THE emergence of Lendlease as a major player in the Perth property development scene reflects the company’s concerted push into Western Australia in the past three years, with a mix of distressed-asset purchases and major new state-run projects.
This week, the state government named the national construction and development player as its preferred proponent for the Waterbank Precinct site, a four-hectare slice of the much bigger Riverside project at the eastern edge of the central business district.
Waterbank is estimated to be a $1 billion development when completed in about a decade.
It is the second $1 billion, long-term project won by Lend Lease after it secured preferred proponent status for the massive Alkimos residential land development project being overseen by Landcorp at the heart of the northern corridor, where several major estates are bringing suburbia to the coastal strip south of Yanchep.
Alkimos was a major win and signalled Lend Lease’s desire to be a participant in WA greenfields development beyond the construction business, which has been in the state for many years.
To win Alkimos, it had seen off a consortium led by local major Satterley Group and another national player in Mirvac, which already had serious roots in WA.
It’s understood the first stage of the project has been delayed by federal environmental approvals, which have plagued fringe land developments along the coast.
The Waterbank project is another league again, a very visible development with major earthworks (to create an inlet) and at least one high-rise building situated right on the riverfront at Perth’s eastern gateway.
It will be in competition, to some degree, with two other similarly sized CBD projects in the Waterfront and CityLink, at the very least for skills and labour in the union-dominated city construction sector.
But Lend Lease’s involvement in the WA property scene is by no means contained to these two projects.
It has also quietly built up a significant portfolio of established property assets during the past three years, taking advantage of the troubles of others in the sector, which were selling due to the GFC.
In 2009, Lend Lease spent $170 million to take over Lend Lease Primelife, the retirement village entity previously called Babcock & Brown Communities Group, which it had rescued a year earlier by paying $195 million for 43 per cent.
That entity had a big WA focus due to a 2007 deal in which Fini Group founder Tony Fini was paid $180 million for his WA retirement village portfolio, a remnant of the property empire he had, in the main, sold to Mirvac some years earlier.
In 2010, Lend Lease bought a bundle of ING Retail Fund assets, with the Lakeside Joondalup shopping centre considered to be the jewel in that particular asset crown.
According to the WA Business News Book of Lists, Lend Lease also currently owns the Harbour Town Shopping Centre, Armadale Shopping City and Southlands Boulevard.
It is also understood to be close to finalising the purchase of a retails asset in Geraldton, which were previously part of the Centro property empire, which has also been sold as a result of the GFC. That asset is thought to be the Northgate Shopping Centre.
In Coolbellup, it is in partnership with Landcorp to develop three former primary school sites that were consolidated into one new school in 2006. The sites are being turned into residential housing.
Lend Lease was also a shortlisted bidder for the $1.5 billion Karratha City of the North project, which was also being run by Landcorp and includes the 1,500-home Mulataga subdivision and a central city project won this week by Mirvac.
Waterbank is a 4ha site adjacent to the Causeway, which is part of the East Perth Redevelopment Authority’s 40ha Riverside precinct extending from Gloucester Park around to the Queens development running up the north side of Adelaide Terrace. Planning Minister John Day announced that Lend Lease was to lead the $1 billion development last week.
There are also numerous other, nearby apartment developments, including Singaporean group Frasers’ Queens development, which is also part of EPRA’s Riverside precinct.
Frasers has stated that 104 of the 265 Qlll apartments have sold for a cumulative value of $74.6 million. The biggest sale as at this stage was almost $1.38 million to buyers who intended to be owner-occupiers.