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Lend Lease Sees 45% Profit Jump on $1.2 Billion Bluewater Sale

Lend Lease's Barangaroo redevelopment
Tower cranes operate on the site of Lend Lease Group's Barangaroo South redevelopment in Sydney. Photographer: Brendon Thorne/Bloomberg

Lend Lease Group, Australia’s biggest developer, said it expects a 45 percent profit boost this fiscal year after selling its stake in the Bluewater Shopping Center in the U.K. for 696 million pounds ($1.2 billion).

Net income will be between A$810 million ($759 million) and A$830 million for the 12 months to June 30, the Sydney-based company said in a regulatory filing. The developer sold its 30 percent stake in Bluewater for 656 million pounds, and its management rights and land interests for 40 million pounds to London-based Land Securities Group Plc, it said.

“The cash proceeds of the sale will initially be used to pay down debt and subsequently support investment in our significant global development pipeline,” Lend Lease Chief Executive Officer Steve McCann said in the statement.

Lend Lease, whose A$38 billion of planned developments include the A$6 billion Barangaroo redevelopment in Sydney and the Elephant & Castle regeneration in London, reported net income of A$551.6 million in the year ended June 30, 2013. Its profit on the Bluewater sale is expected to be about A$480 million after transaction costs, it said today.

The company held the Bluewater stake at its inventory value of A$507 million as of Dec. 31, it said. The market value of Lend Lease’s stake was A$1.02 billion, according to a regulatory filing by the company in February.

Lend Lease is also seeking to exit some projects in the U.K. and Australia as their marginal return on capital is below targets for new projects, and expects to take some provisions on them, it said today.

Lend Lease shares have gained 22 percent this year compared with a 1.5 percent increase in the benchmark S&P/ASX 200 index.

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