Company Profile: Lend Lease

INTRODUCTION

Lend Lease Corporation Ltd is an integrated global real estate group comprising three core businesses:

Retail and Communities: this segment deals with all aspects in relation to retail and residential property development from concept to design, planning; construction, financing, leasing, property management and the subsequent sale.

Investment Management: this segment relates to the management of investment funds and real estate debt on behalf of clients.

Project Management, Construction and Private Financing Initiatives: this segment provides full services in relation to management including design, construction management and engineering.

In FY 2006 Lend Lease reported revenue totalling $12.1 billion and a net profit of $415.2 millon. Lend Lease operates through Australia, the Pacific, North America, Asia, UK and Europe. The company employed 9,815 full-time equivalent staff at the end of the fiscal year.

Lend Lease is a publicly company listed on the Australian Stock exchange. As of 19th December 2006, the company had a market capitalisation of $7.49 billion, making it one of the top 50 companies by market capitalisation in Australia.

HISTORY / BACKGROUND

Some highlights in the history of the company include:

1958 - Lend Lease begins operations under the sponsorship of Civil & Civic.

1961 - Lend Lease acquires Civil & Civic from Bredero's.

1964 - Lend Lease expanded operations internationally with construction commencing in New Zealand

1971 - General Property Trust forms and floats as the first public trust in Australia.

1971 - Lend Lease US & Singapore operations commence.

1978 - Stuart Hornery is appointed Managing Director of Lend Lease Corporation.

1982 - Lend Lease acquires 50% of MLC.

1985 - MLC Limited becomes a wholly owned subsidiary of Lend Lease.

1991 - Lend Lease International commences operations in Europe.

1995 - David Higgins becomes Managing Director and CEO.

1999 - Lend Lease acquires P & O's Global Project Management Company - Bovis.

2001 - Lend Lease sells MLC to National Australia Bank.

In 2003 the company announced that it would exit, over time, the North American real estate investments markets and real estate debt services, Asian debt markets, certain components of the European real estate investments business, and the global fund management business. Lend Lease also incurred writedowns totalling $945 million to the value of various real estate investments businesses in the US, Asia and Europe. The company reorganised the group's management structure on a regional basis, and repurchased 2.9% (12.7 million shares) of issued capital at an average cost of $8.56 per share.

In 2004 the company continued to divest a range of investments in the Real Estate Investments division, in line with the prior year decision to exit the investment portfolio. Total proceeds from the sale of businesses amounted to $547.9 million, which was represented by the sale of controlled entities ($232.4 million), investments ($19.7 million) and the sale of various REI net assets and operations of underlying businesses ($295.8 million). Meanwhile, on 17 August 2004 the company announced that it had entered into an agreement with ACM Acquisition LLC for the sale of the Lend Lease Rosen business. The divestment represents the final stage of the company's exit from the costly real estate investment activities in the Americas.

On 2 June 2005 General Property Trust unit-holders voted 55.9% in favour of ending its 34-year management relationship with Lend Lease. The decision concluded a year-long battle between the two companies, after Lend Lease first proposed a merger with GPT on 24 May 2004. The proposal was voted down in November 2004 after Westfield effectively scuppered the deal when it emerged with a 6.5% stake in GPT. In February 2005, GPT proposed to cut the Lend Lease ties, form a joint-venture with Babcock and Brown and sell its Penrith Plaza and Woden shopping centres to Westfield.

PRODUCTS

Following a business restructuring process undertaken in 2003, the company operates through three core segments, namely:

Bovis Lend Lease (Project and Management Construction)

The business was acquired from P & O in 1999. It provides project management, development management, construction, and consultancy services to local and global companies worldwide. The business operates through 51 countries and is managed through three divisions: Asia Pacific, Americas and Europe.

Integrated Development Businesses

The division provides a range of services to real estate clients, including capital raising, project design and development as well as the ongoing management of assets. Major investment projects in Australia include Caroline Springs and Craigieburn in Melbourne and The Sanctuary in Sydney.

Real Estate Investments

Real Estate Investments - Equity: Provides a range of advisory, funds management and loans services to clients. Services include investment management, portfolio management, commercial mortgages, resolution of under performing loans, and co-investment in funds.

Real Estate Investments - Debt: Provides services in the management of real estate debt including: co-investment real estate assets, resolution of under performing commercial mortgages, and the servicing of commercial and mezzanine loans.