Lendlease in joint venture talks for UK development portfolio

The news: Real estate giant Lendlease has confirmed it is in talks for a development joint venture in the UK as part of efforts to accelerate the release of capital.

The numbers: Lendlease said it is in late stage negotiations with The Crown Estate to enter a 50/50 joint venture for six development projects within Lendlease’s UK development portfolio. It said the deal would release longer-dated capital at or slightly above book value, halve its future funding obligations, accelerate master planning with government clients and generate future fee income.

The context: The group said if the deal is concluded, Lendlease will earn fees as master developer of existing projects on behalf of the JV, with the cost to progress master planning and create further value expected to be self-funding through portfolio land sales. It’s immediate focus would be to continue to progress its master planning obligations, while retaining the rights for any vertical developments.

The news comes just a month after Lendlease completed the $70 million sale of its UK construction business, sealing its exit from international construction operations. It also follows the sale of its US and Asian construction operations, and comes about a year after the group unveiled its strategy to refocus on growing its Australian operations and international investment management platform.