Last updated 12 January 2023
Lendlease Construction (Europe)
Lendlease Construction (Europe) is the main UK vehicle of the Australian-owned property and construction conglomerate, Lend Lease. The business dates back to 1885. After being acquired by P&O in 1974, Bovis was bought by Lend Lease a quarter of a century later. Today, rebranded as Lendlease, the business works in more than 30 countries around the world and turns over more than £500 million a year and employs around 1,200 people in Europe.
Financials
In the 12 months to June 2022, turnover at Lendlease Construction (Europe) firmed at £553.5 million (2021: £554.5 million) and operating profits slipped to £16.5 million (2021: £18.4 million). Before tax, profit also fell, dropping back to £18.9 million (2020: £20.0 million).
To view the financials for Lendlease Construction (Europe) Ltd, visit Companies House and use Company ID 00467006.
Operations
Construction
Lendlease works across Britain and in most sectors and this division traditionally provides the bulk of turnover. The group has had strong presence in the education sector, particularly in Scotland, while Bovis was also amongst the earliest pioneers in the PFI healthcare sector.
The group works for many blue chip private sector clients, such as Blackstone, Stanhope and Stratford City Developments and on flagship projects, including Google’s new £1 billion headquarters in London (Project ID: 10394495). Lendlease is working on the £150 million The Acre scheme for Northwood Investors (Project ID: 20165954).
In the public sector, clients range from the Ministry of Justice to the Ministry of Defence. Lendlease is on a number of major public sector frameworks, including the £7 billion National Construction framework for SCAPE (Project ID: 16115897).
Development
In 2005, Lendlease took a major step into housebuilding with the acquisition of Crosby Homes from Berkeley. Crosby was based primarily in the North West and this business now trades as Lendlease Residential Group but activity in the North West appears muted and the focus shifted to London.
Lendlease’s development model is aimed at master-planning communities, rather than simply building one-off projects, or residential sites. The group was involved in the Greenwich Peninsula regeneration scheme but sold its stake to its joint venture partner Quintain for £100.6 million in 2013.
Lendlease’s main subsequent urban regeneration project was the Elephant & Castle scheme in central London (Project ID: 99192855). The group has the £1.3 billion International Quarter development (Project ID: 0706871) and was appointed by HS2 as its development partner on a £2.2 billion regeneration project around Euston station, also in London (Project ID: 12081779). Work started in 2021.
Infrastructure Development
This division manages the group’s Public Private Partnership and Private Finance Initiative concessions
Investment Management
In the UK, the group operates Lendlease Retail Partnership and Lendlease PFI/PPP Infrastructure Fund.
Glenigan Data
As Lendlease takes on a handful of large contracts, the group’s order book can be lumpy. In the 2022 calendar year, Lendlease Construction Europe had a UK order book totalling £1,235.5 million (2021: £7.7 million) and the group was ranked in eighth place Glenigan”s top 100 contractors annual league table.
In terms of housebuilding, Glenigan’s research shows that in the 2022 calendar year, Lendlease submitted detailed planning applications to build a total of 1,351 units (2021: 222 units).
Conclusion: Growth slows
As the COVID-19 pandemic gripped, turnover at Lendlease was hit due to the lockdown and the adoption of safe site working. The order book also shrank as the group focused more on developing major projects rather than working on contracting and revenue shrank.
There was a strong rebound on all key financial levels in the immediate wake of the pandemic, only for growth to subside and profits have dipped but the group is making plans for further expansion.
In 2022, Lendlease started work on the £215 million Turing Building in East London (Project ID: 15408395) as part of a joint venture with the Canada Pension Plan Investment Board to develop a new £1.5 billion office-led neighbourhood at International Quarter London, but this has had consequences.
The shift to developing work and forming joint ventures had reduced the exposure to contracting but in 2022, the average UK contract won by Lendlease was valued by Glenigan at £176.8 million (2021: £7.7 million).
In 2022, 96% of the order book by value was in London, where Lendlease is ranked second in the capital’s Top 10 but the group has sought work elsewhere. In January 2023, Lendlease won a £30 million deal to convert and restore the Grade II Martin’s Bank building in Liverpool for Kinrise (Project ID: 15221009). The group is also working on the £68.5 million Rylands Building scheme in Manchester for Debenhams and CD9 (Project ID: 18262871).
The group has a residential development pipeline of 25,000 homes and in 2021 there was a major expansion in the planning pipeline. The focus is on major developments and master-planning communities such as Thamesmead, while Lendlease is also moving into the build for rent residential sector in conjunction with Canada Plan Investment Board. In 2022, 70% of new homes proposed were some form of house and the average detailed residential planning application contained 676 units (2021: 222 units).
Lendlease Construction (Europe) became the employing identity for all UK employees in 2020 and the workforce doubled but during the worst of the pandemic the group cut costs. Lendlease suggested that around 240 staff were at risk. After a 10% cut in the previous year, in 2022 the average number of employees was reduced again, this time by 9% to 1,097 people (2021: 1,211 people) but the wage bill rose 1% to £108.6 million (2021: £107.7 million).
The group has a strong balance sheet with net assets of £202.6 million (2021: £186.4 million) and no external debt, although cash in hand fell to £72.1 million £78.2 million). As a multi-faceted business that is part of a behemoth with global reach, Lendlease remains financially strong and able to develop in different directions.
Winning Work With Lendlease Europe
Lendlease Europe is a member of the Considerate Constructors’ scheme and accredited to a range of industry standards, including Achilles and Constructionline. Information on Lend Lease’s involvement with Achilles can be viewed here.
Lendlease has worked with Achilles to develop BuildingConfidence, which is an accreditation scheme aimed at helping contractors assess suppliers in a wide range of areas. Lend Lease was also the first contractor to receive Forestry Stewardship Council certification for its procurement process as 98% of the timber materials sourced were Programme for the Endorsement of Forest Certification or FSC certified. The group’s timber procurement policy can be viewed here.
Lendlease has used the COINS electronic trading community in a pilot scheme to improve four areas of its procurement: electronic catalogue, electronic procurement, electronic invoices, and electronic payment (BACS). The group also runs its own contractor accreditation scheme and used Human Recognition Systems as sole supplier at all Lendlease construction sites of a centrally managed biometric access control and workforce reporting system, the HRS solution MSite. Lendlease has also used the supply chain school and details can be found here.
Lendlease Europe reviews its materiality assessment process to identify, prioritize, validate and review the 12 elements that correspond to the most material issues for its business and key stakeholders and least every two years.
Key Lendlease procurement contacts include:
Head of procurement Europe – Andy Fulterer, tel: 020-3288-6100
Head of supply chain – Jeremy Hutchinson, tel: 020-3288-6100
Head of digital and CIO Europe – Mark Timbs, tel: 020-3288-6100