Lendlease Group (LLC) Investor Update summary

Strategic partnership and capital recycling

• Entered a 50/50 joint venture with The Crown Estate for six UK development projects, subject to conditions precedent expected to be satisfied in FY 2026.

• The transaction will release over $300 million of capital, slightly above book value, and brings total capital recycling initiatives to $2.5 billion out of a $2.8 billion FY 2025 target.

• The partnership halves future funding commitments, reducing capital needs by $125 million, and allows for self-funding of master planning via land sales.

• Both partners retain the right, but not the obligation, to pursue vertical development after three years, with Lendlease requiring a minimum 10% equity commitment if it participates.

• The joint venture is expected to be earnings accretive in year one, with additional potential for performance fees and investment management income.

Financial and operational impacts

• Proceeds from the transaction will be used to pay down debt, supporting deleveraging and progress toward a security buyback.

• Development and asset management fees will be earned on a cost-plus and performance basis, with a margin of around 30%.

• Overhead costs for the projects are now fully funded with a 30% margin, and cost reduction targets in EMEA have been exceeded.

• Gearing is expected to trend lower at year-end, with a target to return to a 5%-15% range by FY 2026.

• Additional capital recycling initiatives, including Retirement Living Australia, Ador Garden in China, and TRX, are ongoing.

Investment management platform and mandates

• Secured a $1.2 billion Australian office asset mandate for Aurora Place, Sydney, with no equity required from Lendlease.

• Funds under management for Australian office assets now total approximately $20 billion, with 80% in Sydney.

• Recent introduction of new investment partners into 21 Moorfields, London, demonstrates continued growth in the investment management platform.

• Lendlease remains focused on driving performance across its investment management platform.