Lendlease Secures $751M from Capella Capital and Military Housing Divestments
Lendlease has agreed to sell Capella Capital for $235 million and completed the $516 million sale of its US Military Housing business, reinforcing its strategy to streamline operations and reduce funding needs.
- Capella Capital sale to Sojitz Corporation for $235 million
- Completion of US Military Housing sale for $516 million
- Transactions contribute approximately $70 million to FY25 Operating Profit after Tax
- Total capital recycling initiatives announced now at $2.2 billion
- FY25 earnings guidance remains unchanged with EPS forecast of 54 to 62 cents
Strategic Divestments Mark Progress in Simplification
Lendlease has taken significant steps to simplify its business portfolio with the announcement of a binding agreement to sell Capella Capital to Japan's Sojitz Corporation for $235 million, alongside the completion of its $516 million sale of the US Military Housing business. These moves are part of a broader capital recycling strategy aimed at reducing complexity and future funding requirements.
Capella Capital, established in 2009 as a partnership between Lendlease and senior management, has evolved into a leading infrastructure investor in Australia. The sale includes Capella's asset origination, management, and equity investments, with around 80 employees transferring to Sojitz. Lendlease will maintain collaborative ties with Capella on ongoing projects and has arranged transitional services to ensure a smooth handover.
Financial Impact and Earnings Outlook
The Capella sale is expected to contribute approximately $70 million to Lendlease's FY25 Operating Profit after Tax (OPAT), complementing the $145 million profit contribution from the Military Housing sale. Together, these transactions bolster Lendlease's capital recycling initiatives, which now total $2.2 billion out of a targeted $2.8 billion for FY25.
Despite these substantial divestments, Lendlease has maintained its FY25 earnings guidance, forecasting Group Earnings Per Security (EPS) between 54 and 62 cents. The company anticipates a heavily weighted second half for earnings, driven by cash inflows from apartment settlements, Communities transaction instalments, and proceeds from these sales.
Strategic Focus and Future Prospects
Group CEO Tony Lombardo emphasized that these transactions accelerate capital release and reduce funding commitments, enabling Lendlease to concentrate on its core Australian operations and international investments platform. The divestments align with the company’s goal to become less complex and more profitable, signaling a clear strategic pivot.
While the Military Housing sale has completed, the Capella Capital transaction remains subject to regulatory approvals, including Foreign Investment Review Board (FIRB) clearance, with completion targeted by the end of FY25. Investors will be watching closely for any developments that could affect timing or terms.
Looking ahead, Lendlease continues to pursue remaining capital recycling opportunities to meet its $2.8 billion target, with updates expected as these initiatives progress. The company’s ability to execute on this strategy will be critical in shaping its financial resilience and operational focus in the coming years.
Bottom Line?
Lendlease’s divestments mark a decisive step toward a leaner, more focused business model, setting the stage for renewed growth and profitability.
Questions in the middle?
- Will regulatory approvals for the Capella Capital sale proceed smoothly and on schedule?
- How will Lendlease deploy the capital freed up from these divestments to drive future growth?
- What impact will the simplification strategy have on Lendlease’s competitive positioning in infrastructure and development?
