For generations, Lendlease has been Australia’s global construction company. Since a strategic review in 2007, it has built its business around six key trends it sees shaping global property development over the coming decades – urbanisation, infrastructure, ageing populations, funds management, technology and sustainability.
Lendlease identified 17 ‘gateway cities’ around the world where these trends and the company’s competitive advantages intersect.
In Asia, Lendlease’s gateway cities are Beijing, Shanghai, Tokyo, Kuala Lumpur and Singapore. Focusing on these cities has helped Lendlease build on its long-established reputation as a global provider of construction services to establish itself as a leading property developer and funder of property development projects.
BUILD CONFIDENCE WITH EACH PROJECT
Lendlease Asia CEO Tony Lombardo describes how successively more ambitious property development projects have helped Lendlease entrench itself as a local player in Singapore. Lendlease commenced its first Singaporean development as an investor in the 313@ somerset shopping centre in 2007. Lombardo explains the success of the project showed that “we knew we could develop; we knew we could invest capital. It gave us the confidence to start moving the business forward.” Lendlease’s next investment, Jem, which started its operations in 2013, is a mixed office and retail development that supported the Singapore government’s Jurong East urban renewal project. Lombardo says: “Every time we do a big project people can see how Lendlease really operates. That gives our investors confidence that we do have something different to offer, and I think they are able to appreciate that we are able to export our urbanisation strategy to the rest of the world.” Lendlease took its next step in Singapore in 2015 when it secured the Paya Lebar Quarter urban renewal project, which integrates residential, office and retail space. Lombardo credits its growth in Singapore to setting a long-term strategy and committing to the market. “For Australian companies, my big thesis is make sure your strategy’s right, make sure you understand what you’re trying to deliver,” he says. Beyond having a clear understanding of competitive advantage, Lombardo stresses this means you need to “make sure you’re making portfolio moves that will allow you to step up once you get confidence to grow your business. It’s an evolution, it can’t be a short-term decision.”
MATCH TRENDS TO YOUR STRENGTHS
Lendlease has an independent research team constantly reviewing global trends. When exploring new opportunities, Lombardo says: “We as a management team on the ground then look at it from our microanalysis and determine whether or not we can operate and take advantage of some of the things we’re looking at from a macro level.”
Lendlease’s macroanalysis supported the decision to pursue an aged care residential complex in Qingpu, just outside Shanghai. Demographic trends in this part of China show a rapidly ageing population – Shanghai alone is expected to have six million people older than 60 by 2021. Chinese government policy encourages the expansion of the aged care sector, including the development of residential care, and encourages foreign investment. This creates incentives for government officials at all levels to collaborate with companies with demonstrated capacity.
Lendlease’s decision to enter residential aged care in China was also supported by the company’s microanalysis of conditions in the market and its own capacity to deliver. From an operational perspective, Lendlease draws on more than two decades of experience delivering construction services in China. Since Lendlease is also recognised in China as the leader in senior living and aged care, the company was well-positioned to attain local government approval.