Lendlease will offload more than $1 billion in housing assets after the Australian Government approved selling 12 housing estates to rival Stockland and the Bangkok-based Supalai.
Wood Central understands the deal will turn Australia’s housing development industry upside down. It comes just months after Lendlease—currently developing 16 housing estates in NSW, Queensland, Victoria, and Western Australia—announced that it would be selling out of its international assets and consolidating its operations in the wake of shareholders’ push to go “back to basics.”
The Stockland Supalai Residential Communities Partnership’s takeover bid had been scrutinized by various government bodies, including the Foreign Investment Review Board (FIRB) – which had concerns over foreign-owned Supalai’s role in controlling the Australian greenfield development market.
It also follows the Australian Securities and Investment Corporation (ASIC), which gave the purchase the nod in September—meaning the 50.1/49.9-controlled Stockland and Supalai consortium is poised to become Australia’s biggest housing estate developer. Lendlease has advised the Australian Stock Exchange that it believes the deal will be finalised in the second quarter of the 2025 financial year, pending the consent of landowners.
In December, Lendlease announced plans to offload the 12 estates, including:
- Kinma Valley (in Queensland)
- Yarrabilba (in Queensland)
- Springfield Rise (in Queensland)
- Shoreline (in Queensland)
- Figtree Hill (in New South Wales)
- Calderwood Valley (in New South Wales)
- Aurora (in Victoria)
- Atherstone (in Victoria)
- Harpley (in Victoria)
- Averley (in Victoria)
- Alkimos Beach (in Western Australia)
- Alkimos Vista (in Western Australia)
At the time, it said it had decided to sell its 12 communities so it could prioritise growing other parts of its business. Stockland claims that its wider development skills—particularly in the fast-growing land lease sector targeting downsizing baby boomers—would allow it to make more profit than Lendlease could from the master-planned communities.
As it stands, 80% of Australia’s house-and-land development uses structural timber framing. Last year, Wood Central spoke to five of the country’s top “project builders”—many of whom build on Lendlease estates struggling to keep up with the housing supply amid an increasingly tight and difficult lending and materials market.
Once the deal go through as expected, Lendlease will close more than $1.9 billion in sales, putting it within reach of its $2.8 billion 12-month sales target, identified during its infamous May strategy meeting.
This would show strong progress on asset sales to date and set up Lendlease to execute on its strategy. Out of the $2.8 billion targeted, Lendlease currently has a further $900m of assets on the market, and once these are progressed, Lendlease may be in a position to execute on the up to $500m of buybacks.
Suraj Nebhani, a Citi analyst who spoke to the Australian today
In June, Wood Central revealed that the construction giant had sold out 45 of its current, under contract, and pre-construction North American projects—including the US Army’s Privatised Army Lodging (PAL) program —which will now see Consigli develop four hotel developments for the US Army out of cross-laminated timber. At the same time, Lendlease has committed to developing the world’s tallest timber tower in downtown Sydney after it vowed to help Milligan Group develop the $1.8 billion 55-storey ‘Halo’ development.
The Thai developer is now tied to 28,000 lots Australia-wide.
Supalai has operated in Australia for more than 11 years and is now connected to 25 housing estates and more than $850m in Australian investments – most of them planned communities – with some apartment and unit developments in the mix. Wood Central understands that once executed, Supalai will be directly connected to estates poised to deliver 28,000 new dwellings Australia-wide, with more to come.
According to Joseph Gersh, executive chairman of Gersh Investment Properties, who helped put the deal together, the joint venture is a “powerful endorsement” of Australia’s residential development sector. “Without such investment,” Mr Gersh said, “the Government’s ambitious program to address Australia’s housing shortage cannot possibly be met.”
“It’s over to Australia to make it attractive to overseas investors,” Mr Gersh said, adding that there was simply not enough domestic funding available to drive the housing market in Australia.
