Lendlease Annual Report 2024

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.

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