024
Our customers
The world is a dynamic place, and so is our business. We’re continuously
adapting and finding better ways to get things done. This dynamism is
essential in our mission to provide our customers the best places and
products while building securityholder value.
Uplift
in Australian customer
satisfaction (CSAT)
and net promoter
(NPS) scores
Maintaining thorough insight into
customer experiences helps us drive
their improvement. This insight includes
via CSAT (customer satisfaction), NPS
(net promoter) and EoDB (ease of doing
business) scores, which combine to give
us a broad picture of where we’re
excelling and where we need to focus
future effort.
During the past six years, all three
metrics have trended upwards in our
Australia market. This level of satisfaction
is reflected in the fact that more than 20
and 29 per cent of buyers at our One
Sydney Harbour and One Circular Quay
developments, respectively, are repeat
Lendlease purchasers. It extends to our
commercial offerings. Salesforce Tower
now fully occupied, while 90 per cent
of tenants at Barangaroo South making
future leasing decisions have chosen
to recommit to the precinct via future
leasing arrangements.
In other markets, overall results remained
relatively stable – a positive outcome
given the challenging trading conditions
in many regions.
Our commitment to improving the
customer experience will continue as
we realign our business following our
May 2024 strategy update. While we
will be refocussing Development and
Construction efforts to Australia, we
remain strongly committed to working
with our partners to complete the great
places we have in delivery.
We’ll also continue to build out the
relationships we have with our 70
major capital partners through new
development projects and investment
opportunities in Australia, and via our
international Investments platform.
Campbelltown: Macarthur Square
Managing and measuring value
31
Our growing build to rent offering
Renters and cities are grappling
with increased migration, demographic
changes and housing shortages that have
impacted people's ability to live and work
in the areas that they want.
Our build to rent (BTR)/Multifamily
apartments create places where people
can thrive, by offering our customers
flexibility and elevated living in a safe,
connected community. We have a history
of constructing these assets in the
Americas and Europe, completing 2,800
apartments since 2019.
In major cities around the world, BTR
projects are in demand, investment
grade assets, supported by industry
fundamentals of housing shortages,
government policy, demographic
change, city migration trends and
investor appetite.
By applying this expertise, along with
more than 60 years of capabilities
and leadership, we are enhancing
customer value through our growing
domestic pipeline of approximately 1,800
BTR apartments, including the recently
announced Gurrowa Place. In partnership
with the City of Melbourne, this
project will deliver around 560 BTR
apartments as part of the broader $1.7b
redevelopment of the southern site of the
iconic Queen Victoria Market. Gurrowa
Place is our second BTR project in
Melbourne and our third in Australia.
Internationally, our BTR offering at The
Reed at Southbank in Chicago continues
to prove the popularity of Lendlease
living, reaching 95 per cent occupancy,
on budget and a full month ahead of
schedule. This echoes similar leasing
success at Elephant Park in London,
which we highlighted in this section of
our 2023 Annual Report.
Going deeper with key investors
Japanese investment in global real estate
has more than tripled since 2021. One
example, our partnership with Daiwa
House, reflects the trust our Japanese
partners have in our ability to deliver high
quality opportunities.
Japan’s biggest home builder, with
more than six decades of experience
in apartment and rental housing, retail,
industrial and construction, Daiwa House
has partnered with us to deliver the
BTR component at Melbourne Quarter.
This marks Daiwa House’s debut into
Australia’s BTR market and reflects
confidence in Melbourne and the
asset class.
We are committed
to broadening our
development footprint in
Australia and welcome
the opportunity to
further expand our
global relationship with
Lendlease to deliver
to the Melbourne
community this quality
build to rent opportunity.
Koji Morishige, CEO
Daiwa House Australia
Daiwa has also entrusted us for its
first foray into the new home market
in the UK, with the October 2023
announcement of a joint development at
Elephant Park in London. We will see out
the development and construction of the
new homes, which will have an end value
of circa £250m, and retain a 25 per cent
interest in the project. This will be the
final stage of residential development at
Elephant Park.
These two collaborations extend our
strong partnership with Daiwa House,
having previously worked on projects,
including the 41-storey mixed-use
Claremont Hall in New York, which this
year commenced condominium closings.
Milestones in Asia
This year, we celebrated 50 years of
operation in Singapore and The Exchange
TRX opened its doors to the community –
inviting customers to discover the future
of experiential retail.
Beginning its journey as a truly dynamic
and vibrant social heart of Kuala Lumpur,
The Exchange TRX marked its opening
with a month-long campaign that tapped
into the community’s enthusiasm to
indulge in highly experiential year-end
holiday celebrations. The opening was a
resounding success that attracted more
than 4.9 million people, exceeding the
target by 63 per cent. The Exchange
TRX mobile app was introduced, and
the campaign successfully acquired
approximately 5,000 members for the
Lendlease Plus MY Loyalty Programme,
which exceeded the target by 75
per cent.
In Japan, with partner Princeton Digital
Group (PDG), we completed the core
and shell construction of one of Japan’s
largest data centre campuses, our
first under the Lendlease Data Centre
Partners facility.
Our team worked tirelessly to identify the
right location, design and construction
schedule to deliver the services and
features they need, as the Japanese
Government makes efforts to enhance
the country’s data capabilities and
digital resilience.
Playbook for
construction excellence
Our European business continues to
lead on safety, social value and
the environment.
As the construction partner on 2
Aldermanbury Square in the heart of
London, we are leading the delivery of
a 13-storey building that will provide
more than 27,000 square metres of
commercial space.
Along with our client Great Portland
Estates, and other businesses delivering
2 Aldermanbury Square, we are signing
up to a Charter pledging to deliver in line
with the principles of a new private sector
construction playbook.
Lendlease is playing a lead role
in developing the playbook, which
aims to help improve the way
projects are commissioned and delivered
for customers.
Businesses signing up to the Charter
are committing to delivering at the
highest standards for their clients across
measures that include health and safety,
social value and the environment.
The Charter will drive higher levels
of productivity and enables the most
effective use of available resources, while
encouraging construction teams and
suppliers to work in a more collaborative
way to help boost productivity, quality
and value for the client.
32
Lendlease Annual Report 2024
Our people
A focus has been on
retention of key talent
in a time of challenging
financial performance
Our people strategy brings our purpose-
led business strategy and culture to life.
A key focus has been strengthening our
performance culture with a relentless
commitment to improving financial results
anchored by our values.
We invest in learning and careers
focussed on key talent in our Investments,
Development and Construction segments,
as a retention tool in a year of difficult
financial performance.
We remain committed to growing and
retaining our diverse talent, in a culture
where people feel valued, belong and
have an opportunity to thrive.
Our focus areas:
•
Culture
•
Leadership
•
Learning
•
Careers
The principles we will never compromise
on are:
•
A physically safe workplace
•
A psychologically safe work
environment where wellbeing is
a priority.
Culture: Relentless commitment to
improving performance, anchored
by our values
Our values are critical. They drive the way
we interact and create an environment for
our people to deliver for our customers
and communities. We have focussed on
continuing to build a performance culture
where our people understand the drivers
of our financial performance and how
they can have an impact. Through our
key senior leaders across the globe, we
continue to focus on the transparency
of current performance in Australia and
offshore and clarity of the work to be
done to deliver to all stakeholders.
We're listening to our employees, formally
through our employee engagement
survey, as well as informally. Our recent
global engagement survey had an 85
per cent participation rate, indicating
our people care about Lendlease and
how we can continually improve. High
participation was supported by the ease
of completing the survey, following a shift
to a new model delivered through our
existing employee platform, which has
enabled speed, efficiency, cost saving and
a better experience for our people.
For this year of transition, we have
reported our scores in both the previous
and new models, and going forward
will report using the new model. Our
engagement score decreased by 1 point
(using the previous model); especially in
the offshore markets, where it decreased
by 4.6 on average, reflecting the
difficult operating environment. Over the
same time period, global benchmarks
also declined. Our continued focus on
retention strategies, especially learning
and development has helped achieve only
a modest decrease in our engagement
results and has been key in retaining our
talent in these challenging times.
The lowest scoring areas of employee
feedback were business strategy,
personal growth and autonomy.
Our guiding principle of Safety continues
to resonate with our people and remains
among our top performing areas.
Our focus in FY25 will be on our financial
performance, championing our values
and providing targeted learning and
development to improve the employee
experience for key talent at Lendlease.
Leadership: A strong and diverse
succession bench
Succession planning is a continuous focus
and all key leadership roles have one or
more identified successors. Fifty per cent
of those identified successors are ready
to move into the leadership roles in the
near term. Key to this is prioritising the
development of our top talent through
a robust assessment process to inform
development needs.
We are committed to enhancing gender
diversity within our leadership cohort,
with women currently occupying 26 per
cent of leadership positions.
Through our recent engagement survey,
we have collected cultural demographic
data which will inform and drive our plans
and targets in this space.
Learning: Investing in
building capabilities
Our global leadership programs have
been successfully implemented across
all regions, with 415 participants globally
over the FY24 reporting window. These
programs aim to develop leaders who are
contemporary and inclusive, at every level
and region.
Values-based decision making learning
has been conducted for our leaders
and will be extended to all employees,
to ensure our people prioritise
the ‘how’ expected in achieving
financial performance.
Our Ignite and Mosaic programs, which
foster sponsorship of diverse talent by
Managing and measuring value
33
senior leaders to mitigate obstacles
that impede the progress of under-
represented talent, have been launched
globally, with a total of 374 participants
since their inception in March and August
2022 respectively.
These programs are aligned with regional
initiatives to enhance representation
and foster inclusion throughout
our organisation.
Careers: Talent for today
and tomorrow
Retention of key talent remains
challenging in the current operating
environment for various reasons.
Recent business performance and cost
optimisation creates a challenge for
retaining top talent, resulting in flat
career structures and limited career
opportunities. This has meant a need to
focus on horizontal development to retain
the talent necessary for key development
and construction projects.
While we achieved a retention rate of 85
per cent, this was below our target of 90
per cent.
Our talent pipeline in Australia greatly
depends on the acquisition of early
career talent. We have hired more
than 158 graduates in Australia for the
graduate programme across 2023 and
2024 cohorts. Following a key focus on
their engagement and experience, we
have seen the engagement scores for
current graduates remain consistent with
this year, at 8.2.
Wellbeing
Prioritising our people’s health and
wellbeing is fundamental to Lendlease’s
culture and purpose. We are committed
to promoting and supporting the health,
wellbeing and psychological safety of
our people.
Our Health and Wellbeing Framework
promotes healthier minds, bodies, places
and cultures through a variety of
programs and initiatives to support our
people. Our commitment to this has
extended our certification of a Global
Healthy Workplace until 2024.
Psychological safety
We strive to create a culture and
environment where our people are
respected and supported. This includes
managing psychosocial risks such as
reward, recognition, work hours, the
physical work environment, and creating
a safe place for people to speak up and
take interpersonal risks.
While psychological safety forms part of
our 3Ps safety strategy, we acknowledge
that this is not the sole responsibility
of our EH&S Team. The People and
Culture Team is a key stakeholder in this
strategy, hence why both functions have
collaborated to create a Psychological
Safety program.
We have delivered 49 Focus group
sessions, with more than 660
people attending. The focus groups
have provided insights into what a
psychological safe workplace looks like,
highlighting areas of improvement and
ideating solutions to implement.
These workshops have been held
throughout our global operations.
Supporting our people and
retaining talent
Following the strategy update in May,
our focus was on supporting our people
by ensuring they received timely and
clear communication and by providing
certainty to people where we could.
Our communication and change strategy
was developed to align with the varied
impacts in each market.
Our change strategy provides our people
and leaders with the opportunity to
develop change management skills and
build resilience to support themselves
and others, in addition to offering
wellbeing support and appropriate
retention initiatives.
As we move into FY25, we are
focussed on providing clear targets and
objectives for our people to deliver
against our stated plans and reward our
people accordingly.
Supporting our people through mental health and
wellbeing initiatives
Mental Health First Aid
•
Provides mental health awareness skills and knowledge and assists in a mental
health crisis
•
168 employees were trained in Mental Health First Aid in the FY24
reporting window
Introduction to Mental Health
•
Provides an understanding of what mental health is, why it’s important and how to
support yourself or someone else who may be struggling
•
175 employees completed the Introduction to Mental Health learning, as well as it
being mandatory for our supply chain partners in the FY24 reporting window
Unmind
•
A holistic wellbeing mental fitness platform offering a range of resources and
courses across many different areas of mental health and connecting people to
in-region mental health specialists for one-on-one personal care
•
All Lendlease employees and two members of their families have free and
confidential access to Unmind
•
Since its inception, there have been more than 4,500 talk sessions completed
•
There are 1,491 active users on the platform; 88% of users have reported a
positive outcome
•
A total of 350 wellbeing trackers have been completed
Headspace
•
A meditation app which helps people stress less, have better focus and
improved sleep
•
1,104 employees and 144 Lendlease family members accessed Headspace
Real Conversations
•
A leadership program that helps increase organisational psychological safety
by embedding leadership behaviours that foster a culture of trust, inclusion
and engagement, which ultimately reduces risk and contributes to sustained
high performance
•
112 leaders completed the Real Conversations training
34
Lendlease Annual Report 2024
Sustainability
We are well positioned to reach our targets of Net Zero by 2025 for
Scope 1 & 2 emissions and $250 million of social value by 2025 and have
laid important groundwork in our journey to reach Absolute Zero by
2040 for Scope 1, 2 & 3 emissions.
53%
Reduction in gross Scope
1 & 2 emissions since
Mission Zero launched
in 20201
1.5 degree aligned
Our progress
Since launching our global Mission Zero
targets in 2020, we have reduced
our gross Scope 1 & 2 emissions by
53 per cent and continue to track
well below our 1.5 degree aligned
target. These emissions reductions are
underpinned by the continued delivery of
our Mission Zero strategy, which supports
the purchase of renewable electricity, the
use of renewable energy, and ongoing
electrification across our business.
Globally, 65 per cent of our electricity
use was from renewable sources, and we
are well positioned to achieve our target
of 100 per cent renewable electricity by
2030. We are also continuing to electrify
our business operations and reduce our
dependency on fossil fuels. In FY24, 66
per cent of total energy use was from
electricity and 44 per cent was from
renewable sources.
We continued our purchase of carbon
offsets for unavoidable emissions. In
FY24, we offset 19 per cent of our gross
Scope 1 & 2 emissions of 99 ktCO2-eq,
taking our net Scope 1 & 2 emissions to
80 ktCO2-eq.
Clear decarbonisation pathways
Our Mission Zero carbon emission
reduction targets have been verified by
the Science Based Targets initiative (SBTi)
as aligned with the Paris Agreement
goal aiming to limit global warming
to 1.5°C. Our climate transition plans,
called Mission Zero Roadmaps, detail
the specific regional strategies and
timeframes we plan to undertake to
progress towards our Mission Zero
targets. Mission Zero Roadmaps are
supported by Mission Zero Minimum
Requirements, which detail shorter-term
actions to drive the appropriate rate of
decarbonisation across our three lines
of business to maintain our 1.5 degree
aligned carbon trajectory. Together, the
Mission Zero Roadmaps and Minimum
Requirements demonstrate our clear
intention and the tangible actions we
are taking to achieve our Mission
Zero targets.
Mission Zero Roadmap delivery
We continued to make strong progress
in the delivery of our Mission Zero
Roadmaps and are currently working
on our second cycle of Mission
Zero Minimum Requirements for FY25
through FY27.
The majority of our Scope 1 emissions
relate to our Construction activities.
To minimise these emissions, we have
continued to move towards our goal of
Fossil Fuel Free Construction.
We are using electric plant and
equipment where available, trialling
battery storage and responsibly sourcing
biofuels and renewable diesel.
In Development, where possible,
new buildings will be designed to
take full advantage of renewable
electricity through 100 per cent
electrification of space heating and hot
water requirements.
We are also progressing the lifecycle
upgrade planning for existing asset
infrastructure, conducting technical
feasibility and prioritising buildings
across our Investments portfolio for all
electric retrofit in line with our Mission
1. This figure excludes emission reductions achieved through divestment of non core businesses. Scope 2 emissions have been calculated using the market-based method,
which includes the use of renewable energy certificates, power purchase agreements, renewable tariffs and the benefit of inherent grid renewable electricity where we have
evidence that there is no claim by another entity.
Melbourne: One Melbourne Quarter
Managing and measuring value
35
Zero Minimum Requirements and asset
sustainability plans. We are also engaging
with our food and beverage tenants
in support of our Global Cooksafe
Coalition commitments.
Examples:
•
In FY24, 99 per cent of liquid fuels
used by our UK Construction business
were from renewable sources.
•
At The Exchange TRX in Kuala
Lumpur, close to 80 per cent
of construction equipment was
electrified, including a fleet of 16
electric tower cranes.
•
At Melbourne Quarter West, we
are using renewable diesel in
concrete pumping, extending our
use of imported renewable diesel
in Australia.
The large majority of our Scope 2
emissions relate to our Investments
portfolio. To minimise our Scope
2 emissions, we continue to focus
on improving the operational energy
efficiency of our assets, setting minimum
third party energy ratings, while also
generating onsite solar electricity at
selected assets. Renewable electricity
purchase across the business remained
high, ahead of our timetable. For our
Australian business, we have progressed
our renewable energy procurement
strategy, with preferred renewable energy
providers agreed and contracts due to
start from FY25.
Examples:
•
At Paya Lebar Quarter, Singapore,
a total of 614 solar PV panels have
been installed and are projected
to reduce emissions by 186 tCO2-eq
in the first year of operation.
•
One Melbourne Quarter achieved
a market leading 6 star NABERS
energy rating for the base building,
incorporating a large 201kW rooftop
PV array, supporting approximately
17 per cent of the base building’s
energy consumption.
Initiatives undertaken to minimise our
Scope 3 emissions include ongoing
collaboration with designers, suppliers
and clients to reduce embodied carbon.
In Australia, we have been engaging
with our key subcontractors and
suppliers to understand their progress
in decarbonising their manufacturing
processes and sourcing low embodied
carbon materials. We continue to engage
with tenants to encourage the shift to
renewable electricity.
Examples:
•
At 51 Flinders Lane in Melbourne,
we are collaborating with GPT Group
to build its first upfront embodied
carbon neutral office tower, to be
certified through Green Star and
Climate Active upon completion.
•
Our portfolio of privatised military
homes in the US was recognised as
a 2024 Platinum Green Lease Leader
for implementing energy efficiency
best practices, including cost
recovery for capital improvements
and sustainability training.
•
In our FY24 engagement survey of
Australian commercial and industrial
tenants, approximately 25 per
cent are already using renewable
electricity. We have begun planning
for the transition to 100 per cent
renewable electricity as part of tenant
lease renewals.
Mission Zero Progress Reports
Our European business published its third
annual Mission Zero Progress Report
while our Americas and Asia regions
published inaugural progress reports.
We have also shared our Australian Fossil
Fuel Free Construction guide, detailing
our plans and progress using electric
equipment, battery energy storage
systems, renewable diesel and biofuel.
Carbon offset procurement
To achieve our Net Zero by 2025
target, we are working to reduce our
Scope 1 & 2 greenhouse gas emissions
as far as possible, with the remainder
offset via acquisition of high quality
carbon offsets.
A central team will manage our group
wide sourcing of high quality nature
based carbon removals that meet our
stringent assessment criteria, including
independent, third party certification.
Pathway to Absolute Zero
We have taken important steps to
establish a pathway to measure and
disclose progress towards achieving our
Absolute Zero by 2040 target.
Our Absolute Zero by 2040 target
includes eliminating Scope 1, 2 and 3
emissions, within the Lendlease defined
boundaries and without the use of offsets.
At Climate Week in New York in
September 2023, we officially launched
the Lendlease Scope 3 Emissions Protocol
v.1, our current view on the Scope 3
emission categories we have determined
to be relevant to our value chain and
that form part of our Absolute Zero by
2040 target.
We published the Protocol to advocate
for and move towards a consistent
and comparable approach to the
measurement and reporting of Scope
3 emissions associated with real
estate Investments, Development and
Construction business activities.
The Protocol has been well received by
peers and industry groups and recognised
in industry leadership and impact awards,
such as the Singapore Green Building
Council & the Building and Construction
Authority, as well as The Urban Developer
in Australia.
In addition to moving forwards on
Scope 3 measurement and reporting, we
have continued to advocate alongside
key industry groups for investment
in transition and decarbonisation,
joining the World Business Council
for Sustainable Development’s Built
Environment Pathway.
Nature and biodiversity
Nature is one of six focus areas in
our global Sustainability Framework and,
given the global decline in biodiversity
and increasing regulatory requirements
to enhance protections for nature, we
have commenced a strategic review to
better understand the role we can play in
protecting and restoring nature.
We have developed a framework to
locate our nature interface across
each line of business and to evaluate
our direct nature-related dependencies
and impacts. Our framework uses
elements of the Taskforce for Nature-
related Financial Disclosures (TNFD)
LEAP approach (locate, evaluate, assess,
prepare). We have also joined as a TNFD
Forum Member.
Governance
We published our ESG Databook,
submitted the latest Lendlease Modern
Slavery Statement and our annual
United Nations Global Compact (UNGC)
Communication on Progress submission.
65%
Global electricity use
from renewable sources1
and targeting 100%
renewables by 2030
1. Includes renewable energy certificates, power purchase agreements, renewable tariffs and the benefit of inherent grid renewable electricity where we have evidence that
there is no claim by another entity.
36
Lendlease Annual Report 2024
Decarbonisation challenges
and insights
We want to play our part to accelerate
the pace and scale of decarbonisation
in our sector but acknowledge much of
our ambition is outside our direct control.
Industry transformation will require
advocacy and collaboration across the
whole property value chain.
Fossil Fuel Free Construction
Eliminating the use of fossil fuels in
construction is an essential step in
tackling climate change and reaching
our Mission Zero targets. On the
Watermans Residences tower at One
Sydney Harbour, we deployed electric
construction plant and equipment and
analysed the implications of switching
from diesel to electric concrete pumping.
We shared our findings in The Electric
Edge report, published in conjunction
with University of Queensland. Electric
concrete pumps showed compelling
energy, carbon, and cost advantages over
diesel concrete pumping. By sharing this
analysis with the broader industry, we
hope to support the transition towards
Fossil Fuel Free Construction.
Industry advocacy
We continued to advocate for a Low
Carbon Liquid Fuels (LCLF) Policy to
support the establishment of a robust
domestic renewable diesel industry for
Australia. We provided submissions
to Federal Government consultation
on their proposed renewable diesel
fuel standard, presented at Bioenergy
Australia’s Renewable Fuels Week, and
actively supported the creation of the
Australian Constructors Association’s
renewable diesel position paper. We have
been pleased to see recent statements
from the Federal Government reflect a
shift towards supporting a LCLF industry
in Australia.
Collaborative partnerships
Embodied carbon emissions from building
materials such as steel, cement,
aluminium and glass represent a
significant portion of our Scope 3
emissions. Decarbonising these harder-
to-abate materials is challenging but we
are capturing opportunities to reduce
embodied carbon through collaboration
with our supply chain partners, motivated
clients and aligned capital partners.
In Australia, we partnered with Boral
Cement and De Martin & Gasparini to
create a lower carbon concrete mix
for the Sydney Metro Martin Place
Station project. Replacing approximately
50 per cent of Ordinary Portland Cement
with lower carbon supplementary
cementitious materials is anticipated to
result in an estimated 38 per cent
reduction in embodied carbon emissions.1
In Singapore, we are partnering
with Singtel to redevelop its
Comcentre headquarters into a world
class sustainable workplace. We are
collaborating with supply chain partners
to deliver Singtel’s ambitious vision to
be Singapore’s first end-to-end carbon
neutral development from design and
construction to operations.
Lendlease and Daiwa House are global
joint venture partners and have aligned
sustainability and innovation objectives to
reduce the embodied carbon footprint
of a residential for sale development
scheme at Elephant Park in London,
through initiatives such as Saint-Gobain
Glass’s ORAE low embodied carbon
glass. We estimate a 75 tCO2-eq saving in
embodied carbon by using ORAE glass on
the project, providing a replicable model
for deployment on future projects.
Sustainability leadership in real estate
We continue to be recognised as a leading creator and manager of sustainable real estate.
GRESB
In the 2023 GRESB Real Estate Assessment, our Investments portfolio received 12 Global and 14 Regional
Sector Leaders awards.
NABERS
Barangaroo International Towers received the highest result for Office Water (6 stars) and Indoor Environment
(5.9 stars) in the 2024 NABERS Sustainable Portfolio Index.
WELL
The Australian Investment Management business received multiple International WELL Building Institute 2023
Awards, including a Global WELL Leadership award and a Health and Safety Leadership award.
6 Star Green Star
Brisbane Showgrounds, Melbourne Quarter and Victoria Harbour achieved recertification of world leading 6
Star Green Star Communities v.1, reflecting our ability to design and maintain sustainable precincts.
LEED
The Exchange TRX is the first retail asset in Malaysia to achieve LEED Gold Core & Shell Certification and its
rooftop 10-acre public park is a unique ecosystem with more than 150,000 plantings.
SECBE
Our UK Construction business was a finalist in SECBE’s 2024 Constructing Excellence Award for
Climate Action.
1. Compared to the Green Star reference case (Sydney Metro Design & As Built v1.1 rating). Metrics could be subject to change pending final assessment at practical completion.
Managing and measuring value
37
Environmental performance
Our environmental performance data1 disclosure is in line with
our financial reporting program and provides 12 months of data
to 30 June 2024, which includes actual data for Q1–Q3 and
partially estimated Q4 data. Our full year environmental data will
be available in our ESG Databook.
Our full year environmental performance data will be available
on the Lendlease website in the ESG Databook once
Q4 data has been gathered and the limited assurance
engagement completed.
In FY24, all global lines of business were reported under
an operational control boundary. In prior years, Investments
were reported under an equity boundary. This shift to a
globally consistent reporting boundary has resulted in an
increase in emissions, energy, water and waste disposed across
our business.
Scope 1 and 2 carbon target performance ktCO2-eq
Our gross Scope 1 & 2 emissions continue to track well below
our 1.5 degree aligned trajectory. There was an increase in gross
Scope 1 & 2 emissions in FY24 partly due to the reporting
boundary shift for Investments. Additionally, we saw an increase
in Scope 2 emissions in our Asia business due to The Exchange
TRX shopping centre in Malaysia, which opened in November
2023. This was further compounded by a substantial increase
in the Malaysia Scope 2 emissions factor in FY24 compared
to FY23.
In FY24, we offset 19 per cent of our gross Scope 1 & 2 emissions,
taking our net position to 80 ktCO2-eq.
FY24 Scope 1 and 2 emissions by segment
Electricity used by the Investments segment is the largest
contributor to our combined Scope 1 & 2 emissions. Our plans
to increase the purchase of renewable electricity to achieve our
target of 100 per cent renewable electricity by 2030 should
significantly reduce the Scope 2 carbon emissions associated
with this line of business.
FY24 energy use by segment (GWh)
FY23
FY24
Investments
178
264
Development
3
8
Construction
140
126
Non-Core
1
-
Lendlease tenancies
5
4,824
Total
327
5,221
% of electricity use from
renewable sources
63%
65%
There was an increase in energy use in FY24 partly due to our
reporting boundary shift for Investments. Additionally, we saw an
increase in energy used in our Asia business due to the opening
of The Exchange, TRX shopping centre in Malaysia.
FY24 waste diverted and disposed (kTonnes)
FY23
FY24
Waste disposed
29
59
Waste diverted
179
154
% waste diverted from landfill
86%
72%
There was an increase in waste disposed and a reduction in
the percentage of waste diverted in FY24 partly due to our
reporting boundary change for Investments in addition to a shift
in construction work phasing and delivery.
FY24 water consumption by segment (MLitres)
FY23
FY24
Investments
4,676
14,569
Development
47
125
Construction
389
302
Non-Core
-
-
Lendlease tenancies
44
56
Total
5,156
15,051
There was an increase in water use in FY24 largely due to our
reporting boundary shift for Investments. Additionally, we saw an
increase in water used in our Asia business due to the opening of
The Exchange, TRX shopping centre in Malaysia.
1. Some charts and tables may not sum due to rounding.
ESG Databook
Our full year environmental performance data is available
on the Lendlease website in the ESG Databook.
See more: https://www.lendlease.com/au/investor-
centre/esg/
38
Lendlease Annual Report 2024
Creating social value
On track to reach our target
Since launching our Social Value Target,
we have created $222m of social value
through the work of our shared value
partnerships, funded by the Lendlease
Foundation through a trust established in
1983 to enrich the lives of our employees
and the community.
Social value is created when an activity
makes a positive impact on an individual’s
quality of life or improves the resilience of
a community.
The social value accounted for in support
of our target is calculated through placing
a financial value on the quantified change
people experience across a series of
social outcomes, and is verified by an
external party.
We are confident in our ability to achieve
our Social Value Target of $250m by the
end of the next financial year, and have
commenced a strategic review of the
social impact agenda to determine our
direction beyond the 2025 target.
$222m
of social value created,
which equates to 89%
of our $250m by
2025 target1
Key achievements of our Social Value Target
After four years of supporting and assessing our portfolio of charitable, shared value partnerships, we are seeing long term positive
outcomes being achieved and significant social value being created. As at 30 June 2024, we have achieved some outstanding results
and impact:
•
50+ shared value partnerships and programs supported and measured.
•
200k+ beneficiaries of our social impact efforts with shared value partners.
•
395 unique social outcomes delivered, including improved employability, increased educational opportunities, reduced risk of
suicide, and enhanced First Nations connection to community.
Regional shared value partnerships
Shown below is a small sample of the shared value partnerships funded by the Lendlease Foundation across our four regions, highlighting the
social value created and the connection to Lendlease projects and assets.
Australian Red Cross
Hideout Youth Zone
Billion Oyster Project
Project Dignity
We are partnering with the
Australian Red Cross on a placed-
based initiative in Katherine in
the Northern Territory, supporting
initiatives that are owned,
managed and led by the
local community.
We are creating an
estimated return of $5.50 for
every $1 invested, producing
strong outcomes across First
Nations engagement, disaster
preparedness, and community
inclusion, with direct business
linkages to our Tindal RAAF
base project.
In London and Manchester, we
are working with Hideout Youth
Zone, a charity supporting young
people with ‘somewhere to go,
something to do, and someone to
talk to’.
Based in communities with
lower socio-economic outcomes,
this program has created
an estimated return of
$7.50 for every $1 invested
alongside Lendlease employee
volunteering activities and work
experience opportunities for
young adults within the program
at Lendlease locations.
In New York City, we support the
work of the Billion Oyster Project,
focussed on the restoration
of critical oyster reef habitats
through community awareness
and engagement efforts.
Creating an estimated $6 of
social value for every $1
invested, this partnership has
produced significant volunteer
and educational opportunities for
our New York based employees
and has been engaged as part of
our 1 Java Street project’s social
and community initiatives.
In Singapore, we partnered with
Project Dignity, an organisation
dedicated to the training
and employment of people
with disabilities.
Through this partnership, we
have created an estimated return
of $6.50 for every $1 invested
and been able to link program
graduates to opportunities in
our retail assets and support
Project Dignity with volunteering
and catering opportunities within
our business.
1. Our global corporate social value target does not include social impact activities across our projects and assets in each region.
Managing and measuring value
39
Elevate Reconciliation
Action Plan (RAP)
Our Reconciliation Action Plan (RAP) is only as good as the value it
generates for and with First Nations communities and organisations.
We empower Project and Asset Teams
to deliver the actions that recognise
and embed First Nations rights and the
knowledge, talent and wisdom of First
Nations peoples in the places we invest,
develop and operate.
There are many examples that
demonstrate how our RAP commitments
are delivered. The One Sydney Harbour
(OSH) project has invested in several First
Nations-led shared value partnerships
and initiatives that support community
objectives. Below is a selection of stories
that bring our RAP vision to life.
Creating future careers
with NASCA1
Lendlease and NASCA have had a
formal partnership since 2015. One
Sydney Harbour and NASCA have
a three-year shared value partnership
focussed on developing career pathways,
strengthening cultural pride and identity,
and building leadership skills in First
Nations secondary students, while
also developing cultural understanding
and leadership skills in Lendlease
employees. Partnership activities include
collaboration on: The NASCA Traditional
Indigenous Games Corporate Challenge
in which NASCA students cultivate
leadership skills and competitors have a
unique cultural engagement experience;
NASCA CareerFit which gives First
Nations students insights into the world
of work and introduces them to work
experience opportunities; and a White
Card2 training program
Harry Murphy, NASCA Pathways Lead:
“Obtaining qualifications such as a White
Card can often be difficult for our
young people, with financial barriers,
among other things, preventing them
from entering the workforce or pursuing
career opportunities that are of interest
to them. Our partnership is having a
very real impact on the lives of these
young people, and the White Card
Training is just one example of how
our collaborative work is contributing to
giving our young people happier, healthier
and more successful futures.”
Supporting Gujaga Foundation’s
language revitalisation work
The partnership with the Gujaga
Foundation was developed to support
delivery of an innovative community
language program that continues to
revitalise the Dharawal language in the La
Perouse Aboriginal Community.
Gujaga works to instil a strong sense
of cultural identity and belonging in the
children and young people of Aboriginal
Coastal Sydney with Dharawal language
education but in order to reinforce
language learning at home, their parents,
carers and relatives also needed access
to the language education. To date 45
community members have undertaken
the 12-week language program.
The partnership has also provided the
opportunity for OSH First Nations intern
Kristen Martin, studying Bachelor of
Linguistics and Language Sciences, to
experience a language revitalisation
program first-hand.
Making a new home with Redfern
Youth Connect
Redfern Youth Connect (RYC) plays a
vital role in providing support to more
than 240 inner-Sydney children, young
people, and their families.
The OSH team worked with RYC to
refurbish its new premises which was
previously an old industrial use building.
The fit-for-purpose refurbishment has
provided fitness and activity spaces for
all ages, including an indoor basketball
court, an industrial kitchen, office and
meeting space for the RYC team and
community, as well as an upgrade to the
building’s amenities.
Lendlease foreman Daniel Boyd who
worked on the refurbishment over several
months, stated: “I’ve shared a lot of blood,
sweat and tears with the RYC team to
help make their vision come to life in this
new facility. Their incredible commitment
to the young people in this community
inspired me and other industry members
to be part of the team delivering the
new premises and I’m proud the One
Sydney Harbour team has developed this
fantastic community partnership.”
Reporting against our targets
Goal
Action
Supporting First Nations
Voices within Lendlease
1.5% of Lendlease employees in Australia identify as Aboriginal and/or Torres Strait Islander peoples.
Providing cultural engagement
and learning for all employees
Lendlease commits to 95% of employees engaging in First Nations cultural awareness learning or
immersion experiences. This learning creates opportunities to advance the national reconciliation
conversation, enhance cross-cultural understanding and trust between First Nations people and other
Australians, and allows Lendlease employees to better engage with the First Nations communities and
incorporate their knowledge, skills, and perspectives in the places we operate.
Embedding First Nations
businesses in our supply chain
Lendlease's procurement spend with 126 Supply Nation registered and certified First Nations
businesses was $110.3m.
1. National Aboriginal Sporting Chance Academy.
2. A white card (or general construction induction card) is required for workers who want to carry out construction work.
London
Park & Sayer
Elephant Park
Artist’s impression
Risk and
Climate Related
Resillience
40
Lendlease Annual Report 2024
Risk and Climate- Related Resilience
41
42
Lendlease Annual Report 2024
Risk governance
and management
A robust strategic risk framework that integrates a risk focussed culture,
aligns with organisational strategy and enhances value through risk
informed decision making.
Risk governance
Lendlease is committed to excellence
in corporate governance to help deliver
sustainable value to all our stakeholders.
Our effective management of risk enables
us to anticipate, understand and manage
uncertainty effectively in pursuit of
our strategy objectives. Our governance
is underpinned by a ‘Three Lines of
Defence’ model, setting the organisation's
tone, reinforcing the importance of
informed risk taking and decision making.
Risk framework
Lendlease operates an enterprise risk
management framework that integrates
governance, enterprise risk management,
risk appetite and operational resilience.
Our enterprise risks are the strategic
and operational risks we manage
across our global operations. The
risks are articulated, measured and
managed through a hierarchical reporting
framework that extends from operations
and ultimately the board. This framework
ensures oversight and effective risk
management across the organisation.
Our risk appetite framework is articulated
across our enterprise risks, defining
the financial and non financial risks
that impact our operations and the
risk Lendlease is willing to accept
in pursuit of its strategic objectives.
Our approach for operational resilience
emphasises proactive preparation and
adaptability. This dynamic approach
enables Lendlease to anticipate, prepare
for, respond to and recover from
disruption while delivering core services.
Risk and Climate- Related Resilience
43
Enterprise risk management
Lendlease identifies six enterprise
risks that relate to its strategic and
operational activities.
These risks encompass various
aspects, including financial, people
and sustainability. Risk management is
integrated across all business areas, with
an assessment of risk appetite, oversight
by the Risk Committee and regular
reporting to the Board.
The Lendlease enterprise risks and risk
appetite to manage the risks are set out
in the following table.
Enterprise
risk
Risk outcome
Risk appetite
Business
strategy
We seek to deploy our
capabilities and resources in
areas aligned to our strategy,
while maintaining resilience to
geopolitical challenges and other
market forces.
•
We act with integrity and transparency as we deliver our strategy.
•
We set and review our strategic goals on a regular basis to ensure business resilience
and continuity.
•
Inform our investment decisions using internal research, market risk expertise,
appropriate systems and proficient workforce.
•
Utilise systems, tools and data captured on our supply chain to better anticipate,
report, and mitigate risks.
People,
corporate
culture and
customer
Our employees seek to live
the behaviours expected of
them in interactions with
colleagues, customers and the
broader community.
•
Employees are engaged and operate with an enterprise mindset.
•
Attract and retain best, diverse talent and ensure our employees have appropriate
skills and capabilities to perform their roles.
•
We empower our people to act with integrity and transparency.
•
We expect our suppliers to act in accordance with our Supplier Code of Conduct,
upholding our core values and behaviours.
Performance
and capital
We seek to drive consistency
in returns against our strategic
targets through excellence
in execution across our
Investments, Development and
Construction activities.
•
Deploy our capital in line with our business strategy to deliver market
acceptable returns.
•
Commit to projects/ opportunities where we have adequate knowledge and
experience to identify, assess, resource and manage the execution risks to an
acceptable level.
•
Review and manage commercial and contractual exposures through robust
operational controls.
EH&S and
Assurance
We seek to protect our people,
our subcontractors, and all of
those who interact with a
Lendlease place from serious
harm to their health, safety,
and wellbeing.
•
Promote activity and decisions that decrease health, safety and wellbeing risks and
impacts on our employees, partners, supply chain and the general public.
•
Invest in health and wellbeing initiatives that improve the lives of our employees and
the communities in which we operate.
•
Ensure our Global Minimum Requirements (GMRs), which addresses both physical
safety and health and wellbeing are applied to empower our people to operate to a
consistent standard across all our operations and phases of operational lifecycle.
•
Require our supply chain to act consistently with our Supplier Code of Conduct
and GMRs
Sustainability
We seek to work together
with our stakeholders to deliver
positive environmental and social
outcomes from our activities.
•
Operate business in line with our sustainability strategy and provide
transparent reporting on our activities and progress.
•
Conduct our business in a sustainable and ethical manner.
•
Manage environmental, biodiversity and social impacts in accordance with the
Lendlease values and sustainability strategy.
•
Leverage our supply chain partners' sustainability progress to procure sustainable
services, products, and materials.
Technology
and data
security
We seek to carefully manage
our digital assets to prevent
unauthorised access to our data
and systems and protect our
intellectual property.
•
Employees are aware of cyber risks, manage data securely, use Lendlease
technology appropriately and report potential breaches through the
correct channels.
•
Ensure our technology adheres to our security policy and meets business purpose.
•
Invest in preventative technology and upskill employees to achieve a sustainable
security culture – for both physical and data security.
•
We continue to progress cybersecurity risk mitigation plans with our supply chain to
minimise risks to our business and stakeholders.
44
Lendlease Annual Report 2024
Supply chain risk management
Our global Supply Chain Risk Framework
focuses on the management of risks,
such as the disruption caused by
geopolitical events, insolvencies, and
labour shortages, as well as issues
such as modern slavery. This framework
relies on the strength of our corporate
risk governance, planning, capability
development, integrated systems,
tools, and standards. Additionally, it
incorporates insights from targeted
supplier risk assessments and audits,
and is increasingly integrated into our
investment and operational decision
making processes.
Lendlease takes a comprehensive
approach to mitigating modern slavery
risks in its operations and supply chains.
Led by a dedicated risk team within
the Group supply chain function, their
efforts are overseen by the Chief
Operating Officer and Chief Legal
Officer, with Board-level engagement
through the Lendlease Group Board
Sustainability Committee.
Overall, our regional supply chains
have remained resilient in recent years;
however, a range of issues still intersect
with modern slavery risks, which are
summarised along with our mitigating
strategies in the below table. Further
detail is outlined in the FY23 Modern
Slavery Statement.
Operating region
Lendlease response
Australia
Insolvencies have been increasing with specific impact to general contractors
and subcontractors.
Concentration risk remained elevated across high priority trades, particularly
relating to facades.
Shipping congestion and costs from Asia moderated to pre-pandemic levels.
We prioritised early engagement with general
contractors and sub-contractors engaging labour,
and diversified sourcing avenues to moderate
concentration risk
Asia (Singapore, Malaysia, China, Japan)
While foreign worker numbers in SE Asia have surpassed pre pandemic levels,
local construction contractors, particularly in Malaysia are still dealing with major
labour shortages. Inflationary pressures are emerging in countries such as Japan.
We focussed on early embedment of
fair and ethical recruitment principles into
project requirements and associated contractual
documentation, for general contractors and
major sub-contractors.
Europe (including UK)
The war in Ukraine and earthquake in Turkey in February 2023 influenced
regional supply chains, though no significant delays or shortages were
directly experienced.
The region continued to see an elevation in insolvencies across all sectors,
including construction.
Energy and steel costs continued to moderate, though still higher than pre
pandemic levels.
We continued leveraging insights from the annual
Achilles Ethical Labour Practices industry audit
program, into our projects in Italy, and monitoring
contractors who may be more highly exposed.
Americas
Geopolitical tensions continued to provide a risk point, with import bans under the
US Uyghur Forced Labour Prevention Act 2021 extending to polysilicon and some
aluminium products from the Xinjiang Autonomous Region, China. Metal products
rose in price due to increased scrap pricing.
Long product lead times for mechanical electrical and plumbing equipment is
creating a backlog for construction projects.
We monitor developments of U.S. Customs
and Border Protection's implementation of the
Uyghur Forced Labor Prevention Act, and conflict
material risks.
Kuala Lumpur
The Exchange TRX
Risk and Climate- Related Resilience
45
46
Lendlease Annual Report 2024
Climate-related
strategic resilience
Transitioning from the Task Force on Climate-Related
Financial Disclosures to the incoming Australian Sustainability
Reporting Standards.
As a cross-functional
team, we've carefully
considered the potential
impacts of climate-
change using the
deep knowledge of
our business.
Reporting transition underway
In 2018, Lendlease committed to
producing annual disclosures that
respond to the recommendations of the
Task Force on Climate-Related Financial
Disclosures (TCFD).
We have since been reporting under the
TCFD framework on an annual basis.
In 2021, the Trustees of the IFRS
Foundation announced the formation of
the International Sustainability Standards
Board (ISSB). Their remit was to prepare
a high quality, comprehensive, global
baseline of sustainability disclosures.
In June 2023, ISSB published the
first two sustainability standards, which
were later endorsed by the International
Organization of Securities Commissions
(IOSCO). These were based on the
framework developed by TCFD. As
a result, TCFD considered its remit
fulfilled and officially disbanded in
November 2023.
The Australian Government is considering
legislation to amend the Australian
Securities and Investment Commission
Act 2001 and the Corporations Act 2001
to introduce mandatory reporting for
large businesses to disclose their climate-
related risks and opportunities.
The Australian Accounting Standards
Board (AASB) has drafted the Australian
Sustainability Reporting Standards
(ASRS), which are based on the ISSB IFRS
Risk and Climate- Related Resilience
47
Sustainability Standards, which in turn are
closely aligned to the TCFD approach.
As a large Australian listed corporation,
Lendlease will be captured within the
proposed ‘Group 1’ category of the
reporting hierarchy and subsequently
subject to reporting requirements under
ASRS commencing in FY26. We are well
placed to respond to the ASRS, given
our history of voluntary disclosure under
TCFD. While ASRS introduces some new
and specific disclosure requirements, for
the most part, these build on the strategic
work that Lendlease has been progressing
under the TCFD framework.
Cross-functional approach
As we work to transition from TCFD
to the ASRS, we have conducted a
gap assessment between our TCFD
related measures and ASRS disclosure
requirements. Where differences or gaps
have been identified, we have established
plans to address them, often through
leveraging additional information readily
available across our business. We are
also developing processes to capture new
metrics to further assist in the ongoing
monitoring and management of key
climate-related risks and opportunities.
From our initial commitment to TCFD,
Lendlease undertook a cross-functional
approach to assessing and reporting on
climate-related risks and opportunities.
Climate change can be pervasive in its
impacts and, by examining the potential
impacts of climate as an integrated team,
we’ve carefully considered it using the
deep knowledge of our business.
Governance of our approach is overseen
by functional working groups composed
of senior leadership across sustainability,
finance, legal, and supply chain functions.
We also use our Executive Committee
reporting rhythm to oversee our
sustainability reporting from the business
level through to the Board.
To facilitate our readiness to respond
to the ASRS, we established a specific
Sustainability/Finance Working Group,
which was formed to examine how
the business can further streamline and
leverage existing accounting frameworks
and processes to capture climate-related
financial metrics.
In addition, a Supply Chain/Sustainability
Working Group was formed to
analyse potential climate-related risk
concentrations across our global supply
chain to proactively monitor and guide
our strategic risk management planning
and future disclosures.
Assessing physical climate-
related risks
To help identify and manage the physical
climate-related impacts to projects and
assets that Lendlease are engaged in, we
have worked with Swiss Re to implement
a new risk data and services (RDS)
platform with geospatial physical climate
and nature risk capabilities.
The RDS platform uses cutting-edge
technology to help users manage current
and future climate and nature risks. It
provides Lendlease with access to data
that was previously only available to
insurance risk experts.
The deployment of the RDS platform
has streamlined our physical climate
risk assessment screening process
for any new project proposals or
asset acquisitions and is now being
used to examine physical climate risk
exposure across our existing assets under
management. We are also using RDS data
to assist in our preparation to report
against ASRS in FY26.
More information
For more information about our TCFD disclosures, please refer to our ESG Databook.
For further information about our decarbonisation strategy, please visit Mission Zero.
Performance
and Outlook
Yokohama
Leaf Minatomirai
48
Lendlease Annual Report 2024
Performance and Outlook
49
50
Lendlease Annual Report 2024
Group performance
Key Financials1
$m
FY23
FY24
Var.
Core Business
Investments
332
174
(48%)
Development
283
509
80%
Construction
90
126
40%
Segment EBITDA
705
809
15%
Corporate Costs
(161)
(140)
13%
Operating EBITDA
544
669
23%
Depreciation & Amortisation
(140)
(120)
14%
Net Finance Costs
(88)
(238)
NM
Operating Profit before Tax
316
311
(2%)
Income tax expense
(59)
(48)
19%
Core Operating Profit after Tax
257
263
2%
Reconciliation to Statutory Loss
after Tax
Non Core
(19)
(9)
53%
Investments segment revaluations
(175)
(260)
(49%)
Non Operating Items
(excluding revaluations)2
(295)
(1,496)
NM
Statutory Loss after Tax
(232)
(1,502)
NM
Group
Core Operating EPS
cents
37.3
38.1
2%
Distribution per Security
cents
16.0
16.0
-
Total Group Statutory EPS
cents
(33.7)
(217.7)
NM
Total Group Statutory ROE3
%
(3.4%)
(25.4%)
NM
1. Operating earnings presented reflects Statutory profit adjusted for Investment
property revaluations (including in Other financial assets and Equity accounted
investments) that are classified in the Investments segment, and material
one-off items that could not reasonably have been expected to arise from
normal operations.
2. Non operating items after tax for the year ending 30 June 2024 includes costs
relating to the 27 May 2024 strategy update $1,384m, other restructuring costs of
$95m and UK building remediation of $17m. Prior period includes a provision in
relation to UK building remediation of $295m.
3. Return on Equity is calculated using Profit after Tax divided by the arithmetic
average of beginning, half and year end securityholders’ equity.
Performance1
The Group recorded a Statutory Loss after Tax for the year
ending 30 June 2024 of $1,502m, compared with a Statutory
Loss after Tax of $232m for the prior year. This includes
$1,384m of impairments and charges required to implement the
revised strategy announced in May 2024, comprising $805m
relating to goodwill, deferred tax assets and other costs, $506m
from development asset impairments and $73m of provisions
relating to redundancy, tenancy and other break costs. Property
revaluation losses in the Investments segment of $260m and
other restructuring charges of $95m, which largely relate to
redundancies announced in July 2023, also contributed.
The Group’s Core Operating Profit after Tax (OPAT) for the year
was $263m, up 2 per cent on the prior year. Core Operating
Earnings per Security was 38.1 cents, equating to a Return on
Equity of 4.4 per cent. Distributions per Security totalled 16.0
cents, unchanged from the prior year, representing a payout ratio
of 42 per cent of OPAT.
Core segment EBITDA increased by 15 per cent to $809m.
Improved Development and Construction earnings were partially
offset by lower contributions from Investments. Development
earnings were higher following the completion of key projects
in Australia and Malaysia, and a payment received in relation
to the San Francisco Bay project in the US. Construction
earnings were higher, including a gain from the remeasurement
of UK pension scheme liabilities. Investments earnings were
lower primarily due to performance in the US, noting an
absence of earnings from prior year asset sales, and a final
provision taken against a receivable from the disposal of the US
Telecommunications business.
Corporate costs decreased 13 per cent to $140m, predominantly
due to people related cost savings. Net finance costs of $238m
increased due to higher average net debt for the year and higher
base rates impacting the average cost of debt. This increase was
partially offset by a $39m pre-tax gain from a further buy-back of
the Group’s Sterling bonds in the first half of FY24. Excluding the
impact of the Sterling bond buy-backs, net finance costs were 83
per cent higher on the prior year.
Gearing of 21 per cent includes the impact of impairments and
charges relating to the revised strategy. There is a clear pathway
to de-leverage the balance sheet with net cash proceeds of
~$2.4b anticipated in FY25. This includes settlements at One
Sydney Harbour, first receipts from the sale of 12 Communities
projects, completion of the sale of the US Military Housing
business and the sale of the Group’s Asian life sciences interests
into a new joint venture.
The increase in net debt from $2.4b at FY23 to $3.2b at
FY24, follows peak production capex being reached at HY24,
and includes production spend on key development projects
including One Sydney Harbour, One Circular Quay, Victoria
Cross over station development (all in Sydney), MIND, MSG
(both in Milan) and Habitat (Los Angeles) as well as Communities
production in Australia.
The Group maintains strong liquidity, with total available
committed facilities and cash of $2.2b. This liquidity, together
with expected cash inflows from transactions, provides the
Group with flexibility to manage its balance sheet.
The Group recorded a Non core loss of $9m which primarily
reflects overhead costs associated with the retained elements of
the Engineering and Services businesses. The Group continues to
maintain provisions it considers appropriate to complete its share
of the retained Melbourne Metro project, which is more than 85
per cent complete, and for potential warranties associated with
the exited Engineering and Services businesses.
1. Comparative period the year ended 30 June 2023.
Performance and Outlook
51
Group performance continued
Outlook
In May 2024, a refreshed strategy was announced, to
improve securityholder value and position the Group for
profitable future growth by focussing on our high returning
integrated Australian business and our international investment
management capabilities. Details of the strategy are outlined on
page 15 of this Report.
As part of the strategy, a Capital Release Unit (CRU) was
established to recycle more than $4.5b of capital and to divest
international Construction operations. The new structures and
processes that will support the strategy were implemented on
1 July 2024.
Accordingly, from 1H25, the Group will report the CRU as a
stand-alone operating segment that will include:
•
International Construction operations;
•
International Development projects;
•
Australian assets to be divested, including 12 Communities
projects and Keyton Retirement Living; and
•
Retained Engineering and Services.
The Group has also updated the definition of its core
performance measure, OPAT, introducing a higher threshold
for measuring performance and greater alignment with
securityholder outcomes.
From 1H25, the OPAT definition will more closely align with
statutory reporting, with the only exclusion being investment
property revaluations in the Investments segment.
The revised strategy also sees the replacement of the Portfolio
Management Framework (PMF), with the targets announced
on 27 May 2024. A Capital Allocation Framework has been
established to provide a transparent hierarchy for capital
deployment, with securityholder value and returns to be assessed
against debt reduction, return of capital to securityholders and
investing for growth. Allocation of capital will reflect the Group’s
continued focus on securityholder returns, with the Group
targeting a return on equity greater than its cost of equity,
through-the-cycle. The Group also introduced a lower revised
target gearing range of 5-15 per cent that it targets to achieve by
the end of FY26.
Refer to page 28 of this Report for a summary of current Group
targets from its May 2024 strategy update.
The Group’s operational priorities for FY25 are progressing
CRU initiatives, replenishing the Australian Development pipeline,
growing the international Investments platform, and furthering
cost out initiatives.
Within the CRU, $1.9b1 of asset recycling has been announced
to date, with at least a further $0.9b targeted for recycling in
FY25. These assets include The Exchange TRX (retail), Keyton
Retirement Living and our China senior living project, Ardor
Gardens, with sale processes underway for each asset.
The divestment of international Construction operations is
progressing, with terms agreed in principle for the sale of the
US East Coast construction operations and the UK construction
business being prepared for sale.
Approximately $40b of new development opportunities have
been identified in the Australian market, of which $13b are in an
advanced stage, with Lendlease being either one of two parties
competing for the project or in exclusive discussions. The Group
remains well positioned to win new projects across mixed-use,
residential and commercial, and will seek to add to its existing
$11.8b Urban domestic pipeline.
In Investments, increased profitability will be targeted through
recycling of assets and redeployment of capital, increasing
performance and transaction fees, achieving greater scale in the
platform and reducing operating costs.
The Group has achieved strong early progress against its targets
as it transitions to a higher performing, lower risk business. The
focus for FY25 remains on execution of the refreshed strategy as
the Group seeks to maximise securityholder returns as it further
simplifies its operations and recycles capital.
1. Includes $1.3b Communities transaction, including $239m for certain land parcels in respect of which the right to buy is now an agreement to negotiate due to the passage of
time and in respect of which various conditions to the creation of those land parcels continue.
52
Lendlease Annual Report 2024
Investments segment
Key financial and operational metrics
FY23
FY24
Management EBITDA ($m)1
104
113
Co-investment EBITDA ($m)2
118
124
Other EBITDA3
110
(63)
Operating EBITDA ($m)2
332
174
Operating Profit after Tax ($m)
245
136
Invested Capital ($b)4
4.0
3.8
Funds Under Management ($b)5
48.3
47.3
Assets Under Management ($b)5
32.8
33.8
Management EBITDA Margin (%)
37.8%
41.5%
Investment Portfolio ($b)6
3.9
3.6
1. Earnings primarily derived from the investment management platform.
2. Returns excluding non-cash backed property related revaluation movements of
Investment Property, Other Financial Assets, and Equity Accounted Investments in
the Investments segment.
3. Includes transaction gains and losses.
4. Securityholder equity plus gross debt less cash on balance sheet.
5. The Group's assessment of market value.
6. The Group’s assessment of market value of ownership interests.
Performance1
The Investments segment generated EBITDA of $174m, down
48 per cent on FY23 which benefitted from the divestment
of 34 per cent of the US Military Housing Asset Management
income stream. FY24 EBITDA was impacted by a final provision
of $58m taken against a receivable from the FY21 disposal of the
US Telecommunications business, which followed a provision of
$74m in FY23.
Management EBITDA, derived from funds and asset
management fees was $113m, up 9 per cent on the prior year
due to lower expenses that more than offset the impact of lower
average FUM. Management EBITDA margin increased to 41.5 per
cent, up from 37.8 per cent in the prior year.
Co-investment EBITDA of $124m was up 5 per cent from $118m.
Stabilised investment yield of 3.5 per cent across the portfolio,
increased from 3.1 per cent. Improved yields were seen across
workplace, Retirement Living and retail assets.
The Group’s total Investments segment capital of $3.8b
decreased by 5 per cent and primarily relates to co-investments
in funds managed by the Group. The co-investment portfolio at
FY24 was $3.6b, down from $3.9b, following revaluation and
foreign exchange impacts of $0.4b, asset divestments of $0.1b,
including the sale of Darling Square retail in Sydney, and a further
$0.2b of capital invested, mostly into APPF Retail.
The co-investment portfolio is well diversified, with primary
exposures across workplace, retail and residential as well as
investments in retirement and industrial.
Other EBITDA recorded a loss of $63m, including a final
$58m provision against the receivable from the disposal of
the US Telecommunications business and the divestment of
retail assets in FY24 at modest discounts to book value. Other
EBITDA in FY23 benefitted primarily from US Military Housing
transaction profits.
Operations
Investments earnings are comprised of funds and assets under
management contributions, co-investment portfolio yield and
performance and transactions fees.
Funds under management reduced by 2 per cent from $48.3b
to $47.3b. Negative revaluations of $3.5b and largely retail
divestments of $0.7b, were mostly offset by FUM additions of
$3.4b from the completion of several projects. These included
The Exchange TRX in Kuala Lumpur, The Reed in Chicago and
a data centre in Tokyo, as well as capital invested across APPF
Commercial and several US assets.
In addition to current FUM, international development projects
with capital partners are expected to add more than $6b in FUM
over coming years, with $0.8b contributed in FY24 and a further
$1.0b expected in FY25, including workplace developments the
Forum, Boston; the Turing Building, London; and Paya Lebar
Green, Singapore.
Assets under management increased 3 per cent from $32.8b to
$33.8b underpinned by the $1.5b completion of The Exchange
TRX retail asset which opened during the year and is now more
than 98 per cent leased. This was partially offset by a number of
retail divestments in the year.
The Group’s co-investment portfolio of $3.6b is well diversified
with $1.0b in workplace, $1.0b in retail assets and $0.6b in
residential, $0.5b in retirement and $0.5b across other asset
classes, including industrial.
The Group intends to continue to grow its investment portfolio
while targeting an average co-investment of 5-10 per cent
of capital deployed, providing alignment with partners and
continued exposure to operating leverage as the platform
achieves greater scale.
1. Comparative period the year ended 30 June 2023.
Performance and Outlook
53
Development segment
Key financial and operational metrics
FY23
FY24
Operating EBITDA ($m)
283
509
Urban EBITDA ($m)
141
461
Communities EBITDA ($m)
142
48
Operating Profit after Tax ($m)
192
320
Invested Capital ($b)1
6.1
5.9
Work in Progress ($b)
22.9
14.5
Commencements ($b)2
7.7
1.9
Completions($b)3
3.6
8.2
1. Securityholder equity plus gross debt less cash on balance sheet.
2. Project end value on product commenced during a financial period (representing
100% of project value). Subject to changes in delivery program.
3. Project end value on product completed during a financial period (representing
100% of project value).
Performance1
EBITDA of $509m was up from $283m in the prior year, including
a $461m contribution from Urban projects.
The Development segment generated a ROIC of 5.0 per cent, up
from 3.3 per cent in the prior year.
Key drivers of the result included the completion of Residences
One, One Sydney Harbour, generating $183m, a payment
received relating to the San Francisco Bay Area project in
the US, and $73m from the completion of TRX retail and
residential projects, comprising a development gain of $39m
and residential settlements of $34m. European projects also
contributed positively, including the completion of Park & Sayer
at Elephant Park and a land sale at Stratford Cross, each
in London. The downward revaluation of the Victoria Cross
Over Station development in North Sydney negatively impacted
earnings by $57m.
The Communities business generated EBITDA of $48m,
compared with $142m in the prior year which benefitted from
higher margin settlements and the sale of industrial land parcels.
Settlements of 2,237 for the year were down marginally from
2,253 while sales of 1,721 were down 2 per cent. Operating
performance for the Communities business was impacted by
delays, resulting in the deferral of higher margin settlements.
The sale of 12 Communities projects was announced in 1H24 with
the expected transfer of ownership being delayed from 2H24 to
FY25, pending a decision from the Australian Competition and
Consumer Commission (ACCC), anticipated on 12 September
2024. Due to the delay, $40m of FY24 EBITDA, equating to $28m
of OPAT, was booked in FY24 which would otherwise have been
part of the sale.
There were $8.2b of completions during the year including
Residences One, One Sydney Harbour; Melbourne Quarter
Tower; retail and residential product at TRX in Kuala Lumpur;
residential product in New York, Chicago and London; and a life
sciences building and data centre, both in Asia.
There were $1.9b of commencements including build to
sell apartments at Elephant Park, London, and Victoria
Harbour, Melbourne.
Leasing was achieved across workplace assets including
Victoria Cross Over Station development and Town Hall Place
in Melbourne.
Invested capital reduced from $6.1 b to $5.9b, with capital
released from the completion of Residences One, One Sydney
Harbour, being mostly offset by development production
across other large projects including: Residences Two and
Watermans Residences, One Sydney Harbour; The Exchange
TRX; One Circular Quay; as well as production in the Australian
Communities business.
Operations
Work in Progress of $14.5b decreased from $22.9b on the prior
year, due to project completions of $8.2b and $2.1b of other
adjustments, including projects removed from WIP resulting from
strategy related impacts, partially offset by commencements
of $1.9b.
The FY24 development pipeline reflects movements within the
year and impacts from the strategy update, and comprises:
•
$11.8b of Australian Urban development opportunities
•
$15.1b of Communities projects, including $11.9b held for sale
•
$8.8b of international joint venture projects, including
more than $6b of potential investment product to be
completed; and
•
$57.4b of primarily land management agreements in Europe.
The primary impact to the development pipeline, which reduced
from $124.3b to $93.1b, was the removal of the San Francisco Bay
Area Project.
Development origination is solely focussed on Australia, with the
existing Urban pipeline of $11.8b comprising $7.5b of WIP and
$4.3b of master planned and in-conversion projects. Origination
wins this year included $1.3b of new work secured relating to the
Gurrowa Place project at Queen Victoria Market in Melbourne.
The Group remains well positioned to further originate
development projects across mixed-use, residential
and workplace assets, leveraging its market leading
placemaking capabilities.
1. Comparative period the year ended 30 June 2023.
54
Lendlease Annual Report 2024
Construction segment
Key financial and operational metrics
FY23
FY24
Revenue ($m)
7,203
5,936
Operating EBITDA ($m)
90
126
Operating Profit after Tax ($m)
32
64
New Work Secured ($b)1
4.7
4.8
Backlog ($b)1
8.7
7.6
1. Construction revenue to be earned in future periods (excludes internal projects).
Performance1
The Construction segment delivered EBITDA of $126m, up 40
per cent on the prior year. A gain from the remeasurement of
UK pension scheme liabilities and an improved contribution from
Asia was partially offset by a lower contribution from Australia.
Revenue of $5.9b was down 18 per cent. This was driven by
reduced activity across all regions, with the largest revenue
contributor, Australia, the least impacted, down 7 per cent to
$3.4b. The US contributed to more than half of the revenue
decline, following the earlier wind down of West Coast and
Central US operations.
Social infrastructure remained the key driver of revenue, up 3
per cent on the prior year at $2.3b. Other revenue categories
were impacted by lower activity levels, particularly, residential,
which decreased 47 per cent following a decision to no longer
build external apartments for sale or construction projects below
$150m in value.
The EBITDA margin was 2.1 per cent, up from 1.2 per cent,
with the gain from the remeasurement of the UK defined
pension scheme contributing 0.7 percentage points. Australia’s
EBITDA margin was 1.7 per cent, down from 2.8 per cent, due
primarily to supplier insolvencies on Australian projects, requiring
re-tendering for various goods and services. The estimate of the
impact in FY24 of those insolvencies was in the order of $50m.
New work secured was $4.8b, up 2 per cent on the prior year.
A recovery in European activity led the growth, contributing
$1.1b, while the US and Australia were the largest components.
Social infrastructure projects remain the key sector for new work
secured at $2.3b, followed by workplace at $1.1b.
The Construction business is preferred for $15.3b in new projects,
including $5.1b of social infrastructure projects, $4.7b of Defence
and $2.9b of workplace, supporting the future pipeline of
new work.
A considerable proportion of the customer base is repeat
business from deep and trusted relationships with government
and corporate clients.
Operations
Backlog revenue reduced 12 per cent to $7.6b, led by a $1.8b
decline in the Australian backlog. This was partly offset by a
$0.6b increase in UK backlog, while the US and Asia remained
broadly stable.
Australia’s backlog revenue of $3.9b is weighted to social
infrastructure and defence projects and is supported by a
strong preferred book of $10.6b, providing visibility on future
revenues. Key projects underway include the Frankston Hospital
Redevelopment, various Australian Department of Defence
projects, Powerhouse Parramatta and Liverpool Health and
Academic Precinct.
The US backlog revenue of $2.6b is expected to reduce
significantly in line with the wind down of West Coast and
Central operations and terms agreed in principle for the sale of
the East Coast construction operations.
The UK construction business has backlog revenue of $1.0b and
is supported by a preferred book of $4.4b. The business is being
prepared for sale, in line with the decision to divest international
construction operations.
1. Comparative period the year ended 30 June 2023.
Performance and Outlook
55
Financial position and cash
flow movements
Financial position ($m)
FY23
FY24
Var.
Investment assets
Other financial assets
1,124
972
(14%)
Equity accounted investments
2,611
2,567
(2%)
Investment properties
223
77
(65%)
Disposal Group net assets held for sale
-
304
NM
Development assets
Inventories
3,649
2,358
(35%)
Equity accounted investments
3,031
3,289
9%
Investment properties
316
341
8%
Disposal Group net assets held for sale
-
989
NM
Other assets and liabilities
(including financial)
Cash and cash equivalents
900
1,000
11%
Borrowing and financing arrangements
(3,281)
(4,176)
(27%)
Other net assets and liabilities
(1,929)
(2,844)
(47%)
Net assets
6,644
4,877
(27%)
Investment Assets
Investment assets decreased 1 per cent overall with negative
revaluation movements, particularly across workplace and
residential for rent sectors, and the sale of Darling Square retail,
partially offset by $150m of capital deployed into APPF Retail.
Development Assets
Development assets were flat on the prior year. Key movements
included a reduction of Inventories from the reclassification
of the 12 Communities projects held for sale, partially offset
by increased production costs capitalised on Watermans
Residences, One Sydney Harbour. The increase in Equity
accounted investment assets predominantly relate to equity
contributions to development projects including One Sydney
Harbour, The Exchange TRX, Habitat in Los Angeles, and
Victoria Cross Over Station development, partially offset by
settlements received from Residences One, One Sydney Harbour
following completion.
Other assets and liabilities
The movement in Other assets and liabilities includes
impairment of goodwill, deferred tax balances and other charges
required to implement the revised strategy, alongside timing
differences in receivables and payables across Development and
Construction activities.
Cash flow and treasury management
The Group commenced the financial year with cash and cash
equivalents of $0.9b. Movements during the year comprised
Operating cash outflow of $0.1b, Investing cash outflow of $0.6b
and Financing cash inflow of $0.7b. The Group closed the year
with cash and cash equivalents of $1.0b.
Core operating cash outflows included production spend on
development projects on balance sheet including Watermans
Residences at One Sydney Harbour, and Communities.
Investing cash outflows during the year included production
spend on key development joint venture projects including
Residences Two, One Sydney Harbour, The Exchange TRX,
Habitat and Victoria Cross Over Station development, along with
further equity contributions to APPF Retail.
The Group remains in a strong position with $2.2b of committed
liquidity comprising $1.0b of cash and cash equivalents and $1.2b
in available undrawn debt. Average debt maturity of 3.4 years has
reduced following the further buy-back of longer dated Sterling
bonds in 1H24.
Gearing of 21 per cent at year end was modestly above the
target range of 10-20 per cent, however, includes a 1 per
cent impact as a consequence of the impairments and charges
recorded following the May 2024 strategy update. Following
a year of peak development capex, there is a clear pathway
to deleveraging, with $2.4b of contracted and anticipated
cash flows expected to be received following the sale of 12
Communities projects, the sale of life sciences interests in Asia
to establish a new Asia Pacific joint venture, the sale of the
US Military Housing business and expected settlements at One
Sydney Harbour.
Treasury management
FY23
FY24
Var.
Net debt
$m
2,381
3,176
33%
Gearing1
%
14.8
21.1
43%
Interest cover2
times
3.0
2.7
(10%)
Average cost of debt
%
4.3
5.4
26%
Average drawn debt maturity
years
4.4
3.4
(23%)
Available liquidity
$m
2,581
2,159
(16%)
Average debt mix fixed:floating
$m
64:36
43:57
NM
1. Net debt to total tangible assets, less cash.
2. EBITDA has been adjusted to exclude Non Operating Items.
Credit Ratings1
Moody's
Baa3 stable outlook
Fitch
BBB- stable outlook
1. Credit ratings have been issued by a credit rating agency which holds an Australian
Financial Services Licence with an authorisation to issue credit ratings to wholesale
clients only and are for the benefit of the Group’s debt providers.
Governance
Melbourne
Gurrowa Place
Artist’s impression
56
Lendlease Annual Report 2024
Governance
57
58
Lendlease Annual Report 2024
Board of Directors’
information and profiles
Michael J Ullmer, AO
Chairman
(Independent Non Executive Director)
Term of Office
Mr Ullmer joined the Board in December 2011 and was appointed
Chairman in November 2018.
Skills, Experience and Qualifications
Mr Ullmer brings to the Board extensive strategic, financial
and management experience accumulated over his career in
international banking, finance and professional services. He was
the Deputy Group Chief Executive Officer of the National Australia
Bank (NAB) from 2007 until he retired from the Bank in August
2011. He joined NAB in 2004 as Finance Director and held a
number of key positions including Chairman of the subsidiaries
Great Western Bank (US) and JB Were. Prior to NAB, Mr Ullmer
was at Commonwealth Bank of Australia, initially as Group Chief
Financial Officer and then Group Executive with responsibility for
Institutional and Business Banking. Before that, he was a Partner
at accounting firms KPMG (1982 to 1992) and Coopers & Lybrand
(1992 to 1997).
Mr Ullmer has a degree in mathematics from the University of
Sussex. He is a Fellow of the Institute of Chartered Accountants,
a Senior Fellow of the Financial Services Institute of Australia, and a
Fellow of the Australian Institute of Company Directors.
Listed Company Directorships (held within the last
three years)
Non Executive Director of Westpac (appointed April 2023)
Non Executive Director of Woolworths Limited (appointed January
2012) (retired November 2021)
Other Current Appointments
Nil
Board Committee Memberships
Member of the Audit Committee
Member of the Nomination Committee
Member of the People & Culture Committee
Member of the Risk Committee
Member of the Sustainability Committee
Anthony P Lombardo
Group Chief Executive Officer
(Executive Director)
Term of Office
Anthony (Tony) was appointed Managing Director on 3 September
2021 and also appointed Group Chief Executive Officer in
June 2021.
Skills, Experience and Qualifications
Tony Lombardo has more than 25 years’ experience working across
real estate development, investment management, finance, mergers
and acquisitions (M&A) and strategy in Australia and internationally.
Tony joined Lendlease in 2007 as Group Head of Strategy and
M&A where he led a number of initiatives including refocussing
the Group's overall business strategy. In 2011, he was appointed
Group Chief Financial Officer and played a key role in enhancing
the flexibility of the Group’s capital structure via a stapled
structure as well as significantly broadening its funding and
banking relationships. He also implemented a range of people
focussed initiatives including creation of the Young Indigenous
Pathways program, which provides mentoring opportunities for
young Indigenous students.
In 2016, Tony was appointed Chief Executive Officer Asia based
in Singapore. As part of resetting Lendlease Asia’s growth
strategy, Tony spearheaded a number of major initiatives to
drive future growth. Recent successes include the completion
of Singapore’s S$3.7 billion Paya Lebar Quarter mixed use
development, establishment of a US$1 billion data centres joint
venture with a large institutional investor and the successful listing
of S$1 billion global LREIT on the Singapore Exchange.
Prior to joining Lendlease, Tony spent almost 10 years at GE with
responsibilities across a number of functional disciplines including
strategy, M&A and finance for both GE Capital and GE Corporate.
Tony commenced his career at KPMG where he worked for more
than four years.
Tony holds a degree in Accounting and Finance from RMIT
University and is a member of the Institute of Chartered
Accountants in Australia.
Governance
59
Nicola M Wakefield
Evans, AM
(Independent Non Executive Director)
Term of Office
Ms Wakefield Evans joined the Board in
September 2013.
Skills, Experience
and Qualifications
Ms Wakefield Evans is an experienced
business leader and Non Executive
Director with broad ranging commercial,
business management, strategy and legal
experience gained over a 30 year
international career.
Ms Wakefield Evans has had a diverse
career as one of Australasia’s leading
corporate finance lawyers and held several
senior key management and leadership
positions at King & Wood Mallesons
(KWM), including Managing Partner
International in Hong Kong, where she was
responsible for the overall governance and
strategic positioning of the business in the
Asia region. She has extensive experience
in the financial services, resources and
energy and infrastructure sectors and
also has extensive international experience
working in Australia, New York and
Hong Kong.
Ms Wakefield Evans holds a Bachelor of
Jurisprudence and a Bachelor of Laws
from the University of New South Wales
and is a qualified lawyer in Australia, Hong
Kong and the United Kingdom. She is a
member of Chief Executive Women.
Listed Company Directorships
(held within the last three years)
Non Executive Director of Viva Energy
Group Limited (appointed August 2021)
Non Executive Director of Macquarie
Group Limited (appointed February 2014)
(retired February 2024)
Other Current Appointments
Chair of 30% Club, Australia
Chair of Metlife Insurance Limited
Guardian of the Future Fund
Director of the Clean Energy
Finance Corporation
Director of UNSW Foundation Limited
Director of the Goodes O'Loughlin (GO)
Foundation Limited
Member of the Takeovers Panel
Board Committee Memberships
Chair of the Sustainability Committee
Member of the Nomination Committee
Member of the Audit Committee
Member of the Risk Committee
David P Craig
(Independent Non Executive Director)
Term of Office
Mr Craig joined the Board in March 2016
Skills, Experience
and Qualifications
Mr Craig is a business leader with a
successful international career spanning
over 40 years in finance, accounting, audit,
risk management, strategy and mergers
and acquisitions in the banking, property
and professional services industries. He
was the Chief Financial Officer (CFO) of
Commonwealth Bank of Australia from
2006 through the GFC, until he retired in
June 2017. At Commonwealth Bank, he
was responsible for leading the finance,
treasury, property, security, audit and
investor relations teams.
Mr Craig’s previous leadership roles have
included CFO for Australand Property
Group, Global CFO for PwC Consulting
and a Partner at PwC (17 years).
As well as his role as CFO of Australand
Property Group (now Frasers), Mr Craig
was responsible for Property for the
last 22 years of his executive career,
including overseeing three significant
property transformations at CBA.
Mr Craig holds a Bachelor of Economics
from the University of Sydney. He is
a Fellow of the Institute of Chartered
Accountants, ANZ and a Fellow of the
Australian Institute of Company Directors.
Listed Company Directorships
(held within the last three years)
Nil
Other Current Appointments
Deputy Chairman of the Victor Chang
Cardiac Research Institute
Deputy Chair of Sydney Theatre Company
Board Committee Memberships
Chair of the Audit Committee
Member of the Nomination Committee
Member of the People and
Culture Committee
Member of the Risk Committee
Philip M Coffey
(Independent Non Executive Director)
Term of Office
Mr Coffey joined the Board in
January 2017
Skills, Experience
and Qualifications
Mr Coffey served as the Deputy Chief
Executive Officer (CEO) of Westpac
Banking Corporation from April 2014
until his retirement in May 2017. As
the Deputy CEO, Mr Coffey had the
responsibility of overseeing and supporting
relationships with key stakeholders of
Westpac including industry groups,
regulators, customers and government.
He was also responsible for the Group’s
Mergers & Acquisitions function. Prior to
this role, Mr Coffey held a number of
executive positions at Westpac including
Chief Financial Officer and Group
Executive, Westpac Institutional Bank. He
has successfully led operations based
in Australia, New Zealand, the United
States, the United Kingdom and Asia
and has extensive experience in financial
markets, funds management, balance
sheet management and risk management.
He began his career at the Reserve Bank
of Australia and has also held executive
positions at Citibank.
Mr Coffey holds a Bachelor of Economics
(Hons) from the University of Adelaide and
has completed the Executive Program at
Stanford University Business School. He
is a graduate member of the Australian
Institute of Company Directors and Senior
Fellow of the Financial Services Institute
of Australasia.
Listed Company Directorships
(held within the last three years)
Non Executive Director of Macquarie
Group Limited (appointed August 2018)
Other Current Appointments
Director of Goodstart Early Learning
Board Committee Memberships
Member of the Nomination Committee
Member of the Risk Committee
Member of the Sustainability Committee
60
Lendlease Annual Report 2024
Elizabeth M Proust, AO
(Independent Non Executive Director)
Term of Office
Ms Proust joined the Board in
February 2018.
Skills, Experience
and Qualifications
Ms Proust is one of Australia’s leading
business figures and has had a diverse
career holding leadership roles in the
public and private sectors for over 30
years. Ms Proust spent eight years at ANZ
Group including four years as Managing
Director of Esanda, Managing Director
of Metrobanking and Group General
Manager, Human Resources, Corporate
Affairs and Management Services. Before
joining ANZ, Ms Proust was Secretary
(CEO) of the Department of Premier and
Cabinet (Victoria) and Chief Executive of
the City of Melbourne.
Ms Proust has extensive board experience
in listed and private companies,
subsidiaries and joint ventures, as well as
government and not for profits. She was
made an Officer of the Order of Australia
in 2010 for distinguished service to public
administration and to business, through
leadership roles in government and private
enterprise, as a mentor to women, and
to the community through contributions
to arts, charitable and educational bodies.
She is a Life Fellow of the Australian
Institute of Company Directors.
Ms Proust holds a Bachelor of Arts (Hons)
from La Trobe University and a Bachelor of
Laws from the University of Melbourne.
Listed Company Directorships
(held within the last three years)
Lead Independent Director GQG Partners
(appointed October 2021)
Other Current Appointments
Chair of Cuscal Limited
Member of the Fujitsu Advisory Board
Board Committee Memberships
Chair of the People and
Culture Committee
Member of the Nomination Committee
Member of the Risk Committee
Member of the Sustainability Committee
Robert F Welanetz
(Independent Non Executive Director)
Term of Office
Mr Welanetz joined the Board in
March 2020.
Skills, Experience
and Qualifications
Mr Welanetz is based in the US and has
significant executive, advisory, strategic
and operational experience in the property
and construction sectors gained over
an international career spanning over
40 years.
In his most recent role, Mr Welanetz
served as Chief Executive Officer in the
property division of Majid Al Futtaim
(MAF), based in Dubai, where he
had overall responsibility for managing
MAF’s property portfolio and development
pipeline. Mr Welanetz retired from that
position in 2018. Prior to joining MAF,
Mr Welanetz spent over seven years
in a global role in Blackstone’s Real
Estate Group advising and identifying
acquisition opportunities in retail real
estate and providing strategic guidance for
Blackstone’s portfolio of retail assets and
retail operating companies.
Mr Welanetz also served as Chief
Executive Officer of Shanghai Kinghill Ltd,
based in China, with responsibility for
the operations and delivery of retail and
development projects in mainland China.
Prior to this, Mr Welanetz was President
and Chief Executive Officer, Retail, at
Jones Lang LaSalle Inc Americas.
Mr Welanetz holds a Bachelor of Science
degree from Colorado State University. He
is a former Chairman of the International
Council of Shopping Centres and served
on the board of the Galileo Property Trust,
an Australian shopping centre investor.
Listed Company Directorships
(held within the last three years)
Nil
Other Current Appointments
Non Executive Director of Qiddiya Coast
Saudi Arabia
Non Executive Director of Stone Mountain
Industrial Property Company, USA
Board Committee Memberships
Chair of the Nomination Committee
Member of the Risk Committee
Member of the People &
Culture Committee
Member of the Sustainability Committee
Nicholas R Collishaw
(Independent Non Executive Director)
Term of Office
Nicholas Collishaw was appointed to the
Board as an independent Non Executive
Director, effective 1 December 2021.
Skills, Experience
and Qualifications
Based in Sydney, Mr Collishaw is an
experienced property executive and non
executive director with more than 40
years’ expertise gained across Lendlease’s
core segments of Development,
Construction and Investments. During his
career he has overseen the development
and delivery of a number of significant
and ground-breaking projects across
the commercial, industrial and retail
sectors. Mr Collishaw currently serves
as the joint Chief Executive Officer
of Lincoln Place Pty Ltd, a boutique
funds management entity focussed on
affordable retirement accommodation, and
is Chairman of hospitality group, Redcape
Hotel Group. Until his recent retirement, he
was a non-executive director of ASX-listed
investment manager, Centuria Capital. Mr
Collishaw’s executive career comprised
a number of high-profile roles including
Centuria Capital’s Chief Executive Officer
of Listed Property. Prior to this role, Mr
Collishaw spent eight years at Mirvac
Group serving as the Chief Executive
Officer and Managing Director between
2008 and 2012. He also held senior
leadership positions at James Fielding
Group where he was Executive Director
and Head of Property, Deutsche Industrial
Trust and Paladin Commercial Trust.
Listed Company Directorships
(held within the last three years)
Non Executive Director of Centuria Capital
Group (appointed May 2013, retired
August 2021)
Other Current Appointments
Nil
Board Committee Memberships
Chair of the Risk Committee
Member of the Audit Committee
Member of the People and
Culture Committee
Member of the Nomination Committee
Governance
61
Ann Soo Chan
("Margaret Lui")
(Independent Non Executive Director)
Term of Office
Ms Lui joined the Board in
December 2022.
Skills, Experience
and Qualifications
Based in Singapore, Ms Lui is currently
the Chief Executive Officer and Executive
Director of Azalea Asset Management,
which she helped to found in 2015. At
Azalea, Ms Lui leads an experienced team
of investment managers, overseeing a
portfolio valued at US$10 billion.
Ms Lui was previously a member of the
investment team at Temasek Holdings and
involved in direct investments across a
variety of sectors including transportation,
industrial, real estate investments, and
major redevelopment projects in Asia.
She has a track record in restructuring,
transforming and creating new Temasek
businesses and led the startup of several
business joint ventures including Tiger
Airways and Jetstar Asia, and the creation
of Cityspring Infrastructure, the first
infrastructure business trust listed on
the Singapore Exchange. As a senior
executive at Temasek, she was a director
of numerous subsidiaries and JV entities
and listed companies including Sembcorp
Industries, a leading energy and urban
development company.
Ms Lui holds a Bachelor of Accountancy
from The National University of Singapore
and has attended the Advanced
Management Development Program
at the Wharton School, University
of Pennsylvania.
Listed Company Directorships
(held within the last three years)
None
Other Current Appointments
Member of the Singapore Exchange's
Listing Advisory Committee
Board Committee Memberships
Member of the Nomination Committee
Member of the People &
Culture Committee
Member of the Risk Committee
Member of the Sustainability Committee
Barbara A Knoflach
(Independent Non Executive Director)
Term of Office
Ms Knoflach joined the Board in
October 2023.
Skills, Experience
and Qualifications
Based in Frankfurt, Ms Knoflach has
significant real estate, asset management,
investment management, strategy and
finance experience gained over an
international career spanning 35 years.
Ms Knoflach was Deputy Chief
Executive and Global Head of Investment
Management of BNP Paribas Real Estate
between 2015 to 2019. Prior to that,
she held the role of CEO SEB Asset
Management and Managing Director of
SEB Investment, one of the Nordic region's
leading asset management companies. Ms
Knoflach is a founder of LifeWorkSpace,
a company focussed on innovative
and sustainable strategies in the real
estate industry.
Ms Knoflach is a Fellow of the Royal
Institution of Chartered Surveyors and
serves in numerous associations and
organisations in the real estate industry.
She is Chair of CTP NV which owns,
develops, manages and leases logistics and
industrial real estate properties throughout
Europe, is a member of the Board of
Directors of Swiss Prime Site, one of the
leading real estate companies in Europe,
and is a trustee member of ULI (Urban
Land Institute).
Ms Knoflach holds an Economics degree
from the University of Applied Sciences
in Mainz.
Listed Company Directorships
(held within the last three years)
Chair of CTP NV
Other Current Appointments
Deputy Chair of the Supervisory Board of
Aareal Bank, AG
CEO of WorkLifeSpace
Director of Swiss Prime Site
Board Committee Memberships
Member of the Nomination Committee
Member of the Audit Committee
Member of the Risk Committee
General Counsel
and Company
Secretary qualifications
and experience
Karen
Pedersen
Ms Pedersen was appointed
Group General Counsel in January
2013. Prior to this she was
General Counsel and Company
Secretary for other large property
and construction companies. Ms
Pedersen has a Masters of Law
from the University of Technology,
Sydney and a Bachelor of
Commerce/Bachelor of Laws from
the University of New South Wales.
Wendy
Lee
Ms Lee joined Lendlease in
September 2009 and was appointed
Company Secretary in January
2010. Prior to her appointment,
Ms Lee was a Company Secretary
for several subsidiaries of a large
financial institution listed on the
Australian Securities Exchange. She
has over 15 years of company
secretarial experience. Ms Lee has
a Bachelor of Arts and a Bachelor
of Laws from the University of
Sydney, a Graduate Diploma in
Applied Corporate Governance, and
is a Fellow of the Governance
Institute Australia.
62
Lendlease Annual Report 2024
Board skills and experience
The Directors have a mix of Australian and international experience and expertise, as well as specialised skills to assist with decision
making to effectively govern and direct the organisation for the benefit of securityholders. The skills matrix assists the Board with
succession planning and professional development initiatives for Directors.
The Board has set a target of 40 per cent female Board members by 2030, which the aim of improving gender diversity. Currently, the
Board has met this target with female Directors representing 40 per cent of the Board.
The table below sets out the skills and experience considered by the Board to be important for its Directors to have collectively. The
Board considers that Governance, Strategy, People & Culture, Financial Acumen, Risk Management are core skills which all Directors
have self-assessed as being within their core competencies.
Skills/
Experience
Michael
Ullmer
Nicola
Wakefield
Evans
David
Craig
Phil
Coffey
Elizabeth
Proust
Robert
Welanetz
Anthony
Lombardo
Nicholas
Collishaw
Margaret
Lui
Barbara
Knoflach
Total
Governance
Commitment to and experience in setting exceptional corporate governance policies, practices and standards.
10
Industry
experience
Possessing industry knowledge, exposure and experience gained in one or more of the core Lendlease
operating segments of Investments, Development and/or Construction. This includes acting in advisory roles for
these industries.
10
International
Operations
Exposure to international regions either through experience gained directly in the region or through the management
of regional clients and other stakeholder relationships.
10
Health and
Safety
Experience in programs implementing safety, mental health and physical wellbeing on site and within the business.
Monitoring the proactive management of workplace health and safety practices.
-
9
ESG
Experience in assessment strategy and performance against environmental, social and governance criteria.
-
-
8
Strategy
Developing, setting and executing strategic direction. Experience in driving growth and executing against a
clear strategy.
10
Risk
Management
Experience in anticipating and evaluating risks that could impact business. Recognising and managing these risks by
developing sound risk governance policies and frameworks.
10
Legal
Identifying and resolving legal and regulatory issues, and advising the Board on these matters.
-
-
-
-
-
-
-
3
People and
Culture
Experience in building workforce capability, setting a remuneration framework which attracts and retains a high
calibre of executives, promoting workplace culture, diversity and inclusion.
10
Executive
Leadership
Skills gained while performing at a senior executive level for a considerable length of time including delivering
superior results, dealing with complex business models, projects, and issues and change management.
10
Financial
Acumen
Understanding of the financial drivers of a business. Experience in financial reporting and corporate
financial management.
10
Technology
Experience via direct line accountability for managing significant technology functions or major
project implementations.
-
-
-
-
6
Governance
63
Governance in action
An important role of the Board is in monitoring organisational
performance and ensuring that the directors have the information
they need to make decisions that deliver sustainable returns
to securityholders.
Board regional program FY24 and
engagement with our people
The Board members have approved a
code of conduct which articulates the
standards of behaviour expected of all
our people. The tone is ‘set at the
top’ and Board members believe that
meeting with our people, in addition to
information received in formal meetings
on the organisation’s culture, is an
important element of reinforcing the
Lendlease values. The Board members
meet regularly with local teams and
in FY24, this occurred in the UK
and Australia.
The Board program whether in Australia
or offshore, typically comprises formal
meetings and additional business
briefings, presentations from internal
and external sources, project site visits,
employee events and meetings with key
stakeholders. In FY24, in recognition of
the need to move to a leaner and
more focussed organisation, the Board's
regional program shifted so that the
international trips occur on an annual
basis. These are scheduled in each of the
regions where Lendlease operates on a
rotational basis.
The Board views that these program
activities – in addition to the
formal, scheduled Board and Committee
meetings – are important for Board
members to receive a greater
understanding of our people and our
business and a deep understanding of the
activities and operations. The Chair works
with the Company Secretary to plan the
yearly program. Depending on the time of
year, the program runs for a minimum of
two days and up to five days where more
detailed project reviews are required.
In FY24, the Board engagement
program included:
Europe
•
Received a briefing from a major
Lendlease capital partner on their
views on global real estate investment
(October 2023)
•
Received a briefing from the UK
based Board advisor on the political
and economic landscape in the UK
(October 2023)
•
Engagement with Europe Regional
Leadership Team (October 2023)
•
Town Hall with Europe regional
employees (October 2023)
•
Hosted a round table discussion
on topics relevant to the London
real estate and investments market
(October 2023).
Australia
•
Engagement with regional business
leaders to provide updates
and overview of key regional
business issues
•
Review of the Melbourne Metro
Project followed by a site visit
(November 2023)
•
Review of the Melbourne Quarter
precinct followed by a site visit
(November 2023)
•
Site visit to One Sydney Harbour
Residences One (February 2024)
•
Deep dive review of the Queen
Victoria Market project (May 2024)
•
Review of Docklands Projects
followed by a site visit (May 2024)
•
Continued engagement throughout
the year with the Global Leadership
Team (February 2024 and May 2024)
•
Town Hall with Australia regional
employees (November 2023).
Melbourne: Gurrowa Place
Queen Victoria Market
64
Lendlease Annual Report 2024
Supporting
value creation
The Board recognises that the five
focus areas of value creation, supported
by disciplined governance and risk
management, contribute to performance
and drive the long-term value of
our business.
During the year, the Board and Board
Committees deliberated on the following
specific matters and undertook a number
of activities to support value creation.
While these do not represent the full
scope of Board activities, they highlight
some of the areas of focus by the Board.
Health and Safety
Material Issue:
Operating safely across our operations
and projects. Maintaining the health and
wellbeing of our employees and those
who engage with our assets and sites.
The Board, Risk and Sustainability
Committees undertook the following
activities as part of their continued
review of the Lendlease Health and
Safety Framework and the unwavering
commitment to the safety of our people
and those who interact with Lendlease
assets and sites.
Activities and actions:
•
Continued to receive reports from
management on the steps taken to
reduce incidents through continuous
improvement measures, and by
advocating for industry change.
•
In August 2023, assessed the
remuneration adjustments to be made
following the supply chain fatality in
FY23, using a safety decision tree. No
fatalities were reported in FY24.
•
Oversighted the progress of the
revised health and safety strategy
which addresses the '3Ps', being
Physical Safety, Product Safety and
Psychological Safety.
•
Monitored lead and lag indicator
targets to measure broader safety
performance in FY24 to create a
Lendlease Safety Index.
•
Reviewed the overall external reporting
definitions to align with the Group's
Investment led strategy.
•
Continued to receive reports on Critical
Incidents, investigation findings and the
actions to close out these incidents.
•
Continued to receive quarterly updates
on project metrics which are treated as a
leading indicator of safety risk.
•
Received a report on the roll out of
the Psychological Safety Workshops held
across all regions.
•
Endorsed a Group wide approach
to Engineered Stone Benchtop
requirements and installation in line with
SafeWork Australia recommendations.
•
Received a report on global safety
initiatives such as 'Stop the Drops' to
reduce critical incident exposure to fall
of materials.
Financial
Material Issue:
Delivering securityholder returns.
Maintaining strong capital management to
enable investment in our future pipeline.
The Board, Audit and Risk Committees
undertook the following activities to help
fulfil the Board’s oversight responsibilities
in delivering returns to securityholders
and by adopting a prudent approach
to capital management with a view
to maintaining a strong balance sheet
throughout market cycles.
Activities and actions:
•
Considerable focus was spent in FY24
on reviewing and approving the Group's
strategic direction, culminating in a
comprehensive update to the market in
May 2024 on the new direction to build
a more profitable Lendlease. The key
outcomes for the new direction included:
– Refocussing the business towards
the Australia market and maintaining
and growing the international
Investments platform.
– Simplifying structures to support the
business segments of Investments,
Development and Construction.
•
Ongoing monitoring and review of
Treasury management was a key
focus area to ensure that Lendlease
remains within the target gearing
ranges and maintains investment grade
credit ratings.
•
Concluded the audit tender process
in accordance with the Group's Audit
Tender Policy. Given uncertainties in the
professional services market and the
extent of change across the Group, a
decision was made to retain KPMG until
the end of FY27. Owing to the current
dynamics in the Australian consultancy
sector, this was agreed to be the
optimum path for our business.
•
Continued to consider project approvals
in the context of the Portfolio
Management Framework, with the
object to maximising long-term
securityholder value.
Governance
65
Our Customers
Material Issue:
Understanding our customers and
responding to changes in the market.
Designing and delivering innovative,
customer-driven solutions to win
the projects we want to win and
ultimately deliver the best places.
The Board and its committees
undertook the following activities as
part of its support of the Group’s
customer focussed approach and
to embed a process of continuous
improvement based on customer
insights and actions.
Activities and actions:
•
Continued to engage with clients,
investors and other stakeholders
at various industry functions, site
visits, events and meetings.
•
Continued to receive reports on the
progress against prescribed metrics
for the Australian Government
Payment Times Reporting Scheme
for small business suppliers.
•
Engaged with securityholders
through meetings and events
including the Annual General
Meeting (AGM) and webcasts.
•
Continued to provide access to a
greater number of securityholders
at the AGM, by facilitating
attendance via a hybrid meeting.
Our People
Material Issue:
Attracting, developing and retaining
diverse talent. Ensuring we have the
right capability across the organisation
to deliver results for all stakeholders.
The Board, People and Culture
Committee and Nomination Committee
undertook the following activities to
help attract, develop and retain diverse
talent and to monitor the investment in
developing leaders and capabilities.
Activities and actions:
•
Continued the program of Board
renewal by actively reviewing Board
composition against the skills matrix.
Appointed Barbara Knoflach to the
Board effective October 2024.
•
In line with the approval of the Group's
new strategic direction, approved
a new segment led leadership
structure (the Corporate Leadership
Team) to replace the existing Global
Leadership Team responsible for
leading Lendlease into the future.
•
Continued to oversee the
implementation of the human capital
strategy, review mission critical
capabilities and endorsed refreshed
global leadership programs.
•
Continued to receive reports on
the outputs of the Group's flagship
leadership programs focussed on
acceleration of under-represented
female and racial minority talent.
•
Considered ways to respond to the
strike received against the FY23
Remuneration Report and engaged
with key stakeholders to understand
the reasons for the strike and receive
input on potential changes to the
reward framework.
•
Continued to receive reports on the
recalibration of globally consistent
gender pay reporting.
Sustainability
Material Issue:
Managing and optimising our performance
in the context of challenges facing the built
environment, including climate change and
social pressures such as population growth and
housing affordability.
The Board and the Sustainability Committee
engaged in the following activities to help
deliver inclusive, healthy and adaptable places
that can thrive through change.
Activities and actions:
•
Received quarterly reports tracking progress
against the Group’s two sustainability targets
to reflect the Group’s commitment to:
– A ‘Net Zero Carbon’ for Scope 1 and 2
emissions by 2025, and ‘Absolute Zero
Carbon’ by 2040
– Delivering $250m of measured social value
by 2025.
•
Received Deep Dive reviews on:
– The output of business engagement
including key regional & global insights on
Nature & Biodiversity.
– The Group's Mission Zero emissions
reduction strategies including information
on RECs and offset strategies.
– An overview of Scope 3 emissions as they
relate to Lendlease's Absolute Zero Target.
– The Social Value Strategic Direction review.
•
Received regular reports on ethical supply
chain within the Group to ameliorate the risk
of material substitution and modern slavery.
•
Continued to receive reports at every meeting
on the progress against the Task Force
on Climate-Related Financial Disclosures risk
assessment and reporting framework.
•
Reviewed and approved the extension of the
Elevate RAP.
•
In tandem with the Audit Committee,
continued to receive reports on Lendlease's
readiness for adoption of enhanced
climate and sustainability reporting under
the proposed International Sustainability
Standards Board exposure drafts.
•
Reviewed and approved the Lendlease
position statement on Nature & Biodiversity.
•
Approved TEM as the preferred Offset
Partner for Lendlease.
66
Lendlease Annual Report 2024
Board of Directors’ information
Interests in Capital
The interests of each of the Directors in the stapled securities of the Group at 19 August 2024 are set out below. The current Non
Executive Directors acquired Lendlease securities using their own funds.
Directors
Securities
held directly
2024
Securities
held
beneficially/
indirectly
2024
Total 2024
Securities
held directly
2023
Securities
held
beneficially/
indirectly
2023
Total 2023
M J Ullmer
-
200,000
200,000
-
175,000
175,000
A P Lombardo1
152,130
138,007
290,137
86,895
141,144
228,039
A S Chan ("Margaret Lui")
-
20,000
20,000
-
3,000
3,000
P M Coffey
-
71,216
71,216
-
51,216
51,216
N R Collishaw
-
45,000
45,000
-
25,000
25,000
D P Craig
-
136,000
136,000
-
106,000
106,000
B A Knoflach2
10,000
-
10,000
-
-
-
E M Proust3
-
123,061
123,061
-
83,061
83,061
N M Wakefield Evans
-
38,000
38,000
-
38,000
38,000
R F Welanetz1
27,000
-
27,000
27,000
-
27,000
1. Prior year balances were restated.
2. As B A Knoflach was appointed to the Board on 1 October 2023, a nil balance is shown at the beginning of the financial year.
3. As at 30 June 2023 E M Proust holds through her super fund, $500,000 face value of Lendlease Green Bonds.
Directors’ Meetings
Board meetings
The Board meets as often as necessary
to fulfil its role. Directors are required to
allocate sufficient time to the Group to
perform their responsibilities effectively,
including adequate time to prepare for
Board meetings. During the financial year
ended 30 June 2024, 12 Board meetings
were held. Seven face to face meetings
were held and five meetings were held
virtually. Matters were also dealt with as
required by circular resolution.
Overview of Board Committees
The Board recognises the essential role
of Committees in guiding the Company
on specific issues. There are five
standing Board Committees to assist,
advise and make recommendations to
the Board on matters falling within their
areas of responsibility. Each Committee
consists of independent, Non Executive
Directors. The Chair of each Committee
is not a Chair of other Committees, or
Chair of the Board. Each Committee
is governed by a formal Charter
setting out its objectives, roles and
responsibilities, composition, structure,
membership requirements and operation.
During the reporting period a review
of the accompanying Charters and
Workplans for each of the Committees
was undertaken.
The five permanent Committees of
the Board are:
Audit Committee
The Audit Committee assists the Board
with its oversight responsibilities in
relation to accounting policies and
practices, tax matters, treasury reporting,
monitoring of internal financial controls,
internal and external audit functions and
financial reporting of the Group.
People and Culture Committee
The People and Culture Committee
assists the Board with its oversight
responsibilities in relation to establishing
people management, diversity and
inclusion, talent and remuneration/
compensation policies for the Group.
Risk Committee
The Risk Committee assists the Board
with its oversight responsibilities in
relation to risk management and
internal control systems, risk policies
and practices and compliance. The
Risk Committee also has the role
of considering, and if approved,
recommending to the Board for
approval major transactions as referred
to the Committee by the Global
Investment Committee.
Sustainability Committee
The Sustainability Committee assists the
Board in monitoring the decisions and
actions of management in achieving
Lendlease’s aspiration to be a sustainable
organisation. The Committee has
oversight of health and safety, ESG
matters, the Lendlease Foundation,
modern slavery and the Group’s
Elevate RAP.
Nominations Committee
The Nominations Committee has
responsibility for Board renewal,
composition and Director development
and oversees the reviews of Board,
Committee and Director performance.
In response to the strategy refresh, a
review of the committee structures will
be undertaken in FY25.
Governance
67
Attendance at Meetings of Directors 1 July 2023 to 30 June 2024
The number of Board and Board Committee meetings held, and the number of meetings attended by each Director during the 2024
financial year, are set out in the tables below.
(MH) Number of meetings held. (MA) Number of meetings attended.
Membership
Board
(Chair M J Ullmer)
Nomination
Committee(Chair R
F Welanetz)
Audit Committee
(Chair D P Craig)
MH1
MA
MH
MA
MH
MA
M J Ullmer (Chairman)
12
12
7
7
4
4
A P Lombardo (CEO)
11
11
72
7
42
4
A S Chan (M Lui)
12
12
7
7
-
-
P M Coffey
12
12
7
7
-
-
N R Collishaw
12
12
7
7
4
4
D P Craig
12
12
7
7
4
4
E M Proust
12
11
7
7
-
-
N M Wakefield Evans
12
12
7
7
4
4
R F Welanetz
12
11
7
7
-
-
B A Knoflach
113
11
6
6
1
1
1. 5 of the 12 meetings were teleconferences called to deal with specific matters. One of these was a meeting of the Non Executive Directors only so A Lombardo was not
present. E Proust and R Welanetz were unable to attend 1 of these teleconferences.
2. A P Lombardo is not a member of the Committee, however as CEO and MD, he attends every meeting except for the part of the meeting where a Non Executive Director
session is scheduled)
3. B A Knoflach was appointed to the Board on 1 October 2023. The number of meetings attended reflects the number of meetings since Ms Knoflach's appointment.
Membership
Risk Committee
(Chair P M Coffey / N
R Collishaw)1
Sustainability
Committee(Chair N M
Wakefield Evans)
People and Culture
(Chair E M Proust)
MH
MA
MH
MA
MH
MA
M J Ullmer (Chairman)
4
4
4
4
4
4
A P Lombardo (CEO)
42
4
42
4
42
4
A S Chan (M Lui)
4
4
4
4
4
4
P M Coffey
4
4
4
4
-
-
N R Collishaw
4
4
-
-
4
4
D P Craig
4
4
-
-
4
4
E M Proust
4
4
4
4
4
4
N M Wakefield Evans
4
4
4
4
-
-
R F Welanetz
4
4
4
3
4
4
B A Knoflach3
3
3
-
-
-
-
1. P M Coffey Chairman July 2024 to April 2024. N R Collishaw commenced as Chair in May 2024.
2. A P Lombardo is not a member of the Committee, however as CEO and MD, he attends every meeting except for the part of the meeting where a Non Executive Director
session is scheduled)
3. B A Knoflach was appointed to the Board on 1 October 2023. The number of meetings attended reflects the number of meetings since Ms Knoflach's appointment.
68
Lendlease Annual Report 2024
Remuneration Report
Message from the Board
It has been a challenging year for
Lendlease, with rising costs, industry
shifts, and a persistent market downturn
impacting the global sector and
slowing the pace of capital recycling.
Our significant investments outside of
Australia have not yielded the near-term
returns our securityholders expect.
In light of these obstacles, the Board
and the Corporate Leadership Team
(CLT) have chosen to streamline and
refocus our efforts. We're simplifying
our organisational structure, reducing our
costs, focusing on our market-leading
Australian business, and enhancing
our international investment platform.
Additionally, we're aiming to release
$4.5b of capital by moving away
from international construction and fast-
tracking the release of capital from our
overseas projects and other holdings. To
facilitate this strategic shift, we've made
a post-tax provision of $1.4b for FY24,
contributing to a Group Statutory Loss
after Tax of $1.5b.
We recognise that these outcomes
are disappointing. The Board and the
Group CEO take accountability for
the company’s performance, and are
committed to turning it around.
Since the announcement of targeted
business divestiture plans, Lendlease has
already made progress toward the new
strategy, including:
•
Restructuring the organisation
by removing regional
management structures;
•
Announcing key business sales in
Asia, Australia and Americas; and
•
Progressing the ongoing sale of the
remaining stake in Keyton retirement
living platform, as well as interests in
The Exchange TRX commercial assets
in Malaysia.
In year outcomes
Lendlease has had a productive year with
$8.2b of Development completions and
$1.9b of new project commencements,
such as build-to-sell apartments in
London and Melbourne.
Our Core Operating Profit After Tax
(OPAT) increased modestly to $263m,
delivering Earnings per Security of 38.1
cents, and Return on Equity of 4.4 per
cent. Distributions per Security totalled 16
cents compared to 16 cents in FY23. This
represents a payout ratio of 42 per cent
of OPAT.
The Short-Term Award (STA) Scorecard
outcome for FY24 was at 58% of target,
including commendable Safety and
Sustainability outcomes. However, in light
of the continued decline in securityholder
experience, the Board determined to
reduce FY24 STA payments for the Group
CEO and the Corporate Leadership Team
(CLT) to zero.
The exercise of discretion in this manner
is prudent, reflects the securityholder
experience, and recognises the
accountability of the CLT for the
performance of the Group as a whole.
We note the Group CEO supported
this decision.
For Long-Term Award (LTA) subject
to performance measurement at the
end of FY24, performance did not
meet the required thresholds set by
the Board. Consequently, there was
nil vesting.
Strike response
At the November 2023 Annual
General Meeting we received a first
strike, with approximately 40% of
securityholders voting against the FY23
Remuneration Report.
Feedback from securityholders and
proxy advisors highlighted key
concerns as performance and reward
alignment, disclosure transparency and
remuneration quantum.
Although this outcome was disappointing,
the Board has carefully considered
stakeholder feedback and has taken
the following actions to address
key concerns:
•
Exercised downward discretion to
award zero FY24 STA to the CLT,
including the Group CEO;
•
Suspended the FY25 STA plan;
•
Developed a temporary
Transformation Award for FY25;
•
Applied zero fixed remuneration
increase to KMP in FY24; and
•
Amended the LTA measures and
weighting to improve focus on
securityholder returns.
These actions have been implemented
alongside the strategic refocus. Our
expectation is that by successfully
executing the new strategy, we will
strengthen our market position and
realign executive remuneration with
market benchmarks.
For further detail regarding our response
to the strike, please refer to page 72.
FY25 Transformation Award
We believe the Executive Remuneration
Strategy (ERS) remains fit for purpose
in a “business as usual” context, but a
different approach is needed to ensure
alignment with securityholders in the
short-term. While we believe executives
should be rewarded for successfully
implementing the strategy, this should
only occur to the extent that performance
drives real gains to securityholders, via an
improvement in the security price.
To this end, we have developed
a temporary Transformation Award,
delivered in options, with vesting
contingent on achieving a significant
improvement in security price after
two-years. We believe this timeframe
is appropriate to link to measurable
securityholder outcomes.
Further detail will be provided in the
FY24 Notice of Meeting and the FY25
Remuneration Report.
Changes to Key Management Personnel
As part of the reorganisation, the role
of Chief Risk Officer (CRO) has been
discontinued effective 30 June 2024. As
a result, the CRO will no longer be a KMP
in FY25.
Commencing 1 July 2024, we have
welcomed two new faces to our
leadership team: Tom Mackellar as CEO
Development, and Penny Ransom as
Chief Investment Officer (CIO).
We also welcomed Barbara Knoflach who
joined the Lendlease Board of Directors
effective 1 October 2023.
Looking ahead
Over FY25 we will continue to consider
the appropriateness of the ERS, both in
the context of the business turnaround,
and returning to business as usual.
We appreciate the patience, support
and feedback we have received from
securityholders over this challenging time
and acknowledge the trust we hold in
steering Lendlease to a brighter future.
M J Ullmer, AO
Chairman
Elizabeth Proust, AO
Chairman, People & Culture Committee
FY24 Remuneration Report Snapshot
Nil
STA awarded
Downward discretion
applied for Group CEO
and KMP to reflect
overall company
performance
76%
of Group CEO
Total Maximum
Remuneration
was performance
based
Nil
LTA awards vested
Long Term Performance
Targets (Relative
TSR, ROE and FUM)
failed to meet challenging
thresholds
FY25 Changes
LTA
change
Linked to 50%
Relative TSR and
50% Statutory ROE
FY25 STA
suspended
Replaced with
Transformation Award
linked to security
price growth
Nil
fixed pay
increase applied
to KMP
Employee Security Plan
To be offered in FY25
Governance
69
70
Lendlease Annual Report 2024
Contents
KMPs covered by this report
74
FY25 KMP Changes
74
Response to FY23 Remuneration Report Strike
75
Executive Reward Strategy
76
Our Remuneration Framework
77
Fixed Remuneration
78
Short Term Award (STA)
78
Long Term Award (LTA)
79
FY24 Group CEO STA Scorecard
81
FY24 Short Term Performance Outcomes
81
FY24 Long Term Performance Outcomes
82
Alignment Between Remuneration Outcomes and
Securityholder Experience
83
Total Remuneration Realised
84
Executive Service Agreements
85
Non Executive Director Fee Policy
86
Non Executive Directors' Fees
86
Board and Committee Fees
86
Travel Fees
86
Remuneration Governance and Risk Management
87
Other Statutory Disclosures
90
FY24 Executive Statutory Remuneration
90
FY24 Non Executive Director Statutory Remuneration
91
FY24 Executive Equity Holdings
91
Executive Equity Based Remuneration - Deferred Securities
92
Executive Equity Based Remuneration - Long Term Awards
93
FY24 Non Executive Director Equity Holdings
94
Abbreviations
AGM
Annual General Meeting
LTA
Long Term Award
CAGR
Compound Annual Growth Rate
LTI
Long Term Incentive
CIFR
Critical Incident Frequency Rate
PMF
Portfolio Management Framework
CLT
Corporate Leadership Team (previously referred to as Global
Leadership Team)
ROE
Return on Equity
CSAT
Customer Satisfaction
ROIC
Return on Invested Capital
ERS
Executive Reward Strategy
RSA
Restricted Securities Award
FUM
Funds Under Management
RTSR
Relative Total Shareholder Return
FY23
Financial year ending 30 June 2023
SBP
Security Based Payment
FY24
Financial year ending 30 June 2024
STA
Short Term Award
GDV
Google Development Ventures
STI
Short Term Incentive
GMR
Global Minimum Requirements
TA
Transformation Award - Options Plan
KMP
Key Management Personnel
TPV
Total Package Value
KPI
Key Performance Indicator
VWAP
Volume Weighted Average Price
Governance
71
KMPs covered by this report
Name
Position
Term as KMP
People &
Culture Committee
Non Executive KMP
Michael Ullmer
Independent Non Executive Chairman
Full Year
X
Philip Coffey
Independent Non Executive Director
Full Year
Nicholas Collishaw
Independent Non Executive Director
Full Year
X
David Craig
Independent Non Executive Director
Full Year
X
Barbara Knoflach1
Independent Non Executive Director
Part Year
Margaret Lui
Independent Non Executive Director
Full Year
X
Elizabeth Proust
Independent Non Executive Director
Full Year
Chair
Nicola Wakefield Evans
Independent Non Executive Director
Full Year
Robert Welanetz
Independent Non Executive Director
Full Year
X
Executive KMP2
Anthony Lombardo
Group CEO
Full Year
Dale Connor
CEO, Australia
Full Year
Simon Dixon
Group CFO
Full Year
Justin Gabbani
CEO, Asia
Full Year
Claire Johnston3
CEO, Americas
Full Year
Frank Krile3
Group CRO
Full Year
Andrea Ruckstuhl4
CEO, Europe
Full Year
1. Appointed 1 October 2023.
2. Whilst the majority of Executive KMP are male, 38% of the Lendlease Corporate Leadership Team are female.
3. Ceased as KMP 30 June 2024.
4. Appointed CEO Europe 3 July 2023. Ceased as KMP 30 June 2024.
Note: The term 'Executives' used throughout this Remuneration Report refers to the Executive KMP listed above, unless
stated otherwise.
FY25 KMP Changes
Based on the new strategic direction announced in May 2024, Lendlease reviewed its organisational structure to align to the
Investments, Development and Construction (IDC) model. The new KMP structure under the revised organisational structure is
as follows:
•
Anthony Lombardo will remain as Group CEO.
•
Simon Dixon will remain as Group CFO.
•
Justin Gabbani appointed as CEO Investment Management effective 1 July 2024.
•
Tom Mackellar appointed as CEO Development effective 1 July 2024.
•
Dale Connor appointed as Group COO/CEO Construction effective 1 July 2024.
•
Penny Ransom appointed as CIO effective 1 July 2024.
Former KMP roles made redundant
•
Frank Krile ceased as Group CRO effective from 31 July 2024.
72
Lendlease Annual Report 2024
Response to FY23 Remuneration Report Strike
At the 2023 Annual General Meeting, Lendlease securityholders
signalled concerns with our remuneration outcomes for FY23,
delivering a first strike against the Remuneration Report. While
disappointing, the feedback was considered carefully by the
Board over the course of FY24 to determine an appropriate
way forward.
Having regard to feedback received from securityholders,
the Board determined that the fundamental structure of
the Executive Reward Strategy remains fit for purpose in
a ‘business as usual’ context. The ERS is a market-aligned
remuneration framework that balances short and long-term
business performance, with significant focus on alignment of
reward to securityholder experience via the delivery of equity.
However, the Board also recognises Lendlease’s current
environment and context, including poor security price
performance and securityholder returns as a result of structural
challenges and a prolonged market downturn. From this
perspective, the Board acknowledged that the FY25 framework
requires greater focus and link to security price recovery and the
delivery of the turnaround strategy.
A key theme arising from the FY23 Remuneration Report feedback relates to the need to stregthen the alignment of KMP reward to
securityholder outcomes. The below table summarises the Board response:
Key Themes
Board Response
Alignment of KMP
reward to
securityholder
outcomes
The key focus area in
responding to the
FY23 strike has been
to strengthen the link
between executive
reward and
securityholder
outcomes.
Zero FY24 Short-Term Award (STA) Outcome
Based on FY24 STA Scorecard results, the Group CEO achieved a STA outcome of 58% of target (42% of maximum).
However, in context of Lendlease’s continued performance challenges (including provisions taken in FY24) and the
impact on the security price, the Board has exercised downward discretion to reduce FY24 STA payments for the Group
CEO and the Corporate Leadership Team (CLT) to zero.
The exercise of discretion in this manner is prudent, reflects the securityholder experience, and recognises the
accountability of the CLT for the performance of the Group as a whole.
STA suspended and replaced with options plan with an Absolute TSR performance hurdle
The FY25 STA will be replaced with a Transformation Award focused on security price recovery. Awards will take
the form of security options, with vesting contingent on achieving a significant improvement in security price over
a two-year performance period. The Board will maintain discretion around the vesting of awards in accordance with
existing protocols.
The Board believes the Transformation Award will support our focus on security price recovery, and allow executives to
be rewarded for their success in this area over an appropriate period.
At this point, the intention is for the STA to be reinstated for FY26. However, this will be considered throughout FY25.
Long-term Award (LTA)
The current LTA remains aligned with our performance in that no LTA awards vested in relation to the performance
period ending in FY24.
To improve our focus on securityholder returns, the FY25 LTA hurdles will be simplified to allocate greater weighting on
just two measures of Relative Total Securityholder Return (TSR) and Statutory Return on Equity (ROE).
Fixed remuneration quantum
In FY24, there were no in-role executive KMP remuneration
increases and none have been proposed for FY25. Lendlease
have also decreased fixed remuneration quantum by 17-25%
when replacing KMP roles, and will continue to ‘right size’ fixed
remuneration as we turnover like-for-like KMP roles.
Due to the significant decline in security price since 2020,
Lendlease is no longer a Top ASX50 company. However, it needs
to be acknowledged that Lendlease remains a globally significant
company operating in a complex environment where our talent is
highly sought.
The new strategy is intended to support a recovery in
security price, bringing Lendlease back closer with the ASX50
remuneration benchmark at which current structures were
originally set.
Disclosure transparency
Lendlease will continue to improve the quality of disclosure
around remuneration decisions, performance measures and
targets in publishing our Remuneration Report and the Notice
of Meeting (NOM). For example, Lendlease will provide detailed
design and key performance conditions underpinning the
Transformation Award that will replace the STA plan for Group
CEO and KMP in FY25.
It is also highlighted that LTA weighting on Relative TSR
increased to 50 per cent and is set with greater levels of stretch
compared to the prevailing market approach. The Relative TSR
hurdle is dislcosed in the Remuneration Report, and the Statutory
ROE hurdle will remain retrospectively disclosed at vesting.
Executive Reward Strategy
Our remuneration framework is designed to support
our strategy and reinforce our culture and values.
Aligned with securityholder interests
Transparent and easy to communicate
Aligned with team behaviours and enterprise leadership
Market competitive to retain highly capable executives
Balanced with a significant portion of remuneration at risk, which is only earned
for outstanding performance
Longer dated and aligned to our earnings profile, reflecting the importance of
urbanisation projects
Risk management focused with clear practices that minimise potential conflicts
of interest and enable effective and aligned decision making
Lendlease Remuneration Principles
Our Strategy
Australia's leading integrated real estate
business with a strong international
investment management capability.
Our Values
Respect, trust, collaboration, excellence,
innovation and integrity guide our behaviours
and underpin our Code of Conduct.
Governance
73
74
Lendlease Annual Report 2024
Our Remuneration Framework
Fixed Remuneration
Short Term Award (STA)
Long Term Award (LTA)
Purpose
To attract and retain highly capable
executive talent.
To provide focus on key
strategic priorities in the relevant
financial year.
To reward for delivering sustained long
term securityholder value.
Approach
Fixed remuneration is
benchmarked against relevant
comparator companies to assess
market competitiveness.
Considers the relative size, scale
and complexity of roles to enable a
fair comparison.
STA is linked to a balanced
scorecard representing key
strategic priorities aligned to
delivering the Group Strategy and
securityholder returns.
Delivered as 50% cash and 50%
deferred as Lendlease securities
released in two equal tranches after
one and two years.
LTA provides an annual grant of ‘at-
risk’ equity to reward for delivering the
Group Strategy, aligned with long term
securityholder returns.
Delivered as rights to Lendlease
securities which are released in four
equal tranches at the end of Y3, Y4, Y5
and Y6.
Link to Performance
Sustained performance and
leadership as an Executive.
STA scorecards are designed to
include a mix of financial and non-
financial performance targets for the
relevant financial year:
• Financial (70%)
• Non-Financial (30%).
LTA is linked to forward-looking, three-
year performance under:
• Relative TSR (1/3)
• Return on Equity (1/3)
• Growth in Investment Return on
Invested Capital (IM ROIC) (1/3).
Award value is linked to security price
movements over three to six years.
Governance
The People & Culture Committee and the Board review our remuneration principles and remuneration framework as
well as determine the STA and LTA outcomes for Executive KMP, which remain subject to the Board's discretion to
reduce or forfiet any unvested awards. The Board retains the discretion to reduce or forfeit any unvested awards if it
considers that vesting of such awards will result in the participant receiving a benefit that would be unwarranted or
inappropriate. Additionally, the Group CEO LTA is submitted for securityholder approval at the AGM.
For more information, refer to the 'Remuneration Governance and Risk Management' section.
Executive Reward Strategy Structure
The following diagram illustrates the structure of the Executive Reward Strategy:
Fixed
Remuneration
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
STA
End of deferral / performance period
LTA
FY24 Remuneration Mix
Target remuneration mix for the Group CEO and Executives (excluding the Group CRO1) is as follows:
1The remuneration mix for the Group CRO in FY24 was: 38% Fixed Remuneration, 31% Target STA and 31% Target LTA.
Governance
75
Fixed Remuneration
This section presents our approach to setting Fixed Remuneration.
Design
How Fixed Remuneration Works
Benchmarking Approach
•
Quantum and remuneration mix are benchmarked to test that total remuneration remains
market competitive.
•
Reviewed periodically as part of the Group's Annual Compensation Review process.
•
Considers the relative size, scale and complexity of roles to enable a fair comparison.
•
Benchmarking considers fixed and total remuneration with reference to the market median and
75th percentile.
•
Primary market benchmarking compares companies with relative revenue and market capitalisation.
•
To supplement the above, companies operating in similar industries and those that Lendlease compete
for talent are also considered, such as Charter Hall Group, Dexus, Goodman Group, GPT Group,
Mirvac Group, Scentre Group, Stockland and Vicinity Centres.
Short Term Award (STA)
This section presents the key features of the STA plan.
STA Design
How the STA Works
Eligibility
•
Group CEO and Executives.
Quantum
•
For FY24, target STA opportunity was as follows:
– Group CEO: 100% of Fixed Remuneration
– Executives (excluding Group CRO): 100% of Fixed Remuneration
– Group CRO: 80% of Fixed Remuneration.
•
The minimum possible STA outcome is zero.
•
The maximum STA outcome is limited to 139% of target STA opportunity for the Group CEO and
140% of target STA opportunity for other Executives.
Funding
•
The Board determines the pool of funds to be made available to reward Executives, with reference to
Group financial and non financial performance.
•
The Board examines safety performance and the overall health of the business (including a broader
set of metrics around origination, sustainability and how we have managed risk).
Key Performance Indicators
•
Group CEO and Executive scorecards, including:
– 70% Financial Performance (Group Operating Profit After Tax, Gearing, Development -
Completions, Construction - EBITDA margin, Investment Management - EBITDA margin)
– 30% Non Financial Performance (safety, sustainability, customer and people).
•
Refer to page 78 for a summary of the FY24 Group CEO scorecard.
•
Lendlease is committed to the safety and wellbeing of all of its employees. Whilst the assessment
is not structured formulaically or as a ‘gateway’ measure, health and safety outcomes are taken into
consideration by the Board in assessing the appropriateness of STA outcomes.
•
The People & Culture Committee considers feedback from multiple sources to consider ‘how’
performance outcomes are achieved:
– Executive input: Group CFO and Group CRO
– Board committees: the Audit Committee, Risk Committee, and Sustainability Committee.
Delivery
•
50% paid as cash in September following the assessment of performance.
•
50% deferred as Lendlease securities released in two equal tranches after one and two years.
FY25 STA Changes
For FY25, the STA has been suspended and replaced with a Tranformation Award (TA) focused on security price recovery. TA will
be delivered as market-priced security options, with vesting contingent on achieving significant security price growth over a two
year horizon. Board discretion in relation to safety will apply in line with existing protocols.
76
Lendlease Annual Report 2024
Long Term Award (LTA)
This section presents the key features of the 2024 LTA (granted in September 2023).
LTA Design
How the LTA Works
Eligibility
•
Group CEO and Executives.
Quantum
•
The maximum face value of the 2024 LTA award granted in September 2023 is as follows:
– Group CEO: 178% of Fixed Remuneration
– Executives (excluding Group CRO): 180% of Fixed Remuneration
– Group CRO: 144% of Fixed Remuneration.
Delivery
•
Rights to acquire securities, subject to specific performance conditions and continued tenure.
•
The number of performance rights is adjusted up or down at vesting based on performance over the
assessment period.
•
The award may be settled in cash or other means at the Board’s discretion.
Determining the
Number of
Performance Rights
•
Face value - VWAP of stapled securities traded on the ASX over the 20 trading days prior to the release of the full year
results preceding the grant date.
Performance Period
•
Three years.
Deferral
•
Released in four equal tranches at the end of Y3, Y4, Y5 and Y6.
•
The timeframe reflects a balance between reward that motivates Executives while reflecting the ‘long tail’ of
profitability and risk associated with ‘today’s decisions’.
Performance Hurdles
•
The Board believes that these measures provide a suitable link to long term securityholder value creation.
•
While the Board appreciates that there are, at times, differing views held by stakeholders, we believe that these
measures provide the appropriate balance between market and non-market measures.
Market Measure
Non Market Measures
Relative Total
Securityholder (RTSR)
– 1/3
Average Operating Return
on Equity (ROE) – 1/3
CAGR % in IM ROIC– 1/3
Rationale
•
TSR incentivises
Executives to deliver
returns that
outperform what a
securityholder could
achieve in the market
and promotes
management to
maintain a strong
focus on
securityholder
outcomes.
•
Operating ROE reflects the capital
intensive nature of Lendlease’s activities
and is an important long term measure
of how well the management team
generates acceptable earnings from
capital invested and rewards decisions
in respect of developing, managing,
acquiring and disposing of assets.
•
CAGR % in IM ROIC
reflects the Investment
segment's capital intensive
nature and assesses
the ability to generate
acceptable earnings, which
further aligns with the
securityholder experience
and a greater mix of stable
recurring earnings.
Definition
•
TSR is measured
by the growth
in security price
and any dividends/
distributions paid
during the
performance period.
•
Operating ROE is calculated as the
Group’s Operating Profit After Tax
divided by the arithmetic average
of beginning, half and year end
securityholders’ equity.
•
Performance is based on the average
Operating ROE results over the three
year performance period.
•
CAGR % in IM ROIC is
calculated based on the
average Investments (IM)
ROIC results over the
performance period.
Target
Setting
•
TSR is measured
against companies that
comprise the Standard
& Poor’s (S&P)/
Australian Securities
Exchange (ASX)
100 index.
•
Operating ROE target is reviewed
annually and is set within the
published range of the Group’s Portfolio
Management Framework which was
between 8% and 10% in FY241.
•
Operating ROE target aims to drive
outperformance without incentivising
excessive risk taking.
•
The Board believes that the vesting
range provides a realistic goal at the
lower end (in the context of risk free
rates of return, cost of capital and
market consensus) and a stretch at the
upper end.
•
The Board is conscious of the impact
that debt can have on the Operating
ROE result and has governance
protocols in place to monitor this.
•
IM ROIC hurdles are
reviewed annually and
were set with reference
to the Group’s Portfolio
Management Framework
(PMF) in FY24.
Governance
77
LTA Design
How the LTA Works
Vesting Schedule (as
% of Maximum LTA)
RTSR
Percentile
Ranking
% of Maximum LTA
Average
Operating ROE
% of Maximum LTA
CAGR % in IM
ROIC
% of
Maximum LTA
Below 50th
Nil
Below threshold
Nil
Below threshold
Nil
At the 50th
40%
At threshold
0%
At threshold
0%
At or above
the 50th and
below the
75th
Straight line vesting
between 40% and 100%
Between threshold
and maximum
Straight line vesting
between 0%
and 100%
Between
threshold and
maximum
Straight line
vesting
between 0%
and 100%
75th or
greater
100%
At or
above maximum
100%
At or above
maximum
100%
Retesting
•
No retesting.
•
If the performance hurdle is not met at the time of testing, the awards are forfeited.
Distribution
•
Distributions are not paid, unless and until vesting conditions are met.
1. PMF was retired at the end of FY24.
FY25 LTA Changes
In FY25, LTA plan will move from referencing three to two performance hurdles focussing on securityholder returns. The changes
will include:
•
Removal of CAGR % in IM ROIC;
•
Increased weighting from 33% to 50% on Relative Total Shareholder Return (TSR); and
•
Increased weighting from 33% to 50% on Statutory Return on Equity (ROE).
78
Lendlease Annual Report 2024
FY24 Group CEO STA Scorecard
The Board in assessing STA outcomes for the CEO and the executive team have given consideration to both financial outcomes and
strategic progress.
KPI
Weighting
FY24 Result
Financials 70%
Operating Profit After
Tax ($m)
35%
OPAT of $263m was achieved, marking a
slight increase from FY23 but falling below the
threshold for the period. This result reflects delays
in transaction timing for key divestitures and
impacted Development transactions, which were
not completed as anticipated. Additionally, the
timing of deferred transactions contributed to a
reduction in OPAT due to higher borrowing costs.
Group Gearing Cash
Flow Target (%)
5%
Group gearing was below threshold for the period
at 21% as a result of delayed Communities
transaction impacting the timing of expected
cash inflows.
Investments – Funds
Management EBITDA
margin (%)
10%
The Funds Management EBITDA margin of 41.5%
is above target and has been driven by improved
performance from Australia and Asia regions.
Development –
Completions ($b)
10%
$8.2b of Development completions delivered
were above target in FY24, highlighted by key
projects such as One Sydney Harbour and
TRX Retail.
Construction – EBITDA
margin (%)
10%
An above target Construction EBITDA margin of
2.1% reflects improved contribution from Asia,
which was partially offset by a lower contribution
from Australia.
Non Financials
30%
Safety – Critical
Incident Frequency
Rate (CIFR) (%)
7.5%
The FY24 CIFR result achieved was slightly above
target. The target was set to achieve <0.570, the
Group’s result was 0.569. There were no fatalities
in the reporting period.
Sustainability - carbon
emission (000's tonnes)
7.5%
The Group has continued to make progress on our
carbon emissions targets, recording 99k tonnes
and beating the target maximum of <100k tonnes.
Customer Satisfaction
(CSAT score)
7.5%
Customer Satisfaction of 7.9 out of 10 is
in line with FY23 result and has achieved
target outcome.
People - Employee
Engagement (%)
7.5%
Employee engagement for the period was 60%,
representing a year-on-year decrease of 1% from
FY23, falling below threshold for the target.
Downward Discrection on Group CEO STA outcome to zero
Based on the above STA Scorecard outcomes, the Group CEO's STA for FY24 resulted in an achievement of 58% of target (42%
of maximum), which would normally deliver a STA outcome of $1,045,800.
However, in light of the continued decline in securityholder experience, the Board exercised downward discretion to reduce FY24
STA payments for the Group CEO and the Corporate Leadership Team (CLT) to zero.
Governance
79
FY24 Short Term Performance Outcomes
The following table outlines the FY24 STA opportunity and outcomes for the CEO and KMP.
A$’0001
Target STA
opportunity
Maximum STA
opportunity
Total STA
awarded
STA awarded -
cash2
STA awarded -
deferred3
Total STA
awarded as %
of Maximum
STA4
Total STA
forfeited as %
of Maximum
STA4
Anthony Lombardo
1,800
2,500
-
-
-
0%
100%
Dale Connor
1,200
1,680
-
-
-
0%
100%
Simon Dixon
1,000
1,400
-
-
-
0%
100%
Justin Gabbani
950
1,330
-
-
-
0%
100%
Claire Johnston
1,273
1,782
-
-
-
0%
100%
Frank Krile
800
1,120
-
-
-
0%
100%
Andrea Ruckstuhl
835
1,169
-
-
-
0%
100%
1. Remuneration is reported in AUD based on the 12 month average historic foreign exchange rates for FY24 (rounded to two decimal places): SGD 0.88 (applied to Justin
Gabbani), USD 0.66 (applied to Claire Johnston) and GBP 0.52 (applied to Andrea Ruckstuhl).
2. 50% of the FY24 STA would have been paid as cash in September 2024.
3. 50% of the FY24 STA would have been granted as Deferred Securities, released in two equal tranches after one and two years.
4. Rounded to the nearest decimal place.
FY24 Long Term Performance Outcomes
The table below presents the performance and vesting outcomes for awards that were tested in FY24. The Board sets challenging LTA
targets. The 2022 LTA was tested following the end of the financial year, resulting in nil vesting for FY24.
LTA1
Performance Period
Performance
Hurdle2
Performance
Outcome
Vesting Outcome
Overall Vesting
Outcome (%
Maximum LTA)
% Maximum
LTA forfeited
2022 LTA
1 July 2021 to 30 June 2024
RTSR
Below Threshold
0%
0%
0%
(3 years)
ROE
Below Threshold
0%
FUM
Below Threshold
0%
2023 LTA
1 July 2022 to 30 June 2025
RTSR
Peformance period ongoing
(3 years)
ROE
FUM
2024 LTA
1 July 2023 to 30 June 2026
RTSR
(3 years)
ROE
IM ROIC
1. Refer Note 35 of the Notes to Consolidated Financial Statements for details of LTI / LTA Awards granted in prior financial years.
2. Growth in FUM was replaced with an Investments Return on Invested Capital (IM ROIC) measure from FY24 onwards.
Adjustment to Denis Hickey's Incentive Award
GDV performance adjustment
In FY22, Denis Hickey was issued a one–off incentive aligned to key delivery milestones under the Google Development Ventures
(GDV) project over a 3-year performance period from 1 July 2021 to 30 June 2024. At the time of grant, this incentive reflected the
criticality and scope of the GDV project.
The Board retains an overarching discretion to reduce or forfeit any unvested awards if it considers that the vesting of the awards would
result in receipt of a benefit that was unwarranted or inappropriate.
In FY23, the Board exercised discretion to carry out an interim assessment on the GDV performance hurdles relating to FY22 (Year 1)
and FY23 (Year 2) project key milestones. The Board determined that 51% of the total GDV Incentive award would lapse based on past
milestone outcomes during FY22 and FY23.
In FY24, the Board reviewed the remaining 49% GDV Incentive milestones, and in consideration of the cancellation of the GDV project
and surrounding circumstances, determined the final vesting outcome be zero.
80
Lendlease Annual Report 2024
Alignment Between Remuneration Outcomes and Securityholder Experience
STA outcomes and securityholder experience
In May 20241, Lendlease announced a new strategy to simplify the business with a focus on strengthening its market-leading Australian
business and international Investments platform. Aligned to the new strategic direction, the Group has already progressed in the
recycling of capital through announced transactions, exiting international construction in Asia and the US, and is accelerating capital
release from its offshore development projects and assets.
Key outcomes delivered in FY24 aligned to these strategic objectives included:
•
Recorded Funds Management EBITDA margin of 41.5% through improved performance across the scale Australia and Asia
platforms, while investing for future growth.
•
Development completions of $8.2b, driven by the One Sydney Harbour project in Sydney and The Exchange, TRX Retail mall
in Malaysia.
•
Supported the restocking of the Australian Development Pipeline through securing the Queen Victoria Market project with an
estimated end value of approximately $1.3b.
•
Delivered a resilient Construction result in the context of industry challenges.
•
The successful completion of the announced Cost Optimisation initiative, leading to the reduction of ~$210m of annual costs from
~734 FTEs.
1 Refer to the ASX Announcement "Lendlease Strategy Update" released on 27 May 2024.
FY20
FY21
FY22
FY23
FY24
Statutory Profit after Tax (PAT) Attributable to Securityholders ($m)
(310)
222
(99)
(232)
(1,502)
Core Operating Profit After Tax (PAT) Attributable to Securityholders ($m)
206
377
276
257
263
Total Dividends / Distributions ($m)
191
186
110
110
111
Statutory Earnings per Stapled Security (EPS) (cents) excluding
treasury securities
(51.8)
32.5
(14.5)
(34.0)
(219.9)
Core Operating Earnings per Stapled Security (EPS) (cents)
34.2
54.8
40.1
37.3
38.1
Annual Total Securityholder Return (%)
(2)
(6)
(19)
(13)
(21)
Statutory Return on Equity (ROE) (%)1
(4.7)
3.2
(1.4)
(3.4)
(25.4)
Core Operating Return on Equity (ROE) (%)2
3.1
5.4
4.0
3.8
4.4
Closing Security Price as at 30 June ($)3
12.37
11.50
9.11
7.75
5.41
CEO STA outcome (% maximum opportunity)
23%
0%4
48%
32%
0%
Executive STA outcomes (% maximum opportunity)
17% - 27%
17% - 40%
55% - 61%
25% - 46%
0%
LTI / LTA vesting outcome5
0%
0%
0%
0%
0%
1. Statutory ROE is calculated as the annual Statutory Profit after Tax attributable to securityholders divided by the arithmetic average of beginning, half year and year end
securityholders' equity.
2. Core Operating ROE is calculated as annual Core Operating Profit after Tax attributable to securityholders divided by the arithmetic average of beginning, half year and
year end securityholders' equity. Core Operating ROE replaces Statutory ROE as an LTA hurdle from FY21 onwards reflected the impact management have in creating value
for securityholders.
3. FY24 reflects 28 June 2024 closing security price.
4. Reflects STA outcome for the Former Group CEO, Steve McCann for the period 1 July 2020 to 31 May 2021. The STA outcome for the Current Group CEO, Tony Lombardo
was 30% for the period from 1 June 2021 to 30 June 2021.
5. Relating to the LTA grant where the performance period ends in the relevant financial year. The FY20 result relates to the 2018 LTI award.
Governance
81
Total Remuneration Realised
The table below presents non-statutory information which provides additional detail in relation to the remuneration paid to, or vested
for, Executives in respect of FY24. For statutory information refer to page 86.
A$’0001
Fixed
Remuneration
Previous
years' RSA2
Previous
years'
deferred
securities
vested
FY24 STA
awarded
(cash
component)
Previous
years' LTA
awards
FY24 Total
Remuneration
Realised
Awards
forfeited or
lapsed
Current Executives
Anthony Lombardo
1,800
95
236
-
-
2,131
(5,700)
Dale Connor
1,200
95
199
-
-
1,494
(3,840)
Simon Dixon
1,000
-
125
-
-
1,125
(3,200)
Justin Gabbani
950
-
181
-
-
1,131
(2,771)
Claire Johnston
1,273
-
143
-
-
1,416
(1,782)
Frank Krile
1,000
-
189
-
-
1,189
(2,560)
Andrea Ruckstuhl
782
-
154
-
-
936
(1,169)
Former Executives
-
-
-
-
Denis Hickey3
-
95
222
-
-
317
(2,702)
Neil Martin4
-
133
183
-
-
316
(2,266)
1. Remuneration is reported in AUD based on the 12 month average historic foreign exchange rates for FY24 (rounded to two decimal places): SGD 0.88 (applied to Justin
Gabbani), USD 0.66 (applied to Claire Johnston) and GBP 0.52 (applied to Andrea Ruckstuhl).
2. The RSA vests following notification by the Board or the Board’s delegate that vesting has occurred. The first tranche (25%) vests after three years, and the remaining tranches
(75%) will be deferred and will vest equally on or around four, five and six years after 1 September 2020 grant date.
3. Denis Hickey ceased as KMP 31 October 2022.
4. Neil Martin ceased as KMP 30 June 2023.
Definitions
Fixed Remuneration
Includes the TPV / Base Salary plus superannuation (where applicable) received during FY24.
Previous years' RSA and
security price growth / decline
Includes the RSA that was granted in September 2021 and reached the end of the deferral period on
30 June 2024. The value reflects the number of securities multiplied by the security price at the end
of the deferral period. 25 per cent of this award value will be released in September 2024 and the
remaining 75 per cent will be released in three equal tranches in September 2025, 2026 and 2027,
subject to malus provisions. Also includes the value of the distribution equivalent amounts paid as cash
on the RSA.
Previous years' deferred
securities vested
Includes previously granted deferred securities that are not subject to hurdles such as Deferred STA,
Deferred Equity Awards, and sign-on awards. The value reflects the number of securities that vested in
FY24 multiplied by the security price at vesting, and includes the value of any distribution equivalent
amounts received at vesting.
FY24 STA awarded
(cash component)
Reflects the 50% cash portion of the STA awarded in relation to FY24 performance to be paid in
September 2024.
Previous years' LTA awards
Includes the 2022 LTA that reached the end of the performance period on 30 June 2024, vesting in
September 2024. The value reflects securities scheduled to vest multiplied by the grant price.
Awards forfeited or lapsed
The value reflects the maximum number of securities that were forfeited / lapsed in respect of FY24
multiplied by the grant price plus the value of the forfeited portion of the maximum FY24 STA.
Executive Service Agreements
An overview of key terms of employment for current Executives is provided below:
Contract Term
Group CEO
Other Executives
Contract type
Permanent
Permanent
Notice period
by Lendlease
12 months
6 months
Notice period by executive
12 months
6 months
Termination Payment
All Executives have termination benefits that are within the limit allowed by the Corporations Act 2001 without
securityholder approval. Specifically, in the case where the Executive is not employed for the full period of
notice, a payment in lieu of notice may be made.
Treatment of unvested awards depends on the reason for termination:
•
Terminated for cause: Awards lapse.
•
Terminated for poor performance: Board discretion.
•
Resignation (engaged in activities that are competitive with the Group): Awards lapse.
•
‘Good leavers’: Awards remain on foot subject to the original vesting conditions. LTA granted from FY23
onwards are prorated for good leavers based on time served.
82
Lendlease Annual Report 2024
Non Executive Director Fee Policy
Non Executive Directors’ fees
The maximum aggregate remuneration payable to Non Executive Directors is $3.5 million per year, as approved at the 2015 Annual
General Meeting.
Board and Committee Fees
Non Executive Directors receive a Board fee and fees for chairing or participating on Board committees:
A$’000
Board
Nominations
Committee
People & Culture
Committee
Risk Committee
Audit Committee
Sustainability
Committee
Chair Fee
640
1
36
48
48
48
48
Member Fee
160
Nil
36
Nil
36
36
1. The Chairman does not receive extra fees for participating on committees
Board and committee fees are paid as cash. Superannuation contributions are paid in addition to the Board and committee fees outlined
above in accordance with superannuation legislation and are capped at the Maximum Superannuation Contribution Base.
Non Executive Directors are not entitled to retirement benefits other than superannuation.
There were no increases to Non Executive Director fees during FY24.
Travel Fees
Board meetings are scheduled in Australia and in each of the regions where Lendlease operates. As an international company, the Board
program is formulated to reflect the geographic spread of the Lendlease businesses. Generally, the program runs over three to five days
and includes a number of activities outside the formal meeting. These include business briefings, presentations from external sources,
project site visits, client meetings, and networking events with employees and key stakeholders. Where deeper project reviews are
required, the program may take up to five days.
The program is an important element of the Board’s activities to enable the Non Executive Directors to obtain the required deep
understanding of operations across the Group.
Where significant additional time has been spent travelling to fulfil the requirements of the program, fees are paid to compensate Non
Executive Directors for the extra time commitment:
A$
Fee (each way)
Travel less than 4 hours
Nil
Travel between 4 and 10 hours
2,800
Travel over 10 hours
6,000
In FY24, one Board meeting was scheduled for offshore, in London in October 2023. All other Board meetings were undertaken
in Australia.
Governance
83
Remuneration Governance and Risk Management
Robust governance is a critical part of Lendlease’s approach to executive remuneration. The diagram below illustrates the roles various
stakeholders played in making remuneration decisions at Lendlease in FY24:
Independent
Remuneration Advisor
The Board and People & Culture
Committee engage advisors (EY) to
provide advice or information.
Their input is used to guide Board
and Committee decisions
During the year, advisors did
not provide a remuneration
recommendation as defined in
Section 9B of the Corporations
Act 2001
The Board is satisfied that any advice
provided by advisors was made free
from undue influence from any of
the KMP given the structure of the
engagement
Management
The Global CEO recommends Fixed
Remuneration and STA outcomes for
his direct reports (for approval by the
People & Culture Committee)
The Group Chief Financial Officer
and Group Chief Risk Officer present
on the ‘Health of the Business’ when
the Committee is considering STA
outcomes
Recommends potential approaches
for developing and implementing
the Executive Reward Strategy and
structure
Provides information relevant to
remuneration decisions and, if
appropriate liaises with advisors to
provide factual information relating
to company processes, practices and
other business issues; and provide
management’s perspectives
Audit Committee
Assists in setting and assessing
financial targets for remuneration
purposes
Assesses and advises of any
audit matters which may impact
remuneration outcomes
The Chair of the Audit Committee
is a member of the People &
Culture Committee
Risk Committee
Advises of risk issues and/or
conduct matters to assist in
determining an appropriate Risk
adjustment for STA outcomes
Sustainability Committee
Assists in setting and assessing
Safety/Sustainability related Key
Performance Indicators
People & Culture Committee
Assists in establishing appropriate policies for people management and
remuneration across the Group
Reviews and recommends the goals, performance and remuneration of
other Executives
Undertakes a holistic assessment of annual performance when determining
STA outcomes, including input from other Committees and Management
Regularly considers matters outside of remuneration – including organisational
culture, talent development and succession, and feedback from employees through
Our People Survey
Board
The Board has overall responsibility for Executive and Non Executive Director remuneration at Lendlease
The Board assesses the performance of and determines the remuneration outcomes for the Global CEO
84
Lendlease Annual Report 2024
Risk management and governance processes apply across remuneration timelines, aligned with our business cycle. We have short term,
long term and ongoing mechanisms:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Long term
• Long dated performance periods (up to 3 years)
• Significant portion of remuneration delivered in equity
• Remuneration deferral (up to 6 years)
Short term
• Significant portion of annual opportunity at
risk and subject to performance
• Holistic assessment of annual performance
• Input from Risk committee
Ongoing
• Board discretion
• Malus
• Guiding principles
(remuneration adjustments
arising from safety incidents)
See below for
details of ongoing
Risk Management
and Governance
Mechanisms
• Change of control
• Mandatory securityholding
• Securities trading policy
• Hedging
• Independent advisor governance protocols
Overall Board Discretion
•
The Board makes, reviews and approves decisions concerning executive remuneration throughout the
year. The Board uses its discretion to influence individual outcomes or to steer management towards
appropriate outcomes.
Malus
•
The Board retains an overarching discretion to reduce or forfeit any unvested awards (during the deferral
period beyond the performance testing period) if it considers that vesting of such awards would result in the
participant receiving a benefit that was unwarranted or inappropriate.
Guiding principles
for determining
remuneration
adjustments arising
from safety incidents
•
To inform robust decision making in relation to remuneration adjustments arising from safety incidents, the
Board formalised a set of guiding principles and relevant factors in FY22. The key guiding principles are
as follows:
– Our objective is to learn from incidents and to reinforce an open dialogue and safety culture. Our people
must have confidence that sharing safety related information supports this objective and helps to identify
how we will adapt in the future.
– As the facts and circumstances surrounding each incident are unique, decision making is not prescriptive or
formulaic and requires the application of judgement.
– To facilitate a consistent approach to decision making, rather than the application of a consistent outcome,
the following set of relevant factors are used by the Board to evaluate the application of any remuneration
adjustments to be made arising from safety incidents:
Safety Leadership
How is safety leadership demonstrated in the relevant
business / project?
Safety Performance
How has the relevant business / project performed against safety
performance indicators?
Findings
In the event of a fatality, what was Lendlease's role based on
internal investigations?
Availability of new information
As events unfold over time, has new and pertinent information
emerged from external investigations?
Change of Control
•
The early vesting of any unvested awards may be permitted by the Board in other limited circumstances
such as a change in control of Lendlease. In these circumstances the Board will determine the timing and
proportion of any unvested awards that vest.
Governance
85
Mandatory
Securityholding
•
The current Mandatory Securityholding Policy was reviewed and updated in February 2023 to standardise
one globally consistent approach.
•
The Group CEO and Executives are required to accumulate and maintain a significant personal investment
in Lendlease securities. This policy encourages Executives to consider long term securityholder value when
making decisions.
What is the Mandatory Securityholding requirement?
Mandatory Securityholding Requirement
Group CEO
150% of TPV
Executives (Australia)
100% of TPV
Executives (International)
100% of Base Salary
What is counted towards the Mandatory Securityholding requirement?
Included
Personally held securities
Vested or unvested securities subject to a time-based hurdle only (i.e., RSA, LTA Minimum and Deferred STI/STA)
•
The Mandatory Securityholding requirement is a set number of securities based on the 20-day VWAP on the
date of appointment to the Corporate Leadership Team.
Until the Mandatory Securityholding requirement is reached, 50 per cent of any vested equity awards (e.g.
Deferred STI, Deferred STA, RSA, LTI or LTA) will be subject to a disposal restriction.
•
Executives are required to achieve the Mandatory Securityholding requirement within five years of their
appointment to a KMP role.
•
The Board may review the number of mandatory securities to be held to account for movements in
security price using 20-day VWAP leading up to 30 June financial year end and movements in salary. The
Board will have regard to what is an appropriate level of security holding to demonstrate alignment with
securityholder interests.
•
Progress toward the minimum requirement is outlined in the Executive Equity Holdings table on page 87.
Securities Trading Policy •
The Lendlease Securities Trading Policy applies to all employees of the Lendlease Group. In accordance with
the policy, Directors and Executives may only deal in Lendlease securities during designated periods.
Hedging
•
Directors and Executives must not enter into transactions or arrangements that operate to limit the economic
risk of unvested entitlements to Lendlease securities. No Director or Executive may enter into a margin loan
arrangement in respect of unvested Lendlease securities.
•
Deferred STI, Deferred STA, RSA, LTI and LTA awards are subject to the Securities Trading Policy, which
prohibits Executives from entering into any type of ‘protection arrangements’ (including hedging, derivatives
and warrants) in respect of those awards before vesting.
Independent Advisor
Governance Protocols
•
Strict governance protocols are observed so that advisors’ advice to the Committee is made free from undue
influence by Executive KMP:
– Advisors are engaged by, and report directly to, the Chair of the People & Culture Committee
– The agreement for the provision of any remuneration consulting services is executed by the Chair of the
People & Culture Committee on behalf of the Board
– Any reports delivered by advisors were provided directly to the Chair of the People & Culture
Committee; and
– Advisors are permitted, where approved by the People & Culture Committee Chair, to speak to
management to understand company processes, practices and other business issues and obtain
management’s perspectives.
86
Lendlease Annual Report 2024
Other Statutory Disclosures
FY24 Executive Statutory Remuneration
A$’0001
Short term benefits
Post-
employment
benefits
Security Based
Payments2
Name
Year
Cash
salary3
STA
cash4
Non
monetary
benefits5
Super-
annuation6
Other
long term
benefits7
Sub-
Total
LTA
Deferred
STI
Termi-
nation
benefits
Total
%
Performance
Based8
Current Executives
Anthony Lombardo
2024
1,782
-
111
35
29
1,957
271
454
-
2,682
27%
2023
1,788
405
111
33
29
2,366
952
450
-
3,768
48%
Dale Connor
2024
1,182
-
27
34
19
1,262
328
373
-
1,963
36%
2023
1,187
329
25
31
19
1,591
918
380
-
2,889
56%
Simon Dixon
2024
972
-
26
27
16
1,041
(35)
267
-
1,273
18%
2023
975
250
22
25
16
1,288
422
279
-
1,989
48%
Justin Gabbani
2024
950
-
67
-
-
1,017
3
324
-
1,344
24%
2023
912
299
23
-
-
1,234
361
306
-
1,901
51%
Claire Johnston
2024
1,273
-
101
-
-
1,374
188
310
-
1,872
27%
2023
805
165
173
-
-
1,143
378
271
-
1,792
45%
Frank Krile
2024
973
-
37
30
16
1,056
(25)
235
7439 2,009
10%
2023
975
200
(36)
28
16
1,183
294
305
-
1,782
45%
Andrea Ruckstuhl
2024
950
-
99710
-
-
1,947
212
93
-
2,252
14%
Total
2024
8,082
-
1,366
126
80
9,654
942
2,056
743 13,395
22%
2023
6,641
1,647
318
118
79
8,805
3,324
1,990
-
14,121
49%
1. 2024 remuneration is reported in AUD based on the 12 month average historic foreign exchange rates for FY24 (rounded to two decimal places): SGD 0.88 (applied to Justin
Gabbani), USD 0.66 (applied to Claire Johnston), EUR 0.61 (applied to Andrea Ruckstuhl Jul to Sept 2023 payments) and GBP 0.52 (applied to Andrea Ruckstuhl Sept 2023 to
June 2024 payments). 2023 remuneration is reported in AUD based on the 12 month average historic foreign exchange rates for FY23 (rounded to two decimal places): SGD
0.91 (applied to Justin Gabbani), USD 0.67 (applied to Claire Johnston).
2. Security based payments reflect the accounting expense on a fair value basis. Security based payments are issued either as indeterminate rights and performance rights or as
deferred securities. LTI/LTA includes the accounting expense for the RSA. These relate to securities granted in prior years.
3. Includes the payment of cash allowances such as motor vehicle allowance and the value of the distribution amounts paid as cash on the RSA.
4. Reflects 50 per cent of the FY23 STA that is paid as cash in September 2023.
5. Non monetary benefits may include items such as car parking, relocation and expatriate benefits (such as house rental, health insurance, shipping of goods and tax return
preparation), motor vehicle costs, travel benefits and annual leave.
6. Superannuation includes the value of insurance premiums funded by Lendlease for Australian Executives who are members of the Lendlease default superannuation fund.
7. Other Long Term Benefits represents the accrual of long term leave entitlements (e.g. long service leave).
8. Performance based includes STA Cash, LTA and Deferred STI, relating to years other than FY24.
9. Frank Krile ceased to be KMP 30 June 2024 and exited by redundancy 31 July 2024. Termination benefit received is comprised of a Payment in Lieu of Notice and an
additional restraint payment, paid in FY25, expensed in FY24.
10.Includes grossed up relocation costs covering Andrea Ruckstuhl and his family's relocation from Italy to London (covering a one-off housing lump sum, school fee support, tax
and immigration advice, relocation and shipping costs and insurances).
Governance
87
FY24 Non Executive Director Statutory Remuneration
A$’000
Short term benefits
Post-employment
benefits
Name
Year
Base fees
Committee
chair fees
Committee
membership
fees
Travel fees
Superannuation1
Total
Current Non Executive Directors
Michael Ullmer
2024
640
-
-
24
27
691
2023
640
-
-
30
25
695
Philip Coffey2
2024
160
44
36
12
27
279
2023
160
48
36
30
25
299
Nicholas Collishaw3
2024
160
8
72
12
27
279
2023
160
-
72
30
25
287
David Craig
2024
160
48
36
12
27
283
2023
160
48
36
30
25
299
Barbara Knoflach4
2024
120
-
6
48
15
189
Margaret Lui
2024
160
-
72
46
23
301
2023
93
-
18
11
9
131
Elizabeth Proust
2024
160
48
36
12
27
283
2023
160
48
36
30
25
299
Nicola Wakefield Evans
2024
160
48
36
12
27
283
2023
160
48
36
30
25
299
Robert Welanetz
2024
160
36
72
78
26
372
2023
160
24
72
81
25
362
Total
2024
1,880
232
366
256
226
2,960
2023
1,693
216
306
272
184
2,671
1. Directors have superannuation contributions paid on their behalf in accordance with superannuation legislation.
2. Philip Coffey ceased as Chair of Risk Committee in April 2024.
3. Nicholas Collishaw became Chair of Risk Committee in May 2024.
4. Barbara Knoflach was appointed as a Non Executive Director on 1 October 2023. Audit Committee member from May 2024.
FY24 Executive Equity Holdings
Name
Number of
securities
required
under the
mandatory
securityholding
at period end1
Securities
held at
beginning of
financial year
Securities
received
during the
financial year2
Other net
changes to
securities
Securities
held at end of
financial year
Unvested
unhurdled
deferred
securities /
rights3
Total
securities /
performance
rights that
count
towards the
mandatory
securityholding
requirement
Current Executives
Anthony Lombardo
280,000
86,895
50,235
15,000
152,130
138,007
290,137
Dale Connor
124,000
53,772
48,911
-
102,683
121,324
224,007
Simon Dixon
104,000
66,889
16,059
-
82,948
47,920
130,868
Justin Gabbani
82,000
41,957
23,225
-
65,182
57,860
123,042
Claire Johnston4
125,000
70,058
12,620
-
82,678
58,615
141,293
Frank Krile5
98,000
462,722
24,211
(24,211)
462,722
42,531
505,253
Andrea Ruckstuhl6
111,000
-
10,437
-
10,437
15,992
26,429
Total
782,293
185,698
(9,211)
958,780
482,249
1,441,029
1. The current Mandatory Security Holding requirement was set as of September 2022.
2. For Executives, securities received relate to security entitlements under employee benefit vehicles.
3. Under the updated policy, unvested deferred securities and performance rights which are only subject to a time-based vesting hurdle count towards mandatory
securityholding requirements.
4. Claire Johnston ceased as KMP 30 June 2024.
5. Frank Krile ceased as KMP 30 June 2024.
6. Andrea Ruckstuhl was appointed to the CEO, Europe role on 3 July 2023 and ceased as KMP 30 June 2024.
88
Lendlease Annual Report 2024
Executive Equity Based Remuneration – Deferred Securities
Name
Plan
Performance
Year
Grant date
Vesting date
Number
granted
Fair value
per
security $1
Total fair
value at
grant date
$1
Expense
for the
year
ended
30 June
2024 $
Remaining
Expense
for future
years $2
Current Executives
Anthony Lombardo
Deferred STA
2022
Sept 2022
Sept 2023-2024
29,621
10.13
300,004
150,002
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
52,136
7.77
405,002
303,752
101,250
Total
81,757
705,006
453,754
101,250
Dale Connor
Deferred STA
2022
Sept 2022
Sept 2023-2024
25,000
10.13
253,203
126,601
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
42,328
7.77
328,812
246,609
82,203
Total
67,328
582,015
373,210
82,203
Simon Dixon
Deferred STA
2022
Sept 2022
Sept 2023-2024
15,736
10.13
159,376
79,688
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
32,184
7.77
250,012
187,509
62,503
Total
47,920
409,388
267,197
62,503
Justin Gabbani
Deferred STA
2022
Sept 2022
Sept 2023-2024
17,606
10.13
178,315
89,158
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
40,254
7.77
312,702
234,526
78,176
Total
57,860
491,017
323,684
78,176
Claire Johnston
Deferred STI
2022
Sept 2022
Sept 2023-2024
12,135
10.13
122,904
61,452
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
32,320
7.77
251,068
188,301
62,767
Operational
Leaders
Incentive
2022
Sept 2022
Sept 2024-2025
14,160
10.13
143,440
59,756
33,862
Total
58,615
517,412
309,509
96,629
Frank Krile
Deferred STA
2022
Sept 2022
Sept 2023-2024
16,785
10.13
170,000
85,000
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
25,746
7.77
200,000
150,000
50,000
Total
42,531
370,000
235,000
50,000
Andrea Ruckstuhl
Deferred STA
2023
Sept 2023
Sept 2024-2025
15,992
7.77
124,230
93,172
31,058
Total
15,992
124,230
93,172
31,058
Former Executives
Neil Martin
Deferred STA
2022
Sept 2022
Sept 2023-2024
22,988
10.13
232,825
116,412
-
Deferred STA
2023
Sept 2023
Sept 2024-2025
30,864
7.77
239,758
239,758
-
Total
53,852
472,583
356,170
-
1. The fair value at grant date is the value of the deferred short term award (as advised to the executive).
2. The maximum value of equity yet to vest is determined based on the amount of the grant date fair value that is yet to be expensed. The minimum value of equity yet to vest is
nill, since these will be forfeited if the vesting conditions are not met.
Governance
89
Executive Equity Based Remuneration – Long Term Awards
Name
Plan (for the year ended)
Grant
Date
Vesting date
Number
granted1
Fair value
per
security $2
Total fair
value at
grant date
$3
Expense for
the year
ended
30 June
2024 $
Remaining
Expense
for future
years $4
Current Executives
Anthony Lombardo
June 2019 LTA
Sept 2018
Sept 2022-2024
38,468
11.49
441,998
33,842
8,058
June 2020 LTA
Sept 2019
Sept 2022-2025
83,340
22.08
1,840,146
183,944
102,609
June 2021 LTA
Sept 2020
Sept 2023-2026
96,432
12.92
1,245,900
81,064
76,708
June 2021 LTA Prorata CEO
Sept 2020
Sept 2023-2026
5,124
12.92
66,204
4,307
4,076
June 2021 RSA
Sept 2020
Sept 2023-2026
43,832
11.41
500,124
84,032
79,516
June 2022 LTA
Sept 2021
Sept 2024-2027
265,416
8.42
2,234,804
(307,392)
128,722
June 2023 LTA
Sept 2022
Sept 2025-2028
314,928
6.25
1,968,300
(245,960)
186,200
June 2024 LTA
Sept 2023
Sept 2026-2029
384,744
5.74
2,208,432
437,084
1,771,348
Total
1,232,284
10,505,908
270,921
2,157,237
Dale Connor
June 2019 LTA
Sept 2018
Sept 2022-2024
24,044
11.49
276,266
21,153
5,036
June 2020 LTA
Sept 2019
Sept 2022-2025
83,340
22.08
1,840,146
183,944
102,609
June 2021 LTA
Sept 2020
Sept 2023-2026
96,432
12.92
1,245,900
81,064
76,708
June 2021 RSA
Sept 2020
Sept 2023-2026
43,832
11.41
500,124
84,032
79,516
June 2022 LTA
Sept 2021
Sept 2024-2027
179,160
10.40
1,863,264
(215,564)
136,582
June 2023 LTA
Sept 2022
Sept 2025-2028
212,580
9.01
1,915,344
(171,204)
269,543
June 2024 LTA
Sept 2023
Sept 2026-2029
259,704
6.71
1,742,612
344,892
1,397,720
Total
899,092
9,383,656
328,317
2,067,714
Simon Dixon
June 2022 LTA
Sept 2021
Sept 2024-2027
149,304
10.40
1,552,760
(179,640)
113,822
June 2023 LTA
Sept 2022
Sept 2025-2028
177,144
9.01
1,596,068
(142,664)
224,612
June 2024 LTA
Sept 2023
Sept 2026-2029
216,420
6.71
1,452,180
287,412
1,164,768
Total
542,868
4,601,008
(34,892)
1,503,201
Justin Gabbani
June 2022 LTA
Sept 2021
Sept 2024-2027
119,532
10.40
1,243,132
(143,820)
91,125
June 2023 LTA
Sept 2022
Sept 2025-2028
154,440
9.01
1,391,504
(124,380)
195,824
June 2024 LTA
Sept 2023
Sept 2026-2029
203,880
6.71
1,368,036
270,756
1,097,280
Total
477,852
4,002,672
2,556
1,384,229
Claire Johnston
June 2023 LTA
Sept 2022
Sept 2025-2028
211,944
9.01
1,909,616
(170,692)
268,737
June 2024 LTA
Sept 2023
Sept 2026-2029
270,012
6.71
1,811,780
358,580
1,453,200
Total
481,956
3,721,396
187,888
1,721,937
Frank Krile
June 2021 LTI
Sept 2020
Sept 2023
26,301
10.15
266,955
3,258
-
June 2022 LTA
Sept 2021
Sept 2024-2027
119,436
10.40
1,242,136
(143,704)
91,052
June 2023 LTA
Sept 2022
Sept 2025-2028
141,720
9.01
1,276,896
(114,136)
179,695
June 2024 LTA
Sept 2023
Sept 2026-2029
173,136
6.71
1,161,744
229,928
931,816
Total
460,593
3,947,731
(24,654)
1,202,563
Andrea Ruckstuhl
June 2023 LTI
Sept 2022
Sept 2025
25,176
10.16
255,788
(28,282)
22,233
June 2024 LTA
Sept 2023
Sept 2026-2029
180,996
6.71
1,214,484
240,368
974,116
Total
206,172
1,470,272
212,086
996,349
Former Executives5
Denis Hickey6
June 2022 LTA
Sept 2021
Sept 2023-2026
224,076
10.40
2,330,392
(904,064)
-
June 2023 LTA
Sept 2022
Sept 2024-2027
77,916
9.01
702,024
(527,036)
-
GDV Incentive
Jan 2022
Sept 2024
469,572
10.65
5,000,942
(2,450,001)
-
Total
771,564
8,033,358
(3,881,101)
-
Neil Martin
June 2020 LTA
Sept 2019
Sept 2022-2025
52,086
22.08
1,150,059
179,090
-
June 2021 LTA
Sept 2020
Sept 2023-2026
96,432
12.92
1,245,900
157,772
-
June 2021 RSA
Sept 2020
Sept 2023-2026
43,832
11.41
500,124
163,548
-
June 2022 LTA
Sept 2021
Sept 2024-2027
187,980
10.40
1,954,992
(82,868)
-
June 2023 LTA
Sept 2022
Sept 2025-2028
214,944
9.01
1,936,644
99,436
-
Total
595,274
6,787,719
516,978
-
1. For LTA awards granted from September 2021 and for LTI and other long term awards, the number granted reflects maximum opportunity. For all prior awards, the number
granted reflects target opportunity.
2. The fair value at grant date represents an actuarial valuation of the award, including the RSA (LTA Min), based on the Black-Scholes methodology to produce a Monte-Carlo
simulation model in accordance with Australian Accounting Standards rounded to two decimal places.
3. The fair value at grant date represents an actuarial valuation of the award, including the RSA (LTA Minimum), using assumptions underlying the Black-Scholes methodology to
produce a Monte-Carlo simulation model in accordance with Australian Accounting Standards rounded to two decimal places.
4. The maximum value of equity yet to vest is determined based on the amount of the grant date fair value that is yet to be expensed. The minimum value of equity yet to vest is
nill, since these will be forfeited if the vesting conditions are not met.
5. Denis Hickey and Neil Martin were Good Leavers. As a Good Leaver, unvested equity awards remain on foot and subject to original vesting conditions. Accounting expense
for FY24 therefore includes all remaining unvested award expense that has been accelerated and disclosed in total for FY24, including amounts which would otherwise have
been disclosed in future years. All unvested equity awards that are on foot following departure, remain subject to the original performance conditions and will be tested at the
relevant testing date. Depending on performance, these awards may have nil value.
6. Please refer to the section "Adjustment to Denis Hickey's Incentive Award" for more detail on the forfeiture of a portion of the GDV award that has not met relevant
performance conditions to date.
90
Lendlease Annual Report 2024
FY24 Non Executive Director Equity Holdings
Name
Securities held at
beginning of financial year
Other net changes
to securities
Securities held at end of
financial year
Non Executive Directors
Michael Ullmer
175,000
25,000
200,000
Philip Coffey
51,216
20,000
71,216
Nicholas Collishaw
25,000
20,000
45,000
David Craig
106,000
30,000
136,000
Barbara Knoflach1
10,000
-
10,000
Margaret Lui
3,000
17,000
20,000
Elizabeth Proust2
83,061
40,000
123,061
Nicola Wakefield Evans
38,000
-
38,000
Robert Welanetz
27,000
-
27,000
Total
518,277
152,000
670,277
1. Barbara Knoflach was appointed as a Non-Executive Director 1 October 2023.
2. As at 30 June 2024 Elizabeth Proust also holds $500,000 of green bonds.
Purchase of Lendlease securities by Non Executive Directors
The current Non Executive Directors acquired Lendlease securities using their own funds.
Loans to KMP
No loans were made to KMP or their related parties during the current year or prior year.
Other transactions with KMP
From time to time, Directors and Executives of Lendlease or its consolidated entities, or parties related to them, may purchase
goods from the Consolidated Entity. These purchases are on terms and conditions no more favourable that those entered into by
unrelated customers.
Governance
91
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92
Lendlease Annual Report 2024
Directors’ Report
The Directors’ Report for the financial year ended 30 June 2024 has been prepared in accordance with the requirements of the
Corporations Act 2001.
The information below forms part of the Directors’ Report:
•
Principal activities on page 14
•
Operating and Financial Review on pages 4 to 55 incorporating the Performance and Outlook on pages 48 to 55
•
Biographical information for the Directors and Company Secretary on pages 58 to 61
•
Officers who were previously partners of the audit firm on page 58 and 59
•
Directors’ interests in capital on page 66
•
Board and committee meetings and attendance on pages 66 and 67
•
Remuneration Report on pages 68 to 90
•
Lead Auditor’s Independence Declaration on page 94
a. Dividends/Distributions
The 2023 final dividend/distribution of $76 million (comprised of a dividend component fully franked of 4.7 cents per share to be paid
by the Company and an unfranked trust distribution of 6.4 cents per unit to be paid by Lendlease Trust) referred to in the Directors’
Report dated 14 August 2023 was paid on 13 September 2023. Details of dividends/distributions in respect of the current year are
as follows:
$m
Interim distribution of 6.5 cents per security (unfranked) paid on 13 March 2024
1
45
Final dividends/distributions of 9.5 cents per security declared by Directors to be payable on 18 September 2024
2
66
Total dividends/distributions
111
1. Comprised of an unfranked trust distribution of 6.5 cents per unit paid by Lendlease Trust.
2. Comprised of a dividend component fully franked of 3.2 cents per share to be paid by the Company and an unfranked trust distribution of 6.3 cents per unit to be paid by
Lendlease Trust.
b. Significant Changes in State of Affairs
There have been no significant changes in the Group’s state of affairs.
c. Events Subsequent to Balance Date
In July 2024 Lendlease completed the sale of its life sciences interests in Asia to a 50/50 joint venture with Warburg Pincus. The
transaction is expected to contribute approximately $80 million to FY25 OPAT.
There were no other material events subsequent to the end of the financial reporting period.
d. Security Options
No security options were issued during the year by the Company or any of its controlled entities, and there are no such options
on issue.
e. Indemnification and Insurance of Directors and Officers
Rule 12 of the Company’s Constitution provides for indemnification in favour of each of the Directors named on pages 58 to 61 of this
report and the officers of the Company or of wholly owned subsidiaries or related entities of the Company (Officers) to the extent
permitted by the Corporations Act 2001. Rule 12 does not indemnify a Director, Company Secretary or Officer for any liability involving
a lack of good faith.
In conformity with Rule 12 of the Company’s Constitution, the Company has entered into Deeds of Indemnity, Insurance and Access
with each of the Directors named on pages 58 to 61 of this report and for officers of the Company and Directors of related entities of
the Company. The indemnities operate to the full extent permitted by law and are not subject to a monetary limit. The Company is not
aware of any liability having arisen, and no claims have been made during or since the financial year under the Deeds of Indemnity,
Insurance and Access.
For unrelated entities in which the Group has an interest, Deeds of Indemnity may be entered into between Lendlease Corporation
Limited and the Director or Officer. Since the date of the last report, the Company has not entered into any separate Deeds of
Indemnity with a Director or Officer of an unrelated entity.
No indemnity has been granted to an auditor of the Company in their capacity as auditor of the Company.
In accordance with the Corporations Act 2001, Rule 12 of the Constitution also permits the Company to purchase and maintain
insurance or pay or agree to pay a premium for insurance for Officers against any liability incurred as an Officer of the Company or of a
related body corporate. This may include a liability for reasonable costs and expenses incurred in defending proceedings, whether civil
or criminal, regardless of their outcome. Due to confidentiality obligations and undertakings of the policy, no further details in respect of
the premium or policy can be disclosed.
Governance
93
f. Environmental Regulation
The Group is subject to various state and federal environmental regulations in Australia.
The Directors are not aware of any material non compliance with environmental regulations pertaining to the operations or activities
during the period covered by this report. In addition, the Lendlease Group is registered and publicly reports the annual performance
of its Australian operations under the requirements of the National Greenhouse and Energy Reporting (NGER) Act 2007 and Energy
Efficiency Opportunities (EEO) Act 2006.
All Lendlease businesses continue to operate an integrated Environment, Health and Safety Management System, ensuring that non
compliance risks and opportunities for environmental improvements are identified, managed and reported accordingly.
g. Non Audit Services
During the year, KPMG, the Company’s auditor, performed certain other services in addition to its statutory duties.
The Board has considered the other services provided during the year by the auditor and, in accordance with written advice provided
by resolution of the Audit Committee, is satisfied that the provision of those services during the year by the auditor is compatible with,
and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reason:
•
All other services were subject to the corporate governance procedures adopted by the Group and the Audit Committee is satisfied
that those services do not impact the integrity and objectivity of the auditor.
The other services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of
Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or
decision making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and rewards.
A copy of the Lead Auditor's Independence Declaration, as required under Section 307C of the Corporations Act 2001, is included at
the end of the Directors’ Report.
Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and other services provided during
the year are set out below:
Consolidated
June 2024
June 2023
$000s
$000s
Audit and Other Assurance Services
Audit services
9,767
7,887
Other assurance services
925
985
Total audit and other assurance services
10,692
8,872
Non audit services
-
159
Total audit, non audit and other assurance services
10,692
9,031
h. Rounding Off
Lendlease Corporation Limited is a company of the kind referred to in the ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191 dated 24 March 2016 and, in accordance with that Instrument, amounts in the Consolidated Financial Statements
and this report have been rounded off to the nearest million dollars unless specifically stated to be otherwise.
This report is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the Directors.
M J Ullmer, AO
Chairman
Sydney, 19 August 2024
A P Lombardo
Group Chief Executive Officer and
Managing Director
Sydney, 19 August 2024
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Lendlease Corporation Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Lendlease Corporation
Limited for the financial year ended 30 June 2024 there have been:
i.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
KPM_INI_01
PAR_SIG_01
PAR_NAM_01
PAR_POS_01
PAR_DAT_01
PAR_CIT_01
KPMG
Eileen Hoggett
Partner
Sydney
19 August 2024
94
Lendlease Annual Report 2024
Financial
Statements
London
Silvertown
Artist’s impression
Financial Statements
95
96
Lendlease Annual Report 2024
Table of Contents
Consolidated Financial Statements
Income Statement
97
Statement of Comprehensive Income
98
Statement of Financial Position
99
Statement of Changes in Equity
100
Statement of Cash Flows
101
Notes to Consolidated Financial Statements
Section A. Performance
1.
Segment Reporting
103
2.
Dividends/Distributions
110
3.
Earnings Per Share/Stapled Security (EPS/EPSS)
111
4.
Revenue from Contracts with Customers
112
5.
Share of Profit of Equity Accounted Investments
114
6.
Other Income
114
7.
Other Expenses
115
8.
Finance Revenue and Finance Costs
117
9.
Taxation
118
10.
Events Subsequent to Balance Date
121
Section B. Investment
11.
Inventories
122
12.
Equity Accounted Investments
123
13.
Other Financial Assets
128
Section C. Liquidity and Working Capital
14.
Cash and Cash Equivalents
129
15.
Notes to Statement of Cash Flows
130
16.
Borrowings and Financing Arrangements
130
17.
Issued Capital
132
18.
Capital Management
133
19.
Liquidity Risk Exposure
133
20.
Commitments
134
21.
Loans and Receivables
135
22.
Trade and Other Payables
136
23.
Provisions
138
Section D. Risk Management
24.
Financial Risk Management
140
25.
Hedging
142
26.
Fair Value Measurement
143
27.
Contingent Liabilities
144
Section E. Basis of Consolidation
28.
Consolidated Entities
145
29.
Employee Benefit Vehicles
146
30.
Parent Entity Disclosures
147
31.
Related Party Information
147
Section F. Other Notes
32.
Intangible Assets
149
33.
Disposal Group Assets and Liabilities Held for Sale
151
34.
Defined Benefit Plan
152
35.
Employee Benefits
154
36.
Reserves
159
37.
Impact of New and Revised Accounting Standards
159
38.
Other Material Accounting Policies
160
Consolidated Entity Disclosure Statement
Consolidated Entity Disclosure Statement
161
Directors’ Declaration
Directors' Declaration
175
Independent Auditor’s Report
176
Lendlease Corporation Limited (the Company) is incorporated and domiciled in Australia. The consolidated financial report of the
Company for the financial year ended 30 June 2024 comprises the Company and its controlled entities including Lendlease Trust (LLT)
(together referred to as the Consolidated Entity or the Group). The Group is a for profit entity and is an international property and
investments group. Further information about the Group’s primary activities is included in Note 1 ‘Segment Reporting’.
Shares in the Company and units in LLT are traded as one security under the name of Lendlease Group on the Australian Securities
Exchange (ASX). The Company is deemed to control LLT for accounting purposes and therefore LLT is consolidated into the Group’s
financial report. The issued units of LLT, however, are not owned by the Company and are therefore presented separately in the
consolidated entity Statement of Financial Position within equity, notwithstanding that the unitholders of LLT are also the shareholders
of the Company.
The consolidated financial report was authorised for issue by the Directors on 19 August 2024.
Financial Statements
97
Consolidated Financial Statements
Income Statement
Year Ended 30 June 2024
June 2024
June 2023
Note
$m
$m
Revenue from contracts with customers
4
9,218
10,229
Other revenue
151
144
Cost of sales
(8,442)
(9,642)
Gross profit
927
731
Share of profit of equity accounted investments
5
139
28
Other income
6
38
299
Other expenses
7
(2,255)
(1,208)
Results from operating activities
(1,151)
(150)
Finance revenue
8
68
85
Finance costs
8
(306)
(173)
Net finance costs
(238)
(88)
Loss before tax from continuing operations
(1,389)
(238)
Income tax (expense)/benefit from continuing operations
9.a
(113)
6
Loss after tax from continuing operations
(1,502)
(232)
Profit after tax from discontinued operations
-
-
Loss after tax
(1,502)
(232)
(Loss)/profit after tax attributable to:
Members of Lendlease Corporation Limited
(1,461)
(278)
Unitholders of Lendlease Trust
(41)
46
Loss after tax attributable to securityholders
(1,502)
(232)
External non controlling interests
-
-
Loss after tax
(1,502)
(232)
Basic/Diluted Earnings per Lendlease Group Stapled
Security (EPSS)
Securities excluding treasury shares
(cents)
3
(219.9)
(34.0)
Securities on issue
(cents)
3
(217.7)
(33.7)
The accompanying notes form part of these consolidated financial statements.
98
Lendlease Annual Report 2024
Consolidated Financial Statements continued
Statement of Comprehensive Income
Year Ended 30 June 2024
June 2024
June 2023
Note
$m
$m
Loss after Tax
(1,502)
(232)
Other Comprehensive (Loss)/Income after Tax
Items that may be reclassified subsequently to profit or loss:
Movements in hedging reserve
9.b
(7)
1
Movements in foreign currency translation reserve
9.b
(48)
120
Total items that may be reclassified subsequently to profit or loss1
(55)
121
Items that will not be reclassified to profit or loss:
Movements in non controlling interest acquisition reserve
9.b
-
(4)
Movements in defined benefit plan remeasurements2
9.b
(91)
(108)
Total items that will not be reclassified to profit or loss
(91)
(112)
Total comprehensive loss after tax
(1,648)
(223)
Total comprehensive (loss)/income after tax attributable to:
Members of Lendlease Corporation Limited
(1,610)
(297)
Unitholders of Lendlease Trust
(38)
73
Total comprehensive loss after tax attributable to securityholders
(1,648)
(224)
External non controlling interests
-
1
Total comprehensive loss after tax
(1,648)
(223)
1. Includes Other comprehensive loss of $44 million (June 2023: Other comprehensive income of $166 million) relating to share of other comprehensive income of equity
accounted investments.
2. During the year the Group executed an insurance scheme buy-in in relation to the Lendlease UK Pension Scheme. This transaction involved trading the majority of the
scheme’s assets for an insurance policy that covers the scheme’s obligations. The difference between the value of the liabilities insured and the cost of the insurance policy of
$75 million (pre-tax) was recognised as a loss in Other comprehensive income. Refer to Note 34 'Defined Benefit Plan' for further detail.
The accompanying notes form part of these consolidated financial statements.
Financial Statements
99
Statement of Financial Position
As at 30 June 2024
June 2024
June 2023
Note
$m
$m
Current Assets
Cash and cash equivalents
14
1,000
900
Loans and receivables
21
2,222
2,299
Inventories
11
1,676
1,562
Other financial assets
13
12
32
Other assets
76
57
Disposal Group assets held for sale
33
1,596
-
Total current assets
6,582
4,850
Non Current Assets
Loans and receivables
21
448
1,439
Inventories
11
1,342
2,681
Equity accounted investments
12
5,859
5,647
Investment properties
418
539
Other financial assets
13
974
1,140
Deferred tax assets
9.c
169
219
Property, plant and equipment
177
247
Intangible assets
32
692
1,236
Defined benefit plan asset
34
82
171
Other assets
29
45
Total non current assets
10,190
13,364
Total assets
16,772
18,214
Current Liabilities
Trade and other payables
22
4,869
4,646
Provisions
23
891
708
Borrowings and financing arrangements
16.a
9
19
Other financial liabilities
43
53
Income tax payable
41
3
Disposal Group liabilities held for sale
33
303
-
Total current liabilities
6,156
5,429
Non Current Liabilities
Trade and other payables
22
1,151
2,333
Provisions
23
300
326
Borrowings and financing arrangements
16.a
4,167
3,262
Other financial liabilities
64
87
Deferred tax liabilities
9.c
57
133
Total non current liabilities
5,739
6,141
Total liabilities
11,895
11,570
Net assets
4,877
6,644
Equity
Issued capital
17
1,896
1,894
Treasury securities
(67)
(67)
Reserves
36
208
273
Retained earnings
1,069
2,653
Total equity attributable to members of Lendlease Corporation Limited
3,106
4,753
Total equity attributable to unitholders of Lendlease Trust
1,737
1,863
Total equity attributable to securityholders
4,843
6,616
External non controlling interests
34
28
Total equity
4,877
6,644
The accompanying notes form part of these consolidated financial statements.
100
Lendlease Annual Report 2024
Consolidated Financial Statements continued
Statement of Changes in Equity
Year Ended 30 June 2024
Issued
Capital
Treasury
Securities1
Reserves
Retained
Earnings
Members of
Lendlease
Corporation
Limited
Unitholders
of
Lendlease
Trust
External
Non
Controlling
Interests
Total
Equity
$m
$m
$m
$m
$m
$m
$m
$m
Balance as at 1 July 2022
1,891
(77)
184
3,078
5,076
1,867
27
6,970
Total Comprehensive Income
Loss for the financial year
-
-
-
(278)
(278)
46
-
(232)
Other comprehensive income (net of tax)
-
-
89
(108)
(19)
27
1
9
Total comprehensive income
-
-
89
(386)
(297)
73
1
(223)
Other Comprehensive Income (Net of tax)
Net investment hedge
-
-
(20)
-
(20)
-
-
(20)
Effect of foreign exchange movements
-
-
108
-
108
27
1
136
Effective cash flow hedges
-
-
1
-
1
-
-
1
Defined benefit plan remeasurements
-
-
-
(108)
(108)
-
-
(108)
Other comprehensive income (net of tax)
-
-
89
(108)
(19)
27
1
9
Transactions with Owners of the Company
Distribution Reinvestment Plan (DRP)
3
-
-
-
3
1
-
4
Dividends and distributions
-
-
-
(39)
(39)
(78)
-
(117)
Treasury securities acquired
-
(39)
-
-
(39)
-
-
(39)
Treasury securities vested
-
49
-
-
49
-
-
49
Total other movements through reserves
3
10
-
(39)
(26)
(77)
-
(103)
Balance as at 30 June 2023
1,894
(67)
273
2,653
4,753
1,863
28
6,644
Balance as at 1 July 2023
1,894
(67)
273
2,653
4,753
1,863
28
6,644
Total Comprehensive Income
Loss for the financial year
-
-
-
(1,461)
(1,461)
(41)
-
(1,502)
Other comprehensive income (net of tax)
-
-
(58)
(91)
(149)
3
-
(146)
Total comprehensive income
-
-
(58)
(1,552)
(1,610)
(38)
-
(1,648)
Other Comprehensive Income (Net of tax)
Effect of foreign exchange movements
-
-
(51)
-
(51)
3
-
(48)
Effective cash flow hedges
-
-
(7)
-
(7)
-
-
(7)
Defined benefit plan remeasurements2
-
-
-
(91)
(91)
-
-
(91)
Other comprehensive income (net of tax)
-
-
(58)
(91)
(149)
3
-
(146)
Transactions with Owners of the Company
Capital contributed by non controlling interests
-
-
-
-
-
-
6
6
Distribution Reinvestment Plan (DRP)
2
-
-
-
2
1
-
3
Dividends and distributions
-
-
-
(32)
(32)
(89)
-
(121)
Treasury securities acquired
-
(29)
-
-
(29)
-
-
(29)
Treasury securities vested
-
29
-
-
29
-
-
29
Fair value movement on allocation and vesting
of securities
-
-
(7)
-
(7)
-
-
(7)
Total other movements through reserves
2
-
(7)
(32)
(37)
(88)
6
(119)
Balance as at 30 June 2024
1,896
(67)
208
1,069
3,106
1,737
34
4,877
1. Opening balance for number of treasury securities 1 July 2023 was 6 million (1 July 2022: 6 million) and closing balance at 30 June 2024 was 6 million.
2. During the year the Group executed an insurance scheme buy-in in relation to the Lendlease UK Pension Scheme. This transaction involved trading the majority of the
scheme’s assets for an insurance policy that covers the scheme’s obligations. The difference between the value of the liabilities insured and the cost of the insurance policy of
$75 million (pre-tax) was recognised as a loss in Other comprehensive income. Refer to Note 34 'Defined Benefit Plan' for further detail.
The accompanying notes form part of these consolidated financial statements.
Financial Statements
101
Statement of Cash Flows
Year Ended 30 June 2024
June 2024
June 2023
Note
$m
$m
Cash Flows from Operating Activities
Cash receipts in the course of operations
15,834
10,801
Cash payments in the course of operations
(15,984)
(11,104)
Interest received
48
27
Interest paid in relation to other corporations
(294)
(192)
Interest paid in relation to lease liabilities
(13)
(15)
Dividends/distributions received
424
113
Income tax paid in respect of operations
(70)
(116)
Net cash used in operating activities
15
(55)
(486)
Cash Flows from Investing Activities
Sale/redemption of investments
371
622
Acquisition of investments
(993)
(1,632)
Sale of investment properties
109
84
Capital expenditure on investment properties
(22)
(6)
Net loan (repayment to)/drawdowns from associates and joint ventures
(39)
6
Disposal of consolidated entities (net of cash disposed and transaction costs)
85
247
Disposal of other financial assets
-
3
Acquisition of property, plant and equipment
(31)
(28)
Acquisition of intangible assets
(32)
(54)
Net cash used in investing activities
(552)
(758)
Cash Flows from Financing Activities
Proceeds from borrowings
6,315
5,235
Repayment of borrowings
(5,406)
(4,333)
Dividends/distributions paid
(118)
(105)
Repayment of lease liabilities
(68)
(74)
Net cash provided by financing activities
723
723
Other Cash Flow Items
Effect of foreign exchange rate movements on cash and cash equivalents
(16)
124
Net increase/(decrease) in cash and cash equivalents
100
(397)
Cash and cash equivalents at beginning of financial year
900
1,297
Cash and cash equivalents at end of financial year
14
1,000
900
The accompanying notes form part of these consolidated financial statements.
102
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements
Basis of Preparation
The consolidated financial report is a general purpose financial report which:
•
Has been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards
Board, and the Corporations Act 2001
•
Complies with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board
•
Is presented in Australian dollars ($). At June 2024, all values have been rounded off to the nearest million dollars unless otherwise
indicated, in accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
•
Is prepared under the historical cost basis except for the following assets and liabilities, which are stated at their fair value:
derivative financial instruments, fair value through profit or loss investments, investment properties, and liabilities for cash settled
share based compensation plans. Recognised assets and liabilities that are hedged are stated at fair value in respect of the risk
that is hedged. Refer to the specific accounting policies within the Notes to the Consolidated Financial Statements for the basis of
valuation of assets and liabilities measured at fair value.
Material accounting policies have been:
•
Included in the relevant notes to which the policies relate, while other material accounting policies are discussed in Note 38 ‘Other
Material Accounting Policies’
•
Consistently applied to all financial years presented in the consolidated financial statements and by all entities in the Group, except
as explained in Note 37 ‘Impact of New and Revised Accounting Standards’.
The preparation of a financial report that complies with AASBs requires management to make judgements, estimates and assumptions.
•
This can affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates
•
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively
•
The material accounting policies highlight information about accounting judgements in applying accounting policies that have the
most significant effects on reported amounts and further information about estimated uncertainties that have a significant risk of
resulting in material adjustments within the next financial year
•
The Group considers the following as material accounting estimates and judgements:
– Revenue recognition. Refer to Note 4 'Revenue from Contracts with Customers' for further detail
– Recoverability of inventories. Refer to Note 11 'Inventories' for further detail
– Asset valuation. Refer to Note 12 ‘Equity Accounted Investments’, Note 13 ‘Other Financial Assets’ and Note 26 ‘Fair Value
Measurement’ for further detail
– Recoverability of goodwill in relation to the overseas construction businesses. Refer to Note 32 'Intangible Assets' for
further detail
– Provision estimation in relation to the UK building remediation. Refer to Note 23 'Provisions' for further detail
– The contingent liability in relation to the Retirement Living tax matter. Refer to Note 27 'Contingent Liabilities' for further detail
•
These material accounting estimates and judgements have been considered in the context of the current economic conditions.
The Group presents assets and liabilities in the Statement of Financial Position as current or non current.
•
Current assets include assets held primarily for trading purposes, cash and cash equivalents, and assets expected to be realised in,
or intended for sale or use in, the course of the Group’s operating cycle or within the next 12 months. All other assets are classified
as non current
•
Current liabilities include liabilities held primarily for trading purposes, liabilities expected to be settled in the course of the Group’s
operating cycle and those liabilities due within one year from the reporting date. All other liabilities are classified as non current.
On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international
construction and accelerate the release of capital from its offshore development project and assets. Financial impacts include
impairment charges on Goodwill and Development projects and other related costs to accelerate the release of capital. These impacts
have been disclosed in the relevant notes to the consolidated financial statements.
The Consolidated Financial Statements are prepared on a going concern basis. In preparing the Consolidated Financial Statements,
including assessing the going concern basis of accounting, the Group has considered the general market conditions.
The Group has:
•
$1,159 million in undrawn facilities. See Note 16 ‘Borrowings and Financing Arrangements’
•
$350 million in undrawn uncommitted facilities maturing October 2024. See Note 16 'Borrowings and Financing Arrangements'
•
$1,000 million in cash and cash equivalents. See Note 14 ‘Cash and Cash Equivalents’.
Following this assessment, the Group is well placed to manage its financing and future commitments over the next 12 months from the
date of the Consolidated Financial Statements.
Financial Statements
103
Section A. Performance
In addition to the statutory result, Operating Earnings before Interest, Tax, Depreciation and Amortisation (Operating EBITDA)
and Operating Profit after Tax (Operating PAT) are the key measures used to assess the Group’s performance. This section
of the Financial Report focuses on disclosure that enhances a user’s understanding of Operating EBITDA and Operating PAT.
Segment Reporting below provides a breakdown of profit and revenue by the operational activity and region. The key line items
of the Income Statement, along with their components, provide detail behind the reported balances. Group performance will
also impact the earnings per stapled security and dividend payout, therefore disclosure on these items has been included in
this section. Further information and analysis on performance and allocation of resources can be found in the Performance and
Outlook section of the Directors’ Report.
1. Segment Reporting
Accounting Policies
The Group’s segments are Investments, Development, Construction and Non core. The Group has identified these operating
segments based on the distinct products and services provided by each segment, the distinct target return profile and allocation
of resources for each segment, and internal reports that are reviewed and used by the Group Chief Executive Officer and
Managing Director (the Chief Operating Decision Maker) in assessing performance, determining the allocation of resources,
setting operational targets, and managing the Group.
The Group has presented the segments around business activity due to the Group's business model being broadly consistent in all
regions. Additional disclosure has also been included for Operating EBITDA, Operating PAT and Statutory Profit by region.
The Group reports Operating EBITDA and Operating PAT as its primary earnings metrics, in addition to the statutory result.
Operating PAT is defined as Statutory profit adjusted for Investment property revaluations (including in Other financial assets and
Equity accounted investments) that are classified in the Investment segment, and material one-off items that could not reasonably
have been expected to arise from normal operations. Operating EBITDA is before Interest, Tax, Depreciation and Amortisation.
Operating EBITDA and Operating PAT includes revaluation increases or decreases of Investment properties under construction
that are classified in the Development segment.
The Chief Operating Decision Maker receives information and assesses segment performance under these metrics. Operating
EBITDA and Operating PAT are used to measure performance as management believes that such information is the most relevant
in evaluating the results of certain reportable segments relative to other entities that operate within these industries. The Group
does not consider corporate activities to be an operating segment.
The operating segments are as follows:
Investments
Operates across all four geographic regions. Services include owning and/or managing investments. The segment includes an
investment management platform and the Group’s ownership interests in residential, office, retail, industrial, retirement and
infrastructure investment assets.
Development
Operates in all four geographic regions. Its products and services include the development of inner city mixed use developments,
apartments, communities, retirement, retail, commercial assets and social and economic infrastructure. Construction margin earned on
development projects is recognised in this segment.
Construction
Operates across all four geographic regions. Its products and services include the provision of project management, design and
construction services, predominantly in the commercial, residential, mixed use, defence and social infrastructure sectors.
Non core
Non core includes the provision of project management, design and construction services in the Australian infrastructure sector. These
products and services represent the retained Engineering and retained Services projects. The discontinued operations referenced
throughout the financial statements are included in this segment. Discontinued operations represent the Engineering and Services
businesses sold in previous periods, excluding the projects retained by the Group.
In May 2024 a revised strategy was announced. There is no impact to operating segments reported on for the year ended 30 June
2024. New structures and processes that will support the strategy were implemented from 1 July 2024. Details of the strategy are
outlined in the Performance and Outlook section of the Directors’ Report.
104
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
1.a. Business Segment Information
Financial information regarding the performance of each reportable segment and a reconciliation of these reportable segments to the
financial statements are included below:
Section A. Performance continued
1. Segment Reporting continued
The Non core segment operating profit after tax includes overhead costs associated with managing the completion of the remaining retained projects
from the sale of the Engineering and Services businesses and other residual exit related matters. Corporate Activity costs are not allocated to the Non
core segment given these costs relate to supporting the growth and operations of the Core segments.
TOTAL SEGMENT RESULTS
Investments
Development1
Construction
Total Core Segments
30 June 2024
$m
$m
$m
$m
Revenue
Construction services
-
-
5,915
5,915
Investment services
253
-
-
253
Development services
-
1,472
-
1,472
Sale of development properties
-
1,149
-
1,149
Total revenue from contracts with customers
253
2,621
5,915
8,789
Other revenue
71
41
20
132
Total revenue from external customers
324
2,662
5,935
8,921
Cost of sales
(89)
(2,216)
(5,690)
(7,995)
Gross profit/(loss)
235
446
245
926
Share of profit of equity accounted investments2
82
208
3
293
Other income
3
17
18
38
Other expenses2
(146)
(162)
(140)
(448)
Operating EBITDA
174
509
126
809
Reconciling Items
Finance revenue
-
10
1
11
Finance expense
(1)
(48)
(3)
(52)
Depreciation and amortisation
(14)
(21)
(42)
(77)
Operating profit/(loss) before tax3
159
450
82
691
Operating income tax (expense)/benefit
(23)
(130)
(18)
(171)
Operating profit/(loss) after tax
136
320
64
520
Investments segment revaluations (pre-tax):
Investment properties
(26)
-
-
(26)
Financial assets
(132)
-
-
(132)
Equity accounted investments
(154)
-
-
(154)
UK building remediation
-
(17)
-
(17)
Costs relating to the strategy update (pre-tax):
Development impairment
-
(547)
-
(547)
Goodwill impairment
-
(34)
(479)
(513)
Redundancy, tenancy and other break costs
-
-
-
-
Other strategy update costs
-
-
(50)
(50)
Other restructuring costs (pre-tax)
-
-
-
-
Total adjustments3
(312)
(598)
(529)
(1,439)
Income tax benefit/(expense) on adjustments
52
41
8
101
Statutory (loss)/profit after tax
(124)
(237)
(457)
(818)
1. The Development segment includes $4 million of revaluation losses from Equity accounted investments.
2. Excludes Investments segment revaluations, depreciation, amortisation, restructuring costs, costs relating to the strategy update announced in May 2024 and UK
building remediation.
3. Operating profit before tax of $299 million plus Investment segment revaluations (pre-tax) of $(312) million, UK building remediation of $(17) million, Costs relating to the strategy
update (pre-tax) of $(1,242) million and Other restructuring costs (pre-tax) of $(117) million reconciles to Loss before tax as disclosed in the Income Statement.
Financial Statements
105
RECONCILIATION OF CORE AND NON CORE SEGMENTS TO STATUTORY PROFIT
Non Core
Total Segments
Total Core Segments
Corporate Activities
Total Core
Non Core
Total Group
$m
$m
$m
$m
$m
$m
$m
429
6,344
5,915
-
5,915
429
6,344
-
253
253
-
253
-
253
-
1,472
1,472
-
1,472
-
1,472
-
1,149
1,149
-
1,149
-
1,149
429
9,218
8,789
-
8,789
429
9,218
-
132
132
19
151
-
151
429
9,350
8,921
19
8,940
429
9,369
(436)
(8,431)
(7,995)
(11)
(8,006)
(436)
(8,442)
(7)
919
926
8
934
(7)
927
-
293
293
-
293
-
293
-
38
38
-
38
-
38
(3)
(451)
(448)
(148)
(596)
(3)
(599)
(10)
799
809
(140)
669
(10)
659
-
11
11
57
68
-
68
-
(52)
(52)
(254)
(306)
-
(306)
(2)
(79)
(77)
(43)
(120)
(2)
(122)
(12)
679
691
(380)
311
(12)
299
3
(168)
(171)
123
(48)
3
(45)
(9)
511
520
(257)
263
(9)
254
-
(26)
(26)
-
(26)
-
(26)
-
(132)
(132)
-
(132)
-
(132)
-
(154)
(154)
-
(154)
-
(154)
-
(17)
(17)
-
(17)
-
(17)
-
(547)
(547)
-
(547)
-
(547)
-
(513)
(513)
-
(513)
-
(513)
-
-
-
(91)
(91)
-
(91)
-
(50)
(50)
(41)
(91)
-
(91)
-
-
-
(117)
(117)
-
(117)
-
(1,439)
(1,439)
(249)
(1,688)
-
(1,688)
-
101
101
(169)
(68)
-
(68)
(9)
(827)
(818)
(675)
(1,493)
(9)
(1,502)
106
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
Section A. Performance continued
1. Segment Reporting continued
1.a. Business Segment Information continued
TOTAL SEGMENT RESULTS
Investments
Development1
Construction
Total Core Segments
30 June 2023
$m
$m
$m
$m
Revenue
Construction services
-
-
7,191
7,191
Investment services
261
-
-
261
Development services
-
1,483
-
1,483
Sale of development properties
-
795
-
795
Total revenue from contracts with customers
261
2,278
7,191
9,730
Other revenue
68
47
12
127
Total revenue from external customers
329
2,325
7,203
9,857
Cost of sales
(110)
(2,036)
(6,963)
(9,109)
Gross profit
219
289
240
748
Share of profit of Equity accounted investments2
77
78
7
162
Other income2
204
84
34
322
Other expenses3,2
(168)
(168)
(191)
(527)
Operating EBITDA
332
283
90
705
Reconciling items
Finance revenue
1
8
-
9
Finance expenses
(1)
(2)
(3)
(6)
Depreciation and amortisation
(15)
(19)
(39)
(73)
Operating profit/(loss) before tax4
317
270
48
635
Operating income tax (expenses)/benefit
(72)
(78)
(16)
(166)
Operating profit/(loss) after tax
245
192
32
469
Investments segment revaluations (pre-tax):
Investment properties
(20)
-
-
(20)
Financial assets
(76)
-
-
(76)
Equity accounted investments
(134)
-
-
(134)
UK building remediation
-
(295)
-
(295)
Total adjustments4
(230)
(295)
-
(525)
Income tax benefit on adjustments
55
-
-
55
Statutory profit/(loss) after tax
70
(103)
32
(1)
1. The Development segment includes $87 million of revaluation gains from Equity accounted investments.
2. Excludes Investments segment revaluations.
3. Excludes depreciation and amortisation.
4. Operating profit before tax of $211 million plus Investment segment revaluations (pre-tax) of $(230) million and UK building remediation of $(295) million reconciles to Loss before
tax from continuing operations of $(238) million as disclosed in the Income Statement and Loss before tax for discontinued operations of $(76) million.
Financial Statements
107
RECONCILIATION OF CORE AND NON CORE SEGMENTS TO STATUTORY PROFIT
Non Core
Total Segments
Total Core Segments
Corporate Activities
Total Core
Non Core
Total Group
$m
$m
$m
$m
$m
$m
$m
499
7,690
7,191
-
7,191
499
7,690
-
261
261
-
261
-
261
-
1,483
1,483
-
1,483
-
1,483
-
795
795
-
795
-
795
499
10,229
9,730
-
9,730
499
10,229
-
127
127
17
144
-
144
499
10,356
9,857
17
9,874
499
10,373
(517)
(9,626)
(9,109)
(16)
(9,125)
(517)
(9,642)
(18)
730
748
1
749
(18)
731
1
163
162
(1)
161
1
162
(5)
317
322
2
324
(5)
319
(80)
(607)
(527)
(163)
(690)
(80)
(770)
(102)
603
705
(161)
544
(102)
442
-
9
9
76
85
-
85
-
(6)
(6)
(167)
(173)
-
(173)
(3)
(76)
(73)
(67)
(140)
(3)
(143)
(105)
530
635
(319)
316
(105)
211
86
(80)
(166)
107
(59)
86
27
(19)
450
469
(212)
257
(19)
238
-
(20)
(20)
-
(20)
-
(20)
-
(76)
(76)
-
(76)
-
(76)
-
(134)
(134)
-
(134)
-
(134)
-
(295)
(295)
-
(295)
-
(295)
-
(525)
(525)
-
(525)
-
(525)
-
55
55
-
55
-
55
(19)
(20)
(1)
(212)
(213)
(19)
(232)
108
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
The following table provides information on the Return on invested capital for the Investments and Development segment. Construction
is excluded from the table below on the basis that its main operational metric is EBITDA margin.
June 2024
June 2023
Investments
$m
Development
$m
Remaining
Group
$m
Total
Group
$m
Investments
$m
Development
$m
Remaining
Group
$m
Total
Group
$m
Net assets
3,885
6,043
(5,051)
4,877
4,065
5,949
(3,370)
6,644
Less: Cash and cash equivalents
(62)
(341)
(597)
(1,000)
(33)
(68)
(799)
(900)
Less: Other financial liabilities
(6)
-
113
107
-
-
140
140
Less: Borrowings and
financing arrangements
-
153
4,023
4,176
-
208
3,073
3,281
Invested capital at end of year
3,817
5,855
4,032
6,089
Invested capital at half year
3,972
7,152
4,365
5,947
Invested capital at beginning of year
4,032
6,089
3,657
5,377
Average invested capital
3,940
6,365
4,018
5,804
Operating profit after tax
136
320
245
192
Return on invested capital1
3.5%
5.0%
6.1%
3.3%
1. Return on Invested Capital is calculated using the Operating Profit after Tax divided by the arithmetic average of beginning, half year and year end invested capital.
The following table provides information on the Group's Return on equity:
June 2024
June 2023
$m
$m
Equity attributable to securityholders at end of year
4,843
6,616
Equity attributable to securityholders at half year
6,293
6,766
Equity attributable to securityholders at beginning of year
6,616
6,943
Average equity attributable to securityholders
5,917
6,775
Core Operating profit after tax
263
257
Operating return on equity1
4.4%
3.8%
Statutory loss after tax
(1,502)
(232)
Statutory return on equity
(25.4)%
(3.4)%
1. Return on Equity is calculated using the Core Operating Profit after Tax divided by the arithmetic average of beginning, half year and year end securityholders’ equity.
The following table provides a reconciliation of Core operating earnings per stapled security to the Total Group statutory earnings per
stapled security:
CENTS PER STAPLED SECURITY
Note
June 2024
June 2023
Core Operating earnings per stapled security
38.1
37.3
Non core operating earnings per stapled security
(1.3)
(2.8)
Total Segment operating earnings per stapled security
36.8
34.5
Total adjustments (after tax) to reconcile to statutory profit1
(254.5)
(68.2)
Total Group statutory earnings per stapled security
3
(217.7)
(33.7)
1. The total adjustments (after tax) is calculated using the Total adjustments of $(1,688) million (June 2023: $(525) million) and Income tax (expense)/benefit on adjustments of
$(68) million (June 2023: $55 million) divided by the weighted average number of stapled securities on issue.
Section A. Performance continued
1. Segment Reporting continued
1.a. Business Segment Information continued
Financial Statements
109
The following tables set out other financial information by reportable segment:
June 2024
June 2023
Material Non
Cash Items1
Non Current
Segment Assets2
Group Total
Assets
Material Non
Cash Items1
Non Current
Segment Assets2
Group Total
Assets
$m
$m
$m
$m
$m
$m
Core
Investments
(163)
2,599
4,034
(109)
2,989
4,355
Development
(552)
5,619
9,355
(271)
7,170
9,495
Construction
(530)
554
2,984
(1)
1,375
3,769
Total core segments
(1,245)
8,772
16,373
(381)
11,534
17,619
Non core
1
1
279
(1)
4
256
Total segments
(1,244)
8,773
16,652
(382)
11,538
17,875
Corporate activities
(237)
192
120
19
296
339
Total
(1,481)
8,965
16,772
(363)
11,834
18,214
1. Material Non Cash Items relates to impairments and provisions raised or written back, unrealised foreign exchange movements and fair value gains or losses.
2. Excludes deferred tax assets, financial instruments and defined benefit plan asset.
1.b. Geography Segment Information
The following table sets out further information on Operating EBITDA, Operating PAT and Statutory Profit by region:
OPERATING
EBITDA
OPERATING
PAT
TOTAL
ADJUSTMENTS
TAX ON
ADJUSTMENTS
STATUTORY
PROFIT
June
2024
June
2023
June
2024
June
2023
June
2024
June
2023
June
2024
June
2023
June
2024
June
2023
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Australia
430
499
260
348
(159)
(76)
4
8
105
280
Asia
196
100
148
78
(46)
(1)
12
6
114
83
Europe
125
18
91
(1)
(578)
(347)
19
9
(468)
(339)
Americas
58
88
21
44
(656)
(101)
66
32
(569)
(25)
Total region
809
705
520
469
(1,439)
(525)
101
55
(818)
(1)
Corporate activities
(140)
(161)
(257)
(212)
(249)
-
(169)
-
(675)
(212)
Total core
669
544
263
257
(1,688)
(525)
(68)
55
(1,493)
(213)
Non core
(10)
(102)
(9)
(19)
-
-
-
-
(9)
(19)
Total Group
659
442
254
238
(1,688)
(525)
(68)
55
(1,502)
(232)
The following table sets out Non current assets by region:
NON CURRENT ASSETS1
June 2024
June 2023
$m
$m
Australia
3,539
4,915
Asia
2,158
2,108
Europe
1,848
1,996
Americas
1,228
2,519
Total segment
8,773
11,538
Corporate activities
192
296
Total
8,965
11,834
1. Excludes deferred tax assets, financial instruments and defined benefit plan asset and is based on the geographical location of assets.
110
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
The operating segments generate revenue in the following regions:
REVENUE1
June 2024
Investments
$m
Development
$m
Construction
$m
Total Core
Segments
$m
Non Core
$m
Total
Segments
$m
Corporate
Activities
$m
Statutory
Result
$m
Australia
177
1,402
3,437
5,016
429
5,445
76
5,521
Asia
85
79
159
323
-
323
-
323
Europe
24
828
539
1,391
-
1,391
-
1,391
Americas
38
363
1,801
2,202
-
2,202
-
2,202
Total
324
2,672
5,936
8,932
429
9,361
76
9,437
June 2023
Australia
189
1,615
3,707
5,511
499
6,010
93
6,103
Asia
86
50
295
431
-
431
-
431
Europe
23
394
742
1,159
-
1,159
-
1,159
Americas
32
274
2,459
2,765
-
2,765
-
2,765
Total
330
2,333
7,203
9,866
499
10,365
93
10,458
1. Comprised of Revenue from contracts with customers of $9,218 million (June 2023: $10,229 million), Other revenue of $151 million (June 2023: $144 million), Finance revenue
of $68 million (June 2023: $85 million).
No revenue from transactions with a single external customer amounts to 10 per cent or more of the Group’s revenue.
2. Dividends/Distributions
COMPANY/TRUST1
Cents
June 2024
June 2023
Per Share/Unit
$m
$m
Parent Company Interim Dividend
December 20232
-
-
-
December 20222
-
-
-
Lendlease Trust Interim Distribution
December 2023 – paid 13 March 2024
6.5
45
-
December 2022 – paid 8 March 2023
4.9
-
34
Parent Company Final Dividend
June 2024 – declared subsequent to reporting date3
3.2
22
-
June 2023 – paid 13 September 2023
4.7
-
32
Lendlease Trust Final Distribution
June 2024 – provided for and payable 18 September 2024
6.3
44
-
June 2023 – paid 13 September 2023
6.4
-
44
Total
111
110
1. The current and prior year final dividends were fully franked.
2. No interim dividend was declared by the Company for 31 December 2022 and 31 December 2023.
3. No provision for this dividend has been recognised in the Statement of Financial Position at 30 June 2024, as it was declared after the end of the reporting period.
Dividend Franking
The amount of franking credits available for use as at 30 June 2024 in subsequent reporting periods is $127 million (30 June 2023:
$99 million), based on a 30 per cent tax rate.
Section A. Performance continued
1. Segment Reporting continued
1.b. Geography Segment Information continued
Financial Statements
111
3. Earnings Per Share/Stapled Security (EPS/EPSS)
Accounting Policies
The Group presents basic and diluted EPS/EPSS in the Income Statement. This is a key performance measure for the Group.
Refer to further details in the Managing and Measuring Value - Financial section of this Annual Report.
Basic EPS/EPSS is determined by dividing Profit/(loss) after tax attributable to members of the Company and Group (excluding
any costs of servicing equity other than ordinary shares/securities) by the weighted average number of ordinary shares/securities
outstanding during the financial year, adjusted for bonus elements in ordinary shares/securities issued during the financial year.
Diluted EPS/EPSS is determined by adjusting the Profit/(loss) after tax attributable to members of the Company and Group, and
the weighted average number of ordinary shares/securities outstanding for the effects of all dilutive potential ordinary shares/
securities. The Group currently does not have any dilutive potential ordinary shares/securities. Dilution occurs when treasury
shares and employee share options are included in outstanding shares.
The issued units of Lendlease Trust (LLT) are presented separately within equity, and therefore the profit attributable to LLT is
excluded from the calculation of basic and diluted earnings per Company share presented in the Income Statement.
June 2024
June 2023
Shares/
Securities
Excluding
Treasury
Securities
Shares/
Securities on
Issue
Shares/
Securities
Excluding
Treasury
Securities
Shares/
Securities on
Issue
Basic/Diluted Earnings Per Share (EPS)
Loss attributable to members of Lendlease Corporation
Limited (Company)
$m
(1,461)
(1,461)
(278)
(278)
Weighted average number of ordinary shares
m
683
690
683
689
Basic/Diluted EPS
cents
(213.9)
(211.7)
(40.7)
(40.3)
Basic/Diluted Earnings Per Stapled Security (EPSS)
Loss attributable to securityholders of Lendlease Group
$m
(1,502)
(1,502)
(232)
(232)
Weighted average number of stapled securities
m
683
690
683
689
Basic/Diluted EPSS1
cents
(219.9)
(217.7)
(34.0)
(33.7)
1. Details of the Group's Core operating earnings per stapled security is disclosed in Note 1a 'Segment Reporting'.
112
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
4. Revenue from Contracts with Customers
Accounting Policies
Construction and Development services
Construction services include project management, design and construction services predominantly in the commercial,
residential, mixed use, defence and social infrastructure sectors. Development services include development fees earned on
development of inner city mixed use developments, retirement, retail, commercial assets and social and economic infrastructure.
Contracts with customers to provide Construction or Development services can include either one performance obligation or
multiple performance obligations within each contract. The Group assesses each of its contracts individually and where there are
separate performance obligations identified, the transaction price is allocated based on the relative standalone selling prices of
the services provided. Typically, the Construction or Development services in contracts are not considered distinct as the services
are highly interrelated and an integrated bundle of services and therefore are accounted for as a single performance obligation.
The transaction price for each contract may include variable consideration in the form of contract variations or modifications, and
contract claims (collectively, ‘Modifications’). Variable consideration may also include performance or other incentive fees. The
transaction price is the amount of consideration to which the Group expects to be entitled to receive in exchange for transferring
promised goods or services to a customer per the contract.
Variable consideration is only included in the transaction price for a contract to the extent it is highly probable that a significant
reversal of that revenue will not occur, which is an area of accounting judgement. Factors considered in assessing whether the
estimated revenue associated with Modifications should be recognised include the following:
i.
Status of negotiations with customers
ii.
The contract or other evidence provides a legal basis for the Modifications
iii. Additional costs incurred were caused by circumstances that were unforeseen at the contract date and for which entitlement
contractually exists
iv. Modification related costs are identifiable, measurable, and considered reasonable in view of the work performed
v.
Evidence supporting the Modification is objective and verifiable, which may include independent third-party advice
vi. Commercial and market factors specific to the Modifications
vii. Historical experience in resolving Modifications.
This assessment is reviewed each reporting period or when facts and circumstances change during the reporting period.
Revenue is recognised over time, typically based on an input method using an estimate of costs incurred to date as a percentage
of total estimated costs. These contracts are typically executed on the customer’s land so they control the assets as they are
being built or the customer benefits from the service as the work is performed. Differences between amounts recognised as
revenue and amounts billed to customers are recognised as contract assets or liabilities in the Statement of Financial Position.
The measurement of revenue is an area of accounting judgement. Management uses judgement to estimate:
i.
Progress in satisfying the performance obligations within the contract, which includes estimating contract costs expected to
be incurred to satisfy performance obligations
ii.
The probability of the amount to be recognised as variable consideration for approved variations and claims where the final
price has not been agreed with the customer.
Revenue is invoiced based on the terms of each individual contract, which may include a periodic billing schedule or achievement
of specific milestones. Invoices are issued under commercial payment terms which are typically 30 days from when an invoice
is issued.
A provision for loss making contracts is recorded for the difference between the expected costs of fulfilling a contract
and the expected remaining economic benefits to be received where the forecast remaining costs exceed the forecast
remaining benefits.
Investment services
Investment services include funds management, asset management, leasing and origination services.
Each contract with a customer to provide Investment services is typically one performance obligation with revenue recognised
over time as services are rendered. Typically, our performance obligation is to manage a client’s capital and/or property for a
specified period of time and is delivered as a series of daily performance obligations over time.
The transaction price for each contract may include variable consideration in the form of performance fees. Variable
consideration is only included in the transaction price for a contract to the extent it is highly probable that a significant reversal of
that revenue will not occur. The Group assesses probability of receiving variable consideration using a combination of commercial
and market factors, and historical experience.
Revenue is invoiced either monthly or quarterly based on the terms of each individual contract. Invoices are issued under
commercial payment terms which are typically 30 days from when an invoice is issued.
Section A. Performance continued
Financial Statements
113
Accounting Policies continued
Sale of Development Properties
The Group develops and sells residential land lots and built form products, including residential apartments, commercial and retail
buildings. Sales of residential land lots and apartments typically are recognised at a point in time, with each contract treated as a
single performance obligation to transfer control of an asset to a customer. Residential land lots and apartments are recognised
on settlement with the customer.
The sale of retail, commercial and mixed use assets may include land, construction, development management and investment
service components. Where there are multiple components within one contract, the transaction price is allocated based on the
standalone selling prices of each component, typically using the residual approach, and revenue is recognised based on the
policies noted above. Sales of commercial and retail buildings are recognised when the customer obtains control of the asset
based on the specific terms and conditions of the sales contract.
The Group discounts deferred proceeds to reflect the time value of money where the period between the transfer of control of
a development property and receipt of payment from the customer exceeds one year. Deferred proceeds from customers are
recognised in trade and other receivables where the right to receive payment is unconditional. Deposits received in advance from
customers are recognised as a contract liability until the performance obligation has been met.
The measurement of revenue from the sale of development properties is an area of accounting judgement as it requires
management to exercise judgement in valuing the individual components of a development property sale, given the due
consideration to cost inputs, market conditions and commercial factors. The recognition and determination of when control
passes requires management judgement and is considered an area of accounting judgement.
Proceeds from the sale of residential land lots and apartments are received upon settlement, which typically occurs between
6-12 weeks following practical completion on the asset. Proceeds from the sale of retail, commercial and mixed use assets are
received in accordance with the specific terms of each contract.
The Group may enter a PLLACes (Presold Lendlease Apartment Cash Flows) transaction for certain residential apartment
buildings from time to time. This involves the Group receiving an upfront cash inflow from third party investors (investors)
in exchange for selling the investors the rights to the cash proceeds that are due from customers once the apartments are
completed. When customers settle their apartments the Group does not receive any cash proceeds nor does it pay any amounts
to the investors as the customers pay the investors directly. On entry into a PLLACes transaction the cash inflow is disclosed as
an operating cash inflow in the Statement of Cash Flows which typically occurs over a year in advance of the revenue recognition
from the sale of the apartments. At the same time, an Other payables – PLLACes is also recognised within Trade and Other
Payables and is derecognised as revenue once settlement of the apartments occurs.
June 2024
June 2023
$m
$m
Revenue from the provision of services
Core Construction services
5,915
7,191
Non core Construction services
429
499
Construction services
6,344
7,690
Investment services
253
261
Development services
1,472
1,483
Total revenue from the provision of services
8,069
9,434
Revenue from the sale of development properties
1,149
795
Total revenue from contracts with customers1
9,218
10,229
1. Further information on revenue by geography and by segments is included in Note 1b ‘Segment Reporting’.
114
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
5. Share of Profit of Equity Accounted Investments
Accounting Policies
Investments in associates and joint ventures are accounted for using the equity method. The share of profit recognised under
the equity method is the Group’s share of the investment’s profit or loss based on ownership interest held. Associates (including
partnerships) are entities in which the Group, as a result of its voting rights, has significant influence, but not control or joint
control, over the financial and operating policies. A joint venture is a joint arrangement whereby the parties that have joint control
of the arrangement have rights to the net assets of the arrangement.
For associates, this is from the date that significant influence commences until the date that significant influence ceases, and for
joint ventures, this is from the date joint control commences until the date joint control ceases.
June 2024
June 2023
Note
$m
$m
Associates1,2
Share of profit
12.a
5
11
Joint Ventures1,2
Share of profit
12.b
134
17
Total share of profit of equity accounted investments
139
28
1. Reflects the contribution to the Group’s profit, and is after tax paid by the Equity accounted investment vehicles themselves, where relevant. However, for various Equity
accounted investments, the share of tax is paid by the Group and is included in the Group’s current tax expense.
2. Share of profit from Associates and Joint Ventures includes $(18) million loss (June 2023: $(10) million loss) and $(136) million loss (June 2023: $(124) million loss), respectively,
in revaluation losses recognised in the Investments segment adjustment in Note 1 ‘Segment Reporting’. Share of profit from Associates and Joint Ventures include $nil million
(June 2023: $nil million) and $(4) million loss (June 2023 $87 million gain), respectively, in revaluation losses and gains in the Development segment.
6. Other Income
Accounting Policies
Net gains or losses on sale/transfer of investments, including consolidated entities and Equity Accounted Investments are
recognised when an unconditional contract is in place.
Net gains or losses on fair value remeasurements are recognised in accordance with the policies stated in Note 13 ‘Other
Financial Assets’.
June 2024
June 2023
$m
$m
Net gain on sale/transfer of investments
Consolidated entities
-
30
Asset management contract sale
-
192
Equity accounted investments
-
13
Investment properties
-
1
Other assets and liabilities
-
26
Total net gain on sale/transfer of investments
-
262
Net gain on fair value measurement
Investment properties
-
13
Total net gain on fair value measurement
-
13
Other
38
24
Total other income
38
299
Section A. Performance continued
Financial Statements
115
7. Other Expenses
Accounting Policies
Other expenses in general are recognised as incurred.
Employee Benefit Expenses
Employee benefits are expensed as the related service by the employee is provided and includes both equity and cash based
payment transactions. Employee benefits recognised in the Income Statement are net of recoveries.
For cash bonuses, the Group recognises an accrued liability for the amount expected to be paid. This is based on a formula that
takes into consideration the profit attributable to the Group’s securityholders after certain adjustments. Refer to Note 35a ‘Short
Term Incentive (STI)’ for further detail.
Share Based Compensation
The Group operates equity settled share based compensation plans that are linked to Lendlease’s security price. The fair value of
the equity received in exchange for the grant is recognised as an expense and a corresponding increase in equity, in the Equity
Compensation Reserve. The total amount to be expensed over the vesting period is determined by reference to the fair value of
the securities granted.
The fair value is primarily determined using a Monte-Carlo simulation model. Refer to Note 35g ‘Amounts Recognised in the
Financial Statements’ for further detail. Management considers the fair value assigned to be an area of estimation uncertainty as it
requires judgements on Lendlease’s security price and whether vesting conditions will be satisfied.
At each balance sheet date, the Group revises its estimates of the entitlement due. It recognises the impact of revision of
original estimates on non market conditions, if any, in the Income Statement, and a corresponding adjustment to equity over the
remaining vesting period. Changes in entitlement for equity settled share based compensation plans are not recognised if they fail
to vest due to market conditions not being met.
Superannuation Accumulation Plan Expense
All employees in the Australia region are entitled to benefits on retirement, disability or death from the Group’s superannuation
accumulation plan. The majority of these employees are party to a defined contribution plan and receive fixed contributions
from the Group. The Group has no further payment obligations once the contributions have been paid. The contributions are
recognised as an employee benefit expense when they are due. The Group also operates a defined benefit superannuation plan,
membership of which is now closed. Refer to Note 34 ‘Defined Benefit Plan’ for further detail.
Impairment
The carrying amounts of the Group’s assets, subject to impairment tests, are reviewed at each balance sheet date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. The
calculation of this recoverable amount is dependent on the type of asset. The material assets’ accounting policies will contain
further information on these calculations.
An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses
are recognised in the Income Statement.
Reversals of Impairment
Impairment losses on assets can be reversed (other than goodwill) when there is a subsequent increase in the recoverable
amount. The increase could be due to a specific event, the indication that impairment may no longer exist or there is a change in
estimates used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Lease Expense
Short term lease and low value lease payments, including outgoings, are recognised in the Income Statement on a straight line
basis over the term of the lease.
Depreciation and Amortisation
Depreciation on owned assets is charged to the Income Statement on a straight line basis over the estimated useful lives of items
of property, plant and equipment. Amortisation is provided on leasehold improvements over the remaining term of the lease.
Most plant is depreciated over a period not exceeding 20 years, furniture and fittings over three to 15 years, motor vehicles over
four to eight years and computer equipment over three years.
Right-of-use assets are depreciated using the straight line method from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term.
116
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
June 2024
June 2023
$m
$m
Loss before income tax includes the following expense items:
Total Employee Benefit Expense
1,781
1,963
Less: Recoveries through projects
(1,494)
(1,570)
Net employee overhead
287
393
Lease expense (including outgoings)
26
27
IT expense
125
82
Other
99
99
Net overheads
537
601
Americas Telecommunications provision1
58
74
Loans and receivables impairments
22
20
Property inventories impairments
16
-
Equity accounted investments impairments
-
2
Net (gain)/loss on fair value measurement of investment properties and other financial assets
(4)
-
Net loss on sale of investment property
5
-
Net defined benefit plan expense2
(47)
(9)
Net foreign exchange loss
12
6
Total other expenses per Note 1a 'Segment Reporting'3
599
694
Depreciation on right-of-use assets
47
51
Depreciation on owned assets
28
26
Amortisation
47
66
Total depreciation and amortisation
122
143
Costs relating to the strategy update4
Development impairments5
547
-
Goodwill impairments6
513
-
Redundancy, tenancy and other break costs
91
-
Other strategy update costs7
91
-
Total costs relating to the strategy update per Note 1a 'Segment Reporting'
1,242
-
Other items
Other restructuring costs8
117
-
UK building remediation9
17
295
Net loss/(gain) on fair value measurement of investment properties and other financial assets
158
76
Total other expense non-operating items included in Note 1a 'Segment Reporting'
292
371
Total Other Expenses
2,255
1,208
1. Represents provisions raised on future consideration receivable on the sale of the Americas Telecommunication business. The recoverability of the receivable is contingent
on the disposed business meeting certain revenue targets post sale, the measurement date for this is 31 December 2024. Based on current performance these targets are no
longer expected to be met by the measurement date and the balance has been provided in full.
2. Includes the impact of a Lendlease UK Pension Scheme amendment during the year, approved by the Trustees, to bring the valuation of members' future benefits in line with
the scheme rules and statutory requirements, resulting in a gain of $42 million recognised in the income statement. Refer to Note 34 'Defined Benefit Plan' for further detail.
3. Prior year excludes $76 million of Other expenses recognised as discontinued operations.
4. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release
of offshore development capital. Financial impacts include impairment charges on Goodwill and Development projects and other related costs to accelerate the release
of capital.
5. Relates to the impairment of development assets attributable to the Americas and Europe regions as a result of the strategy update. Includes impairment of inventory and
receivables from joint ventures. Refer to Note 11 'Inventories' and Note 21 'Loans and Receivables' for further detail.
6. Relates to the impairment of Construction and Development goodwill attributable to the Americas ($247 million), Asia ($6 million) and Europe ($260 million) regions as a result
of the strategy update announced on 27 May 2024. Refer to Note 32 'Intangible Assets' for further detail.
7. Includes the impact to the Digital products as a result of this strategy update, wherein the recoverable amount of the Digital assets was reassessed and an impairment charge
$16 million was recognised in Corporate Activities. At 30 June 2024, the carrying value of the remaining Digital assets was $55 million (30 June 2023: $53 million). Refer to
Note 32 'Intangible Assets' for further detail.
8. Represents expenses in relation to other cost initiatives undertaken during the current period, primarily consisting of redundancy costs.
9. Expense recorded during the period in relation to UK building remediation. Refer to Note 23 ‘Provisions’ for further detail.
Section A. Performance continued
7. Other Expenses continued
Financial Statements
117
June 2024
June 2023
$000s
$000s
Auditors’ Remuneration
Amounts received or due and receivable by the auditors of Lendlease Group and its consolidated
entities for:
Audit services
9,767
7,887
Other assurance services
925
985
Total audit and other assurance services
10,692
8,872
Non audit services1
-
159
Total audit, other assurance and non audit services
10,692
9,031
1. Non audit services include amounts charged for work relating to financial, regulatory and asset due diligence of the Group and its consolidated entities.
8. Finance Revenue and Finance Costs
Accounting Policies
Finance revenue is recognised as it is earned using the effective interest method, which applies the interest rate that discounts
estimated future cash receipts over the expected life of the financial instrument. The discount is then recognised as finance
revenue over the remaining life of the financial instrument.
Finance costs include interest, amortisation of discounts or premiums relating to borrowings and amortisation of costs incurred in
connection with the arrangement of new borrowings facilities. Costs incurred in connection with the arrangement of borrowings
are capitalised and amortised over the life of the borrowings. Finance costs are expensed immediately as incurred unless they
relate to acquisition and development of qualifying assets. Qualifying assets are assets that take more than six months to prepare
for their intended use or sale. Finance costs related to qualifying assets are capitalised.
June 2024
June 2023
$m
$m
Finance Revenue
Other corporations
17
13
Other finance revenue
9
8
Total interest finance revenue
26
21
Interest discounting
3
1
Gain on repurchase of commercial notes1
39
63
Total finance revenue
68
85
Finance Costs
Interest expense in relation to other corporations
265
174
Interest expense in relation to lease liabilities
13
15
Less: Capitalised interest finance costs2
(29)
(30)
Total interest finance costs
249
159
Non interest finance costs
57
14
Total finance costs
306
173
Net finance costs
(238)
(88)
1. Reflects $39 million (June 2023: $63 million) in relation to the repurchase of £83 million (June 2023: £125 million) of Green senior notes in the Sterling bond market.
2. The weighted average interest rate used to determine the amount of interest finance costs eligible for capitalisation was 5.4 per cent (June 2023: 4.3 per cent), which is the
effective interest rate.
118
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
9. Taxation
Accounting Policies
Income tax on the profit or loss for the financial year comprises current and deferred tax. Income tax is recognised in the Income
Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Under
current Australian income tax law, LLT is not liable for income tax, including capital gains tax, to the extent that unitholders are
attributed the taxable income of LLT.
Current tax is the expected tax payable on the taxable income for the financial year, using applicable tax rates (and tax laws) at
the balance sheet date in each jurisdiction, and any adjustment to tax payable in respect of previous financial years.
Deferred tax is the expected tax payable in future periods as a result of past transactions or events and is calculated by
comparing the accounting balance sheet to the tax balance sheet. Temporary differences are provided for any differences in the
carrying amounts of assets and liabilities between the accounting and tax balance sheets. The following temporary differences
are not provided for:
•
The initial recognition of taxable goodwill
•
The initial recognition of assets or liabilities that affect neither accounting nor taxable profit
•
Differences relating to investments in subsidiaries to the extent that they are not likely to reverse in the foreseeable future.
Measurement of deferred tax is based on the expected manner of realisation or settlement of the carrying amount of assets and
liabilities, using applicable tax rates (and tax laws) at the balance sheet date.
Global minimum tax
The Company is monitoring the global progress toward the enactment and implementation of new Organisation for Economic
Co-Operation and Development rules under Pillar Two. Under the Pillar Two rules, the Group would be liable to pay a top-up
tax for jurisdictions where the effective tax rate calculated in accordance with Pillar Two rules falls below the minimum tax rate
of 15%.
Pillar Two legislation has been passed in certain jurisdictions in which the Group operates. The Group is in scope of the legislation
that will be effective in certain jurisdictions for the Group’s financial year beginning 1 July 2024.
An assessment of the Group’s potential exposure to Pillar Two income taxes has been performed, based on historical data over
several years for the impacted entities in the Group. Based on this assessment, it is not anticipated that there will be a material
impact to tax expense for the Group on implementation of Pillar Two. The impact of implementing Pillar Two on future years will
continue to be assessed.
The Group has applied the mandatory exception to recognising and disclosing information about deferred tax assets and liabilities
related to Pillar Two income tax legislation, in accordance with AASB 112 Income Taxes.
Recognition of deferred tax assets is only to the extent it is probable that future taxable profits will be available so as the related
tax asset will be realised. Deferred tax assets may include the following:
•
Deductible temporary differences
•
Unused tax losses
•
Unused tax credits.
Management considers the estimation of future taxable profits to be an area of estimation uncertainty as a change in any of
the assumptions used in budgeting and forecasting would have an impact on the future profitability of the Group. The Group
prepares financial budgets and forecasts, covering a five year period, which are reviewed on a regular basis. These forecasts
and budgets form the basis of future profitability to support the carrying value of the deferred tax assets. The performance
of the Group is influenced by a variety of general economic and business conditions, which are outside the control of the
Group, including the level of inflation, interest rates, exchange rates, commodity prices, ability to access funding, oversupply and
demand conditions and government fiscal, monetary and regulatory policies.
Presentation of deferred tax assets and liabilities can be offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities,
but are intended to be settled on a net basis or to be realised simultaneously.
Tax Consolidation
The Company is the head entity of the Australian Tax Consolidated Group comprising all the Australian wholly owned
subsidiaries, excluding LLT. As a consequence, all members of the Australian Tax Consolidation Group are taxed as a single entity.
Section A. Performance continued
Financial Statements
119
June 2024
June 2023
9.a. Income Tax Expense
$m
$m
Recognised in the Income Statement
Current Tax Expense
Current year
144
62
Adjustments for prior years
(40)
(13)
Current year tax losses not recognised
9
27
Total current tax expense
113
76
Deferred Tax Expense
Origination and reversal of temporary differences
(383)
(192)
Temporary differences recognised through income tax expense
215
30
Write-off of prior year net tax losses
168
11
Change in tax rate
-
(7)
Total deferred tax benefit
-
(158)
Income Tax Expense
Total income tax expense/(benefit) from continuing operations
113
(6)
Total income tax benefit from discontinued operations
-
(76)
Total income tax expense/(benefit)
113
(82)
Reconciliation of Effective Tax Rate
Loss before tax1
(1,389)
(314)
Income tax using domestic corporate tax rate 30%
(417)
(94)
Adjustments for prior year
(40)
(13)
Non assessable and exempt income2
1
(29)
Non allowable expenses3
183
16
Net write off of tax losses through income tax expense
178
-
Temporary differences recognised through income tax expense4
215
30
Utilisation of capital losses on disposal of assets
(1)
(14)
Effect of tax rates in foreign jurisdictions5
(4)
29
Other
(2)
(7)
Income tax expense/(benefit)
113
(82)
Deferred Tax Recognised Directly in Equity
Relating to:
Hedging reserve
6
11
Defined benefit plan remeasurements
(25)
(36)
Foreign currency translation reserve
(8)
(7)
Unused revenue tax losses recognised
(1)
-
Total deferred tax recognised directly in equity
(28)
(32)
1. In the prior year provisions previously recognised in relation to the sold Engineering business were revised to include the associated tax benefit. This resulted in a $76m gross
up of the provision and recognition of an equal and offsetting deferred tax asset. There was no net impact on profit after tax from discontinued operations.
2. Includes Lendlease Trust Group loss/(profit).
3. Includes accounting expense for which a tax deduction is not allowed permanently. Current period includes the non-deductible impairment of Construction and Development
goodwill attributable to the Americas and Europe regions as a result of the strategy update announced on 27 May 2024. Refer to Note 32 'Intangible assets' for further detail.
4. Includes temporary differences not recognised in the current period which are written off to income tax expense in the current period and temporary differences that arose in
a previous year but were not recognised until the current period. Includes de-recognition of deferred tax assets on carried forward interest deductions.
5. The Group operates in a number of foreign jurisdictions for trading purposes which have lower tax rates than Australia such as the United Kingdom and Singapore and higher
tax rates such as the United States of America (blended federal, state and local rate) and Japan. This also includes the effect of changes in tax rates.
June 2024
June 2023
9.b. Tax Effect Relating to Other Comprehensive Income
Before Tax
Tax
(Expense)/
Benefit
Net of Tax
Before Tax
Tax
(Expense)/
Benefit
Net of Tax
$m
$m
$m
$m
$m
$m
Movements in hedging reserve
(1)
(6)
(7)
12
(11)
1
Movements in foreign currency translation reserve
(56)
8
(48)
113
7
120
Movements in non controlling interest acquisition reserve
-
-
-
(4)
-
(4)
Movements in defined benefit plan remeasurements
(116)
25
(91)
(144)
36
(108)
Movements in unused revenue tax losses recognised
(1)
1
-
-
-
-
Total other comprehensive income net of tax
(174)
28
(146)
(23)
32
9
120
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
June 2024
June 2023
9.c. Deferred Tax Assets and Liabilities
Assets
Liabilities
Assets
Liabilities
$m
$m
$m
$m
Recognised Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are attributable to the following:
Loans and receivables
8
(4)
37
(32)
Inventories
108
(197)
74
(296)
Other financial assets
23
(88)
46
(87)
Other assets
3
(4)
3
(4)
Equity accounted investments
7
(273)
49
(375)
Investment properties
-
(10)
3
(10)
Property, plant and equipment
77
(24)
60
(7)
Intangible assets
9
(12)
7
(11)
Net defined benefit plan
6
(21)
15
(43)
Trade and other payables
128
(13)
152
(14)
Provisions
107
-
135
-
Borrowings and financing arrangements
39
(3)
77
(18)
Other financial and non financial liabilities
47
(12)
37
-
Unused revenue tax losses recognised
131
-
204
-
Unused capital tax losses recognised
50
-
57
-
Items with a tax base but no carrying value
62
(32)
41
(14)
Total deferred tax assets/(liabilities)
805
(693)
997
(911)
Deferred tax set off
(636)
636
(778)
778
Net deferred tax assets/(liabilities)
169
(57)
219
(133)
1 July
2023
Recognised
in Income
Recognised
in Equity
Other/
Foreign
Exchange
30 June
2024
$m
$m
$m
$m
$m
June 2024
Movement in temporary differences during the financial year:
Loans and receivables
5
(1)
-
-
4
Inventories
(222)
151
-
(18)
(89)
Other financial assets
(41)
(22)
-
(2)
(65)
Other assets
(1)
(2)
-
2
(1)
Equity accounted investments
(326)
59
(6)
7
(266)
Investment properties
(7)
(4)
-
1
(10)
Property, plant and equipment
53
16
-
(16)
53
Intangible assets
(4)
2
-
(1)
(3)
Net defined benefit plan
(28)
(12)
25
-
(15)
Trade and other payables
138
(23)
-
-
115
Provisions
135
(29)
-
1
107
Borrowings and financing arrangements
59
(32)
8
1
36
Other financial and non financial liabilities
37
(17)
-
15
35
Unused revenue tax losses recognised
204
(72)
1
(2)
131
Unused capital tax losses recognised
57
(6)
-
(1)
50
Items with a tax base but no carrying value
27
(8)
-
11
30
Total deferred tax assets/(liabilities)
86
-
28
(2)
112
Section A. Performance continued
9. Taxation continued
Financial Statements
121
1 July
2022
Recognised
in Income
Recognised
in Equity
Other/
Foreign
Exchange
30 June
2023
$m
$m
$m
$m
$m
June 2023
Movement in temporary differences during the financial year:
Loans and receivables
(68)
73
-
-
5
Inventories
(249)
37
-
(10)
(222)
Other financial assets
(54)
(27)
-
40
(41)
Other assets
55
(12)
-
(44)
(1)
Equity accounted investments
(340)
36
(11)
(11)
(326)
Investment properties
(9)
2
-
-
(7)
Property, plant and equipment
43
2
-
8
53
Intangible assets
(7)
3
-
-
(4)
Net defined benefit plan
(57)
(3)
36
(4)
(28)
Trade and other payables
146
(3)
-
(5)
138
Provisions
151
(4)
-
(12)
135
Borrowings and financing arrangements
81
(34)
7
5
59
Other financial and non financial liabilities
41
(4)
-
-
37
Unused revenue tax losses recognised
134
56
-
14
204
Unused capital tax losses recognised
-
57
-
-
57
Items with a tax base but no carrying value
15
(21)
-
33
27
Total deferred tax (liabilities)/assets
(118)
158
32
14
86
June 2024
June 2023
$m
$m
Unrecognised Deferred Tax Assets
Deferred tax assets have not been recognised in respect of the following items:
Unused revenue tax losses
182
86
Unused capital tax losses
32
33
Net deductible temporary differences
282
66
Total unrecognised deferred tax assets
496
185
Of the unrecognised deferred tax assets of $496 million, only $29 million expires between 2025 to 2037. The remainder of the
unrecognised deferred tax assets have no expiry date. In determining the recoverability of unrecognised deferred tax assets the Group
has considered the impacts of the strategy update announced on 27 May 2024.
10. Events Subsequent to Balance Date
In July 2024 Lendlease completed the sale of its life sciences interests in Asia to a 50/50 joint venture with Warburg Pincus. The
transaction is expected to contribute approximately $80 million to FY25 OPAT. Refer to Note 33 'Disposal Group assets and liabilities
held for sale' for further detail.
There were no other material events subsequent to the end of the financial reporting period.
122
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
Section B. Investment
Investment in the Development pipeline, joint ventures in property projects, the retirement sector, and more passive assets, such
as property funds, drive the current and future performance of the Group. This section includes disclosures for property such as
Inventories and indirect property assets such as Equity Accounted Investments and Other Financial Assets contained within the
Statement of Financial Position.
11. Inventories
Accounting Policies
Development Properties
Property acquired for development and sale in the ordinary course of business is carried at the lower of cost and Net Realisable
Value (NRV).
The cost of development properties includes expenditure incurred in acquiring the property, preparing it for sale and borrowing
costs incurred.
The NRV is the estimated selling price, less the estimated costs of completion and selling expenses. Management considers the
estimation of both selling prices and costs of completion to be an area of estimation uncertainty, as these estimations take into
consideration market conditions affecting each property and the underlying strategy for selling the property.
The recoverable amount of each property is assessed at each balance date and accounting judgement is required to assess
whether a provision is raised where cost (including costs to complete) exceeds NRV.
Inventories are expensed as cost of sales in the Income Statement. Management uses accounting judgement in determining
the following:
•
The apportionment of cost of sales through sales revenue
•
The amount of cost of sales, which includes costs incurred to date and final forecast costs
•
The nature of the expenditure, which may include acquisition costs, development costs, borrowing costs and those costs
incurred in preparing the property for sale.
Construction Contract Assets
The gross amount of Construction and Development Work in Progress consists of costs attributable to work performed, including
recoverable pre contract and project bidding costs and emerging profit after providing for any foreseeable losses. In applying the
accounting policies on providing for these losses, accounting judgement is required.
Construction contract assets are presented as part of inventories for all contracts in which revenue recognised (costs incurred
plus recognised profits) exceed progress billings. If progress billings and/or recognised contract losses exceed revenue
recognised, then the difference is presented in Trade and other payables as a Construction contract liability.
June 2024
June 2023
Note
$m
$m
Current
Development properties1
1,016
968
Construction contract assets
21.a
660
594
Total current
1,676
1,562
Non Current
Development properties1
1,342
2,681
Total non current
1,342
2,681
Total inventories
3,018
4,243
1. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of
capital from its offshore development project and assets. As a result of this strategy update, the recoverability of development assets in these regions was reassessed and an
impairment charge on Development properties of $488 million was recognised for the year.
Financial Statements
123
12. Equity Accounted Investments
Accounting Policies
Equity Accounted Investments (Associates and Joint Ventures)
As outlined in Note 5 ‘Share of Profit of Equity Accounted Investments’, investments in Associates and Joint Ventures are equity
accounted. The share of investment recognised under the equity method is the Group’s share of the investment’s net assets
based on ownership interest held.
Investments in associates and joint ventures are carried at the lower of the equity accounted carrying amount and the recoverable
amount. When the Group’s share of losses exceeds the carrying amount of the equity accounted investment (including assets that
form part of the net investment in the associate or joint venture entity), the carrying amount is reduced to nil and recognition of
further losses is discontinued except to the extent that the Group has obligations in respect of the associate or joint venture.
Dividends from associates and joint ventures represent a return on the Group’s investment and, as such, are applied as a
reduction to the carrying value of the investment. Unrealised gains arising from transactions with equity accounted investments
are eliminated against the investment in the associate or joint venture to the extent of the Group’s interest in the associate
or joint venture. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment. Other movements in associates’ and joint ventures’ reserves are recognised directly in the Group’s
consolidated reserves.
Development - Investment Property
Investments in this category hold investment property that is under construction and is subject to periodic revaluations. These
revaluations represent development profit earned and are recognised in the Development segment.
Development - Inventory
Investments in this category contain inventory under development and are held at cost. Revenue is recognised once the inventory
settles with the customer and is recognised in the Development segment.
Service Concession Arrangements (SCAs)
The Group equity accounts its investment in project companies with SCAs through Public Private Partnerships (PPPs). These
arrangements provide facilities management and maintenance services with terms generally of 25 to 30 years. They also
incorporate contractual obligations to make available the individual assets for their prescribed use and, where necessary, overhaul
or replace major items of plant and equipment related to the assets with payment obtained through periodic draw downs from
the relevant government authorities.
Joint Operations
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets
and obligations for the liabilities relating to the arrangement.
Investments in joint operations are accounted for by recognising amounts on a line by line basis in accordance with the
accounting standards applicable to the particular assets, liabilities, revenues and expenses in relation to the Group’s interest in the
joint operation.
June 2024
June 2023
Note
$m
$m
Associates
Investment in associates
12.a
740
713
Less: Impairment
12.a
-
-
Total associates
740
713
Joint Ventures
Investment in joint ventures
12.b
5,146
4,961
Less: Impairment
12.b
(27)
(27)
Total joint ventures
5,119
4,934
Total equity accounted investments
5,859
5,647
124
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
INTEREST
SHARE OF PROFIT
NET BOOK VALUE
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
12.a. Associates
%
%
$m
$m
$m
$m
Australia
Investments
Lendlease Sub Regional Retail Fund1
10.0
10.0
-
(1)
1
8
Lendlease Real Estate Partners 4
33.3
33.3
(24)
(24)
95
103
Other
-
(1)
4
4
Total Australia
(24)
(26)
100
115
Asia
Investments
Lendlease Global Commercial REIT
27.9
26.9
35
39
585
552
Lendlease Asian Retail Investment Fund 1
-
48.7
-
-
-
4
Lendlease Asian Retail Investment Fund 2
39.8
39.8
(8)
(4)
29
38
Total Asia
27
35
614
594
Europe
Investments
Lendlease Elephant Park Plot H11B - Daiwa House
25.0
-
(1)
-
25
-
Total Europe
(1)
-
25
-
Americas
Investments
Winn Housing Services
20.0
20.0
3
2
1
4
Total Americas
3
2
1
4
Total Group
5
11
740
713
Less: Impairment
-
-
-
-
Total associates
5
11
740
713
1. Although the Group has a 10 per cent ownership interest in Lendlease Sub Regional Retail Fund, it holds at least 20 per cent of the voting rights over the fund and has
significant influence over the investment. As a result, the Group applies equity accounting for its ownership interest.
INTEREST
SHARE OF PROFIT
NET BOOK VALUE
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
12.b. Joint Ventures
%
%
$m
$m
$m
$m
Australia
Investments
Lendlease Retirement Living Trust
25.1
25.1
33
26
573
544
Lendlease DTC Industrial Trust
-
-
-
3
-
-
Other
-
(1)
7
2
Development
Development - Investment Property
Victoria Cross
75.0
75.0
(57)
(5)
260
187
Development - Inventory
Melbourne Quarter R1
50.0
50.0
-
2
-
2
North East Link
20.0
20.0
5
2
176
155
Frankston Hospital
50.0
50.0
(1)
-
109
90
One Sydney Harbour R1 Trust
75.0
75.0
183
-
43
396
One Sydney Harbour R2 Trust
75.0
75.0
-
-
571
413
One Circular Quay1
33.3
33.3
5
12
221
166
Other Development
-
1
20
21
Total Australia
168
40
1,980
1,976
Section B. Investment continued
12. Equity Accounted Investments continued
Financial Statements
125
INTEREST
SHARE OF PROFIT
NET BOOK VALUE
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
12.b. Joint Ventures
%
%
$m
$m
$m
$m
Asia
Investments
CDR JV Limited
-
25.0
-
-
-
3
Paya Lebar Quarter
30.0
30.0
(28)
(9)
358
391
Development
Development - Investment Property
Certis and Lendlease Property Trust
49.0
49.0
-
-
68
54
The Exchange TRX1
60.0
60.0
73
40
748
685
Lendlease Data Centre Partners
20.0
20.0
25
(1)
47
22
Lendlease Life Science and Innovation Partners2
15.0
15.0
2
2
-
23
Total Asia
72
32
1,221
1,178
Europe
Investments
LRIP LP
20.0
20.0
(13)
1
162
185
MSG South
50.0
50.0
(1)
(7)
137
139
21 Moorfields
25.0
25.0
(13)
(12)
155
170
LRIP 2 LP
50.0
50.0
(21)
2
128
138
Other
8
-
22
15
Development
Development - Investment Property
IQL Office LP
50.0
50.0
(18)
-
180
142
Milano Innovation District
50.0
50.0
1
(1)
128
112
Stratford City Business District Limited (International
Quarter London)
50.0
50.0
(2)
(2)
2
10
MSG North
14.0
8.9
-
-
149
92
Development - Inventory
Victoria Drive Wandsworth
50.0
50.0
(3)
(3)
16
19
Other Development
-
-
7
8
Total Europe
(62)
(22)
1,086
1,030
Americas
Investments
845 Madison
37.5
37.5
(17)
(14)
55
80
Americas Residential Partnership
Clippership Wharf Multifamily Holdings
50.1
50.1
(2)
(16)
72
75
720 S Wells Holdings
50.1
50.1
(11)
(22)
54
67
445 East Waterside
42.5
42.5
(12)
(5)
72
89
SB Polk Street
50.1
50.1
-
8
39
36
DoD Asset Management Holdings2
25.0
25.0
6
10
-
8
Other
(1)
-
8
7
Development
Development - Investment Property
60 Guest Street
25.0
25.0
-
-
80
63
Americas Residential Partnership
211 North Harbor Drive Venture
42.5
42.5
(9)
-
110
117
SB Polk Street
50.1
50.1
-
-
53
45
1 Java Holdings
25.0
25.0
-
-
90
58
La Cienega
50.0
50.0
(1)
(1)
168
72
Development - Inventory
277 Fifth Avenue
40.0
40.0
-
-
17
17
Other Development
-
-
38
38
Construction
Lendlease Turner Joint Venture
50.0
50.0
3
7
3
5
Total Americas
(44)
(33)
859
777
Total Group
134
17
5,146
4,961
Less: Impairment
-
-
(27)
(27)
Total joint ventures
134
17
5,119
4,934
Total associates
5
11
740
713
Total equity accounted investments
139
28
5,859
5,647
1. Investment includes both investment property and residential inventory.
2. On 17 May 2024, the Group announced it had agreed to sell its Asia life science interests, including Lendlease Life Science and Innovation Partners. As a result, the investment
was classified as Disposal Group assets held for sale at June 2024. Refer to Note 33 'Disposal Group Assets and Liabilities Held for Sale' for further detail.
126
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
12.c. Material Associates and Joint Ventures Summarised Financial Information
The table below provides summarised financial information for those associates and joint ventures that are material to the Group.
Material associates and joint ventures have been determined by comparing individual investment net book value with the total equity
accounted investment carrying value and share of profit, along with consideration of relevant qualitative factors. The information
disclosed reflects the amounts presented in the financial statements of the relevant joint ventures and associates and, where indicated,
the Group’s share of those amounts. They have been amended to reflect adjustments made by the Group when using the equity
method, including fair value adjustments and differences in accounting policies. The nature and principal activities of the material
associates and joint ventures is investment in property assets.
LENDLEASE GLOBAL
COMMERCIAL REIT
LENDLEASE
RETIREMENT
LIVING TRUST
PAYA LEBAR QUARTER
THE EXCHANGE
TRX
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
Income Statement1
$m
$m
$m
$m
$m
$m
$m
$m
Revenue and other income
250
233
382
301
139
154
335
147
Cost of sales
(63)
(56)
(56)
(53)
(48)
(33)
(202)
(150)
Other expenses
(25)
(26)
(99)
(86)
(20)
(23)
(24)
(4)
Unrealised fair value gains/(losses)
3
45
(53)
(29)
(169)
4
86
18
Finance costs
(78)
(56)
(46)
(30)
(80)
(64)
(36)
-
Income tax (benefit)/expense
-
-
-
(1)
(3)
(2)
(15)
3
Other
(11)
(12)
-
-
-
-
-
-
Profit/(loss) for the financial year
76
128
128
102
(181)
36
144
14
Other comprehensive
income/(expense)
11
(4)
(18)
(3)
-
-
-
(3)
Total comprehensive income
87
124
110
99
(181)
36
144
11
Group's ownership interest
27.9%
26.9%
25.1%
25.1%
30.0%
30.0%
60.0%
60.0%
Group's total share of:
Profit/(loss) for the financial year
21
34
32
26
(54)
11
86
8
Other adjustments
14
5
1
-
26
(20)
(13)
32
Total profit/(loss) for the
financial year
35
39
33
26
(28)
(9)
73
40
Other comprehensive
income/(expenses)
3
29
(4)
(1)
(5)
40
(29)
(3)
Total comprehensive
income/(expenses)
38
68
29
25
(33)
31
44
37
1. The underlying investments in the material associate and joint ventures are office, retail and retirement living investment properties measured at fair value. At 30 June 2024,
valuations were undertaken on the underlying assets. The carrying value of the investments are considered recoverable as it correlates with the net assets of the associate and
joint ventures, which have been valued at 30 June 2024.
The table below provides summarised financial information for those associates and joint ventures that are individually immaterial to
the Group:
ASSOCIATES
JOINT VENTURES
June 2024
June 2023
June 2024
June 2023
Income Statement
$m
$m
$m
$m
Aggregate amounts of the Group's share of:
(Loss)/profit from continuing operations
(30)
(28)
56
(40)
Other comprehensive income/(expense)
(1)
1
(8)
100
Aggregate amounts of Group's share of total comprehensive income/
(expense) of individually immaterial equity accounted investments
(31)
(27)
48
60
Section B. Investment continued
12. Equity Accounted Investments continued
Financial Statements
127
LENDLEASE GLOBAL
COMMERCIAL REIT
LENDLEASE
RETIREMENT
LIVING TRUST1
PAYA LEBAR QUARTER
THE EXCHANGE
TRX
Statement of Financial Position
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
June 2024
June 2023
$m
$m
$m
$m
$m
$m
$m
$m
Current assets
Cash and cash equivalents
38
57
27
24
171
158
108
87
Other current assets
19
18
55
86
12
8
56
19
Total current assets
57
75
82
110
183
166
164
106
Non current assets
Investment properties
4,092
4,047
8,868
8,310
3,174
3,338
1,976
1,840
Equity accounted investments
5
9
-
-
-
-
-
-
Other non current assets
108
105
38
51
6
23
25
27
Total non current assets
4,205
4,161
8,906
8,361
3,180
3,361
2,001
1,867
Current liabilities
Resident liabilities
-
-
5,755
5,349
-
-
-
-
Financial liabilities (excluding
trade payables)
398
472
2
2
-
-
67
28
Other current liabilities
57
60
59
105
77
77
76
94
Total current liabilities
455
532
5,816
5,456
77
77
143
122
Non current liabilities
Financial liabilities (excluding
trade payables)
1,314
1,200
935
888
1,944
1,938
669
654
Other non current liabilities
28
29
-
-
34
27
-
-
Total non current liabilities
1,342
1,229
935
888
1,978
1,965
669
654
Net assets
2,465
2,475
2,237
2,127
1,308
1,485
1,353
1,197
Reconciliation to
Carrying Amounts
Opening net assets 1 July
2,475
2,285
2,127
2,055
1,485
1,458
1,197
956
Total comprehensive income/
(loss) for the financial year
87
124
110
99
(181)
36
144
11
Acquisition/(capital reduction)
21
40
-
-
107
(105)
79
263
Distributions
(118)
(91)
-
(27)
(107)
-
(48)
-
Foreign currency translation for
the financial year
-
117
-
-
4
96
(19)
(33)
Closing net assets
2,465
2,475
2,237
2,127
1,308
1,485
1,353
1,197
% ownership
27.9%
26.9%
25.1%
25.1%
30.0%
30.0%
60.0%
60.0%
Group's share of net assets
688
665
561
534
392
446
812
718
Other adjustments
(103)
(113)
(1)
(3)
(34)
(55)
(64)
(33)
Carrying amount at end of the
financial year
585
552
560
531
358
391
748
685
1. The carrying amount at the end of the financial year differs to Note 12b ‘Joint Ventures’ due to an impairment of $13 million.
Material joint ventures had $219 million (June 2023: $135 million) in capital expenditure commitments.
The table below provides summarised financial information for those associates and joint ventures that are individually immaterial to
the Group:
ASSOCIATES
JOINT VENTURES
June 2024
June 2023
June 2024
June 2023
Statement of Financial Position
$m
$m
$m
$m
Aggregate carrying value of individually immaterial equity
accounted investments
155
161
3,467
3,341
128
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
13. Other Financial Assets
Accounting Policies
Financial Assets at fair value through profit or loss on initial recognition are measured at fair value (generally transaction price)
and subsequently stated at fair value. Transaction costs are recorded as expenses when they are incurred. Any gain or loss arising
from a change in fair value is recognised in the Income Statement.
Financial Assets at amortised cost are presented within Note 21 ‘Loans and Receivables’.
Fair Value
June 2024
June 2023
Level1
$m
$m
Current Measured at Fair Value
Fair Value Through Profit or Loss - Designated at Initial Recognition
Derivatives
Level 2
12
32
Total current
12
32
Non Current Measured at Fair Value
Fair Value Through Profit or Loss - Designated at Initial Recognition
Lendlease International Towers Sydney Trust
Level 3
140
155
Lendlease One International Towers Sydney Trust
Level 3
47
56
Australian Prime Property Fund - Industrial
Level 3
256
276
Australian Prime Property Fund - Commercial
Level 3
303
380
Australian Prime Property Fund - Retail
Level 3
200
57
Military Housing Projects Initiative2
Level 3
-
167
Other investments
Level 3
26
33
Derivatives
Level 2
2
16
Total non current
974
1,140
Total other financial assets
986
1,172
1. Refer to Note 26 ‘Fair Value Measurement’ for detail on basis of determining fair value and valuation technique.
2. On 1 July 2024, the Group announced it had entered into an agreement, for the sale of US Military Housing Business, including Military Housing Projects Initiative. As a result,
the investment was classified as Disposal Group assets held for sale at June 2024. Refer to Note 33 'Disposal Group Assets and Liabilities Held for Sale' for further detail.
13.a. Fair Value Reconciliation
The reconciliation of the carrying amount for Level 3 financial assets is set out as follows:
June 2024
June 2023
$m
$m
Carrying amount at beginning of financial year
1,124
1,149
Acquisition
151
17
Net losses recognised in Income Statement
(131)
(76)
Transfer to Disposal Group assets held for sale
(171)
-
Other movements
(1)
34
Carrying amount at end of financial year
972
1,124
The potential effect of using reasonably possible alternative assumptions for valuation inputs would not have a material impact on
the Group.
Section B. Investment continued
Financial Statements
129
Section C. Liquidity and Working Capital
The ability of the Group to fund the continued investment in the development pipeline, invest in new opportunities and meet
current commitments is dependent on available cash, undrawn debt facilities and access to third party capital. This section
contains disclosures on the financial assets, financial liabilities, cash flows and equity that are required to finance the Group’s
activities, including existing commitments and the liquidity risk exposure associated with financial liabilities. The section also
contains disclosures for the Group’s trading assets, excluding inventories, and the trading liabilities incurred as a result of trading
activities used to generate the Group’s performance.
14. Cash and Cash Equivalents
Accounting Policies
Cash and cash equivalents include cash on hand, deposits held at call with banks, bank overdrafts and other short term highly
liquid investments that are readily convertible to known amounts of cash within three months and which are subject to an
insignificant risk of changes in value.
Bank overdrafts (if applicable) are shown as a current liability on the Statement of Financial Position and are shown as a reduction
to the cash balance in the Statement of Cash Flows.
June 2024
June 2023
$m
$m
Cash
872
856
Short term investments1
128
44
Total cash and cash equivalents
1,000
900
1. Short term investments earned variable rates of interest which averaged 4.5 per cent per annum during the financial year (30 June 2023: 2.9 per cent).
130
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
15. Notes to Statement of Cash Flows
June 2024
June 2023
$m
$m
Reconciliation of Loss after Tax to Net Cash Used in Operating Activities
Loss after tax (including external non controlling interests)
(1,502)
(232)
Amortisation and depreciation
122
143
Net gain on sale of investments, plant and equipment
-
(232)
Impairment of equity accounted investments
-
2
Impairment of loan and receivables
22
20
Impairment of intangible assets
529
-
Development Impairments
547
-
Net foreign exchange loss and currency hedging costs
12
4
Net loss on fair value measurement of fair value through profit or loss assets
154
76
Share of profit of equity accounted investments
(138)
(28)
Dividends/distributions from equity accounted investments
382
126
Fair value gain on investment properties
-
(13)
Gain on repurchase of commercial notes
(39)
(63)
Other
(33)
(24)
Net cash from/(used) in operating activities before changes in assets and liabilities
56
(221)
Changes in Assets and Liabilities Adjusted for Effects of Purchase and
Disposal of Consolidated Entities and Operations During the Financial Year
Decrease in receivables
597
199
Increase in inventories
(343)
(342)
(Increase)/decrease in other assets
(6)
7
(Increase)/decrease in net defined benefit plan asset
(36)
12
(Decrease)/increase in payables
(507)
118
(Decrease)/increase in operating derivatives assets/liabilities
(5)
18
Increase/(decrease) in deferred tax items
4
(343)
Increase/(decrease) in current tax
37
(42)
Increase in other provisions
148
108
Net cash used in operating activities
(55)
(486)
16. Borrowings and Financing Arrangements
Accounting Policies
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently measured at
amortised cost using the effective interest rate method. Under the amortised cost method the difference between the amount
initially recognised and the redemption value is recorded in the Income Statement over the period of the borrowing on an
effective interest basis. Borrowings are referred to in this section using their redemption value when describing the terms
and conditions.
Section C. Liquidity and Working Capital continued
Financial Statements
131
June 2024
June 2023
16.a. Borrowings – Measured at Amortised Cost
$m
$m
Current
Bank credit facilities
9
19
Total current
9
19
Non Current
Commercial notes
1,789
1,928
Bank credit facilities
2,378
1,334
Total non current
4,167
3,262
Total borrowings
4,176
3,281
The Group has net debt of $3,176 million (June 2023: $2,381 million) and is 21.1% per cent (June 2023: 14.8 per cent) geared at the
balance sheet date. The Group's gearing is calculated as net debt to total tangible assets, less cash.
June 2024
June 2023
16.b. Finance Facilities
$m
$m
The Group has access to the following lines of credit:
Commercial Notes
Facility available
1,789
1,928
Amount of facility used
(1,789)
(1,928)
Amount of facility unused
-
-
Bank Credit Facilities
Facility available
3,422
2,910
Amount of facility used
(2,387)
(1,353)
Amount of facility unused
1,035
1,557
Bank Overdrafts
Facility available and amount unused
124
124
Commercial notes include:
•
US$400 million of guaranteed unsecured senior notes issued in May 2016 in the US Reg. S market with a 4.5 per cent per annum
coupon maturing in May 2026.
•
S$300 million of guaranteed unsecured senior notes issued in April 2017 in the Singapore bond market with a 3.9 per cent coupon
maturing in April 2027.
•
$500 million of guaranteed unsecured Green senior notes issued in October 2020 in the Australian bond market with a 3.4 per cent
coupon maturing in October 2027.
•
$80 million of guaranteed unsecured senior medium term notes issued as an A$ private placement in December 2018 with a 5.4 per
cent per annum coupon maturing in December 2028.
•
$300 million of guaranteed unsecured Green senior notes issued in March 2021 in the Australian bond market with a 3.7 per cent
coupon maturing in March 2031.
•
£42 million of guaranteed unsecured Green senior notes issued in December 2021 in the Sterling bond market with a 3.5 per cent
coupon maturing in December 2033.
Bank credit facilities include:
•
£400 million sustainability linked loan was drawn to $679 million as at 30 June 2024, with $98 million maturing in October 2027 and
$581 million maturing in October 2028.
•
US$300 million sustainability linked loan was drawn to $396 million as at 30 June 2024, with $66 million maturing in July 2025 and
$330 million maturing in July 2026.
•
CNY713 million bank facility maturing in January 2034 was drawn to $144 million as at 30 June 2024.
•
S$300 million sustainability linked loan maturing in February 2026 was drawn to $322 million as at 30 June 2024.
•
$800 million sustainability linked loan with Tranche A $400 million maturing in November 2025, was drawn to $295 million as at
30 June 2024 and Tranche B $400 million maturing in November 2026 was drawn to $175 million as at 30 June 2024.
•
€200 million sustainability linked loan was drawn to $282 million as at 30 June 2024, with $28 million maturing in July 2027 and
$254 million maturing in July 2028.
•
$600 million sustainability linked loan with Tranche C $85 million maturing in September 2026, was drawn to $85 million as at
30 June 2024 and Tranche A $250 million maturing in September 2025 and Tranche B $265 million maturing in September 2026
were undrawn as at 30 June 2024.
The Group has an uncommitted facility of $350 million maturing October 2024 which was undrawn as at 30 June 2024.
The bank overdraft facilities may be drawn at any time and are repayable on demand.
The Group has not defaulted on any obligations in relation to its borrowings and financing arrangements.
132
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
INTEREST EXPOSURE
CURRENCY
Fixed
$m
Floating
$m
Total
$m
A$
$m
US$
$m
£
$m
€
$m
CNY
$m
S$
$m
Total
$m
June 2024
Within one year
9
-
9
-
-
9
-
-
-
9
Between one and five years
1,448
2,234
3,682
1,075
991
679
282
-
655
3,682
More than five years
485
-
485
262
-
79
-
144
-
485
Total
1,942
2,234
4,176
1,337
991
767
282
144
655
4,176
June 2023
Within one year
19
-
19
-
-
19
-
-
-
19
Between one and five years
1,542
1,145
2,687
745
767
192
328
189
466
2,687
More than five years
575
-
575
337
-
238
-
-
-
575
Total
2,136
1,145
3,281
1,082
767
449
328
189
466
3,281
June 2024
June 2023
16.c. Movement in Borrowings and Financing Arrangements
Note
$m
$m
Balance at beginning of financial year
16.a
3,281
2,357
Net proceeds from borrowings
909
902
Effect of foreign exchange rate movements
(34)
80
Other movements
20
(58)
Balance at end of financial year
16.a
4,176
3,281
17. Issued Capital
Accounting Policies
Issued Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a
deduction from equity.
When share capital recognised as equity is repurchased, the amount of the consideration paid, including directly attributable
costs, is recognised as a change in equity. Repurchased shares are typically classified as treasury shares and are recognised as a
deduction from equity.
LENDLEASE CORPORATION LIMITED
LENDLEASE TRUST
June 2024
June 2023
June 2024
June 2023
No. of
Shares
No. of
Shares
No. of Units
No. of Units
(m)
$m
(m)
$m
(m)
$m
(m)
$m
Issued capital at beginning
of financial year, net of
prior period share buyback
689
1,894
689
1,891
689
1,539
689
1,538
Distribution Reinvestment
Plan (DRP)
1
2
-
3
1
1
-
1
Issued capital at end of
financial period
690
1,896
689
1,894
690
1,540
689
1,539
17.a. Issuance of Securities
As at 30 June 2024, the Group had 690 million stapled securities on issue, equivalent to the number of Lendlease Corporation shares
and Lendlease Trust (LLT) units on issue as at that date. The issued units of LLT are not owned by the Company and are therefore
presented separately in the Consolidated Statement of Financial Position within equity.
Section C. Liquidity and Working Capital continued
16. Borrowings and Financing Arrangements continued
Financial Statements
133
17.b. Security Accumulation Plans
The Group’s Distribution Reinvestment Plan (DRP) was reactivated in February 2011. The last date for receipt of an election notice for
participation in the DRP is 27 August 2024. The issue price is the arithmetic average of the daily volume weighted average price of
Lendlease Group stapled securities traded (on the Australian Securities Exchange) for the period of five consecutive business days
immediately following the record date, commencing on 27 August 2024, for determining entitlements to distribution. If that price is less
than 50 cents, the issue price will be 50 cents. Stapled securities issued under the DRP rank equally with all other stapled securities
on issue.
17.c. Terms and Conditions
Issued capital for Lendlease Corporation Limited comprises ordinary shares fully paid. A stapled security represents one share in the
Company stapled to one unit in LLT. Stapled securityholders have the right to receive declared dividends from the Company and
distributions from LLT and are entitled to one vote per stapled security at securityholders’ meetings. Ordinary stapled securityholders
rank after all creditors in repayment of capital.
The Group does not have authorised capital or par value in respect of its issued stapled securities.
18. Capital Management
The Group assesses capital management as part of its broader strategic plan. The Group focuses on interrelated financial parameters,
including Return on Equity, earnings growth and borrowing capacity. The Group also monitors its gearing ratio, leverage ratio, interest
coverage ratio and weighted average cost of debt and maturity profile. These are all taken into account when the Group makes
decisions on how to invest its capital and evaluate its existing investments.
The Group’s capital includes total equity, borrowings and other interest bearing liabilities. When investing capital, the Group’s objective
is to deliver strong total securityholder returns and to maintain an investment grade credit rating by maintaining an appropriate financial
profile. The Moody’s/Fitch long term credit ratings at 30 June 2024 are Baa3/BBB- respectively (June 2023: Baa3/BBB-).
The capital structure of the Group can be changed by equity issuance, paying distributions to securityholders, the Distribution
Reinvestment Plan and changing the level of debt. For further information on how the Group allocates and manages capital, refer to
details of the Portfolio Management Framework in the Managing and Measuring Value - Financial section and Performance and Outlook
section of this Annual Report.
19. Liquidity Risk Exposure
Further information on liquidity risk is disclosed in Note 24 ‘Financial Risk Management’. As disclosed in Note 27 ‘Contingent Liabilities’,
in certain circumstances, the Company guarantees the performance of particular Group entities in respect of their obligations including
bonding and bank guarantees. Issued bank guarantees have cash collateralisation requirements if the bank guarantee facility is not
renewed by the provider.
At 30 June 2024, the Group does not anticipate a significant liquidity risk in relation to the following financial liabilities. This is due to
the Group’s strong financial profile, as supported by the significant committed undrawn facilities and low gearing ratio. Refer to Note 14
‘Cash and Cash Equivalents’ and Note 16 ‘Borrowings and Financing Arrangements’.
The Group has provided collateral of $nil (June 2023: $nil) against letter of credit facilities.
134
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
The following are the contractual cash flow maturities of financial liabilities including estimated interest payments:
Carrying
Amount
Contractual
Cash Flows
Less Than
One Year
One to Two
Years
Two to Five
Years
More Than
Five Years
Note
$m
$m
$m
$m
$m
$m
June 2024
Non Derivative Financial Liabilities
Trade and other payables1
22
4,678
4,957
3,987
728
218
24
Lease liabilities
22
333
352
93
91
154
14
Borrowings and financing arrangements
16.a
4,176
4,579
124
1,394
2,525
536
Total
9,187
9,888
4,204
2,213
2,897
574
Derivative Financial Liabilities
(Outflow)
-
(1,668)
(1,588)
(24)
(44)
(12)
Inflow
101
1,769
1,619
47
83
20
Total
101
101
31
23
39
8
June 2023
Non Derivative Financial Liabilities
Trade and other payables1
22
4,996
5,502
3,572
801
1,103
26
Lease liabilities
22
384
425
89
93
220
23
Borrowings and financing arrangements
16.a
3,281
3,746
135
314
2,174
1,123
Total
8,661
9,673
3,796
1,208
3,497
1,172
Derivative Financial Liabilities
(Outflow)
-
(2,041)
(1,940)
(24)
(58)
(19)
Inflow
140
2,181
1,993
48
109
31
Total
140
140
53
24
51
12
1. Trade and other payables are presented excluding lease liabilities. The carrying amount of trade and other payables excludes $983 million of current and $26 million of non
current amounts (June 2023: $971 million of current and $628 million of non current) in relation to items where there is no future cash outflow or liquidity risk.
Other contractually committed cash flows the Group is exposed to are detailed in Note 20 ‘Commitments’.
20. Commitments
June 2024
June 2023
20.a. Capital Expenditure
$m
$m
At balance date, capital expenditure commitments agreed or contracted but not provided for in the
financial statements are as follows:
Due within one year
-
-
Due between one and five years
-
-
Due later than five years
-
-
Total
-
-
June 2024
June 2023
20.b. Investments
$m
$m
At balance date, capital commitments existing in respect of interests in equity accounted investments
and other investments contracted but not provided for in the financial statements are as follows:
Due within one year
1,864
1,853
Due between one and five years
1,192
1,381
Due later than five years
-
16
Total
3,056
3,250
Section C. Liquidity and Working Capital continued
19. Liquidity Risk Exposure continued
Financial Statements
135
June 2024
June 2023
20.c. Investment Properties
$m
$m
At balance date, capital commitments existing in respect of the purchase, construction or development
of investment properties, contracted but not provided for in the financial statements, are as follows:
Due within one year
80
108
Due between one and five years
81
108
Due later than five years
-
-
Total
161
216
21. Loans and Receivables
Accounting Policies
Loans and receivables, which include trade and other receivables, are non derivative financial assets with fixed or determinable
payments that are not equity securities. They arise when the Group provides money, goods or services directly to a debtor
with no intention of trading the receivable. Contract debtors represent receivables where the right to receive payment from
customers remains conditional. Other receivables include receivables related to investment management, property development
and miscellaneous items.
Loans and receivables are carried at amortised cost using the effective interest method, which applies the interest rate that
discounts estimated future cash receipts over the term of the loans and receivables. Cash flows relating to short term trade and
other receivables are not discounted if the effect of discounting is immaterial. The discount, if material, is then recognised as
revenue over the remaining term.
The Group assesses provision for impairment of loans and receivables based on expected loss, and books a provision if material.
The Group considers reasonable and supportable information that is relevant and available. This includes both quantitative and
qualitative information and analysis, based on the Group’s historical impairment experience, credit assessment of customers and
any relevant forward looking information. The amount of the provision is recognised in the Income Statement.
Retentions receivable on construction contracts represent deposits held by the Group until the satisfaction of conditions
specified in the contract are met.
June 2024
June 2023
Note
$m
$m
Current
Trade receivables
561
651
Less: Impairment
(34)
(29)
527
622
Related parties
444
339
Retentions
293
282
Contract debtors
21.a
250
250
Accrued income
21.a
105
114
Other receivables
603
692
Total Current
2,222
2,299
Non Current
Trade receivables
-
2
Related parties
301
485
Less: Impairment1
(66)
(10)
235
477
Retentions
50
70
Other receivables
163
892
Total non current
448
1,439
Total loans and receivables
2,670
3,738
1. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of
capital from its offshore development project and assets. As a result of this strategy update, the recoverability of Development receivables in these regions was reassessed and
an impairment charge of $59 million was recognised for the year.
As at the reporting date, $428 million of the trade debtors were current (30 June 2023: $514 million) and $133 million were past
due (30 June 2023: $137 million). Of the past due amount, $99 million was not impaired (30 June 2023: $108 million). ‘Past due’ is
defined under accounting standards to mean any amount outstanding for one or more days after the contractual due date. Of the total
trade debtors, 9.4 per cent (30 June 2023: 7.7 per cent) are aged greater than 90 days. Other than trade debtors, no other loans and
receivables are considered past due at 30 June 2024 (30 June 2023: $nil).
136
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
June 2024
June 2023
$m
$m
Provision for Impairment
Carrying amount at beginning of financial year
39
18
Impairment loss recognised during the year
67
20
Bad debts written off
(2)
-
Other movements (including foreign exchange rate movements)
(4)
1
Carrying amount at end of financial year
100
39
Total impairment as a percentage of total loans and receivables
3.7%
1.0%
The credit quality of all loans and receivables, including those neither past due nor impaired, is assessed and monitored on an ongoing
basis. Impairment as noted above was immaterial at 30 June 2024, though in view of prevailing market conditions there exists a
heightened level of credit risk associated with counterparties. The impairment provision relates to specific loans and receivables that
have been identified as being impaired, including related party loans where the Group’s interest in a development was via an equity
accounted investment. A substantial portion of the Group’s loans and receivables balances are unsecured.
June 2024
June 2023
21.a. Contract Assets
Note
$m
$m
Current
Contract debtors1
250
250
Construction contract assets2
11
660
594
Accrued income
105
114
Total contract assets
1,015
958
1. Movements in contract debtors during the financial year relate primarily to amounts transferred into Trade receivables as the right to receive payment from the customer has
become unconditional.
2. Movements in construction contract assets during the financial year related primarily to revenue recognised on construction contracts with customers in excess of billings
raised during the financial year.
22. Trade and Other Payables
Accounting Policies
Trade Creditors
Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to the Group.
Trade and other payables are settled in the normal course of business. Trade and other payables are carried at amortised cost
using the effective interest method, which applies the interest rate that discounts estimated future cash outflows over the term
of the trade and other payables. Cash flows relating to short term trade and other payables are not discounted if the effect of
discounting is immaterial. The discount, if material, is then recognised as an expense over the remaining term.
Construction Contract Liabilities
Construction contracts where the total progress billings issued to clients (together with foreseeable losses, if applicable) on a
project exceed the revenue recognised (costs incurred to date plus recognised profit) on the contract are recognised as a liability.
Retentions
Retentions are amounts payable for the purpose of security and for the provision of defects in accordance with contract terms.
Release of retention amounts are in accordance with contractual terms.
Unearned Income
Primarily relates to unearned income and deposits received in advance on presold apartments. These amounts will be recognised
as income in line with the ‘Sale of development properties’ accounting policy in Note 4 ‘Revenue from Contracts with Customers’.
Lease Liabilities
Lease liabilities are measured at the present value of the lease payments discounted using the interest rate implicit in the lease.
The Group uses its incremental borrowing rate as the discount rate.
Section C. Liquidity and Working Capital continued
21. Loans and Receivables continued
Financial Statements
137
June 2024
June 2023
Note
$m
$m
Current
Trade and accrued creditors
2,436
2,616
Construction contract liabilities
22.a
997
1,148
Related parties
108
145
Retentions
344
379
Deferred land payments
38
16
Unearned income
22.a
125
85
Lease liabilities
85
79
Other payables - PLLACes1
612
-
Other
124
178
Total current
4,869
4,646
Non Current
Trade and accrued creditors
-
306
Retentions
53
74
Deferred land payments
353
337
Unearned income
22.a
26
66
Lease liabilities
248
305
Other payables - PLLACes1
-
562
Other
471
683
Total non current
1,151
2,333
Total trade and other payables
6,020
6,979
1. PLLACes transactions involve selling the presold apartment cash flows for a specific development project to a third party for cash consideration. This amount relates to
$498 million (June 2023: $457 million non current) and $114 million (June 2023: $105 million non current) of proceeds received from PLLACes transactions for One Sydney
Harbour R2 Trust and One Sydney Harbour R3 project, respectively. Refer to Note 4 ‘Revenue from Contracts with Customers’ for further detail.
As at 30 June 2024, the Group recognised right-of-use assets of $123 million (30 June 2023: $161 million) within Property, Plant
and Equipment.
June 2024
June 2023
22.a. Contract Liabilities
$m
$m
Current
Unearned income1
125
85
Construction contract liabilities2
997
1,148
Total current
1,122
1,233
Non Current
Unearned income1
26
66
Total non current
26
66
Total contract liabilities
1,148
1,299
1. Movements in Unearned income relates primarily to residential presales settled during the financial year and deposits received for development properties.
2. Movements in Construction contract liabilities relate primarily to revenue recognised during the period in excess of billings raised on construction contracts with customers.
This balance also contains provisions previously incurred on retained Engineering projects that are in progress.
During the year, the Group recognised $894 million in revenue from contracts that held a contract liability balance at the beginning of
the financial year. The total transaction price relating to the Group’s Unearned income on the Group’s development contracts at June
2024 is $395 million relating primarily to various UK and Australian projects. The difference between the Unearned income amount
noted in the table above and this amount primarily relates to the remaining development value of apartments versus the deposit amount
received. Revenue from these contracts is expected to be realised as control over each asset is transferred to the customer.
The total transaction price allocated to unsatisfied performance obligations on the Group’s construction contracts as at June 2024 is
$10.8 billion. This includes new work secured during the financial year. Of the total construction backlog, 62 per cent is expected to be
realised within the next 12 months to June 2025 (June 2023: 55 per cent to June 2024), 26 per cent to June 2026 (June 2023: 30 per
cent to June 2025) and the remaining 12 per cent realised post June 2026 (June 2023: 15 per cent post June 2025).
138
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
23. Provisions
Accounting Policies
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable
that the Group will be required to settle that obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using
the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the
effect of the time value of money is material).
Management considers this is an area of estimation uncertainty as these calculations involve a number of key assumptions
including the expected future cash outflow and the timing of the outflow to determine the provision.
Employee Benefits
Includes amounts for employee annual leave and long service leave entitlements.
Development Projects
Includes amounts for costs to close out development projects, including defects and residual guarantees. The timing of any
expected outflows of economic benefits is dependent on market factors, such as lease up rates in specific markets, and
negotiations with customers.
Construction Projects
Includes amounts for claims and litigation related to legacy construction projects. The timing of any expected outflows of
economic benefits is dependent on the progression of negotiations and litigation with claimants, which are ongoing at period end.
UK Building Remediation
Includes the provision in relation to UK building remediation. Refer to below for further detail.
Other
Includes amounts related to various litigation and commercial matters and amounts recognised in relation to the strategy update
announced in May 2024.
Employee
Benefits
Development
Projects
Construction
Projects
UK Building
Remediation
Other1
Total
$m
$m
$m
$m
$m
$m
Balance as at 1 July 2023
166
115
370
319
64
1,034
Provisions made during the year
42
12
195
54
141
444
Provisions used during the year
(59)
(43)
(86)
(8)
(21)
(217)
Provisions reversed during the year
(2)
(5)
(59)
-
(4)
(70)
Balance as at 30 June 2024
147
79
420
365
180
1,191
Current provisions
129
46
398
138
180
891
Non current provisions
18
33
22
227
-
300
Total provisions
147
79
420
365
180
1,191
1. Provisions made during the year include impacts of the strategy update announced on 27 May 2024.
Provision in relation to UK building remediation
The UK Government has enacted a number of retrospective legislative changes and additional measures to address building safety
risks concerning residential buildings with a height of 11 metres and above. As part of this action, the defect liabilities period has been
extended from 6 to 30 years, and there have been updates to building safety regulations for completed residential buildings.
So as not to be subject to significant trade restrictions, consistent with other UK developers, Lendlease entered into a contract with the
UK Government on 22 March 2023, committing to remediate building safety risks consistent with these legislative changes.
Lendlease has established a dedicated team undertaking the work to address the issues raised on various buildings. Lendlease believes
that the liability currently relates to 60 buildings (June 2023: 59 buildings), most of which were developed by Crosby, a company that
Lendlease acquired in 2005 to enter the residential development market in the UK. Notably, many of these buildings were completed or
had commenced construction prior to Lendlease’s acquisition. Lendlease no longer owns any of these buildings.
It is noted that each building completed by a Lendlease entity was certified as complying with applicable building regulations at the
time of its completion.
At 30 June 2024, Lendlease holds a provision of $365 million (June 2023: $319 million) in respect of this matter. Movements in the
provision during the year relate to changes in cost estimates, changes in discount rate, the unwinding of discount due to the passage of
Section C. Liquidity and Working Capital continued
Financial Statements
139
time, and the impacts of foreign exchange rate movements. During the year a settlement was reached with a third-party contractor for
the recovery of costs in relation to a number of buildings included in the provision. The settlement payment in relation to these buildings
was received in June 2024. The income statement presents the settlement net against the increase in the provision estimate during the
year, discounting unwind and the administrative costs of managing the remediation program.
The cash expenditure by Lendlease is expected to be spread over a period of at least six and a half years from 30 June 2024.
On-going expenses in relation to this matter have been excluded from Core Operating Profit given it is a consequence of retrospective
government action, which could not reasonably have been expected from normal operations.
We have included in the provision amounts for buildings where we have cost estimates provided by third parties or building owners.
There are a number of other buildings for which we do not have documentation and are not able to establish whether remediation
work is required. There continue to be both risks and opportunities to the provision that has been estimated. Key risks include the
addition of new buildings or new information in relation to already identified buildings, as well as the rising costs in the local market. Key
opportunities include the potential for bulk procurement, re-interrogating scope on tender pricing, and assessing various options in the
delivery model.
The provision does not include any further recoveries anticipated from third parties, including insurances and supply chain. Lendlease is
actively working to maximise third party recoveries however expects this process will be over an extended period of time.
Determining the liability position for this matter and any estimate is a complex process requiring significant judgement with respect
to whether there is an obligating event and the quantum of any liability. The estimate of any potential liability is based on incomplete
information and will be updated as work and time progresses. Lendlease will continue to engage with building owners and the UK
Government on these industry wide actions and assess additional relevant information on an ongoing basis.
140
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
Section D. Risk Management
The Group’s activities expose it to a variety of financial risks. The Group’s overall financial risk management strategy focuses on
the unpredictability of financial markets and seeks to minimise adverse effects on the Group’s performance. Treasury policies
have been approved by the Board for managing this risk. This section contains disclosures of financial risks the Group is exposed
to and how the Group manages these risks. The impact of contingent liabilities is also considered in this section.
24. Financial Risk Management
The Group operates across numerous jurisdictions and markets. The Lendlease Asset and Liability Committee oversees the
management of the Group’s treasury risks, within the parameters of a Board approved Treasury Policy, and maintains a Group wide
framework for financial risk management and reviews issues of material risk exposure within the scope of the Treasury Policy. A
summary of key risks identified, exposures and management of exposures is detailed in the table below:
Risks Identified
Definition
Exposures
Management of Exposures
Foreign Currency
The risk in local currency terms
that the value of a financial
commitment or a recognised
asset or liability will fluctuate
due to changes in foreign
currency exchange rates
•
Foreign currency earnings
•
Net investments in
foreign operations
•
Transactions settled in
foreign currency
•
Further information on exposures
is detailed in Note 24a ‘Foreign
Currency Risk Exposure’
•
Physical financial instruments, including
natural hedges from matching foreign
assets and liabilities
•
Derivative financial instruments, mainly
foreign exchange contracts
•
Contracting out
•
Speculative trading is not permitted
Credit
The risk that a counterparty
will not be able to meet its
obligations in respect of a
financial instrument, resulting in
a financial loss to the Group
•
Recoverability of loans
and receivables
•
Recoverability of other financial
assets and cash deposits
•
Further information on exposures
is detailed in Note 24b ‘Credit
Risk Exposure’
•
Policies in place so that customers
and suppliers are appropriately
credit assessed
•
Treasury Policy sets out credit limits for
each counterparty based on minimum
investment grade ratings
Liquidity
The risk of having insufficient
funds to settle financial liabilities
as and when they fall due
•
Insufficient levels of committed
credit facilities
•
Settlement of financial liabilities
•
Further information on exposures
is detailed in Note 19 ‘Liquidity
Risk Exposure’
•
Maintaining sufficient levels of cash
and committed credit facilities to meet
financial commitments and working
capital requirements
•
Managing to funding portfolio
benchmarks as outlined in the
Treasury Policy
•
Timely review and renewal of
credit facilities
Interest Rate
The risk that the value of a
financial instrument or cash flow
associated with the instrument
will fluctuate due to changes in
market interest rates
•
Financial assets, mainly cash
at bank
•
Financial liabilities,
mainly borrowings and
financing arrangements
•
Further information on exposures
is detailed in Note 24c ‘Interest
Rate Risk Exposure’
•
Physical financial instruments
•
Derivative financial instruments, mainly
interest rate swaps
•
Managing to hedging limits in respect
of recourse funding as outlined in the
Treasury Policy
•
Speculative trading is not permitted
Equity Price
The risk that the fair value of
either a traded or non traded
equity investment, derivative
equity instrument, or a portfolio
of such financial instruments,
increases or decreases in
the future
•
All traded and/or non traded
financial instruments measured
at fair value
•
Material investments within the portfolio
are managed on an individual basis. The
Group’s portfolio is monitored closely as
part of capital recycling initiatives
Financial Statements
141
24.a. Foreign Currency Risk Exposure
The net asset exposure by currency is detailed below.
A$m
US$m
£m
S$m
€m
CNYm
MYRm
Other m1
June 2024
Net asset exposure (local currency)
1,298
559
298
834
157
980
2,363
48
June 2023
Net asset exposure (local currency)
1,842
1,008
803
662
115
638
2,096
23
1. Other currency is translated and disclosed in AUD.
Sensitivity Analysis
The sensitivity analysis of the Group’s Australian dollar denominated Income Statement and Statement of Financial Position to foreign
currency movements is based on a 10 per cent fluctuation (June 2023: 10% fluctuation) on the average rates during the financial year
and the spot rate at balance date respectively. This analysis assumes that all other variables, in particular interest rates, remain constant,
and exclude the effects of the foreign exchange contracts.
A 10 per cent movement in the average foreign exchange rates would have impacted the Group’s Loss after tax as follows:
10% WEAKENING LEADS TO INCREASE/
(DECREASE) IN PROFIT AFTER TAX
10% STRENGTHENING LEADS TO INCREASE/
(DECREASE) IN PROFIT AFTER TAX
June 2024
June 2023
June 2024
June 2023
$m
$m
$m
$m
USD
(72)
(4)
58
4
GBP
(59)
(32)
48
32
SGD
5
7
(3)
(6)
EUR
(6)
1
6
(2)
CNY
(2)
(2)
2
2
MYR
9
5
(7)
(4)
(125)
(25)
104
26
A 10 per cent movement in the foreign exchange spot rates at balance date would have impacted the Group’s net assets as follows:
10% WEAKENING LEADS TO INCREASE/
(DECREASE) IN NET ASSETS
10% STRENGTHENING LEADS TO INCREASE/
(DECREASE) IN NET ASSETS
June 2024
June 2023
June 2024
June 2023
$m
$m
$m
$m
USD
97
175
(80)
(143)
GBP
58
164
(49)
(136)
SGD
103
81
(85)
(67)
EUR
27
21
(22)
(16)
CNY
22
15
(18)
(12)
MYR
82
75
(69)
(61)
389
531
(323)
(435)
142
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
24.b. Credit Risk Exposure
•
The maximum exposure to credit risk at balance date on financial instruments recognised in the Statement of Financial Position
(excluding investments of the Group) equals the carrying amount, net of any impairment
•
The Group is not exposed to any significant concentrations of credit risk on either a geographic or industry specific basis
•
Credit risk on financial instruments is managed under a Board approved credit policy that determines acceptable counterparties.
Derivative counterparties and cash deposits are limited to recognised financial intermediaries with a minimum investment grade
credit rating as determined by a recognised rating agency
•
Refer to Note 21 ‘Loans and Receivables’ for information relating to impairment on loans and receivables
•
In certain circumstances, the Group will hold either financial or non financial assets as collateral to further mitigate the potential
credit risk on selected transactions. During the current and prior year, the Group did not hold financial or non financial assets as
collateral. At any point in time, the Group will hold other collateral such as bank guarantees and performance bonds to mitigate
potential credit risk as a result of default by a counterparty or otherwise.
24.c. Interest Rate Risk Exposure
The Group’s exposure to interest rate risk on its financial assets and liabilities is set out as follows:
CARRYING AMOUNT
June 2024
June 2023
$m
$m
Fixed Rate
Financial assets
200
201
Financial liabilities
(2,129)
(2,375)
(1,929)
(2,174)
Variable Rate
Financial assets
361
783
Financial liabilities
(2,551)
(2,544)
(2,190)
(1,761)
Sensitivity Analysis
At 30 June 2024, it is estimated that an increase of one percentage point in interest rates would have decreased the Group’s Profit
after tax by $15 million (June 2023: $2 million decrease in the Group’s Profit after tax). A one percentage point decrease in interest
rates would have increased the Group’s Profit after tax by $15 million (June 2023: $2 million increase in the Group’s Profit after tax). The
increase or decrease in interest income/(expense) is proportional to the increase or decrease in interest rates. Interest rate derivatives
have been included in this calculation.
25. Hedging
Accounting Policies
The Group uses derivative financial instruments to hedge its exposure to foreign exchange and interest rate risks arising
from operating, financing and investing activities. Derivative financial instruments are recognised initially at fair value on
the date a derivative contract is entered into and subsequently remeasured at fair value. Hedge accounting recognises the
offsetting effects on profit or loss of changes in the fair value of the derivative financial instruments and the hedged item. The
accounting for hedges that meet the criteria for hedge accounting are classified as either fair value hedges, cash flow hedges or
investment hedges.
The Group has minimal hedges designated at fair value. The Group primarily uses forward foreign exchange contracts as cash flow
hedges for highly probable sale, purchase and dividend transactions. The Group also uses forward foreign exchange contracts to hedge
cross border intercompany loans and transactions which mainly net off in the Income Statement. Interest rate swaps and interest rate
options are used to manage the Group’s exposure to interest rates arising from borrowings. These are primarily treated as cash flow
hedges and are mainly on borrowings within equity accounted investments.
The Group has foreign exchange derivative contracts primarily held in GBP, USD, EUR and SGD at reporting date to hedge specific
foreign currency exposures. The total gross payable exposure is $438 million (June 2023: payable $1,595 million).
There are 4 foreign currency contracts that will mature in more than one year (June 2023: 12 foreign currency contracts).
Section D. Risk Management continued
24. Financial Risk Management continued
Financial Statements
143
26. Fair Value Measurement
Accounting Policies
The accounting policies for financial instruments held at fair value are included in Note 13 ‘Other Financial Assets’ and Note
25 ‘Hedging’.
Management considers the valuation of assets at fair value including financial instruments to be an area of estimation uncertainty.
While this represents the best estimation of fair value at the reporting date, the fair values may differ if there is volatility in market
prices or foreign exchange rates in future periods.
All financial instruments recognised in the Statement of Financial Position, including those instruments carried at amortised cost, are
recognised at amounts that represent a reasonable approximation of fair value, with the exception of the following borrowings:
June 2024
June 2023
Carrying Amount
Fair Value
Carrying Amount
Fair Value
Note
$m
$m
$m
$m
Liabilities
Current
Commercial notes
16.a
-
-
-
-
Non Current
Commercial notes
16.a
1,789
1,737
1,928
1,780
The fair value of commercial notes has been calculated by discounting the expected future cash flows by the appropriate government
bond rates and credit margin applicable to the relevant term of the commercial note.
26.a. Basis of Determining Fair Value
The determination of fair values of financial assets and liabilities that are measured at fair value are summarised as follows:
•
The fair value of unlisted equity investments, including investments in property funds, is determined based on an assessment of
the underlying unadjusted net assets values, which may include periodic independent and Directors’ valuations, future maintainable
earnings and any special circumstances pertaining to the particular investment. Fair value of unlisted equity investments has also
taken the economic conditions into consideration to determine fair value at 30 June 2024. This included valuations of underlying
investment properties at balance date
•
The fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with
generally accepted valuation techniques; these include the use of recent arm’s length transactions, reference to other assets that
are substantially the same, and discounted cash flow analysis
•
The fair value of derivative instruments comprises forward foreign exchange contracts, which are valued using forward rates
at balance date, and interest rate swap contracts, which are measured at the present value of future cash flows estimated
and discounted based on applicable yield curves derived from quoted interest rates and include consideration of counterparty
risk adjustments.
26.b. Fair Value Measurements
The different levels for valuation method have been defined as follows:
•
Level 1: The fair value is determined using the unadjusted quoted price for an identical asset or liability in an active market for
identical assets or liabilities
•
Level 2: The fair value is calculated using predominantly observable market data other than unadjusted quoted prices for an
identical asset or liability
•
Level 3: The fair value is calculated using inputs that are not based on observable market data.
All commercial notes were measured at Level 3 for the periods presented in this Consolidated Financial Statements.
During the financial year, there were no material transfers between Level 1, Level 2 and Level 3 fair value hierarchies.
144
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
27. Contingent Liabilities
The Group has the following contingent liabilities, being liabilities in respect of which there is the potential for a cash outflow in excess
of any provision where the likelihood of payment is not considered probable or cannot be measured reliably at this time:
•
There are a number of legal claims and exposures that arise from the normal course of the Group’s business. Such claims and
exposures largely arise in respect of claims for defects (including under both contract and legislation), claims for breach of
performance obligations or breach of warranty or claims under indemnities. In some claims:
– There is uncertainty as to whether a legal obligation exists;
– There is uncertainty as to whether a future cash outflow will arise in respect to these items; and/or
– It is not possible to quantify the potential exposure with sufficient reliability.
This particularly applies in larger more complex projects, in claims involving a number of parties or in claims made a number of
years after completion of a project or the occurrence of the relevant event.
Where it is probable there will be liabilities from such claims and the potential exposure can be quantified with sufficient reliability, a
provision has been made for anticipated losses arising from such claims.
•
In certain circumstances, the Company guarantees the performance of particular Group entities in respect of their obligations. This
includes bonding and bank guarantee facilities used primarily by the Construction business as well as performance guarantees for
certain of the Company’s subsidiaries.
Securities Class Action
Lendlease Corporation Limited and Lendlease Responsible Entity Limited (together the Lendlease Group) were served with a
shareholder class action proceeding filed in the Supreme Court of New South Wales on 18 April 2019 by David William Pallas and
Julie Ann Pallas as trustees for the Pallas Family Superannuation Fund, represented by Maurice Blackburn. On 7 August 2019, Lendlease
Group was served with a shareholder class action proceeding filed in the Supreme Court of New South Wales on 6 August 2019
by Martin John Fletcher, represented by Phi Finney McDonald. On 21 November 2019 the Supreme Court ordered consolidation of
the two class actions into a single proceeding. The consolidated proceeding alleges that Lendlease was in breach of its continuous
disclosure obligations under the Corporations Act 2001 and made representations about its Engineering and Services business that
were misleading or deceptive or likely to mislead or deceive. It is currently not possible to determine the ultimate impact of these
claims, if any, on Lendlease Group. Lendlease Group denies the allegations and intends to vigorously defend this proceeding.
Retirement Living Tax Matter
The Group was subject to an Australian Tax Office (ATO) audit of the partial sale of its Retirement Living business in the 2018 year.
Prior to the commencement of the audit and submitting its 2018 tax return the Group proactively contacted the ATO to review the tax
treatment applied to the partial sale and also obtained independent advice. The ATO previously provided written undertakings that no
interest or penalties would be applied to the 2018 financial year tax return.
During the current reporting period the ATO issued the Group with a statement of audit position and an amended income tax
assessment relating to the audit of the 2018 return. The amended assessment for 2018 is for $112.1 million comprising:
•
$62.4 million capital gains tax arising from the exit of the Retirement Living trust from the Lendlease tax consolidated group which
was a one-off event that only applies to the 2018 transaction;
•
$25.2 million additional tax from the sale of 25% of the units in the joint venture trust; and
•
$24.5 million of interest.
The ATO has the ability to levy penalties and interest where tax that should be paid has not been paid. The amended assessment
did not include any penalties, however the ATO invited Lendlease to make a submission on penalties and interest. The Group has
formally objected to the amended assessment and lodged a submission on penalties and interest based on the ATO’s previous written
undertakings. The ATO has yet to advise its decision on the objection to the amended assessment and the remission of interest and
imposition of penalties. On 9 August 2024, the Group made a payment of $44 million to the ATO, representing 50% of the shortfall tax
currently under dispute to reduce further interest accruing. This amount will be refundable if the Group is ultimately successful with
the dispute.
Since the partial sale of the Retirement Living business in 2018, Lendlease has sold down two further tranches of the units in the joint
venture trust in the 2021 and 2022 financial years, totalling 50%. Based on the ATO’s position for the 2018 income year, additional tax
of approximately $50 million could arise in relation to these subsequent sales. The Group has voluntarily disclosed this to the ATO,
however the ATO are yet to issue amended assessments. It is estimated there could be an additional financial impact of up to $8 million
in relation to interest, absent any remission of that interest by the ATO. The Group will dispute any amended assessments issued in
respect of the subsequent sales.
The Group also retains a 25% interest in the Retirement Living joint venture trust. Should the ATO apply the same treatment to any
future gain on sale of this investment, we estimate this may give rise to additional tax of approximately $25 million.
If the objection is not accepted by the ATO, the timing of resolution of any subsequent dispute cannot be determined.
The Group has received independent legal advice in respect of its position. The Group believes its tax treatment of the partial sale
of the Retirement Living business is in accordance with the law and consistent with the ATO’s 2002 tax ruling on the taxation of the
retirement living industry. The Group lodged its 2018 tax return on that basis and believe that it will be successful in its position. On that
basis it is probable that no additional taxes, interest or penalties in respect of these matters will be paid to the ATO. The Group intends
to vigorously defend its position in relation to that return and subsequent returns which are impacted by the issue and to contest the
matter through litigation, should its objection to the ATO be unsuccessful.
Section D. Risk Management continued
Financial Statements
145
Section E. Basis of Consolidation
This section provides information on how the Group structure affects the financial position and performance of the Group as a
whole. The disclosures detail the types of entities and transactions included in the consolidation and those excluded.
28. Consolidated Entities
Accounting Policies
The Group consolidation comprises all subsidiaries controlled by the Company. Control exists when the Company:
•
Has the power to direct the relevant activities such as key operating, financial and investing decisions
•
Has exposure or rights to variable returns from its involvement with the investee such as dividends, loans and fees
•
Has the ability to use its power over the investee to affect the amount of returns.
In assessing control, potential voting rights that are presently exercisable or convertible are taken into account. Management uses
accounting judgement in determining whether the Group controls an entity by applying the above control criteria and reviewing
the substance of its relationship with the entity.
The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences
until the date that control ceases. The financial statements of subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies with adjustments made to bring into line any dissimilar accounting policies that
may exist.
External non controlling interests are allocated their share of total comprehensive income and are presented within equity in the
consolidated Statement of Financial Position, separately from the equity of securityholders.
The material consolidated entities of the Group listed below were wholly owned during the current and prior year. Refer to the following
section for details on the disposal of entities.
Parent Entity
Europe
Lendlease Corporation Limited
Lendlease Construction (Europe) Limited
Australia
Lendlease Construction Holdings (Europe) Limited
Capella Capital Lendlease Pty Limited
Lendlease Europe Finance plc
Capella Capital Partnership
Asia
Lendlease Construction Pty Limited
Lendlease Japan Inc.
Lendlease Construction (Southern) Pty Limited
Lendlease Singapore Pte. Limited
Lendlease Communities (Australia) Limited
Americas
Lendlease Development Pty Limited
Lendlease (US) Capital Inc.
Lendlease Finance Limited
Lendlease (US) Construction Inc.
Lendlease Infrastructure Investments Pty Limited
Lendlease (US) Construction LMB Inc.
Lendlease International Pty Limited
Lendlease (US) Public Partnerships LLC
Lendlease Real Estate Investments Limited
Lendlease (US) Public Partnerships Holdings LLC
Lendlease Responsible Entity Limited
Lendlease Development Inc.
Lendlease Trust1
1. Lendlease Trust is a consolidated entity of the Group as the parent entity is deemed to control it. The parent entity has no ownership interest in Lendlease Trust.
During the current and prior year, there were no acquisitions of material consolidated entities.
146
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
During the current year, there were no disposals of material consolidated entities. In prior year, the following material consolidated
entity was disposed:
Ownership
Interest Disposed
%
Date Disposed
Consideration
Received/Receivable
$m
June 2023
AHFH Managing Member LLC
100.0
9 August 2022
93
29. Employee Benefit Vehicles
The Company sponsors a number of employee benefit vehicles, including employee security plans and employee security ownership
vehicles. These vehicles, while not legally controlled, are currently required to be consolidated for accounting purposes.
29.a. Employee Security Plans
As at 30 June 2024, employees own approximately 0.9 per cent (June 2023: 0.9 per cent) of the issued capital of the Group through
various active Lendlease employee security plans and ownership vehicles, details of which are outlined below:
•
Australia: Employee Share Acquisition Plan (ESAP): ESAP was established in December 1988 for the purpose of employees
acquiring securities in the Group and is funded by Lendlease subscriptions, and employee salary sacrifice contributions
•
Americas: US Rabbi Trust (Rabbi Trust) was established in 2004 and updated in 2005 for the acceptance of employee profit
share contributions used to acquire Group securities for US based employees. This part of the plan is not currently accepting
new contributions
•
Employee Share Acquisition Plan (STI) (ESAP STI): ESAP STI was established in July 2014 for the purpose of acquiring and
allocating securities granted as the deferred component of Short Term Incentive (STI) awards, which are funded by Lendlease
subscriptions. Securities are currently allocated to employees across Australia, Singapore, Malaysia, the United Kingdom and the
United States.
Eligibility
The eligibility rules for each plan are determined by reference to the regulatory, legal and tax rules of each country in which the
Group operates.
Distributions and/or Voting Rights
Generally, employees in the various operating security plans are entitled to distributions and voting rights for allocated securities. The
plans reflect this intention subject to regulatory, legal and tax constraints. The trustee may exercise these rights in accordance with any
fiduciary or governance rules pertaining to the deed or trust laws in the legal and tax jurisdiction within which the trust operates.
29.b. Employee Security Ownership Vehicles
In addition to the plans discussed above, Lendlease has an employee security ownership vehicle, Lendlease Retirement Benefit
Fund (RBF):
•
RBF was established in 1984 with shareholder approval for the benefit of employees. RBF holds Lendlease securities. The Lendlease
securities in RBF are not available for allocation to employees other than in the event of a change of control of the Group and,
in accordance with RBF’s trust deed, the capital of the trust is not available to the Group. The RBF trustee has discretion as to
the distribution of the RBF funds. In 1992, a deed poll was executed which allows for the distribution of the income of RBF to the
Company to fund employee benefit activities through the Lendlease Foundation. As a result of changes to the constitution and
governance structure of the RBF trustee on 22 June 2017, Lendlease currently does not have control of RBF and therefore RBF is
currently not required to be consolidated for accounting purposes
•
The income distributed by RBF to the Company is used to provide non financial services to employees and the community.
•
The RBF arrangement is subject to periodic review to assess its ongoing role and operation.
Section E. Basis of Consolidation continued
28. Consolidated Entities continued
Financial Statements
147
30. Parent Entity Disclosures
The following summarises the financial information of the Group’s parent entity, Lendlease Corporation Limited (the Company), as at
and for the financial year ended 30 June 2024.
COMPANY
June 2024
June 2023
$m
$m
Results
(Loss)/profit after tax
(1,068)
192
Other comprehensive income after tax
-
-
Total comprehensive (loss)/income after tax
(1,068)
192
Financial Position
Current assets
664
2,150
Non current assets
3,054
2,904
Total assets
3,718
5,054
Current liabilities
1,109
1,256
Non current liabilities
70
-
Total liabilities
1,179
1,256
Net assets
2,539
3,798
Issued capital
1,896
1,894
Treasury securities
(67)
(67)
Equity compensation reserve
109
222
Capital reserve
105
-
Retained earnings
496
1,749
Total equity
2,539
3,798
In respect of the contingent liabilities of the Group disclosed in Note 27 ‘Contingent Liabilities’, the Company participates in the
provision of guarantees to Group entities.
31. Related Party Information
31.a. Consolidated Entities
Intragroup balances and transactions, and any unrealised gains or losses arising from intragroup transactions, are eliminated in
preparing the consolidated financial statements. Investments in subsidiaries are carried at their cost of acquisition less impairments
in the Company’s financial statements.
Lendlease Corporation Limited provides financing and treasury services, which includes working capital facilities and long term
financing to certain subsidiaries. Interest is earned or incurred only on long term loans provided to or drawn with subsidiaries based
on project specific risks and returns. Outstanding balances arising from working capital facilities and long term financing are typically
unsecured and repayable on demand.
In addition, guarantees are provided to particular Group entities in respect of their obligations. These include bonding and bank
guarantee facilities used primarily by the Construction business as well as performance guarantees for certain Development business
commercial built form developments. Guarantee fees are charged under normal terms and conditions.
The following represents the transactions that occurred during the financial year and the balances outstanding at year end between
Lendlease Corporation Limited and its consolidated entities:
COMPANY
June 2024
June 2023
$000s
$000s
Transactions
Guarantee fees
24,253
28,130
Dividend income
194,309
158,740
Interest income
4,841
9,889
Interest expense
68,121
45,434
Outstanding Balances (Net of Provisions Raised)
Receivables
595,304
1,925,210
Payables
821,236
1,172,590
148
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
Transactions that occurred during the financial year between entities in the Lendlease Group included:
•
Provision of project management, design services, construction management services to development projects
•
Provision of development management services
•
Provision of investment management services
•
Provision of payroll, transaction and management services
•
Receipt and payment of superannuation contributions
•
Reimbursement of expenses made on behalf of subsidiaries
•
Loan advances and repayments between subsidiaries
•
Premium payments and receipts for the Group’s insurance policies
•
Dividends received or due and receivable from subsidiaries.
31.b. Associates and Joint Ventures
Interests held in associates and joint ventures by the Group are set out in Note 12 ‘Equity Accounted Investments’.
Transactions between the Group and its associates and joint ventures principally relate to:
•
Investments: provision of property and infrastructure investment management, property management and asset
management services
•
Development: development management services, infrastructure bid and advisory services and the sale and purchase of
development properties with Lendlease managed funds
•
Construction: provision of project management, building and construction services.
There were $nil non interest bearing loans provided to joint ventures at 30 June 2024 (June 2023: $nil).
Except as noted above, transactions and outstanding balances are typically on normal terms and conditions.
Revenue earned by the Group during the financial year as a result of transactions with its associates and joint ventures is as follows:
June 2024
June 2023
$000s
$000s
Revenue
Associates
43,123
42,783
Joint ventures
1,138,398
1,237,258
Total
1,181,521
1,280,041
Other transactions and outstanding balances with associates, joint ventures and other related parties have been disclosed in Note 4
‘Revenue from Contracts with Customers’, Note 6 ‘Other Income’, Note 7 ‘Other Expenses’, Note 8 ‘Finance Revenue and Finance
Costs’, Note 12 ‘Equity Accounted Investments’, Note 13 ‘Other Financial Assets’, Note 21 ‘Loans and Receivables’ and Note 22
‘Trade and Other Payables’. Transactions with joint operations are included in the consolidated Income Statement and Statement of
Financial Position.
31.c. Key Management Personnel
The key management personnel compensation is as follows:
June 2024
June 2023
$000s
$000s
Short term employee benefits
9,448
13,493
Post employment benefits
126
312
Security based payments
2,998
11,308
Termination benefits
743
-
Other long term benefits
80
628
Total
13,395
25,741
Information regarding Directors’ and senior executives’ remuneration is provided in the Remuneration Report within the
Directors’ Report.
Section E. Basis of Consolidation continued
31. Related Party Information continued
Financial Statements
149
Section F. Other Notes
32. Intangible Assets
Accounting Policies
Goodwill represents the excess of the purchase price over the fair value of the Group’s share of the net identifiable assets and
contingent liabilities of the acquired business at the date of acquisition. Goodwill on acquisition of subsidiaries is included in
intangible assets as goodwill. Goodwill on acquisition of associates is included in the carrying value of investments in associates.
Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses. Goodwill is not amortised.
Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.
For the purposes of impairment testing, goodwill is allocated to cash generating units (CGUs) (or groups of CGUs) that are
expected to benefit from the business combination in which the goodwill arose. CGUs are an identifiable group of assets that
generate cash associated with the goodwill. Management considers this is an area of estimation uncertainty as these calculations
involve an estimation of the recoverable amount of the CGU to which the goodwill is allocated. The Australian Construction CGU
applies the value in use basis, and the Europe, Americas and Asia Construction CGUs use the fair value less costs of disposal
basis. Both approaches require the Group to estimate the future cash flows expected to arise from the CGUs and a suitable
discount rate in order to calculate the recoverable amounts.
Management agreements and other intangible assets acquired by the Group are stated at cost less accumulated amortisation
and impairment losses (see Note 7 ‘Other Expenses’). Amortisation is charged to the Income Statement on a straight line basis
over the estimated useful lives of the intangible assets, ranging from three to 20 years.
June 2024
June 2023
Note
$m
$m
Goodwill
32.a
573
1,085
Management agreements
15
16
Other intangibles1
104
135
Total intangible assets
692
1,236
1. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release of
capital from its offshore development project and assets. As a result of this strategy update and the impact to the Digital products, the recoverable amount of the Digital assets
was reassessed and an impairment charge $16 million was recognised in Corporate Activities. At 30 June 2024, the remaining Digital assets was $55 million (30 June 2023:
$51 million).
32.a. Goodwill
June 2024
June 2023
Note
$m
$m
Development
-
34
Construction
573
1,051
Total goodwill
573
1,085
Reconciliations of the carrying amounts for each category of goodwill are as follows:
Development
Carrying amount at beginning of financial year
34
33
Impairment of goodwill1
(34)
-
Effect of foreign exchange rate movements
-
1
Carrying amount at end of financial year
-
34
Construction
Carrying amount at beginning of financial year
1,051
1,023
Impairment of goodwill1
(479)
-
Other movement
(2)
-
Effect of foreign exchange rate/other movements
3
28
Carrying amount at end of financial year
32.b
573
1,051
1. On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international construction and accelerate the release
of capital from its offshore development project and assets. As a result of this strategy update, the recoverable amount of the Construction and Development CGUs was
reassessed to its fair value less costs of disposal and an impairment charge was recognised against the goodwill balance attributable to the Americas, Asia and Europe regions,
writing the balance off in full.
150
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
32.b. Goodwill Allocation
Goodwill relating to the Construction business is allocated to CGUs identified as set out below.
June 2024
June 2023
$m
$m
Construction
Australia
573
573
Europe
-
260
Americas
-
210
Asia
-
8
Total construction goodwill
573
1,051
32.c. Impairment Tests and Key Assumptions Used – Construction
The recoverable amount of the Construction CGUs is determined based on value in use (VIU) calculations for Australia CGU, and fair
value less costs of disposal (FVLCD) for the Americas, Asia and Europe CGUs. For all the Construction CGUs, the assumptions used for
determining the recoverable amount of each CGU are based on past experience and expectations for the future, utilising both internal
and external sources of data and relevant industry trends.
Australia Construction - VIU
No impairment arose as a result of the review of goodwill for the Australia Construction CGU for the financial year ended 30 June
2024. Based on information available and market conditions at 30 June 2024, a reasonably foreseeable change in the assumptions
made in this assessment would not result in impairment of the Australia Construction goodwill. The foreseeable change in the
assumptions took the economic conditions into consideration.
The following describes the key assumptions on which management has based its cash flow projections when determining VIU relating
to the Australia Construction CGU:
•
Cash Flows
The VIU calculations use pre tax cash flow projections based on actual operating results, and financial forecasts covering a five
year period which have been approved by management. These forecasts are based on management estimates to determine income,
expenses, capital expenditure and cash flows for the CGU.
•
Growth Rate
The terminal value growth rate used in the VIU calculations to extrapolate the cash flows beyond the five year period is 3.0 per cent
(June 2023: 3.0 per cent). The growth rate reflects the forecast long term average growth rate for the Australia Construction CGU.
•
Discount Rate
The discount rate applied to the cash flow projections was 13.8 per cent (June 2023: 11.8 per cent). The Group’s weighted average
cost of capital is used as a starting point for determining the discount rate, with appropriate adjustments for the risk profile relating
to Australia Construction CGU. The discount rates used are pre tax.
Americas, Asia and Europe Construction - FVLCD
On 27 May 2024 the Group announced a strategy update with key actions to simplify the organisational structure, exit international
construction and accelerate the release of capital from its offshore development project and assets. As a result of this strategy update,
the recoverable amount of the Americas, Asia and Europe Construction CGUs was reassessed to their FVLCD and an impairment
charge was recognised against the goodwill balances attributable to those regions, writing the balances off in full for the financial
year ended 30 June 2024. No other assets within these CGUs were impaired as part of this assessment given the nature of the
underlying operations.
The following describes the key assumptions on which management has based its cash flow projections when determining FVLCD
relating to the Americas, Asia and Europe Construction CGUs:
•
Cash Flows
The FVLCD calculations use pre tax cash flow projections based on estimated actual operating results, and financial forecasts
covering the period up to expected business divestments, which have been approved by management. The cashflow projections
also include estimated selling price of each business based on current negotiated transactions or appropriate EBITDA multiples, and
expected working capital adjustments on sale. Cashflow projections included expected transaction costs.
•
Discount Rate
The discount rates applied to the cash flow projections vary between 10.8 per cent and 14.1 per cent (June 2023 VIU model discount
rates: between 10.3 per cent and 12.0 per cent). The Group’s weighted average cost of capital is used as a starting point for
determining the discount rate, with appropriate adjustments for the risk profile relating to the relevant CGUs and the countries in
which they operate. The discount rates used are pre tax.
In May 2024 the Group announced it had agreed non-binding heads of terms with leading US construction firm, Consigli Construction
Co, for the sale of the Group’s US East Coast construction operations. The transaction is currently progressing through due diligence
and negotiations to finalise detailed terms and conditions. The Group is progressing with the planned divestment of UK construction
operations, targeting completion within 18 months.
Section F. Other Notes continued
32. Intangible Assets continued
Financial Statements
151
33. Disposal Group Assets and Liabilities Held for Sale
Accounting Policies
The group of assets and their corresponding liabilities (together referred to as a Disposal Group), may only be classified as held
for sale once the following criteria are met:
•
The carrying amount will be recovered principally through a sale transaction rather than through continuing use; and
•
The sale must be highly probable.
A disposal group is measured at the lower of its carrying amount and fair value less costs to sell. Where fair value is lower than
the carrying amount, the difference is recognised as an impairment loss within the Income Statement.
Australia Communities projects
On 18 December 2023, the Group announced that it had entered into an agreement for the sale of 12 Australian master-planned
Communities projects to Stockland Corporation Limited and its capital partner, Supalai Australia Holdings, for $1.3 billion, including the
assumed exercise of a $239 million right to acquire certain land parcels. The transaction is subject to various conditions precedent,
including Foreign Investment Review Board (FIRB), Australian Competition and Consumer Commission (ACCC) and relevant landowner
approvals. On 4 July 2024 the ACCC released a Statement of Issues in relation to the acquisition, which outlined the preliminary views
of the ACCC and identified areas of further enquiry. The ACCC advised a provisional date for announcement of its final decision of
12 September 2024, however this date is subject to change.
As part of the transaction, the Group will retain four Communities projects, which will continue to be recognised as part of Core
operations within the Development segment, with an Inventory balance of $243 million as at 30 June 2024.
Asia Pacific Life Science Platform
On 17 May 2024, the Group announced it had agreed to sell its Asia life sciences interests, which includes current life sciences
construction and development capabilities together with the life sciences investments, to a newly established joint venture with
Warburg Pincus, for $147 million. The transaction, which was completed after the year-end, realised approximately $60 million
in net cash proceeds to Lendlease. The businesses and assets to be sold are currently recognised in the Construction and
Investments segments.
US Military Housing
On 1 July 2024, the Group announced it had entered into an agreement with Omaha Beach Investment Holdings, LLC, an entity
managed by Guggenheim Partners Investment Management, LLC, for the sale of the US Military Housing business for $480 million.
The US Military Housing Business includes the operating platform of the business along with associated management rights for asset,
property, development and construction management. Profit after tax of $105 to 120 million is anticipated from this transaction, with
financial close and receipt of cash proceeds targeted by the end of 1H FY25. The transaction is subject to completion adjustments and
conditions precedent including third-party consents from particular service branches of the U.S. Department of Defense. The business
to be sold is currently recognised in the Construction and Investments segments.
The major classes of Disposal Group assets and liabilities held for sale in relation to these transactions are listed below. These balances
are as at 30 June 2024 and do not represent the expected capital of the projects at completion, which will change based on the
operations of the business up to that date. The purchase price is also subject to adjustments calculated at the date of completion.
June 2024
Australia
Communities
Projects
Asia Pacific Life
Sciences
Platform
US Military
Housing
Total Group
Disposal Group assets and liabilities held for sale
$m
$m
$m
$m
Loans and receivables
74
14
153
241
Inventories
1,108
6
6
1,120
Other financial assets
-
-
171
171
Other assets
7
25
32
64
Total Disposal Group assets held for sale
1,189
45
362
1,596
Trade and other payables
63
19
74
156
Other liabilities
137
1
9
147
Total Disposal Group liabilities held for sale
200
20
83
303
Net Disposal Group assets and liabilities held for sale
989
25
279
1,293
152
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
34. Defined Benefit Plan
Accounting Policies
Group companies operate pension plans. The plans are generally funded through payments to insurance companies or trustee
administered funds as determined by periodic actuarial calculations.
A defined benefit plan is a pension plan that defines the amount of pension benefit an employee will receive on retirement,
usually dependent on one or more factors such as age, years of service and compensation.
The asset or liability recognised in the Statement of Financial Position in respect of defined benefit plan is the present value of the
defined benefit obligation i.e. ‘the pension liability’ at the balance sheet date less the fair value of plan assets. The present value of
the pension liability is determined by discounting the estimated future cash outflows using interest rates of high quality corporate
or government bonds, that:
•
Are denominated in the currency in which the benefits will be paid
•
Have terms to maturity approximating the terms of the related pension liability.
The defined benefit obligation is calculated at least annually by independent actuaries using the projected unit credit method,
which in simplistic terms proportions the benefit based on service. Management considers the valuation of defined benefit
plan undertaken by the actuaries to be an area of estimation uncertainty as a number of key assumptions must be adopted to
determine the valuation.
Actuarial losses/(gains) will arise where there is a difference between previous estimates and actual experience, or a change
to assumptions in relation to demographic and financial trends. These actuarial losses/(gains) are recognised in the period they
occur, directly in other comprehensive income as remeasurements. They are included in retained earnings in the Statement of
Changes in Equity and in the Statement of Financial Position.
Past service costs are recognised immediately in the Income Statement.
June 2024
June 2023
Note
$m
$m
Lendlease UK Pension Scheme
34.a
82
171
Total net defined benefit plan asset
82
171
34.a. Lendlease UK Pension Scheme
Lendlease Construction Holdings (Europe) Limited (UK Construction) sponsors a funded defined benefit pension scheme (the Scheme)
for qualifying UK employees. The Scheme is administered by a separate board of Trustees which is legally separate from UK
Construction. The Scheme’s Trustees are composed of representatives of both the employer and employees. The Trustees are required
by law to act in the interest of all relevant beneficiaries and are responsible for the investment policy with regard to the assets plus the
day to day administration of the benefits.
The Scheme is a funded defined benefit scheme, with the final salary section providing retirement benefits based on final salary and the
index linked section providing retirement benefits based on career average salary. A separate section, the Personal Investment Section,
provides retirement benefits on a defined contribution basis. The UK Construction’s contributions to members’ Personal Investment
Fund accounts are not included in these disclosures.
The final salary section closed to future accruals on 31 August 2008 and the index linked section closed to future accruals on 31 January
2012. During the year, the Trustees transacted a full scheme buy-in to insure the majority of the Scheme’s benefits and materially reduce
the Scheme’s exposure to actuarial risk and market (investment) risk. The difference between the value of the liabilities insured and the
cost of the insurance policy of $75 million (pre-tax) was recognised as a loss in other comprehensive income. This process identified
a number of adjustments required to be made to members’ benefits, with the past service impact of $42 million being recognised as
a gain in the Income Statement. UK Construction is no longer required to fund pension shortfalls, therefore previously held Scheme
assets of $21 million have been removed from Plan Assets accordingly. There were no other Scheme amendments affecting defined
benefits payable, curtailments or settlements during the year. Until 31 March 2024, UK Construction paid 4.0 percent of members’ basic
salaries to cover the Scheme’s expected administration costs and costs of benefits payable on death in service. From 1 April 2024, these
costs are met from plan assets. The latest triennial valuation for 31 March 2023 showed the Scheme to have an actuarial surplus so
deficit repair contributions are not required to be paid.
Section F. Other Notes continued
Financial Statements
153
The following information provides additional detail on the position of the Scheme:
June 2024
June 2023
$m
$m
i. Statement of Financial Position Amounts
The amounts recognised in the Statement of Financial Position are determined as follows:
Defined benefit obligations
(806)
(795)
Fair value of plan assets
888
966
Net defined benefit plan asset
82
171
June 2024
June 2023
$m
$m
ii. Reconciliation of Defined Benefit Obligations
Defined benefit obligations at beginning of financial year
795
902
Included in Income Statement
Interest cost
43
35
Remeasurements Included in Other Comprehensive Income
Actuarial loss/(gain) arising from:
Financial assumptions
(1)
(172)
Experience adjustments
13
68
Demographic assumptions
-
(22)
Other
Benefits paid
(39)
(39)
Past Service Cost1
(42)
-
Effect of foreign exchange rate movements
37
23
Defined benefit obligations at end of financial year
806
795
iii. Reconciliation of the Fair Value of Plan Assets
Fair value of plan assets at beginning of financial year
966
1,184
Included in Income Statement
Interest income
51
46
Administration costs
(3)
(3)
Remeasurements Included in Other Comprehensive Income
Actuarial return on plan assets excluding interest income
(109)
(270)
Other
Contributions by Group companies
4
5
Benefits paid
(39)
(39)
Release of plan asset value
(21)
-
Effect of foreign exchange rate movements
39
43
Fair value of plan assets at end of financial year
888
966
iv. Expense Recognised in the Income Statement
Net interest income
(8)
(11)
Past Service Cost1
(42)
-
Administration costs
3
3
Net defined benefit plan expense
(47)
(8)
v. Fair Value of Plan Assets
Plan assets comprise:
Investment funds
-
10
Government index linked bonds
76
918
Other assets
812
38
Fair value of plan assets at end of financial year
888
966
1. Includes the impact of a Lendlease UK Pension Scheme amendment during the period, approved by the Trustees, to bring the valuation of members' future benefits in line with
the scheme rules and statutory requirements, resulting in a gain of $42 million recognised in the income statement. Refer to Note 7 'Other Expenses' for further detail.
154
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
The plan assets can be categorised as Level 1, where the fair value is determined using an unadjusted quoted price for an identical
asset, or Level 2, where the fair value is derived either directly or indirectly from observable inputs, or Level 3, where inputs are
unobservable (i.e. for which market data is unavailable). At year end, $8 million (June 2023: $nil), $76 million (June 2023: $966 million)
and $804 million (June 2023: $nil) of total plan assets were categorised as Level 1, Level 2 and Level 3, respectively. Level 3 assets
include the buy-in asset, the value of which has been calculated as the present value of the related obligations covered by the policy
and represents about 90% of the total plan assets.
June 2024
June 2023
vi. Principal Actuarial Assumptions
Discount rate (%)
5.1
5.2
RPI inflation (%)
3.5
3.6
Average pension increase in payments (%)
2.6
3.1
Future mortality (years):
Male
24.9
25.5
Female
26.4
26.8
The liabilities are calculated using a discount rate set with reference to corporate bond yields.
A decrease in corporate bond yields will increase the value placed on the Scheme’s liabilities. However, this will be largely matched
by an increase in the value of the Scheme’s buy-in asset. Similarly, most of the Scheme’s benefit obligations are linked to inflation and
higher inflation will lead to higher liabilities, matched by an increase in the buy-in asset value. The majority of the Scheme’s obligations
are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the liabilities which would
again be matched by an increase in the buy-in asset. The mortality assumptions are based on standard mortality tables which allow for
expected future mortality improvements. The assumption is that a member aged 63 will live for a further 24.9 years (June 2023: 25.5
years) if they are male and 26.4 years if they are female (June 2023: 26.8 years).
At 30 June 2024, the weighted average duration of the defined benefit obligation was 13 years (June 2023: 14 years).
vii. Sensitivity Analysis
Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant,
would have affected the defined benefit obligations by the amounts shown below:
0.1%
Increase in
Discount Rate
$m
0.1%
Decrease in
Discount Rate
$m
0.1%
Increase
RPI Inflation
and Pension
Payment
$m
0.1%
Decrease
RPI Inflation
and Pension
Payment
$m
1 Year
Increase in
Future Mortality
$m
1 Year
Decrease in
Future
Mortality
$m
June 2024
Defined benefit obligations
(10)
10
6
(8)
23
(23)
June 2023
Defined benefit obligations
(11)
12
7
(7)
27
(22)
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely
that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated. As noted
above, there would be a corresponding change in value of the buy-in asset and therefore little change in the overall net defined benefit
plan asset.
Non pensioner benefits are linked to RPI in the period up to retirement. Once in payment, pension increases are linked to RPI but with
a zero per cent floor and different caps applying to different periods of pensionable service. The inflation sensitivity reflects a change in
RPI inflation and the associated increases in payment.
35. Employee Benefits
Detailed information regarding the Group’s Executive Reward strategy is provided in the Remuneration Report within the Directors’
Report. The key incentive plans are as follows:
•
Short Term Incentive (STI)
•
Short Term Award (STA)
•
Long Term Incentive (LTI)
•
Long Term Award (LTA)
•
Restricted Securities Award (RSA)
•
Google Development Ventures (GDV) Incentive.
Section F. Other Notes continued
34. Defined Benefit Plan continued
Financial Statements
155
35.a. Short Term Incentive (STI)
The STI plan is an annual incentive plan whereby a number of employees receive benefits which are dependent upon the achievement
of both Lendlease financial and non financial targets, and individual goals. The total value of the potential benefit varies by individual
and is tested against relevant market levels for each role.
•
The STI plan typically comprises a cash component, which is paid in September following year end. For more senior employees,
where the potential benefit is typically higher, the plan also includes a deferred component
•
Deferral periods are generally for one or two years. The deferred component is normally awarded as Lendlease securities and in
some instances as cash. Securities are held in Lendlease employee security plan trusts on behalf of employees for the deferral
period (refer to Note 29a ‘Employee Security Plans’). For employees to receive the deferred component in full, they must generally
be employed by the Group at the time of vesting.
35.b. Short Term Award (STA)
The STA plan is an annual incentive plan which replaced the STI for a limited number of senior executives from 2019. It is designed to
focus senior executives on priority areas for delivery in the current financial year, including key Group and regional financial targets,
safety and other non financial targets aligned to the Group’s areas of focus.
Whilst performance is assessed against a set of Group metrics when determining awards, the Board will assess the overall performance
and contribution of individual senior executives, with a particular focus on safety.
The total value of the potential benefit varies by individual and is set with reference to both internal peers and external market levels.
For FY20 and FY21, the STA plan has been awarded as cash in September following year end. From FY22 onwards, 50 per cent of
awarded STA will be a deferred grant of Lendlease securities. The deferred portion will be released in two equal tranches after one and
two years.
35.c. Long Term Incentive (LTI)
The LTI plan is designed to:
•
Motivate executives to achieve the Group’s long term strategic goals and provide reward where the Group delivers better value to
securityholders than its peers
•
Align the interests of executives and securityholders, given that the reward received is linked to the Group’s security price and
average Return on Equity performance.
Arrangements for LTI Awards
LTI Design
How the LTI Works
Performance
Rights
•
An annual grant of ‘performance rights’ is made to a limited number of executives
•
The Board intends that the awards be settled in Lendlease securities, although the award may be settled in cash or
other means at the Board’s discretion
•
On vesting, each performance right entitles executives to one Lendlease stapled security, or at the Board’s discretion,
cash or other instruments of equivalent value
•
In the event of a change in control of the Group, the Board has the discretion to determine whether the vesting of
some or all performance rights should be accelerated.
Performance
Period
(applicable to
FY22, FY23 and
FY24 Grants)
•
100 per cent of the performance rights are assessed over a three year period. If the performance hurdle is not fully
achieved at this time, those performance rights that have not vested will lapse
•
If the performance hurdle is not met, the awards are forfeited
•
There is no retesting on any portion of the LTI grant.
Termination of
Employment
•
If the executive resigns or is terminated for cause, the unvested LTI is forfeited
•
If the executive is terminated and if the Board considers vesting would provide a benefit that was unwarranted or
inappropriate, the Board can adjust unvested LTI prior to the vesting date
•
For ‘good leavers’, the LTI grant may remain on foot, subject to the original terms
•
In exceptional circumstances (such as death or total and permanent disability), the Board may exercise discretion and
settle the award at the time of termination of employment.
Performance
Hurdles
•
One third subject to Lendlease’s Total Securityholder Return (TSR) compared to the companies in the S&P/ASX 100
index. The S&P/ASX 100 companies are determined at the start of the performance period
•
One third subject to Average Operating Return on Equity (Operating ROE) hurdle
•
One third subject to compound annual growth rate (CAGR) % in funds under management in FY22 and FY23 and
Investments Return on Invested Capital (IM ROIC) from FY24.
156
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
LTI Design
How the LTI Works
Vesting Schedule
- Relative TSR
(FY22, FY23
and FY24)
Measure
Percentage of performance rights that vest as a proportion of
maximum opportunity
Below the 50th percentile
No vesting
At the 50th percentile
40 per cent vesting
Between the 50th percentile and
75th percentile
Pro rata vesting on a straight line basis between 40 per cent and 100
per cent
At or above the 75th percentile
100 per cent vesting
Vesting Schedule
- Average Core
Operating ROE
(FY22, FY23
and FY24)
Below threshold
No vesting
At Core Operating ROE for
threshold vesting
0 per cent vesting
Between Core Operating ROE for threshold
vesting and Core Operating ROE for
maximum vesting
Pro rata vesting on a straight line basis between 0 per cent and 100
per cent1
At or above Core Operating ROE for
maximum vesting
100 per cent vesting
Vesting Schedule
- CAGR % in FUM
(FY22 and FY23)
Below threshold
No vesting
At CAGR % for threshold vesting
0 per cent vesting
Between CAGR % for threshold vesting and
CAGR % for maximum vesting
Pro rata vesting on a straight line basis between 0 per cent and 100
per cent
At or above CAGR % for maximum vesting
100 per cent vesting
Vesting Schedule
- IM ROIC
(FY24)
Below threshold
No vesting
At IM ROIC for threshold vesting
0 per cent vesting
Between IM ROIC for threshold vesting and
IM ROIC for maximum vesting
Pro rata vesting on a straight line basis between 0 per cent and 100
per cent
At or above IM ROIC for maximum vesting
100 per cent vesting
1. Subject to 3 Year Average Annual Core Operating ROE being above the cost of equity determined by the Board.
35.d. Long Term Award (LTA)
The LTA plan replaced the LTI for a limited number of executives from 2019. It was designed to motivate and reward key executives to
deliver on the Group’s long term strategy and to allow them to share in the value created for securityholders. Specifically, the objectives
are to:
•
Create rewards that are aligned to earnings
•
Align the interests of securityholders and our most senior executives
•
Promote team behaviours and an enterprise leadership mindset
•
Retain the senior executive team.
The intended outcome is that reward and strategy are better aligned.
Section F. Other Notes continued
35. Employee Benefits continued
35.c. Long Term Incentive (LTI) continued
Financial Statements
157
Arrangements for LTA Awards
LTA Design
How the LTA Works
Performance
Rights
•
An annual grant of ‘performance rights’ is made to a limited number of executives on the Global Leadership Team
•
The Board intends that the awards be settled in Lendlease securities, although some or all of the award may be settled
in cash at the Board’s discretion
•
Performance rights are rights to receive a variable number of Lendlease securities or at the discretion of the Board,
cash with an equivalent value, upon vesting
•
Outcomes against performance hurdles will determine how many Lendlease securities will be received following
vesting between nil and a maximum number
•
In the event of a change in control of the Group, the Board has the discretion to determine whether the vesting of
some or all performance rights should be accelerated.
Performance
Period
(applicable to
FY22, FY23 and
FY24 Grants)
•
100 per cent of the performance rights are assessed over a three year period and the number of Lendlease securities
that may be delivered on vesting is determined. The first tranche will vest immediately thereafter, and the second,
third and fourth tranches will be deferred and will vest progressively four, five and six years after the grant date
•
If the performance hurdle is not met, the awards are forfeited
•
There is no retesting of the LTA grant.
Termination of
Employment
•
If the executive resigns and becomes engaged in activities that are competitive with the Group or is terminated for
cause, the unvested LTA is forfeited
•
If the executive is terminated and if the Board considers vesting would provide a benefit that was unwarranted or
inappropriate, the Board has the discretion to lapse some or all performance rights prior to the vesting date
•
For ‘good leavers’, the LTA grant may remain on foot, subject to the original terms.
Performance
Hurdles
•
One third subject to Lendlease’s Total Securityholder Return (TSR) compared to the companies in the S&P/ASX 100
Index. The S&P/ASX 100 companies are determined at the start of the performance period
•
One third subject to Average Operating Return on Equity (Operating ROE) hurdle
•
One third subject to compound annual growth rate (CAGR) % in funds under management in FY22 and FY23 and
Investments Return on Invested Capital (IM ROIC) from FY24.
Percentage of performance rights that vest as a proportion of
maximum opportunity
Measure
Senior Executive
Vesting Schedule
- Relative TSR
(FY22, FY23
and FY24)
Below the 50th percentile
No vesting
At the 50th percentile
40 per cent vesting
Between the 50th percentile and
75th percentile
Pro rata vesting on a straight line basis between 40 per cent and 100
per cent
At or above the 75th percentile
100 per cent vesting
Vesting Schedule
- Average Core
Operating ROE
(FY22, FY23
and FY24)
Below threshold
No vesting
At Core Operating ROE for
threshold vesting
0 per cent vesting
Between Core Operating ROE for threshold
vesting and Core Operating ROE for
maximum vesting
Pro rata vesting on a straight line basis between 0 per cent and 100
per cent1
At or above Core Operating ROE for
maximum vesting
100 per cent vesting
Vesting Schedule
- CAGR % in FUM
(FY22 and FY23)
Below threshold
No vesting
At CAGR % for threshold vesting
0 per cent vesting
Between CAGR % for threshold vesting and
CAGR % for maximum vesting
Pro rata vesting on a straight line basis between 0 per cent and 100
per cent
At or above CAGR % for maximum vesting
100 per cent vesting
Vesting Schedule
- IM ROIC
(FY24)
Below threshold
No vesting
At IM ROIC for threshold vesting
0 per cent vesting
Between IM ROIC for threshold vesting and
IM ROIC for maximum vesting
Pro rata vesting on a straight line basis between 0 per cent and 100
per cent
At or above IM ROIC for maximum vesting
100 per cent vesting
1. Subject to 3 Year Average Annual Core Operating ROE being above the cost of equity determined by the Board.
158
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
35.e. Restricted Securities Award (RSA)
The Restricted Securities Award (RSA), previously referred to as the LTA Minimum, is similar to fixed remuneration as it is not subject to
performance conditions. It is designed to motivate and reward a limited number of key executives to deliver on the Group’s long term
strategy and to allow them to have a sense of ownership and share in the value created for securityholders. The RSA (and previously
referred to LTA Minimum) was discontinued from FY22 under the revised Executive Reward Strategy.
Arrangements for RSA Awards
RSA Design
How the RSA Works
Performance Rights
•
An annual grant of ‘performance rights’ is made to a limited number of executives on the Global
Leadership Team
•
However, following feedback from proxy-holders and other stakeholders, the RSA has no longer been offered
from FY22
•
The Board intends that the awards be settled in Lendlease securities, although some or all of the award may
be settled in cash at the Board’s discretion
•
Performance rights are rights to receive one Lendlease stapled security, or at the Board’s discretion, cash or
other instruments of equivalent value
•
In the event of a change in control of the Group, the Board has the discretion to determine whether the
vesting of some or all performance rights should be accelerated.
Vesting Period
•
The first tranche (i.e. 25%) will vest after three years and the second, third and fourth tranches will vest
progressively four, five and six years after the grant date.
Termination
of Employment
•
If the executive resigns and becomes engaged in activities that are competitive with the Group or is
terminated for cause, the unvested RSA is forfeited
•
If the executive is terminated and if the Board considers vesting would provide a benefit that was
unwarranted or inappropriate, the Board has the discretion to lapse some or all performance rights prior
to the vesting date
•
For ‘good leavers’, the RSA grant may remain on foot, subject to the original terms.
35.f. Google Development Ventures (GDV) Incentive
Incentive Design
How the Incentive Works
Performance Rights
•
A one-off grant of ‘performance rights’ to Denis Hickey to reward the successful delivery of GDV
Performance Period
•
3 years from 1 July 2021 to 30 June 2024
Performance Hurdles
•
70% of performance rights will vest based on the achievement of the key milestones for GDV during the
performance period, including the securing of entitlements and capital plans and the commencement of
construction for each project
•
30% of performance rights will vest based on customer satisfaction feedback from the client and internal
stakeholders at key touchpoints in the project life cycle, so that GDV milestones are not only delivered within
the required timeframes but also to an exceptional standard
Termination
of Employment
•
In the event of resignation or termination for cause, unvested rights are forfeited
•
In all other circumstances, the portion of the award that reflects milestones that are already tested and
achieved during the performance period will remain on foot. The untested portion is forfeited (except in the
case of redundancy, whereby the untested portion will be continue to be tested against plan milestones and
vest if applicable following the end of the performance period)
35.g. Amounts Recognised in the Financial Statements
LTI and LTA awards are valued using Monte-Carlo simulation methodology for the TSR component and the Black-Scholes-Merton
model for the non-market based performance measures. Retention awards are valued by discounting the security price by the expected
dividends assumed to be paid from the valuation date until the vesting date (if applicable). The model inputs include the Lendlease
Group security price, a risk free interest rate, expected volatility and dividend yield. During the financial year ended 30 June 2024,
3,080,628 awards were granted with a weighted average fair value of $6.65, and a $22 million expense was recognised in the Income
Statement in relation to equity settled security based payment awards (June 2023: $49 million).
Section F. Other Notes continued
35. Employee Benefits continued
Financial Statements
159
36. Reserves
Hedging
Reserve
$m
Foreign
Currency
Translation
Reserve
$m
Non
Controlling
Interest
Acquisition
Reserve
$m
Other
Reserve
$m
Equity
Compensation
Reserve
$m
Total
Reserve
$m
Balance at 1 July 2022
48
(27)
(97)
106
154
184
Net investment hedge
-
(20)
-
-
-
(20)
Effect of foreign exchange movements
-
112
(4)
-
-
108
Effective cash flow hedges
1
-
-
-
-
1
Total comprehensive income
1
92
(4)
-
-
89
Fair value movement on allocation and
vesting of securities
-
-
-
-
-
-
Total other movements through reserves
-
-
-
-
-
-
Balance at 30 June 2023
49
65
(101)
106
154
273
Balance at 1 July 2023
49
65
(101)
106
154
273
Effect of foreign exchange movements
-
(51)
-
-
-
(51)
Effective cash flow hedges
(7)
-
-
-
-
(7)
Total comprehensive income
(7)
(51)
-
-
-
(58)
Fair value movement on allocation and
vesting of securities
-
-
-
-
(7)
(7)
Total other movements through reserves
-
-
-
-
(7)
(7)
Balance at 30 June 2024
42
14
(101)
106
147
208
37. Impact of New and Revised Accounting Standards
New Accounting Standards adopted 1 July 2023
From 1 July 2023, the Group adopted AASB 17 Insurance Contracts and Disclosure of Accounting Policies and Definitions of Accounting
Estimates (Amendments to AASB 7, 101, 108 and AASB Practice Statement 2), which did not have a material impact on the Group.
New Accounting Standards and Interpretations Not Yet Adopted
Accounting Standard
Requirement
Impact on Financial Statements
AASB 2020-1
Amendments to Australian
Accounting Standards -
Classification of Liabilities as
Current and Non-current
The amendments, as issued in 2020 and 2022, aim to
clarify the requirements on determining whether a liability
is current or non-current, and require new disclosures for
non-current liabilities that are subject to future covenants.
The amendments apply for annual reporting periods
beginning on or after 1 January 2024.
Based on preliminary analysis performed, the
amendments are not expected to have a material
impact on the Group.
AASB 2014-10
Amendments to Australian
Accounting Standards – Sale
or Contribution of Assets
between an Investor and its
Associate or Joint Venture and
consequential amendments.
AASB 2014-10 amends AASB 10 and AASB 128 to clarify
the requirements for recording the sale or contribution
of assets between an investor and its associate or
joint venture.
The amendment becomes mandatory for the June 2026
financial year and will be applied prospectively.
Based on preliminary analysis performed, the
amendments are not expected to have a material
impact on the Group.
AASB 18
Presentation and Disclosure in
Financial Statements
AASB 18 aims to provide greater consistency in
presentation of the income and cash flow statements, and
more disaggregated information.
The Standard will change how the Group presents
its results on the face of the income statement
and disclose information in the notes to the financial
statements. Certain ‘non-GAAP’ measures (management-
defined performance measures) – will now form part of the
audited financial statements.
There will be three new categories of income
and expenses, two defined income statement
subtotals and one single note on management-defined
performance measures.
The Standard is effective for the June 2028 financial year
and will be applied retrospectively.
Management is currently undertaking an analysis
to determine the impact of the Standard on
the Group.
160
Lendlease Annual Report 2024
Notes to Consolidated Financial Statements continued
38. Other Material Accounting Policies
38.a. Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (the functional currency). The consolidated financial report is presented in Australian dollars,
which is the Company’s functional and presentation currency.
Transactions and Balances
Foreign currency transactions are translated into Australian dollars using the exchange rate on the date of the transactions. Assets and
liabilities denominated in foreign currencies are translated to Australian dollars at balance date.
Foreign exchange gains or losses are recognised in the Income Statement for monetary assets and liabilities such as receivables and
payables, except for qualifying cash flow hedges and qualifying net investment hedges in foreign operations, which are recognised in
other comprehensive income. Refer to Note 25 ‘Hedging’ for further detail.
Translation differences on non monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair
value gain or loss.
Group Entities
The results and Statement of Financial Position of all Group entities that are not presented in Australian dollars (none of which has the
currency of a hyperinflationary economy) are translated as follows:
•
Revenue and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the
transaction rate, in which case revenue and expenses are translated at the date of the transactions)
•
Assets and liabilities for each Statement of Financial Position presented are translated at the closing rate at balance date
•
All resulting exchange differences are recognised in other comprehensive income, in the foreign currency translation reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity
and translated at the closing rate.
38.b. Goods and Services Tax
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where the amount of GST
incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition
of the asset or as part of the expense.
Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the
Australian Taxation Office (ATO) is included as a current asset or liability in the Statement of Financial Position. Cash flows are included
in the Statement of Cash Flows on a gross basis. The GST components of cash flows arising from investing and financing activities
which are recoverable from, or payable to, the ATO are classified as operating cash flows.
Section F. Other Notes continued
Financial Statements
161
Consolidated Entity Disclosure Statement
Set out below is a list of entities that are consolidated in this set of Consolidated financial statement at the end of financial year.
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Corporate
Lendlease Corporation Limited
Body Corporate
Australia
N/A
Australian
N/A
Lendlease Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Responsible Entity Limited1
Body Corporate
Australia
100%
Australian
N/A
ACN 651 627 673 Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Be Onsite
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Canopy Assurance Limited
Body Corporate
Bermuda
100%
Australian
N/A
Infrastructure Risk Management Services Limited
Body Corporate
Guernsey
100%
Australian
N/A
Lend Lease Employee Investment Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Aus) Branta Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Australia) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (US) Branta Holdings LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Capital Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Services Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease Americas Holdings Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease Americas Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease Asia Holdings Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Asia Treasury Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Capital Services Holdings Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Capital Services Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Capital Services RL Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease China Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital Asia Holdings Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Digital Asia Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Digital Australia Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital Australia Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital EUR Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Digital Europe Holdings Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Digital Group Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital Investments Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital Investments US LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Digital IP Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Digital UK Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Digital US Holdings LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Digital US LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Employee Share Acquisition Plan (STI)
Trust
Australia
N/A
Australian
N/A
Lendlease Employee Share Acquistion Plan
Trust
Australia
N/A
Australian
N/A
Lendlease Europe Finance plc
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Europe Holdings Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Europe Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Finance Holding Company Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Finance Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Group Projects Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Healthcare Trustee Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease ICT Services Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease International Development Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease International Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease LLT Holdings Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease LLT Holdings Sub Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Management Services Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Proptech Investments Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
1. This entity is a trustee of a trust within the consolidated entity.
162
Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Corporate continued
Lendlease Residual Corp.
Body Corporate
United States
100%
Foreign
United States
Lendlease Singapore Investments Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease SREIT Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease SREIT Sub Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Sunbird Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Technology Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Trust No.2
Trust
Australia
N/A
Australian
N/A
Lendlease US Investments Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Ventures Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Podium Property Services LLC
Body Corporate
United States
100%
Foreign
United States
Podium Pte. Ltd.
Body Corporate
Singapore
87%
Foreign
Singapore
Serenia Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Investments
1 O'Connell AssetCo Pty Limited
Body Corporate
Australia
100%
Australian
N/A
1 O'Connell HeadCo Pty Limited
Body Corporate
Australia
100%
Australian
N/A
720 S. Wells Development Investor LLC
Body Corporate
United States
100%
Foreign
United States
AAFHHC Development Management LLC
Body Corporate
United States
100%
Foreign
United States
AAFHHC Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
AHFH Development Management LLC
Body Corporate
United States
100%
Foreign
United States
AHFH Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
AMCC Asset Management LLC
Body Corporate
United States
100%
Foreign
United States
AMCC Development Management LLC
Body Corporate
United States
100%
Foreign
United States
AMCC Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
Australian Prime Property Fund Custodian Pty. Limited.
Body Corporate
Australia
100%
Australian
N/A
Cadence AM Services LLC
Body Corporate
United States
100%
Foreign
United States
Cadence Development Management LLC
Body Corporate
United States
100%
Foreign
United States
Cadence Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
Chelmsford Meadows (General Partner) Limited
Body Corporate
United Kingdom
75%
Foreign
United Kingdom
Custodian Two Pty Limited
Body Corporate
Australia
100%
Australian
N/A
EQ1 Mid Co Pty Limited
Body Corporate
Australia
100%
Australian
N/A
EQ1 Property Co Pty Limited
Body Corporate
Australia
100%
Australian
N/A
FCFH Development Management LLC
Body Corporate
United States
100%
Foreign
United States
FCFH Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
FDMCH Development Management LLC
Body Corporate
United States
100%
Foreign
United States
FDMCH Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
FHFH Business Management LLC
Body Corporate
United States
100%
Foreign
United States
FHFH Development Management LLC
Body Corporate
United States
100%
Foreign
United States
FHFH Inc.
Body Corporate
United States
100%
Foreign
United States
Fort Hood Family Housing Business Management LLC
Body Corporate
United States
100%
Foreign
United States
Greensborough Pty Limited
Body Corporate
Australia
100%
Australian
N/A
HCH Development Management LLC
Body Corporate
United States
100%
Foreign
United States
HCH Sole Member LLC
Body Corporate
United States
100%
Foreign
United States
Hickam Communities LLC
Body Corporate
United States
100%
Foreign
United States
InTown S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
KH Development Management LLC
Body Corporate
United States
100%
Foreign
United States
KH Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (Circular Quay) Pty Limited
Body Corporate
Australia
20%
Australian
N/A
Lendlease (Daramu House) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Two Melbourne Quarter) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (US) Asset Management II LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Digital Investments LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Infrastructure LLC
Body Corporate
United States
100%
Foreign
United States
1. This entity is a trustee of a trust within the consolidated entity.
Financial Statements
163
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Investments continued
Lendlease (US) Investment Management LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Proptech Fund LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Public Partnerships Holdings LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Telecom Investments SB LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Asia Investments Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Bluewater Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease BTR1 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Business Management (Shanghai) Co. Ltd.
Body Corporate
China
100%
Foreign
China
Lendlease Carlton Connect Asset Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Carlton Connect Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Chelmsford Meadows Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Communities Capital LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Communities LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease CRE Lending (UK) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease DC Holdings Trust
Trust
Singapore
N/A
Foreign
Singapore
Lendlease DC Holdings Trustee Pte. Ltd.1
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease DTC (IHT) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Education Assets Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Energy Solutions & Security LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Europe GP Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Europe Retail Investments Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Funds Management Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease GCR Investment Holding Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Global Commercial Trust Management
Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Horizon Development LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Horizon Holdings LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Horizon LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease IM Investor Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease IM Investor Trust
Trust
Australia
N/A
Australian
N/A
Lendlease IMT (HK) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT (LLITST ST) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT (LLITST) Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT (OITST ST) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT (OITST) Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT (SM) Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT 2 (HP) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease IMT 3 PTY Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Infrastructure (Italy) S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Lendlease International Asia Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Investment Management (AFSL) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Investment Management (Australia)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Investment Management Holdings
(Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Investment Management Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Investments Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Italy SGR S.p.A
Body Corporate
Italy
100%
Foreign
Italy
Lendlease Japan Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease La Trobe St Commercial Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Military Housing LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Moorfields (Europe) GP Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Moorfields Investment (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
1. This entity is a trustee of a trust within the consolidated entity.
164
Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Investments continued
Lendlease Moorfields Investment (Europe) Trust1
Trust
Jersey
N/A
Foreign
Jersey
Lendlease MSG Investment (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease MSG Investment (Europe) Trust1
Trust
Jersey
N/A
Foreign
Jersey
Lendlease MSG North Investment (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease MSG North S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Lendlease MSG South S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Lendlease P&D Realty Sdn. Bhd.
Body Corporate
Malaysia
100%
Foreign
Malaysia
Lendlease Performance Retail Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease PFI/PPP Infrastructure Fund Investor Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Platform Investor LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Platform Residential LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Property Management (Australia) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease R8/R9 Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Real Estate Investment Services Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Real Estate Investments (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Real Estate Investments Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Realty Sdn. Bhd.
Body Corporate
Malaysia
100%
Foreign
Malaysia
Lendlease Renaissance 1 Investment (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease REP4 Asset Pty Limited2
Body Corporate
Australia
33%
Australian
N/A
Lendlease REP4 Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Residential Asset Management Services
(Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Investment (Europe) Trust1
Trust
Jersey
N/A
Foreign
Jersey
Lendlease Residential Investment 2 (Europe) Trust1
Trust
Jersey
N/A
Foreign
Jersey
Lendlease Residential Investment Holdings
(Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Investor Holdings LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Residential Property Management Services
(Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Shopping Centre Development Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Singapore Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Vita Holding Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
LINO GP Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
LINO SG Holding Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
LLBA Property Management Sdn. Bhd.
Body Corporate
Malaysia
49%
Foreign
Malaysia
LRIP 2 GP Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H11A GP Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H11A Nominee 1 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H11A Nominee 2 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H4 GP Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H4 Nominee 1 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H4 Nominee 2 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H5 GP Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H5 Nominee 1 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H5 Nominee 2 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H7 GP Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H7 Nominee 1 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP E&C H7 Nominee 2 Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LRIP GP Limited
Body Corporate
United Kingdom
70%
Foreign
United Kingdom
LTYD Homes Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Military Housing Property Management LLC
Body Corporate
United States
100%
Foreign
United States
MQ West Property Co Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
MQ West Property Trust
Trust
Australia
N/A
Australian
N/A
1. The Jersey trusts are taxed on a flow-through basis. All trust income belonging to the Lendlease unitholders is ultimately subject to UK corporation tax in the hands of
UK companies.
2. This entity is a trustee of a trust within the consolidated entity.
Financial Statements
165
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Investments continued
NHC Development Management LLC
Body Corporate
United States
100%
Foreign
United States
NHC Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
O'Connell Precinct Co Pty Limited
Body Corporate
Australia
100%
Australian
N/A
PI MTA LLC
Body Corporate
United States
100%
Foreign
United States
RE Development Management LLC
Body Corporate
United States
100%
Foreign
United States
RE Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
Rest Easy LLC
Body Corporate
United States
100%
Foreign
United States
SHC Development Management LLC
Body Corporate
United States
100%
Foreign
United States
SHC Sole Member LLC
Body Corporate
United States
100%
Foreign
United States
Soaring Heights Communities LLC
Body Corporate
United States
100%
Foreign
United States
Top AssetCo Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Top SubCo Pty Limited
Body Corporate
Australia
100%
Australian
N/A
TVC Development Management LLC
Body Corporate
United States
100%
Foreign
United States
TVC Managing Member LLC
Body Corporate
United States
100%
Foreign
United States
Vita Asset Holding Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Vita Asset Management Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Vita Growth Partners II Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Vita Growth Partners III Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Vita Growth Partners Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Development
1446 Market Owner LLC
Body Corporate
United States
100%
Foreign
United States
30 Van Ness Development LLC
Body Corporate
United States
100%
Foreign
United States
600 S. Wells (Chicago) II LLC
Body Corporate
United States
100%
Foreign
United States
600 S. Wells (Chicago) III LLC
Body Corporate
United States
100%
Foreign
United States
Assure Energy Asset Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Assure Energy Asset Trust
Trust
Australia
N/A
Australian
N/A
Assure Energy Holding Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Assure Energy Holding Trust
Trust
Australia
N/A
Australian
N/A
Assure Energy NT Darwin Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Assure Energy NT Darwin Trust
Trust
Australia
N/A
Australian
N/A
Assure Energy NT Robertson Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Assure Energy NT Robertson Trust
Trust
Australia
N/A
Australian
N/A
Assure Energy Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Assure Energy Trust
Trust
Australia
N/A
Australian
N/A
Australian Modular Fabrication Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Barangaroo South KWH Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Barangaroo South KWH Trust
Trust
Australia
N/A
Australian
N/A
Beaufort Western Properties Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Bulimba East Commercial Development Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Bulimba East Commercial Development Trust
Trust
Australia
N/A
Australian
N/A
Bulimba East Development Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Bulimba East Development Trust
Trust
Australia
N/A
Australian
N/A
Cambium Residents Management Company Limited2
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Capella Capital Investments Pty Limited
Body Corporate
Australia
50%
Australian
N/A
Capella Capital Lend Lease Pty Limited & Capella
Partners Pty Limited
Partnership
Australia
N/A
N/A
N/A
Capella Capital Lendlease Pty Limited3
Body Corporate
Australia
100%
Australian
N/A
Capella Capital Pty Limited
Body Corporate
Australia
70%
Australian
N/A
Capella Management Services Pty Limited
Body Corporate
Australia
70%
Australian
N/A
CASII Investor Pty Limited
Body Corporate
Australia
50%
Australian
N/A
CASII Sub Investor Pty Limited
Body Corporate
Australia
50%
Australian
N/A
CC Lendlease Pty Limited
Body Corporate
Australia
100%
Australian
N/A
1. This entity is a trustee of a trust within the consolidated entity.
2. This entity is without share capital as it is limited by guarantee and is controlled by members who occupy the role of guarantors.
3. This entity is a partner in a partnership within the consolidated entity.
166
Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Cedarwood Square Residents Management
Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Chobham School Academy (Stratford)1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Clippership Commercial Unit LLC
Body Corporate
United States
100%
Foreign
United States
Clippership Wharf Manager LLC
Body Corporate
United States
100%
Foreign
United States
Comland Limited
Body Corporate
Australia
100%
Australian
N/A
Coolum Beachside Management Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Covington MOB Owners LLC
Body Corporate
United States
100%
Foreign
United States
CQC (Finance) Pty Limited
Body Corporate
Australia
70%
Australian
N/A
CQC Partners Pty Limited
Body Corporate
Australia
70%
Australian
N/A
Cross Yarra 1 Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Cross Yarra Holding Trust 1
Trust
Australia
N/A
Australian
N/A
Cross Yarra Trust 1
Trust
Australia
N/A
Australian
N/A
CY Holding 1 Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Delfin GC Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Delfin Realty (QLD) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Delfin Retirement Living Pty. Limited
Body Corporate
Australia
100%
Australian
N/A
Elephant Park Estate Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Europe Accelerator Platform S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Exemplar Health (Melton) Pty Limited
Body Corporate
Australia
50%
Australian
N/A
Exemplar Housing Pty Ltd
Body Corporate
Australia
70%
Australian
N/A
Exemplar Living (Randwick) Pty Limited
Body Corporate
Australia
70%
Australian
N/A
Footscray Land Limited
Body Corporate
Australia
100%
Australian
N/A
Geelong Live Finance Pty Limited
Body Corporate
Australia
70%
Australian
N/A
Geelong Live Pty Limited
Body Corporate
Australia
70%
Australian
N/A
Glasshouse Gardens Residents' Management
Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
H11A Residents Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
H4 Residents Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
H5 Residents Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
H7 Residents Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Halefield Securities Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
HG Communities Finance Pty Limited
Body Corporate
Australia
70%
Australian
N/A
HG Communities Pty Limited
Body Corporate
Australia
70%
Australian
N/A
HULand1 LLC
Body Corporate
United States
100%
Foreign
United States
HULand2 LLC
Body Corporate
United States
100%
Foreign
United States
HUMF1 LLC
Body Corporate
United States
100%
Foreign
United States
Hungate Estate Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
IJKL LLC
Body Corporate
United States
100%
Foreign
United States
IQL Investments LLP
Body Corporate
United Kingdom
100%
N/A
N/A
IQL Residential (GP) Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
IQL Residential LP
Partnership
United Kingdom
N/A
N/A
N/A
IQL S10 Holdings (GP) Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
IQL S10 Holdings LP
Partnership
United Kingdom
N/A
N/A
N/A
IQL S1S11 (GP) Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
IQL S1S11 Holdco Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
IQL S1S11 LP
Partnership
United Kingdom
N/A
N/A
N/A
IQL S1S11 Trust4,3
Trust
Jersey
N/A
Foreign
Jersey
IQL South Holdings Limited2
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
IQL South Holdings Trust4,3
Trust
Jersey
N/A
Foreign
Jersey
Jacksons Landing Development Pty Limited
Body Corporate
Australia
50%
Australian
N/A
Jacksons Landing Estate Management Pty Limited
Body Corporate
Australia
50%
Australian
N/A
Jacksons Landing Realty Pty Limited
Body Corporate
Australia
100%
Australian
N/A
1. This entity is without share capital as it is limited by guarantee and is controlled by members who occupy the role of guarantors.
2. This entity is a trustee of a trust within the consolidated entity.
3. This entity is a partner in a partnership within the consolidated entity.
4. The Jersey trusts are taxed on a flow-through basis. All trust income belonging to the Lendlease unitholders is ultimately subject to UK corporation tax in the hands of
UK companies.
Financial Statements
167
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Larchwood Residents Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Lendlease (Badgerys Creek) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Barangaroo South Co-Owner) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Batman's Hill) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Bowen Hills) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Carlton Connect Initiative) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Dunheved) Headco Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Dunheved) Subco Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (E&C) Estates and Property Management
Company Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease (E&C) Overriding Lease Company Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease (Elephant & Castle) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease (Elephant & Castle) Retail Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease (Goldfields Hotel Holdings) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Goldfields Hotel) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Goldfields Residential Holdings) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Goldfields Residential) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Goldfields) Development Manager
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) NE Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) NE Retail Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) NE Retail Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) NE Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) Residential Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) Retail Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) Retail TDex Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) Retail TDEX Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) Retail Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) SE Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) SE Retail Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) SE Retail Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) SE Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) SW Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) SW Retail Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Haymarket) SW Retail Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Haymarket) SW Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (High Road West) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease (Local Offices) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Melbourne Quarter R2) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Melbourne Quarter R3) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Millers Point) Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Millers Point) Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (MQ Residential Developer) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (One Darling Point Holdings) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (One Darling Point Landowning) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (One Darling Point) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (OSD South) Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease (OSD South) Subtrust
Trust
Australia
N/A
Australian
N/A
Lendlease (OSD South) Trust
Trust
Australia
N/A
Australian
N/A
Lendlease (Queen Victoria Markets) Head Developer
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (The Anchorage) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Victoria Cross Holdings) Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
1. This entity is without share capital as it is limited by guarantee and is controlled by members who occupy the role of guarantors.
2. This entity is a trustee of a trust within the consolidated entity.
168
Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Lendlease (Victoria Cross) Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Victoria Harbour CW1) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Victoria Harbour Y7) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Victoria Harbour) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Waterbank J) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease (Waterbank) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Apartments (Armadale) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Apartments (Barangaroo) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Apartments (Orrong Road) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Apartments Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Aurum 1 Asset Management Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Aurum 1 Property Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Aurum 2 Property Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Aurum Asset Management Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Aurum Property Holdings Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Broadway Community Properties LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Capital Services Holding Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Capital Services Rl Holding Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Clippership Wharf LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Communities (Alkimos Central) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Alkimos) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Atherstone) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Aurora) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Australia) Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Balance Sheet) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Blakeview) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Calderwood) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Caroline Springs) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Casey-2) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Chase) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Craigieburn) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Ellenbrook) Holdings
Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Ellenbrook) Holdings Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Communities (Ellenbrook) Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Ellenbrook) Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Communities (Figtree Hill No.2) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Figtree Hill No.3) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Figtree Hill) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Forest Lake Management)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Forest Lake Village)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Gawler) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Greystanes) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Harpley) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Holding Entity) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Holroyd) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (JV Finco) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Laurimar Park) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Management Services)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Mawson Lakes) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Pakenham East) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Pakenham Valley) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
1. This entity is a trustee of a trust within the consolidated entity.
Financial Statements
169
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Lendlease Communities (Pakenham) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Pda Holding Company)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Pine Valley) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Redbank Plains) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Shoreline) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Springfield) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Stoneleigh Reserve)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Townsville) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Werrington) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Wilton) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Woodlands) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities (Yarrabilba) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Communities Construction Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease CSRT Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease CW2 Holding Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease CW2 Holding Trust
Trust
Australia
N/A
Australian
N/A
Lendlease CW2 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease CW2 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease CW3 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease CW3 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Darling Park One Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Deptford Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Designmake Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Development (Comland) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Development (Coolum Beachside)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Development (Coolum Residences)
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Development (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Development (Precinct 2) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Development Holdings (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Development Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease Development Malaysia Sdn. Bhd.
Body Corporate
Malaysia
100%
Foreign
Malaysia
Lendlease Development Partner (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Development Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease E&C Legacy Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease ESMANCO S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Lendlease Euston Development LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease Euston Holdings LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease Financial Services Products Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease HDV Holdings LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease HDV Nominee Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Healthcare Development LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Inc.
Body Corporate
Japan
100%
Foreign
Japan
Lendlease Infrastructure Investment (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Infrastructure Investment Holdings Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Infrastructure Investment Management
Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Infrastructure Investments Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease IQL Investments Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Life Science Development Management LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease LQ Residential 1 JR Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease LQ Residential 1 Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease LQ Residential 2 JR Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
1. This entity is a trustee of a trust within the consolidated entity.
170
Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Lendlease LQ Residential 2 Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease LQ Residential 3 JR Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease LQ Residential 3 Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease LQ Retail Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Manufactured Products Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease NoMad Properties LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Norwich Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease OSH Residential A Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease OSH Residential B Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease OSH Residential C Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease OSH Residential C Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Platform Development LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Platform Lab Office GP LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Platform Lab Office GP2 LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Platform Lab Office LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Platform Lab Office2 LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Plot 2 Holdings JR Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Plot 2 Holdings Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Plot 2 Hotel And Retail Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Plot 2 Residential Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Preston Tithebarn Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Preston Tithebarn no2 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease R&H Holdings JR Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease R&H Holdings Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Realty Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Residential (BH) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential (CG) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential (Lancashire) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential (North West) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential (Special Projects) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential (Yorkshire) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Construction Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Director Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Group (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Nominees Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Residential Participant Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Residential Twenty Five Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Retail (Barangaroo) OSH R1 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Retail (Barangaroo) OSH R1 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Retail (Barangaroo) OSH R2 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Retail (Barangaroo) OSH R2 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Retail (Barangaroo) OSH R3 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Retail (Barangaroo) OSH R3 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Retail (Barangaroo) R1 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Retail (Barangaroo) R1 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Retail (Barangaroo) R7 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Retail (Barangaroo) R7 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Retail (Barangaroo) R8/R9 Pty Limited1
Body Corporate
Australia
100%
Australian
N/A
Lendlease Retail (Barangaroo) R8/R9 Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Retail Development Pty Limited
Body Corporate
Australia
100%
Australian
N/A
1. This entity is a trustee of a trust within the consolidated entity.
Financial Statements
171
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Lendlease Retail Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Lendlease SCBD Limited1
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Senior Living 1 (Shanghai) Co. Limited
Body Corporate
China
100%
Foreign
China
Lendlease Senior Living 2 (Shanghai) Co. Limited
Body Corporate
China
100%
Foreign
China
Lendlease Senior Living Property Company Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Senior Living Service (Shanghai) Co. Limited
Body Corporate
China
100%
Foreign
China
Lendlease Services (Italy) S.r.l.
Body Corporate
Italy
100%
Foreign
Italy
Lendlease Silicon Valley Development LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Silicon Valley Holdings LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Silicon Valley Retail LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Silvertown Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Smithfield Development LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease Smithfield Holdings LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease Stratford GP Limited1
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Stratford Limited Partnership
Partnership
United Kingdom
N/A
N/A
N/A
Lendlease Strathfield Town Centre (Holdings)
Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease Strathfield Town Centre Head Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Strathfield Town Centre Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Lendlease Strathfield Town Centre Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Thamesmead Development LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease Thamesmead Holdings LLP
Body Corporate
United Kingdom
100%
N/A
N/A
Lendlease TRX Hotel Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Vault Holdings Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Victoria Cross Head Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Victoria Cross Trust
Trust
Australia
N/A
Australian
N/A
Lendlease Village Management Pty Limited
Body Corporate
Australia
100%
Australian
N/A
LIA Finance Pty Ltd
Body Corporate
Australia
70%
Australian
N/A
Limosa Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Living Utilities Fibre Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Living Utilities Pty Limited
Body Corporate
Australia
100%
Australian
N/A
LL FHR Pty Limited
Body Corporate
Australia
100%
Australian
N/A
LL FHR Trust
Trust
Australia
N/A
Australian
N/A
LL Melbourne Metro Pty Limited
Body Corporate
Australia
100%
Australian
N/A
LL NEL Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
LL NEL Trust
Trust
Australia
N/A
Australian
N/A
LL/SHA Wentworth Point Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Maribyrnong Development Company Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Maryland Development Company Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Melton Hospital Finance Pty Limited
Body Corporate
Australia
50%
Australian
N/A
Merefield Court (Bowden) Management Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Norfolk MOB Owners LLC
Body Corporate
United States
100%
Foreign
United States
Opus Collection Management Company Limited3
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Podium Asset Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
POLK M-100 LLC
Body Corporate
United States
100%
Foreign
United States
Potato Wharf 3 and 4 Residents Management
Company Limited3
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Preston Tithebarn General Partner Limited1
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Preston Tithebarn Partnership
Partnership
United Kingdom
N/A
N/A
N/A
Preston Tithebarn Unit Trust1,4
Trust
Jersey
N/A
Foreign
Jersey
RB Marina Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
RB Marina Trust
Trust
Australia
N/A
Australian
N/A
1. This entity is a partner in a partnership within the consolidated entity.
2. This entity is a trustee of a trust within the consolidated entity.
3. This entity is without share capital as it is limited by guarantee and is controlled by members who occupy the role of guarantors.
4. The Jersey trusts are taxed on a flow-through basis. All trust income belonging to the Lendlease unitholders is ultimately subject to UK corporation tax in the hands of
UK companies.
172
Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Development continued
Rentco 247 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Retirement By Design Pty Limited
Body Corporate
Australia
100%
Australian
N/A
River South Properties LLC
Body Corporate
United States
100%
Foreign
United States
Ropes Crossing Distribution Trust
Trust
Australia
N/A
Australian
N/A
SB Harrison Street Development LLC
Body Corporate
United States
100%
Foreign
United States
SB Wells Street Development LLC
Body Corporate
United States
100%
Foreign
United States
Slip45 Owner LLC
Body Corporate
United States
100%
Foreign
United States
Slip45 Trustee LLC
Body Corporate
United States
100%
Foreign
United States
Slip65 Trustee LLC
Body Corporate
United States
100%
Foreign
United States
South Gardens Residents Management
Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
St Clements Valley Developments Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
St Marys Land Limited2
Body Corporate
Australia
100%
Australian
N/A
Sydney Boathouse Holdings Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Sydney Boathouse Holdings Trust
Trust
Australia
N/A
Australian
N/A
Sydney Superyacht Holdings Pty Limited2
Body Corporate
Australia
100%
Australian
N/A
Sydney Superyacht Trust
Trust
Australia
N/A
Australian
N/A
The Clarence Dock Company Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Estate Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
The Timberyard Plot 2 GP Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plot 2 Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plot 2 Limited Partnership
Partnership
United Kingdom
N/A
N/A
N/A
The Timberyard Plot 2 Nominee No. 1 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plot 2 Nominee No. 2 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plots 1&3 GP Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plots 1&3 Limited Partnership
Partnership
United Kingdom
N/A
N/A
N/A
The Timberyard Plots 1&3 LP Limited3
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plots 1&3 Nominee No.1 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
The Timberyard Plots 1&3 Nominee No.2 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Trafalgar Place Estate Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Trafalgar Place Residents Management
Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Victoria Cross Commercial (Holdings) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Victoria Cross Commercial Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Victoria Cross Retail Head Trust
Trust
Australia
N/A
Australian
N/A
Victoria Cross Retail Pty Limited
Body Corporate
Australia
100%
Australian
N/A
VLL Richmond Trust
Trust
Australia
N/A
Australian
N/A
West Grove Residents Management Company Limited1
Body Corporate
United Kingdom
N/A
Foreign
United Kingdom
Construction
Birmingham Schools PSP LEP Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
BLFB Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Bovis Egypt SAE4
Body Corporate
Egypt
95%
Foreign
Egypt
Bovis International Inc.
Body Corporate
United States
100%
Foreign
United States
Bovis Lend Lease General Construction Limited
Liab Co4
Body Corporate
Greece
100%
Foreign
Greece
Bovis Lend Lease India Pvt Limited4
Body Corporate
India
100%
Foreign
India
Bovis Lend Lease Overseas Holdings B.V.4
Body Corporate
Netherlands
100%
Foreign
Netherlands
Bovis Lend Lease SAS4
Body Corporate
France
100%
Foreign
France
Bovis Lend Lease Sp. z o.o.4
Body Corporate
Poland
100%
Foreign
Poland
Bovis Lend Lease Trinidad & Tobago Unlimited4
Body Corporate
Trinidad & Tobago
100%
Foreign
Trinidad & Tobago
Debut Services (Contracts) Ltd
Body Corporate
United Kingdom
91%
Foreign
United Kingdom
Debut Services Limited
Body Corporate
United Kingdom
85%
Foreign
United Kingdom
DTLA Lending LLC
Body Corporate
United States
100%
Foreign
United States
1. This entity is without share capital as it is limited by guarantee and is controlled by members who occupy the role of guarantors.
2. This entity is a trustee of a trust within the consolidated entity.
3. This entity is a partner in a partnership within the consolidated entity.
4. This is a legacy entity acquired as part of a historical acquisition. It is in liquidation or is proposed to be liquidated. Lendlease has no active operating business in the entity’s tax
residence jurisdiction.
Financial Statements
173
Body Corporates
Tax Residency
Entity Name
Entity Type
Place formed
or incorporated
% of share
capital held
Australian or
foreign resident
Jurisdiction for
foreign resident
Construction continued
Elwick Place Construction Limited
Body Corporate
United Kingdom
50%
Foreign
United Kingdom
EP3 Holdings Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
EP3 Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lehrer McGovern International Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lend Lease (AR) S.A.1
Body Corporate
Argentina
100%
Foreign
Argentina
Lend Lease (BR) Construcoes Limiteda1
Body Corporate
Brazil
100%
Foreign
Brazil
Lend Lease CEMEA Investments B.V.1
Body Corporate
Netherlands
100%
Foreign
Netherlands
Lend Lease Pharmaceutical (EMEA) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease (US) Construction Holdings Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Construction Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Construction LMB Inc.
Body Corporate
United States
100%
Foreign
United States
Lendlease (US) Public Partnerships LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease CEMEA Investments Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction (Aust) Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Construction (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction (Lelliott) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction (QLD / WA) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Construction (Scotland) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction (Southern) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Construction Asia Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Construction Holdings (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction International Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Construction Management Services
(One) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction North Western Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Construction Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Consulting (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Europe International Limited1
Body Corporate
United Kingdom
100%
Foreign
Malta
Lendlease Infrastructure (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Infrastructure Holdings (Europe) Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Japan Inc.
Body Corporate
Japan
100%
Foreign
Japan
Lendlease Management Australia Holdings Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Melbourne Metro Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Multi Site Group LLC
Body Corporate
United States
100%
Foreign
United States
Lendlease Overseas Holdings Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
Lendlease Project Management & Construction
(Shanghai) Co. Limited
Body Corporate
China
100%
Foreign
China
Lendlease Projects (M) Sdn. Bhd.
Body Corporate
Malaysia
100%
Foreign
Malaysia
Lendlease Services (Holdings) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Services (New Zealand) Limited
Body Corporate
New Zealand
100%
Foreign
New Zealand
Lendlease Singapore Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Lendlease Structures Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease Technical Services (Aust) Pty Limited
Body Corporate
Australia
100%
Australian
N/A
Lendlease UK Pension Trustee Limited
Body Corporate
United Kingdom
100%
Foreign
United Kingdom
LL Insurance VT Inc.
Body Corporate
United States
100%
Foreign
United States
M/L Bovis Holdings Limited.
Body Corporate
United States
100%
Foreign
United States
Schal Bovis Inc.
Body Corporate
United States
100%
Foreign
United States
Sitzler Baulderstone Joint Venture
Body Corporate
Australia
70%
Australian
N/A
Tower Pods Godo Kaisha
Body Corporate
Japan
100%
Foreign
Japan
Vita PMC Holding Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Vita PMC SG Pte. Ltd.
Body Corporate
Singapore
100%
Foreign
Singapore
Waste 2 Resources - Project Lancashire LLP
Body Corporate
United Kingdom
100%
N/A
N/A
1. This is a legacy entity acquired as part of a historical acquisition. It is in liquidation or is proposed to be liquidated. Lendlease has no active operating business in the entity’s tax
residence jurisdiction.
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Lendlease Annual Report 2024
Consolidated Entity Disclosure Statement continued
Key Assumptions and Judgements
Determination of Tax Residency
Section 295(3A) of the Corporations Act 2001 requires that the tax residency of each entity which is included in the Consolidated Entity
Disclosure Statement (CEDS) be disclosed.
In determining tax residency, the consolidated entity has applied the following interpretations:
•
Australian tax residency
“Australian resident” has the meaning provided in the Income Tax Assessment Act 1997. The consolidated entity has applied current
legislation and judicial precedent, including having regard to the Commissioner of Taxation’s public guidance in Tax Ruling TR
2018/5 and Practical Compliance Guideline PCG 2018/19.
•
Foreign tax residency
The consolidated entity has applied current legislation, double tax agreements and where available judicial precedent in the
determination of foreign tax residency.
Partnerships and Trusts
Australian tax law does not contain specific residency tests for partnerships and trusts. Generally, these entities are taxed on a flow-
through basis, meaning the partners and unitholders have the obligation to pay tax in relation to their involvement in the partnership or
trust, so there is no need for a general residence test. Other jurisdictions such as the UK, Jersey and Singapore adopt similar positions.
For this reason, the tax residence of partnerships (including UK limited liability partnerships (LLPs) disclosed as body corporates) has
been disclosed as “N/A” and the tax residence of trusts has been disclosed as the same tax residence of the relevant trust’s trustee.
United States Limited Liability Companies (LLCs)
All of the consolidated entity’s LLCs are disregarded for United States income tax purposes, meaning that the ultimate single member,
being in every case either Lendlease Americas Inc. or Lendlease Americas Holdings Inc, has the obligation to pay tax in relation to their
direct or indirect interest in the LLCs. The tax residencies disclosed for LLCs has been determined by reference to the tax residency of
each LLC’s ultimate single member.
Financial Statements
175
Directors’ Declaration
In the opinion of the Directors of Lendlease Corporation Limited (the Company):
1.
The financial statements and notes and the remuneration disclosures contained in the Remuneration Report in the Directors’ Report
are in accordance with the Corporations Act 2001, including:
a.
Giving a true and fair view of the financial position of the Consolidated Entity as at 30 June 2024 and of its performance for the
financial year ended on that date; and
b.
Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations
Regulations 2001.
2.
The financial statements and notes also comply with International Financial Reporting Standards as disclosed in the Basis
of Preparation.
3.
The Consolidated Entity Disclosure Statement as at 30 June 2024 required by Section 295(3A) of the Corporations Act 2001 is true
and correct.
4.
There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
5.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Group Chief
Executive Officer and Managing Director and Group Chief Financial Officer for the financial year ended 30 June 2024.
Signed in accordance with a resolution of the Directors:
M J Ullmer, AO
Chairman
A P Lombardo
Group Chief Executive Officer
and Managing Director
Sydney, 19 August 2024
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
Independent Auditor’s Report
To the stapled security holders of Lendlease Group
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Lendlease Group (the Stapled Group
Financial Report).
In our opinion, the accompanying Stapled
Group Financial Report gives a true and
fair view, including of the Stapled
Group’s financial position as at 30 June
2024 and of its financial performance for
the year then ended, in accordance with
the Corporations Act 2001, in compliance
with Australian Accounting Standards and
the Corporations Regulations 2001.
The Financial Report of the Stapled Group comprises:
Consolidated Statement of Financial Position as at
30 June 2024
Consolidated Income Statement, Consolidated
Statement of Comprehensive Income, Consolidated
Statement of Changes in Equity, and Consolidated
Statement of Cash Flows for the year then ended
Consolidated Entity Disclosure Statement and
accompanying basis of preparation as at 30 June
2024
Notes, including material accounting policies
Directors’ Declaration.
The Stapled Group consists of Lendlease Corporation
Limited and the entities it controlled at the year-end or
from time to time during the financial year and
Lendlease Trust and the entities it controlled at the year-
end or from time to time during the financial year.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Stapled Group in accordance with the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of
Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant
to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in
accordance with these requirements.
176
Lendlease Annual Report 2024
Key Audit Matters
The Key Audit Matters we identified for
the Stapled Group are:
Construction Revenue Recognition
Sale of Development Properties
Recoverability of Development
Property Inventory
Asset Valuation
UK Building Remediation Provision
Contingent liabilities – Retirement
Living tax matter
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of our
audit of the Financial Report as a whole, and in forming
our opinion thereon, and we do not provide a separate
opinion on these matters.
Construction Revenue Recognition (A$6,344m)
Refer to Note 4 ‘Revenue from Contracts with Customers’ to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group performs various building,
engineering and services construction
contract works (projects) for a wide range of
customers. The Group contracts in a variety
of ways. Each project has a different risk
profile based on its individual contractual
and delivery characteristics.
Currently, global market conditions are
uncertain with disruption to supply chains
and inflationary pressures. These conditions
continue to create a challenging operating
environment impacting productivity,
expected timing of completion and
expected costs to complete.
Construction revenue recognition is a key
audit matter as judgement is required to
assess the timing of recognition determined
by the Group. Revenue on construction
contracts is earned over time, typically using
costs incurred as a proportion of total
forecast costs as the measure of progress.
Estimating total forecast costs to complete
during project life is complex and requires
Our procedures included:
Evaluating and testing the Group’s internal
controls relating to review and approval of
revenue and cost forecasting;
Conducting visits to a selection of project sites
to evidence physical progress and understand
key risks;
Selecting a sample of contracts for testing
using:
Data Analytic routines based on a number of
quantitative and qualitative factors, related to
size and risk of projects; and
the Group’s project reporting tool.
For the sample selected, we:
inquired with key project personnel to
assess the project schedule, forecast costs,
risks and opportunities, with involvement
from KPMG engineering specialists where
appropriate;
read relevant contract terms and conditions
to evaluate the inclusion of individual
Financial Statements
177
judgement. Typical cost estimates include
labour, subcontractors, equipment,
materials, and project overheads. Changes
to these cost estimates could give rise to
variances in the amount of revenue
recognised.
The revenue on construction contracts may
also include variations and claims, which fall
under either the variable consideration or
contract modification requirements of AASB
15. It is the Group’s policy to recognise
these on a contract-by-contract basis when
evidence supports that it is highly probable
that a significant reversal in the amount of
revenue recognised will not occur.
The assessment of revenue on construction
contracts resulting from variations and
claims was a focus of our audit due to the
audit effort in assessing this across bespoke
projects and contracting arrangements.
characteristics and project risks in the
Group’s estimates;
tested a sample of incurred costs to supplier
invoices or other underlying documentation;
tested forecast costs for labour,
subcontractors, equipment, materials, and
project overheads by comparing to actual
incurred spend, committed future contracts
and current market quotes, with specific
consideration of inflation in our assessment
of contingency; and
tested the variations and claims recognised
within revenue against the criteria for
recognition in the accounting standards via
inspection and assessment of:
o correspondence between the Group and
the customer;
o the Group’s legal basis for the variations
and claims, including, where necessary,
external legal opinions; and
o the Group’s analysis of the amounts they
consider meet the recognition
requirement of highly probable, using our
knowledge of the Group’s historical
experience in resolving variations and
claims, and considering the commercial
factors specific to each variation or claim
and quality of information underpinning
the amounts recognised.
Sale of Development Properties (A$1,149m)
Refer to Note 4 ‘Revenue from Contracts with Customers’ to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group develops for sale both built form
products (for example residential apartments
and mixed-use buildings which incorporate
commercial and retail) and residential land lots.
It is the Group’s policy for development
revenue to be recognised when control
transfers to the purchaser, based on an
assessment of the contractual terms of sale.
This was a key audit matter due to the volume
of transactions that occur across multiple
jurisdictions. In addition, the assessment of
cost of sales includes judgement as cost
allocation for site infrastructure costs is
Our procedures included:
Evaluating and testing the Group’s internal
controls relating to review and approval of
development revenue and cost forecasting;
Selecting a sample of settlements, across
multiple jurisdictions, during the year. For the
sample selected we:
compared revenue recognised to
contractual terms of sale and cash
settlements;
assessed the Group’s determination of
when control transfers by a detailed
analysis of the contractual terms of sale
178
Lendlease Annual Report 2024
typically based on the proportion of revenue for
each unit, lot or building as compared to total
forecast project revenue.
The assessment of profit recognition requires
judgment as cost allocation is typically a
function of total forecast project profit based
on either revenue or area estimation.
against the criteria in the accounting
standards;
assessed the Group’s cost allocation
methodology against the requirements of
the accounting standards;
tested the application of the cost
allocation methodology by comparing
allocated costs to revenue recognised in
the year relative to the total project
revenue; and
assessed total forecast project revenue
by comparing expected sales prices to
published industry forecasts and
comparable sales prices achieved in the
year, being alert to the impacts of current
challenging market conditions.
Recoverability of Development Property Inventory (A$2,358m)
Refer to Note 11 ‘Inventories’ to the Financial Report
The key audit matter
How the matter was addressed in our audit
It is the Group’s policy to capitalise
development costs into inventory over the life
of its projects. Development costs include the
purchase of land, site infrastructure costs,
construction costs for built form products and
borrowing costs.
It is the Group’s policy to carry inventory at the
lower of cost and net realisable value. The
recoverability therefore of these capitalised
development costs is a significant judgement
made by the Group, and their assessment is
based on forecasts of:
sales prices; and
construction and infrastructure costs to
complete the development.
Where a development is forecast to be loss
making and the inventory is no longer
considered to be recoverable, the Group
considers it to be impaired and it is their policy
for an expense to be recognised.
This was a key audit matter for us due to:
Our procedures included:
Selecting a sample of projects for testing
using:
Data Analytic routines based on a number
of quantitative and qualitative factors,
related to size, duration and risk of
projects; and
the Group’s project reporting tool.
For the sample selected, we:
compared expected sales prices to
published industry forecasts and
comparable sales prices achieved in the
year, being alert to the impacts of current
challenging market conditions;
tested a sample of forecast construction
and infrastructure costs to underlying
supplier contracts, historical experience
of similar costs, and our industry
expectation of cost contingency levels
and cost escalation assumptions; and
assessed the volumes of sales expected
each period and holding costs in light of
current challenging market conditions,
using our industry knowledge.
Financial Statements
179
current year development property write-
down booked of $547m as a result of the
Group’s strategy update in May 2024; and
many developments being long term which
increases the level of forecasting judgement
and audit complexity in assessing estimated
sales prices and future costs to complete the
development. We considered the heightened
risk in estimating future sales prices, the
timing of sales, and future costs as a result
of current economic conditions.
For projects written down during the year,
recalculated the impairment expense by
comparing the cost against net realisable
value; and
Assessing disclosures included in the
financial report highlighting the key factors in
determining recoverability of development
property inventory, using our understanding
obtained from our testing and against the
requirements of the accounting standards.
Asset Valuation
Refer to Note 12 ‘Equity Accounted Investments’ (A$5,859m), Note 13 ‘Other Financial Assets’
(A$986m) and Note 26 ‘Fair Value Measurement’ to the Financial Report
The key audit matter
How the matter was addressed in our audit
The Group is required by accounting
standards to assess the value of equity
accounted investments and other financial
assets at each reporting date. Within these
investments are a significant number of
investment properties measured at fair
value. These properties include commercial,
retail, industrial, life sciences and residential
(build to rent) assets. The fair value of these
properties directly impacts the Group’s
financial interests in its equity accounted
investments and other financial assets.
Valuations of assets are generally performed
by the Group using internal valuation
methodologies (discounted cash flow or
capitalised income approach) or through the
use of external valuation experts. External
valuations are obtained on a rotational basis
by the Group each year, with the remaining
investments being valued internally.
The Group’s key valuation assumptions are
predominantly:
capitalisation of earnings rates
market rent
leasing incentives
discount rates
rental growth rates
Our procedures included:
Selecting a sample of asset valuations based
on the significance of the asset to the Group’s
financial position and performance;
For the sample selected:
Working with our real estate valuation
specialists, we compared the Group’s key
assumptions with market data published by
commercial real estate agents, previous
external valuations, our knowledge of the
industry, and/or our knowledge of the asset
and its historical performance and a
sensitivity to current economic conditions.
Key assumptions include:
o capitalisation of earnings rates
o market rent
o leasing incentives
o discount rates
o rental growth rates
Assessed the scope, competence and
objectivity of external valuation experts
engaged by the Group for assets valued by
external valuation experts;
Assessed the valuation methodology,
assumptions and data for consistency with
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Lendlease Annual Report 2024
Given the current market conditions real
estate valuations have been subject to
fluctuation. The assessment of the
valuations of these assets is a key audit
matter as they:
contain certain forward-looking
assumptions, with higher estimation
uncertainty given current economic
conditions, which are inherently
challenging to audit; and
lead to additional audit effort, often due to
the high number of differing assumptions
and models, across varying asset classes.
accounting standards and industry practice
for the asset’s class; and
Evaluated and tested the Group’s internal
controls relating to the review and approval
of internal valuations based on the Group’s
policies for internally valued assets.
Assessing disclosures included in the financial
report highlighting the estimates and
judgements in determining fair values of the
Group’s equity accounted investments and
other financial assets. We used our
understanding obtained from our testing
against the requirements of the accounting
standards.
UK Building Remediation Provision (A$365m)
Refer to Note 23 ‘Provisions’
The key audit matter
How the matter was addressed in our audit
The estimate of the building safety
rehabilitation provision and associated expense
was a key audit matter for us due to the high
degree of estimation uncertainty and
subjectivity for the Group in determining the
likely cost and timing of future works.
Increasing estimation uncertainty results in an
inherently wider range of possible outcomes,
sometimes out of the control of the entity,
amplifying the importance and consistency of
judgements made by the Group.
The key assumptions giving rise to this
estimation uncertainty are:
The identification of buildings which will
more likely than not require remediation.
Given the nature of the intrusive inspection
process to assess each building against the
required safety standards, the time each
such assessment takes, the status of each
inspection such that confirmation of
remediation is available, necessitates
significant assumptions in the provision.
the number of buildings under inspection and
confirmed as requiring remediation;
Our procedures included:
Obtaining an understanding of the Group’s
process for identifying which buildings, will
more likely than not, require remediation
based on the information available;
Assessing the completeness of buildings
included in the Group’s assessment with
reference to publicly available information on
buildings developed by the Group, including
the impact on the provision;
For buildings identified by the Group,
assessing the basis for recognition of a
provision with reference to information
provided by the UK Government (Building
Safety Fund), building owners, the Group’s
internal investigations and criteria in the
accounting standards;
Working with our major projects advisory
specialists, we compared the methodology
and key assumptions applied by the Group in
developing the estimate by comparison with
our knowledge of the industry. We
challenged key assumptions by:
Financial Statements
181
remediation cost estimates per building;
expected period over which the portfolio of
buildings will be remediated which is planned
to occur several years into the future; and
the discount rate applied to the estimate.
Comparing individual building information
and costs to quotes and tenders from
suppliers, quantity surveyors, the UK
Government (Building Safety Fund) and
building owners compared to the
provision recognised along with obtaining
evidence for any adjustments;
Assessing the expected period over
which the portfolio of buildings will be
remediated; and
Comparing the discount rate and period
of remediation adopted by the Group to
other developers within the industry.
Assessing disclosures included in the
financial report using our understanding
obtained from our testing against the
requirements of the accounting standard.
Contingent liabilities – Retirement Living tax matter
Refer to Note 27 ‘Contingent Liabilities’ to the Financial Report
The key audit matter
How the matter was addressed in our audit
The contingent liability relating to the
Retirement Living tax matter is a key audit
matter as applying IFRIC 23 Uncertainty over
Income Tax Treatments and AASB 137
Provisions, Contingent Liabilities and
Contingent Assets (AASB 137) requires
significant judgement by the Group.
Applying the accounting principles to these
types of ongoing contended matters, such as
legal and regulatory matters, as compared to
known contractual liabilities, are complex and
prone to greater uncertainty.
Given the matter with the Australian Tax Office
(ATO) regarding partial sale of its Retirement
Living business (the RL business), its nature,
size and status, we focused our effort on how
the Group complied with the requirements of
the accounting standard and the information
used to form its judgements.
We involved tax specialists to supplement our
senior audit team members in assessing this
Working with our tax specialists, technical
accounting specialists, tax controversy and
litigation specialists, our procedures of the
Group’s assessment of IFRIC 23 and AASB
137, included:
Obtaining and inspecting relevant
correspondence with the ATO, including the
statement of audit position and amended
income tax assessment issued on 10 May
2024;
Obtaining and understanding the ATO’s basis
for determination outlined in the amended
assessment, including a detailed technical
analysis against the applicable tax law;
Using information from the Group regarding
their tax treatment applied to the partial sale
of the Retirement Living business in the
2018 tax return (and subsequent sell downs)
and the detailed technical analysis against
the applicable tax law;
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Lendlease Annual Report 2024
key audit matter.
Inspecting the Group’s documentation,
including internal and external advice, and
detailed analysis against the applicable
accounting standards;
Inspecting minutes from Board meetings and
attending Audit Committee and other
relevant meetings where this matter and the
Group’s response strategy was tabled and
discussed;
Assessing the scope, competency, and
objectivity of the Group’s tax and legal
advisors;
Enquiring with the Group’s external lawyers
regarding the matter, and evaluating the
conclusions reached by the Group’s external
advisors;
Enquiring of senior management, inhouse
legal counsel and the Directors for updates
through to the date of signing regarding the
matter, the range of possible outcomes and
associated estimation of financial outflows;
Using the cumulative information above,
challenging the Group’s overall conclusion
regarding the contingent liability position
versus giving rise to a liability against the
accounting principles, in particular the basis
for potential loss as either “probable” or
“possible”; and
Evaluating the adequacy of disclosures in the
financial report using our understanding
obtained from our testing and against the
requirements of the accounting standards.
Other Information
Other Information is financial and non-financial information in Lendlease Group’s annual report which
is provided in addition to the Financial Report and the Auditor’s Report. The Directors of Lendlease
Corporation Limited are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
Financial Statements
183
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors of Lendlease Corporation Limited are responsible for:
preparing the Financial Report in accordance with the Corporations Act 2001, including giving
a true and fair view of the financial position and performance of the Stapled Group, and in
compliance with Australian Accounting Standards and the Corporations Regulations 2001
implementing necessary internal control to enable the preparation of a Financial Report in
accordance with the Corporations Act, including giving a true and fair view of the financial
position and performance of the Stapled Group, and that is free from material misstatement,
whether due to fraud or error
assessing the Stapled Group’s ability to continue as a going concern and whether the use of
the going concern basis of accounting is appropriate. This includes disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless they
either intend to liquidate the Stapled Group or to cease operations, or have no realistic
alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our
Auditor’s Report.
184
Lendlease Annual Report 2024
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report
of Lendlease Corporation Limited for the
year ended 30 June 2024, complies with
Section 300A of the Corporations Act
2001.
Directors’ responsibilities
The Directors of the Lend Lease Corporation Limited are
responsible for the preparation and presentation of the
Remuneration Report in accordance with Section 300A
of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 68 to 90 of the Directors’ report for the year
ended 30 June 2024.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
KPMG
Eileen Hoggett
Paul Rogers
Partner
Partner
Sydney
Sydney
19 August 2024
19 August 2024
Financial Statements
185
Other
Information
Melbourne
Melbourne Quarter
186
Lendlease Annual Report 2024
Other Information
187
188
Lendlease Annual Report 2024
Corporate directory
Annual General Meeting 2024 (AGM)
The Annual General Meeting (AGM) of shareholders of Lendlease
Corporation Limited and the general meeting of unitholders
of Lendlease Trust (together, Lendlease Group) will be held
at 10am on Friday 15 November 2024 in the Wesley Theatre,
Wesley Conference Centre, 220 Pitt Street, Sydney, NSW. As the
meeting will be a hybrid AGM, securityholders who are not able
to physically attend the AGM will be able to participate and vote
at the meeting using technology. We will provide securityholders
with full details of participation in the Notice of Meetings.
Lendlease advises that the date of close of Director nominations
for election at the AGM is Friday 27 September 2024.
Important dates
19 August 2024
Full Year results announced
23 August 2024
Security price ex distribution
26 August 2024
Final distribution record date
18 September 2024
Final distribution payable
15 November 2024
Annual General Meeting
17 February 2025
Half Year results announced
21 February 2025
Security price ex distribution
24 February 2025
Interim distribution record date
12 March 2025
Interim distribution payable
Please note that the timing of events can be subject to change. A
current calendar is available online at www.lendlease.com
Entity Details
Lendlease Corporation Limited ABN 32 000 226 228
Incorporated in NSW Australia
Lendlease Responsible Entity Limited ABN 72 122 883 185 AFS
Licence 308983 as responsible entity for Lendlease Trust ABN 39
944 184 773 ARSN 128 052 595
Registered Office
Level 14, Tower Three
International Towers Sydney
Exchange Place
300 Barangaroo Avenue
Barangaroo NSW 2000
Contact
T: +61 2 9236 6111
F: +61 2 9252 2192
www.lendlease.com
Share Registry Information
Computershare Investor Services Pty Limited
ABN 48 078 279 277
GPO Box 2975, Melbourne Victoria 3001 Australia
T: 1300 850 505 (within Australia)
T: +61 3 9415 4000 (outside Australia)
www.computershare.com.au
Other Information
189
Securityholder information
Securities exchange listing and code
Lendlease Group is listed on the
Australian Securities Exchange and trades
under the code LLC.
In the United States, Lendlease
securities are traded on the ‘over
the counter’ market in the form of
sponsored American Depositary Receipts
(ADRs) under the symbol LLESY. Each
ADR represents one ordinary security.
Information about ADRs is available from
the depositary, The Bank of New York
Mellon www.adrbny.com
Voting rights
Each stapled security in Lendlease
Group and each ADR entitles the
holder to one vote. Rights to Lendlease
Group securities granted under Lendlease
Group’s employee equity incentive plans
do not carry voting rights.
Share Accumulation Plan
The Share Accumulation Plan is
designed to be a convenient way for
securityholders with a registered address
in Australia or New Zealand to build
their securityholdings without incurring
transaction costs. The laws of other
countries make it difficult for us to
offer securities in this way. Lendlease
securityholders are able to reinvest their
distributions to acquire more Lendlease
securities through the Distribution
Reinvestment Plan (DRP) or the Share
Election Plan (SEP). Securityholders may
also make contributions of between $500
and $2,500 to acquire new Lendlease
securities under the Share Purchase Plan
(SPP). Together the DRP, SEP and SPP
constitute the Share Accumulation Plan.
The rules of each of these plans are
set out in the Share Accumulation Plan
Information Sheet. Copies are available
on the Lendlease website. Please note
that the Share Election Plan and the Share
Purchase Plan are currently suspended.
Key sources of information
for securityholders
We report the following to
securityholders each year:
•
Annual Report
•
Half Year Financial Report
•
March and September
distribution statements.
Electronic communications
Securityholders have the option of
receiving the following communications
and all other Company related
information electronically:
•
Annual Report
•
Distribution statements
•
Notice of Annual General Meetings.
Lendlease makes the Annual Report
available in an online version. A hard
copy of the Annual Report will only be
sent to those securityholders who elect
to receive it in that form. In addition,
securityholders may elect to receive
notification when the Annual Report is
available online.
Securityholders who wish to register
their email address should go to the
website of the Lendlease share registry
www.investorcentre.com/ecomms
For registry contact details, see page 188.
Privacy legislation
Under Chapter 2C of the Corporations
Act 2001, a securityholder’s information
(including their name, address and details
of securities held) is required to be
included in Lendlease’s public register.
This information must continue to be
included in Lendlease’s public register
for seven years after a person ceases
to be a securityholder. These statutory
obligations are not altered by the Privacy
Amendment (Private Sector) Act 2000.
Information is collected to administer the
securityholder’s holding and if some or
all of the information is not collected,
then it may not be possible to administer
the holding. Lendlease’s privacy policy is
available on its website.
Dispute resolution
There is a dispute resolution
mechanism that covers complaints by
securityholders. For more information,
please contact Lendlease Investor
Relations at +61 2 9236 6111 or email
us investorrelations@lendlease.com
Distribution and Share Accumulation
Plan issue price history
For historical distribution and Share
Accumulation Plan Issue Price
information, please see the below link
to our website www.lendlease.com/au/
investor-centre/distribution-and-tax
190
Lendlease Annual Report 2024
Security information at a glance at 1 August 2024 (comparative 1 August 2023)
2024
2023
Number of securityholders
56,633
61,036
Units issued
689,792,371
688,322,065
Percentage owned by 20 largest securityholders
78.05%
77.28%
Interim dividend/distribution
6.5 cents per security
4.9 cents per security
Total dividend/distribution
16.0 cents per security
16.0 cents per security
Dividend payout ratio
42%
43%
Spread of securityholdings as at 1 August 2024 (comparative 1 August 2023)
2024
2023
1 to 1,000 securities
29,962
32,110
1,001 to 5,000
20,668
22,743
5,001 to 10,000
3,777
3,991
10,001 to 100,000
2,149
2,109
100,001 securities and over
77
83
Total number of securityholders
56,633
61,036
Securityholders with less than a marketable parcel
5,411 (representing
182,500 securities)
4,496 (representing
112,604 securities)
Securities purchased on market
The following securities were purchased on market during the financial year for the purpose of funding employee incentive awards through
Lendlease securities.
Number of Securities Purchased
Average Price Paid Per Security
Stapled Securities
2,860,002
$7.66
Other Information
191
Top 20 securityholders as at 1 August 2024
Rank
Name
Units % of Units
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
206,928,838
30.00
2
CITICORP NOMINEES PTY LIMITED
106,930,589
15.50
3
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
96,947,236
14.05
4
BUTTONWOOD NOMINEES PTY LTD
27,997,992
4.06
5
BNP PARIBAS NOMINEES PTY LTD
17,930,739
2.60
6
LL EMPLOYEE HOLDINGS CUSTODIAN PTY LIMITED
14,075,522
2.04
7
BNP PARIBAS NOMS PTY LTD
12,583,471
1.82
8
HOME CONSORTIUM LIMITED
12,497,862
1.81
9
NATIONAL NOMINEES LIMITED
8,943,998
1.30
10
ARGO INVESTMENTS LIMITED
6,980,092
1.01
11
LL EMPLOYEE HOLDINGS CUSTODIAN PTY LIMITED
6,013,668
0.87
12
BNP PARIBAS NOMINEES PTY LTD
5,163,564
0.75
13
NETWEALTH INVESTMENTS LIMITED
3,458,376
0.50
14
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2,803,124
0.41
15
CITICORP NOMINEES PTY LIMITED
1,944,464
0.28
16
SOLIUM NOMINEES (AUSTRALIA) PTY LTD
1,638,992
0.24
17
BNP PARIBAS NOMS (NZ) LTD
1,585,250
0.23
18
CUSTODIAL SERVICES LIMITED
1,371,771
0.20
19
DE FAZIO CAPITAL PTY LTD
1,300,000
0.19
20
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
1,254,994
0.18
Total Top 20 holders of fully paid ordinary shares
538,350,542
78.05
Total Remaining Holders Balance
151,441,829
21.95
Substantial securityholders as shown in the Company’s Register at 1 August 2024
Name
Date of Last Notice Received
No of Units
% of Issued Capital
Aware Super Pty Limited
20/12/2023
59,166,693
8.58%
Allan Gray Australia Pty Ltd
4/6/2024
50,008,965
7.25%
Macquarie Group Limited
27/6/2024
49,142,981
7.12%
State Street Corporation
4/3/2024
49,098,024
7.12%
The Vanguard Group
3/5/2019
33,903,122
6.01%
HMC Capital Limited
10/4/2024
34,548,408
5.01%
192
Lendlease Annual Report 2024
Glossary
Co-investment: The total market value
of Lendlease equity invested across
Lendlease managed funds as at period
end. Represents the Group’s assessment
of the market value.
Construction backlog revenue: Current
year Construction backlog revenue is
the total revenue to be earned across
future periods.
Core Operating Return on Equity
(ROE): ROE is calculated using annual
operating Profit after Tax attributable to
securityholders divided by the arithmetic
average of beginning, half year and year
end securityholders’ equity.
Development pipeline: Estimated end
value of all of the Group’s secured
development projects based on values as
at period end; includes 100 per cent of
joint venture projects and therefore will
not necessarily correlate with the Group’s
Profit after Tax.
Distribution payout ratio: Distribution
divided by Profit after Tax.
Distribution per security: Amount of
interim and final distribution per stapled
security from the Company/Trust.
Earnings per security: Profit after Tax
divided by the weighted average number
of securities on issue during the year
(including treasury securities) unless
otherwise stated.
EBITDA: Earnings Before Interest, Tax,
Depreciation and Amortisation.
Effective tax rate: Income tax expense as
a percentage of Profit before Tax.
Funds under management (FUM): The
total market value of investments across
Lendlease managed funds.
Gearing: Net debt to total tangible assets
less cash.
Global Minimum Requirements (GMRs):
GMRs are Lendlease’s minimum
environment, health and safety standards
designed to control the risks across
our operations.
Good leaver: An employee who is
leaving Lendlease for a reason such as
retirement or redundancy, and who may
remain eligible for part or all of an
incentive opportunity.
Green Star rating: Green Star is a
national voluntary environmental rating
system used by the Green Building
Council of Australia to evaluate the
environmental design and achievements
of buildings.
Investments: Includes equity invested
in Lendlease managed funds and direct
investment in property and property
related assets. Represents the Group’s
assessment of market value.
Investments performance: The
performance of our Investments business
which includes our funds under
management, assets under management,
co-invested equity in Lendlease managed
funds and direct investment in property
and property related assets.
Key Management Personnel (KMP):
Those executives who have the authority
and responsibility for planning, directing
and controlling the activities of the
Group directly or indirectly (as per
Accounting Standard AASB 124 Related
Party Disclosures).
KPIs: Key Performance Indicators.
Long Term Incentive (LTI)/Long Term
Award (LTA): An incentive scheme which
provides Lendlease equity (or cash, in
some circumstances) to participating
executives that may vest, in whole or
part, if specified performance measures
are met over a three year period.
Lost Time Injury Frequency Rate (LTIFR):
An indicator and industry standard
measuring a workplace injury which
prevents a worker from returning to
duties the next day. LTIFR refers to the
number of lost time injuries within a year,
relative to the total number of hours
worked in the financial year.
Market capitalisation: The number of
securities on issue multiplied by the
security price at year end.
Net debt: Borrowings, including certain
other financial liabilities, less cash.
New work secured revenue: Estimated
revenue to be earned from construction
contracts secured during the period.
New work is secured and forms part of
backlog revenue when formal contracts
are signed.
People and Culture Committee: The
Board subcommittee that helps the
Board fulfil its responsibilities in people
management and reward policies. It is
made up entirely of independent Non
Executive Directors.
PLLACes: Pre-sold Lendlease
Apartment Cashflows.
Profit after Tax (PAT): Profit after
Tax attributable to securityholders,
determined in accordance with Australian
Accounting Standards.
Public Private Partnerships (PPP): A
joint procurement arrangement for
infrastructure development contracts
between the public and private sectors.
Residential build to rent: Residential
apartments, typically in the form of an
entire building, that are made available
for rent as separate dwellings. Lendlease
and its investment partners maintain
ownership of these apartments.
Securityholders: An individual or entity
that owns Lendlease securities.
Senior executive: Employees who hold
a position at executive level according
to the Lendlease Career Job Framework.
This generally includes Regional Business
Unit Heads, Regional Function Heads and
in some cases, direct reports to Group
Function Heads.
Settlements: Cash settled in the period
on completed units/lots in Australia,
Europe and Americas, and units which
have reached practical completion
in Asia.
Short Term Incentive (STI)/Short Term
Award (STA): Incentives awarded with
direct reference to financial and non
financial performance over a one year
period. Measures are designed to focus
individuals on priority areas for the
current financial year.
Total Package Value (TPV): Salary plus
the value of salary package items such
as motor vehicles and parking and
compulsory superannuation contributions
paid on behalf of an employee.
Total Shareholder Return/Total
Securityholder Return (TSR): The
movement in a company’s share/security
price, dividend yield and any return of
capital over a specific period. It is often
expressed as a percentage.
Urban development pipeline: Estimated
end value of all of the Group’s
secured development projects (excluding
Communities projects) based on values as
at period end; includes 100 per cent of
joint venture projects and therefore will
not necessarily correlate with the Group’s
Profit after Tax.
Weighted average number of securities:
The time weighted number of securities
outstanding during the period.
Kuala Lumpur
TRX City Park
Level 14, Tower Three
International Towers Sydney
Exchange Place
300 Barangaroo Avenue
Barangaroo NSW 2000
www.lendlease.com
@lendlease
@lendlease