How Lendlease Group Became The Foremost Choice For Construction Around The World

How Lendlease Group Became The Foremost Choice For Construction Around The World

Established in 1958, Lendlease is a global conglomerate and a renowned name in the construction and investment industry. Let’s look at its inspirational journey…

Lendlease has constructed award-winning urban precincts, civic and social infrastructure around the globe, such as cutting-edge hospitals, universities, and stadiums. Stage 1 of Sydney Opera House and the National September 11 Memorial & Museum in New York are some notable projects entrusted to Lendlease.

It has its operations in 41 countries across six continents including Australia, Europe, the Americas, and Asia. From its establishment in 1958 until today, the company has grown – exponentially – to become a renowned name in the construction and investment industry.

Statistics Of 2021 Highlighting Lendlease’s Success

Lendlease's unique selling point (USP) stems from its demonstrated expertise in implementing big urbanization projects through placemaking, as well as its integrated business strategy, which is underpinned by strong financial backing.

But there’s definitely a lot more that went into crafting the company’s success. Let’s take a detailed look at Lendlease’s incredible journey right from the time it was established to today…

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The Beginning of Lendlease In The 1950s

The beginning of the story traces back to the 1950s where a man named Dick and a company called Civil and Civic (established in 1951) paved the way for the creation of the real estate mammoth we see as Lendlease today.

Dusseldorp Proves Himself

In the late 1940s, Australia was mostly a sheep-farming country with a population of 8.3 million people.

The country relied on Europe and other countries for many of life's necessities in exchange for wool.

Due to Australia's dry climate, a reliable source of water was essential for the country's development.

A project known as the Snowy Mountains Scheme was therefore initiated which included damming a snow-fed alpine river and diverting water away from the sea and towards consumption instead.

In 1950, Bredero's Bouwbedrijf, a Dutch housebuilding corporation, sent Dick Dusseldorp, a 30-year-old engineer, to Australia on a fact-finding mission for the Dutch construction corporation. His research awarded Bredero's with the project to provide and install 200 prefabricated dwellings for the Snowy Mountains project.

lendlease dick dusseldorp

Dick Dusseldorp

Immediately after, Bredero's formed a joint venture with Civil & Civic, an Australian construction company.

Dusseldorp was put in charge of the company, which completed its first task in 15 months. This resulted in more projects being assigned to Civil & Civic and served as proof that Dusseldorp certainly held the credibility and determination to lead construction.

One of the projects entailed building Sydney's first concrete skyscraper, the Caltex House Dusseldorp led the project in 1954 which was completed 5 months ahead of time, establishing Civil & Civic as a premier construction agency.

The building’s erection was faster than any other of its time. In 1955, new floors were added at a rate of one every 14 days, much faster than any other structures being constructed at the time.

lendlease caltex house 1957

Caltex House 1957, Australia’s first sky scraper

Lendlease Is Formed In 1958

At the time, companies in Australia were expanding and building larger premises. To buy larger land and construct meant current cashflows would suffer and profits could no longer be reinvested within the firm as they were earlier.

This was where Dusseldorp saw the golden opportunity. He went on to form a finance and investment firm called Lendlease that assisted in raising cash from the Australian public to finance construction projects i.e., leasing.

Corporations could now build larger premises by taking a lease and incurring low short-term cost, which meant more capital diverted towards business operations.

Lendlease Corporation Limited was founded in April 1958 and listed on the stock exchange with the help of Civil & Civic owning 40% of the shares. For the first three years, Lendlease financed all Civil & Civic construction projects. On the completion of a project, Lendlease was to take all of the company's issued capital and sell the professional suites on term contracts for varied periods while keeping a portion of the space in the building as an investment—in other words, lending and leasing.

It wasn't long before Lendlease began acquiring its own land, planning development, and constructing structures with Civil & Civic. They were set to provide and complete the development of large-scale projects of real estate.

Lendlease Continues To Scale Up

Lendlease was looking for a boost in reputation and visibility, so it started bidding on projects that would place it in the spotlight. It went on to win the Sulman prize for architecture with structures like the Academy of Science in Canberra, and greater progress soon followed. 

In 1958, Lendlease's net total assets equaled £102,098 (£2.5 million today after adjusting for inflation). In 1959, the company was also awarded the contract to construct the Sydney Opera House's first stage.

Dusseldorp held entrepreneurial control over Civil & Civic’s initiatives. As a developer, he was always looking to increase corporate revenues but also to setting industry standards of excellence. He stated, “To leave our mark on the cities of this country, that is our purpose.”

Dusseldorp envisioned a company that could successfully combine the disciplines of construction, development, and investment. Consequently, in 1961, Lendlease acquired Civil & Civic, enabling wider pathways, an enhanced reputation, and expanded market share for the company.

Within half a decade of existing as a finance and investment firm, Lendlease had established its name in the construction industry of Australia. With Dusseldorp in lead, it was now ready to showcase its expertise for the world to see.

lendlease first head office

Lendlease’s first Head Office

Key Takeaway 1: Act On New Opportunities Quickly To Mitigate Risk

Lendlease’s establishment was the result of three things: Observation, Analysis, and Action.

Dick Dusseldorp, while being an accomplished leader at Civil and Civic, quickly recognized a gap in the market when the industry began to expand. Instead of remaining rigid in his comfort zone, he took a leap and founded what was needed at the time – a leasing company.

Even post-discovery, Dusseldorp remained on his toes during the first few years of Lendlease. Mostly called the crucial/survival years for any business, he refined the company’s vision, gave it direction, and hopped onto any and all opportunities that presented themselves aligned to his corporate vision. Acquiring his previous employer was one of such decisions.

Lendlease Grows Into An Empire

To build an empire of its own, Lendlease saw the strategy of diversification to be crucial in its journey.

A larger consumer base, improved efficiency, and risk aversion are all advantages of being a conglomerate. In addition to higher sales from a wider market, Lendlease wanted the benefits from competencies and enhanced efficiencies from different sector companies.

This had enabled the organization to operate at its best while allowing it to market and cross-sell new projects in a diverse range of industries such as medical, real estate, insurance, finance, civic, tourism, education, and banking.

A high-earning future for Lendlease was secured through acquisitions at the end of the 20th Century. 

Lendlease Ventures Into Insurance

Lendlease wished to test its business model in the United States through its subsidiary, U.S. Lendlease, established in 1972.

It functioned as a service company following a strategy of not starting building until an end-buyer had been found. It displayed massive success which stemmed, from a focus on earnings and cash flow rather than asset ownership, amid one of the worst periods in the property market.

Lendlease expanded its global presence by acquiring MLC Life Limited in a two-step process.

First, it took a 50% stake in 1982, and then it made MLC a wholly-owned subsidiary in 1985.

Through this acquisition, Lendlease was able to offer savings, mortgage investment, and superannuation products. Moreover, it expanded into the insurance industry to provide life and general insurance to its clients from the cradle to the grave.

The financial services segment proved to be a wise diversification, accounting for about half of Lendlease's after-tax earnings by 1991. 

Lendlease Diversifies Its Portfolio

The conglomerate's 1993 acquisition of a minority share in Australia's oldest bank, Westpac Banking Corp., was regarded by some observers as a step toward its ambition of becoming the country's largest financial services business.

In 1993, the company also bought Yarmouth Group, Inc., a real estate investment management firm established in the United States. In 1994, it moved on to buy a minority share in Hoyts Theaters, a movie network with facilities in the United States, Australia, and New Zealand. Interest in the international construction and finance community was growing for Lendlease. 

Lendlease purchased Equitable Real Estate Management Inc. for US$400 million from the Equitable Cos. At the time, Equitable Real Estate was a key player in real estate investment management and the largest pension fund adviser in the United States.

By 1995, Lendlease had funds earmarked for Thailand, Indonesia, and other Asian countries. Meanwhile, back in Australia, Lendlease was awarded several high-profile construction projects. Perhaps the most well-known was one for the Olympic Village for the Sydney 2000 Olympic Games, which began construction in 1997.

Lendlease had truly become a global player and, indeed, one of the most powerful global property corporations in the world. 

Key Takeaway 2: You Don’t Have To Drown In Debt To Do Business

One important strategy of Lendlease was the aversion to borrowing. This significantly restricted the company's indebtedness to less than 50% of its entire capital, a very low figure when compared to other firms. Despite a difficult economic climate and lows in the property market, Lendlease was able to generate profits for its shareholders year after year.

Property values in Australia were at an all-time high by 1971. Through public subscription and independent property trusts, Lendlease retained a long-term interest in built properties without long-term capital expenditure. As a result, it was immune to property market fluctuations. The General Property Trust, a publicly held real estate trust, was formed by Lendlease in 1971, making it the first developer to go public.

Lendlease Makes A Mark In The 21st Century

In the period 1999-2011, Lendlease made a series of acquisitions to expand the company to become a truly global conglomerate, with a finger in every pie.

Lendlease Makes Big Deals

Lendlease’s biggest deal of 1999, and the firm’s largest acquisition to date, was the purchase of Bovis Construction Group from the United Kingdom’s Peninsular and Oriental Steam Navigation Company (P&O) for £285 million (A$710 million). Bovis was P&O’s global project management and construction arm. It was merged with Lendlease Projects, to form a new company, Bovis Lendlease, based in London. With this acquisition, Lendlease gained strong operations in the United States, the UK, the Asia-Pacific region, as well as in Australia.

In 1999, Lendlease also added Actus Corporation’s MILCON Construction to its empire, which prompted the founding of Actus Lendlease. This strengthened its presence in the US Real Estate industry.

In 2000, Lendlease moved on to purchase AMRESCO, Inc.’s five commercial mortgage businesses:

  1. AMRESCO Capital Limited Partnership
  2. Holliday Fenoglio Fowler: one of the largest US commercial mortgage brokers
  3. Real Estate Structured Finance
  4. AMRESCO Services Limited Partnership
  5. Asset Management

It took Lendlease US$258.7 million (US$464.5 million today after adjusting for inflation) to enter the mortgage business in the United States. The bright side: It was now in charge of the U.S. institutional real estate debt market. The deal also widened Lendlease’s customer base and significantly expanded the company’s real estate debt-related products and services. Lendlease introduced services like loan origination, loan servicing, lender representation, and asset management/resolution.

Lendlease Enters The Retirement Market 

To become market leaders in the retirement housing industry, Lendlease purchased the Delfin Property Group (now Lendlease Communities) and Crosby Homes (now Lendlease Residential Development) in 2005.

At the time of these acquisitions, Lendlease was Australia’s largest provider of retirement villages.

The above acquisitions brought and strengthened Lendlease’s presence in industries like Real Estate, retirement home construction, and mortgage financing. Moreover, it solidified Lendlease’s geographical reach in the United States and the United Kingdom.

Lendlease’s Test of Adversity: Falling Profits

Soon enough, the company reached a critical point in its life cycle.

Lendlease took some steps to focus even more on integrated global real estate operations. This included the sale of its life insurance company, MLC, which had been bringing a waterfall of revenues to Lendlease. In 2000, National Australia Bank Ltd. bought Lendlease’s MLC funds management and life insurance business for US$2.74 billion.

After its sale, Lendlease’s 25 straight years of profit growth came to an end. For the fiscal year 2001, the firm generated after-tax earnings of AUD$151 million (down from AUD$432 million) on operational revenues of AUD$11.54 billion (down from $13 billion). The stock price of the corporation had dropped from $22.30 per share in mid-December 2000 to around $11 per share in June 2001 – about half its size!

Lendlease was on a bumpy road. However, it still had its main weapon in its arsenal i.e., being a conglomerate.

The diversification strategy had built Lendlease’s financial strength to a point where it could afford some bumps on its road. Despite the company continuing to struggle to replace the regular profits that had been garnered from MLC, Lendlease was adamant about its strategy to diversify into different continents to guarantee revenue inflow for its future.

In August 2002, Lendlease acquired Akeler Holdings SA, a real estate and investment firm specializing in business park developments in the United Kingdom. Akeler Holdings SA had additional operations in Portugal and Germany which Lendlease was more than happy to acquire and increase its consumer base.

Key Takeaway 3: Your Vision Guides You During Hard Times

Lendlease faced its difficult chapter right at the start of the 21st century when its profits drastically dropped by 65% after 25 consecutive years of consistent profit growth. However, Lendlease did not flinch and continued to make a series of acquisitions in the first 2 decades of the 21st century. Its total expenditure used for purchasing other companies equaled to around $873 million. Lendlease secured real estate operations in the UK, Germany, Portugal by acquiring Akeler Holdings SA.

Meanwhile, it carried to be a household name in the United States. Evidence of this comes from the decision to trust Bovis Lendlease as Lead Manager of the clean-up of the World Trade Center site in New York City following the attack of September 11 (9/11 incident).

The Modern Day Lendlease

Lendlease operates in more than 40 countries, currently involved in 215 large-scale projects in Australia, the United States, the United Kingdom, Japan, China, Singapore, and Malaysia. Included in these are 23 major projects across 10 gateway cities around the world.

Current Projects of Lendlease

More than $110 billion in development projects are currently in the works.

By FY2024, the Group is aiming for yearly project completions worth more than $8 billion, nearly double its historical rate! Lendlease’s optimism stems from the expansion of its development pipeline and the investments in project execution capability at scale.

In the United States, Lendlease Investment Management is the largest developer of public-private defense housing. Lendlease Dasco is a market leader in the US for the development, financing, leasing, and management of medical office buildings. Moreover, Lendlease delivered the first LEED BD+C: Core and Shell building in 2005. Leadership in Energy and Environmental Design (LEED) is a green building certification program recognized around the globe.

Some key US projects by Lendlease have been:

  • Preconstruction and construction management of Columbia University Manhattanville. New York
  • National September 11 Memorial & Museum. New York, NY.
  • Development and Construction of Southbank, Chicago.

lendlease 911 memorial and museum

National 911 Memorial & Museum

Moreover, in Asia, Lendlease has operations in Singapore, Malaysia, China, and Japan. One of the ongoing projects is the Petronas Towers. In Singapore, Lendlease operates four retail properties (Parkway Parade, 313@somerset, JEM, and Paya Lebar Quarter) and while one retail property in Malaysia (Setia City Mall).

In the Middle East, Lendlease Project Management & Construction works on a variety of property and infrastructure-related construction projects. The Torino 2006 Winter Olympics complex, as well as Durrat al Bahrain, are among Lendlease’s projects in the region.

In Australia, Lendlease Development focuses on large-scale urban renewal in strategic locations. Currently, the firm has acquired major urban renewal projects in Sydney’s Barangaroo South, Melbourne’s Docklands, Victoria, Brisbane’s RNA Showgrounds. 

Some notable completed projects include:

  • Malaysia’s famous Petronas Twin Towers. At the time of its completion, this was the tallest building in the world.
  • Stage I of the Sydney Opera House
  • Upgrade and Refurbishment of Tate Britain
  • Restoration of the Statue of Liberty, New York, 1984

lendlease petronas twin towers

Petronas Twin Towers, Kuala Lumpur, Malaysia

Lendlease Enhances Focus On The Energy Sector

Recognizing the importance of energy for infrastructural development, Lendlease made significant advancements in the energy sector. It has, especially, focused on renewable energy sources which have resulted in its strong global repute.

In December 2016, Lendlease and Energy Made Clean created a joint venture. Energy Made Clean is a developer of renewable energy technology, the only firm in the world that can provide wave, solar, wind, storage, and desalination via microgrids.

This collaboration intended to develop end-to-end technologies that give energy independence and a reliable alternative to traditional forms of energy in rural off-grid places across Australia, the United States, and the rest of the world. 

Today, Lendlease develops, builds, and finances utility-scale solar and storage projects throughout the United States. It specializes in developing renewable solutions to suit the specific needs of large investor-owned utilities, municipal and power cooperatives, and corporations. Some of its notable solar projects include Rose Hill Solar Array (2.5 Megawatt), EKPC Cooperative Solar One (8.5 Megawatt), and Nestlewood Solar Farm (80 Megawatt).

Operating in select geographic markets, Lendlease focuses on projects that hold long-term value for all its stakeholders, guaranteeing the utmost levels of trust, risk management, and quality. 

Aside from large-scale projects, Lendlease also provides solar solutions to homes through collaboration with retailers. To this day, Lendlease has deployed energy solutions and security initiatives across 40,000 privatized military housing portfolios. Its energy development department has experience in developing and delivering over 10 Gigawatts (GW) of solar, wind, and gas-fired electricity generation.

Key Takeaway 4: Build A Diverse Portfolio That Speaks For Itself

The management of Lendlease knew that their order of business – construction, primarily – needed physical landmarks that proclaimed the company’s proficiency to the world. Going by word-of-mouth or acquisitions was not enough.

What followed were a myriad of large-scale projects like the Petronas Towers and Sydney Opera House, among many others, that spread their work across the globe while standing as proof of impeccable craftsmanship.

Growth that established goodwill and expanded their global image contributed highly to Lendlease’s success.

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The Lendlease Vision, Business Model, & Strategy

Much of the company’s uphill journey has been a result of a determined founder, a clear vision, and making time-sensitive growth decisions.

Lendlease’s Vision

Lendlease started with a vision to shape cities globally. It has constructed award-winning urban and retail precincts, and vital civic and social infrastructures.

Its purpose, as stated by Dusseldorp, remains to leave a mark on the cities of this country.

Lendlease’s Business Strategy

People often form an emotional attachment to physical spaces such as the Fifth Avenue of New York or Hollywood Boulevard in Los Angeles. Consequently, Lendlease’s strategy for this decade deals with the placemaking of cities.

The company is shifting its focus to global gateway cities such as London, Tokyo, New York, and Paris, among others. The creation of the best urban precincts in these cities is a cornerstone of the Group’s strategy for the next decade.

3 Aspects of Lendlease’s Business Strategy:

1. Purpose driven

Lendlease believes that addressing social, environmental, and economic goals maximizes long-term value creation. Customers, investment partners, governments, and the communities in which Lendlease operates are all involved.

The Group has deepened its experience and sophistication to become the foremost urbanization specialist, thanks to a proven track record of more than two decades of building large-scale mixed-use urban districts.

2. Global Mindset

The global operating model, which is backed up by quality products and platforms, provides a framework for systematically applying best practices across 41 countries.

Lendlease is making long-term investments through developing digital capabilities to support the Group’s long-term global strength. The development pipeline is expected to provide more than $50 billion in investment-grade product, which will support future global growth.

3. Adaptable and Resilient

Lendlease recognizes that cities must become cheaper, inclusive, and sustainable, thereby placing a greater emphasis on transportation, security, and employment flexibility. The Group’s placemaking capabilities are already responding to these difficulties, as well as the changes in consumer, corporate, and government behavior that have emerged.

Investments in the renewable energy sector show Lendlease’s preparations for the future shift of energy sources. The Lendlease strategy was created to be adaptable to changing market conditions. The commercial strategy is flexible enough to weather market fluctuations.

Lendlease’s Business Model

To truly grasp Lendlease’s formula for success, a look at its business and revenue model is crucial.

The company develops new mixed-use precincts, communities, and vital civic and social infrastructure by adhering to an Integrated Business Model.

Lendlease has three Operating Segments:

  1. Development
  2. Construction
  3. Investment

lendlease-three-operating-segments

The 3 Operating Segments

Development

This section focuses on the development of housing, offices, leisure, and entertainment activities. The process involves activities such as procuring land, establishing masterplans, and collaborating with communities and authorities through project management, sales, and leasing. Unsurprisingly, Lendlease’s strategy and competitive position rely heavily on the Development Section.

The Lendlease Development Pipeline is worth $114 billion and operates in ten global gateway cities with 231 big urbanization initiatives. Lendlease has worked on 171 master-planned towns in Australia and the United States. Meanwhile, there are more than 59,000 residential flats and 57 commercial buildings that are expected to be completed under Lendlease.

Construction

This section primarily serves in project management, design, and construction services. The Construction segment is responsible for designing and constructing the physical form for Lendlease’s urbanization projects, and is critical to the successful completion of the $114 billion Development Pipeline. It physically supports the Development area in constructing commercial, residential, mixed-use, defense, and social infrastructure.

Investments

The Investments division includes a leading investment and asset management platform. The Group’s investments in the residential, office, retail, industrial, and retirement sectors are all made under the Investment umbrella.

Lendlease provides a research-driven investment capability, as well as an active asset management and sustainability leadership. With 150 Institutional investment partners, Lendlease Investments manages about $40 billion worth of assets including commercial and residential assets.

For decades, Lendlease Investments has been managing funds and assets for some of the world’s greatest money managers, including sovereign wealth funds, and large public/private pension funds.

The Positive Lendlease Brand Image

The Lendlease Foundation was established in 1983 with the goal of employee well-being and conducting charity activities.

Lendlease stated an ambitious social value aim in 2020: to produce $250 million (AUD) in social value through shared-valued partnerships by 2025, independent of any project or asset responsibilities.

Through the help of the Lendlease Foundation, Lendlease intends to uphold its socially responsible reputation.

Key Takeaway 5: Social Responsibility Builds Long-Term Success

Lendlease’s strategy has never been restricted to maximizing profits. It is instead based on the concept that balancing social, environmental, and economic objectives maximize long-term business sustainability. Customers, investors, governments, and the communities where Lendlease does business are all involved.

This is what differentiates Lendlease. It depicts that the company cares for the society, the environment, and community; and this is the reason for the huge trust Lendlease has earned over the years from Governments and Investors. Big profits come as perks of Lendlease’s strategy.

Lendlease’s strategy to focus on its Corporate Social Responsibility (CSR) has created a win-win situation for itself and the industry.

Digital Transformation of Lendlease

Lendlease has always been a forward-thinking company, anticipating the needs of the current and future generations and making it happen well before time.

Not an average real estate company, Lendlease recognized the growing needs of the population in today’s tech-infused world and broadened its digitization strategy.

Lendlease Markets Autonomous Buildings

While the term may imply “smart” buildings, Lendlease realized after consistent market research that what people really wanted were self-operating buildings.

The idea stemmed from the observation that the physical environment isn’t all that people look for in the perfect infrastructure. From the services to technologies used, everything plays a role in determining infrastructural importance.

Adaptive, flexible, and tailor-designed to learn and respond to today’s world and people’s needs, Autonomous Buildings by Lendlease are a brilliant fusion of tech, data, and knowledge.

Being autonomous, these structures are independent and built to further sustainability.

For example, they are not connected to the electrical grid, have gas lines, or any connection to sewerage systems. Instead, they make use of renewable sources of energy to empower themselves, reduce their ecological footprint, and be self-sufficient.

These buildings are created in 5 distinct stages: Baseline, Connected, Smart, Partially Autonomous, and Autonomous.

The company is striving towards greater development of autonomous buildings and introducing a complete shift to such infrastructure in the future.

lendlease autonomous buildings

Autonomous Buildings

Lendlease Podium Redefines Infrastructure Development

Changing the way they create, the development of Lendlease Podium, an end-to-end digital platform for infrastructural development, is another feather in the cap of the conglomerate.

Podium is the way to achieving autonomous buildings, among several other feats. It digitizes the way the company designs, executes, and operates its projects. Integrating digital products and services, the platform automates the way Lendlease real estate works, increasing pace, productivity, and results.

lendlease podium platform

Podium Platform

Podium also delivers real-time insights, enabling Lendlease to make decisions quickly, with more clarity and accuracy.

Podium MX Studio For Better Decision Making

Just as Podium works across tech, the Podium MX Studio was created as a physical space that brings the supply chain together for better, informed decision-making.

Established in four prime cities as of now, including Sydney, Milan, Newark, and Singapore, the studio acts as a space where specialists from various disciplines and domains come together to test the parts of the autonomous buildings (or other projects). They conduct tests, build prototypes, develop, assemble, and deploy, all via the automation service of Podium MX Studio.

Lendlease’s Road To A Promising Future

Realizing the need for embracing tech in today’s fast-paced world, Lendlease has only just begun its journey toward digitization and is going in full throttle.

It has established a separate function within the company called Lendlease Digital. This focuses on analyzing current property pain points, unlocking inefficiencies, and consequently adopting technologies that improve the company’s operating model. Digital Twins is one such example, which consists of visualization in real-time via simulation and machine learning algorithms for improved decision-making.

The Covid-19 pandemic has specially placed great emphasis on the need for remote, virtual, and automated procedures to keep the business rolling, and Lendlease’s management intends to follow in its footsteps.

Key Takeaway 6: Adopt New Technology To Prepare For The Future

Lendlease continues to grasp big projects and make splashes in the real estate domain because its strategy is anything but rigid.

Quick to adapt, the management observed the growth in technological innovation. From IoT (Internet of Things) and deep learning to automating design and development, they were quick to jump on the bandwagon to avoid being left behind – and rightly so.

Their innovative ideas, like Autonomous Buildings, stemmed from observation, such as those of self-driving cars and consumers demanding more and a better experience than simply physical extravagance.

With apps and one-of-a-kind platforms like Podium, Lendlease is changing the way infrastructure is developed and is propelling other companies to follow suit for a profitable business model.

How Lendlease Became So Successful?

Lendlease’s journey from a small, real estate company established in 1958, to a global conglomerate existing in 40+ countries has been nothing short of inspirational.

In the words of Bob Johnston, CEO GPT Group (a Lendlease subsidiary), “If you wanted to be in property, Lendlease was the place to be”.

It would not be wrong to say that the company was perhaps well ahead of its time, proven by its strategic decision making and client-oriented nature. During the ‘70s, that were fatal to several companies, Lendlease enjoyed rising profits.

Today, the company boasts over 60 years of experience, $28.8 billion assets under management, and a $111.8 billion development pipeline. It identifies itself as a city shaper and career maker, building sustainable real estate for all.

Lendlease’s Growth By Numbers

While words may inspire, numbers suffice to highlight the monumental growth Lendlease has enjoyed over the years. Have a look:

 

2019

2015

Revenue

$1.7 billion

$13.3 billion

Return on Equity

12.8%

12.4%

Operating Cash Flow

$316 million

$166.6 million

Net Assets

$6.3 billion

$5.2 billion

Key Strategic Takeaways From Lendlease’s Journey

Lendlease might be categorized as a real estate company, however, its shining legacy of becoming the giant conglomerate that it is today has many lessons to offer.

Let’s sum up its story of mergers and acquisitions and strategic decisions into six, power-packed takeaways to implement for a successful business:

Recognize Industry Gaps To Win

When starting an enterprise, there are usually two cases. One, competition exists, and the entrant would try and break into the market. Two, the entrant has identified a gap in the market and provides a good/service that bridges the need. Lendlease’s creation came as a result of the latter observation, and therefore success was guaranteed from the start.

There was a need for a medium that eased cashflows and borrowing while presenting it in an appealing system. Voila, Lendlease was formed as a leasing company by Dusseldorp.

Expand With Caution

What began as a leasing company was geared to play in the big leagues from the beginning.

The company was listed on the Stock Exchange and made its first acquisition of Civil and Civic merely a few years post-establishment. There began a series of mergers and integrations, within and outside of its industry. From insurance companies to entertainment theatres, construction agencies to investment firms, Lendlease grew left, right, and center.

However, the diversification strategy was more than simply dividing the company’s eggs in several baskets; each growth decision opened a newer trajectory to success. The decisions were based on financial viability, success potential, and capability to grow.

Stick To Your Strengths. Work On Your Weaknesses.

Lendlease might have begun its journey as a leasing agency, but soon, it was much more, and that is exactly what set it above the competition.

From construction to insurance, mortgage, and retirement, the top management continued to make strategic decisions to diversify that remained steadfast on the corporation’s purpose as stated by its founder – to leave a mark on cities across the globe.

Some acquisitions proved fruitful while others bore losses but dividing risk between a varied portfolio meant the company was able to ride the economic cycle of booms and slow growth with steady working capital and better-than-the-rest market share.

Go Big Or Go Home

From the very start, Dusseldorp’s vision for Lendlease had been larger-than-life; he wished for the company to expand beyond regional boundaries. While not many construction agencies had established such a feat in the past, history was not of importance for the founder who believed in his leadership skills and the company’s ability to grow beyond a leasing company.

During the initial stages too, Lendlease’s management strived for big projects. The restoration of the Statue of Liberty in 1984 and the building of Petronas Twin Towers was one of its biggest feats. The top-line management knew that to proclaim the company’s strength of work to the world, there was no better method than to take up projects that would gain worldwide recognition and continuous tourists. These landmarks also displayed Lendlease’s high-tech, proficient staff, and exceptional workmanship to the world.

Curate A Consumer-centric Brand Image

Establishing goodwill has always remained one of the top priorities for Lendlease. This is why it has always ventured above and beyond its company vision to expand on sustainable terms.

The company has collaborated with retailers to deploy solar solutions to more than 40,000 housing portfolios. It has also invested in the renewable energy sector with related acquisitions.

Extending its forward-thinking approach toward its employees has also been a company aim.

The formation of the Lendlease Foundation in 1983, formed for upholding employee wellbeing and happiness, is one such move.

With decisions that favored the society as a whole, Lendlease not only grew in size and market share but also in the hearts of its vast clientele, strengthening its stronghold in the industry.

Evolve With time

If there is one thing that the Lendlease management knew, it is that time and innovation waits for no one. Therefore, they depicted flexibility in their approach and continued to research, innovate, and improve as the world paced towards a tech-infused time.

Creating unique end-to-end digital platforms, automating building management, and transforming the way infrastructural development is conducted, are simply some of the many steps the company has taken to establish its forward-thinking mindset and growth strategy.

This way, Lendlease remains on top and within the minds of potential clients across the globe. However, continuous digitization efforts are required if the company wishes to maintain its position and grow – in size and numbers.

Melbourne, Milan, San Francisco, Singapore, and beyond, Lendlease has proved unstoppable throughout the years with its growth mindset and will to achieve despite the circumstances.

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