Build Back Better

24 May 2021

CEO Asia and Group CEO-Designate Tony Lombardo speaks with the Business Times in Raffles Conversation.

As a child, Lendlease's Asia CEO Tony Lombardo pondered two ambitions. The first was to be a footballer, and the other was to be a boss. Only the latter was acceptable to his mother.

“She said: Don’t even dream about being a sports person, Tony,” he reminisces with a laugh. “She wanted me to be an accountant, a doctor or a lawyer – what all ‘good immigrant parents’ tend to aspire for their children to be.”

Mr Lombardo is the fourth of five siblings, born of Italian parents who immigrated to Australia in the 1950s. His father worked as a cleaner and a butcher, while his mother looked after the home. His parents wanted a different future for their children.

So on the advice of family and friends, Mr Lombardo became an accountant. This proved a sound decision, he says – opening a door into the corporate world, where he was able to work with and learn from leaders like the late Jack Welch at GE.

Now at age 47, Mr Lombardo is poised to take the top job at Lendlease, as the next Group CEO and managing director with effect from June. The board’s decision was announced in February. 

Neither of his parents will witness the milestone, however. While a junior accountant aged 21, Mr Lombardo lost his father to suicide. And at the start of this year – weeks before the board’s announcement – his mother died. 

They were close. Up till the very end, they spoke regularly on the phone in what he fondly calls their weekly, half-hour “debrief”. He wishes she could have lived to hear the news. But he is sure that somehow, and somewhere – she knows.

The best places
The Business Times (BT) meets Mr Lombardo at the Paya Lebar Quarter, known as PLQ. 

The S$3.7 billion, four-hectare site – comprising three office towers, a retail mall and a residential condominium – is special to him. He was Lendlease’s Group CFO when the project was secured in 2015. The next year he was appointed Asia chief, and moved to Singapore to see the project through.

PLQ typifies the Sydney-headquartered infrastructure and property group’s approach to place creation in many ways, he says. One of them is an emphasis on community spaces. “You know how space is so scarce here in Singapore. Just seeing this place now, activated with families, having this vibrancy – for us, that’s what place-making is about.”

He points out the window, where a paved strip divides the office tower we’re in (PLQ 3), and the private residences opposite. “A canal would have run through the middle of this site. We covered that and created community space.”

Instead of a canal, the window now overlooks a tranquil pebble garden with mustard and rust benches, bordered with greenery. As we speak, a young man reclines on one of the benches, while his corgi companion bathes in the shade.

“Our strategy was to give back space to the people – parkland, open space that they can access and use at their own leisure. That’s part of the philosophy of this place creation strategy that we’ve put together.”

When Lendlease was first putting together its corporate vision – to build the “best places” – he recalls one of the company’s project developers saying: “When you get to a great party, no one wants to go home.”

“That’s what we wanted to create,” he says. “A place that everyone wants to come to, and never wants to leave, that can be used 24/7. The buildings are just the first phase. It’s how you curate it with the right type of tenants, the right type of feel; and keep re-mixing it.”

Not a build-and-leaver
Over time however, Mr Lombardo feels Lendlease’s purpose has evolved. Their mission isn’t simply to create the best party-places – but places where communities can thrive. That requires Lendlease to forge connections with the communities it operates in.

Looking around PLQ, for example, there are subtle homages to local traditions. PLQ Mall’s geometric facade is a nod to the songket brocade of the Malay world, and is inspired by the neighbouring Geylang Serai. 

Such connections also extend to deeds. During the project’s development phase, Lendlease staff observed Hari Raya festivals and rituals, including breaking fast with the site’s construction workers, many of whom were Muslim.

But the most convincing testament of Lendlease’s connection with local communities lies in the rebuilding of Minami Sanriku – a town struck by the 2011 Great Eastern Japan tsunami. The disaster claimed nearly 20,000 lives, including over 1,000 in Minami Sanriku; while sweeping away most of the coastal town entirely.

The Lendlease team responded to the scene, working with local teams to restore mobile phone networks so that survivors could contact their families. They also launched a community programme to rebuild public infrastructure, help local farms and engage the area’s elderly residents. That programme is still active today, 10 years later.

“You can’t just build a place and leave,” Mr Lombardo says. “I don’t think that’s the right thing to do, as a developer. You’ve got to build it and make sure you’re actually here for the future, as the area evolves. We want to evolve with the community.”

The great Covid-19 reset (or not)
As a landlord, part of evolving with the community is ensuring your spaces continue to meet their changing needs. Has Covid-19 permanently altered the world’s needs, and what Lendlease’s real estate must offer?

In some ways, clearly. The past year has accelerated technology adoption by three to four years, in Mr Lombardo’s estimate – and the real estate industry must adapt accordingly, offering digitally-enabled environments for digitally-enabled lifestyles and businesses.

Working from home has also changed the retail environment, with implications for tenant mix. More stores have pivoted to takeaway and delivery. Some segments have languished, like fashion apparel, while others have made a comeback, like books and games.

Meanwhile, demand patterns for offices are shifting, affecting some cities more than others. 

“A place like London is a heavily commuting city,” he notes. “People are probably realising that working from home regains them anywhere from three to four hours a day, and are therefore thinking: Where should I best locate myself?”

As a result, offices could require less space, while city planners adopt more hub-and-spoke models for their business districts, with decent-ralised offices.

But how radical will these changes be – and will we see hollowed-out offices and ghostly central business districts, as doomsayers have predicted? Mr Lombardo thinks it’s too early to say. But from the early signs, he doubts it.

Offices still need headquarters as the cultural heart of their organisations, he says. “If you don’t have a place for your people to congregate, what is your company? What does it stand for?” 

He notes that csuites – Lendlease’s flexible workplace solution at PLQ 3, aimed at medium enterprises with 50 to 150 employees – is looking to be fully leased in the coming months. 

He also points to China – the initial epicentre of the pandemic – as a destination that could augur what lies ahead. “My team in China was fully back to work in the office by June last year,” he says. “Offices are being used at a hundred per cent.”

“Everyone keeps telling me, you don’t need an office anymore. But we keep looking at China. They’ve got themselves well under control, and they’ve been using the offices normally.

“Have some of the behaviours changed? Are people working more flexibly? Yes. But it’s too early to call what Covid is going to do. We need to let it all settle, and see how people go back to daily living once the vaccines have come into play.”

First order of business
When Mr Lombardo was headhunted into Lendlease in 2007, he set out to first ask questions – inviting experts out to coffee, walking project sites, and speaking to teams on the ground. That is exactly how he wants to begin his new term in the top job.

“For the first few months, it’s doing a lot of listening,” he says. “I’ll be talking to investors, governments, customers and potential partners. I’ll also be speaking to our people, and our board. And I’ve been talking a lot to Steve (McCann), our current CEO.”

Already, he has a sense of his priorities. There are two themes he says will be integral to Lendlease’s next five years: sustainability, and digitalisation.

In 2019, Lendlease’s Barangaroo South development was named Australia’s first carbon neutral precinct. Carbon neutrality was not initially a project requirement, but Lendlease had pitched the goal in its bid for the 22-hectare development on the Sydney waterfront.

Now the group is taking the sustainability pledge further, with ambitious new targets. They aim to be a net zero carbon company by 2025 for Scope 1 and 2 emissions – namely, emissions produced from the fuels they burn, and from the power they consume.

Beyond that, they aim for absolute zero carbon by 2040 – to eliminate all emissions without the use of offsets. This includes Scope 3 ones, generated from the goods they buy and the activities they facilitate. 

“This is the harder target,” says Mr Lombardo. “It involves working with the steel industry, the concrete industry, different components of what makes up a building. We will have to work as a collective.”

Mr Lombardo’s second priority is digitalisation, in an industry he thinks has been chronically underserved by tech companies. 

For Lendlease, the impetus to think seriously about the issue came about a decade ago, when they were working on their first timber high-rise residential building in Melbourne, Australia – Forté.

Then the world’s tallest timber apartment building, putting up the 32-metre, 10-storey structure turned out to be a logistical nightmare. Lendlease spent years working with various suppliers, while navigating mortgage markets, insurance markets, and building codes to put the new material – cross-laminated timber – into operation.

“That got us thinking about how we needed to change,” Mr Lombardo says. “Part of it was digitalising the design phase, and the other part was digitalising our workflows and how we organise and connect with our supply chain.”

Key to the design phase is the use of digital twins, which Lendlease now adopts for its buildings around the world. Having a virtual counterpart of a physical building allows Lendlease to identify problems before construction even begins, saving time and costs. 

Last June, Lendlease launched Podium – a digital platform to manage the property lifecycle: from design, to construction, to managing buildings. Built on Google Cloud, Podium captures data across the property and construction sector, and comes with data analytics capabilities to inform decisions at every project milestone.

For instance, modelling techniques can help developers assess the best use of land parcels in the development appraisal process. Data can be aggregated to generate manufacturing and construction schedules, as well as plans that comply with prevailing regulations. 

The platform also enables specialists to collaborate remotely across the supply chain, to jointly design, prototype, test and codify content through to assembly and production.

With the Economic Development Board’s support, Lendlease has set up a S$40 million product development centre in Singapore – similar to existing centres in Silicon Valley and Sydney – that is developing Podium’s products and providing services to the built environment sector. 

Eyes on sky, feet on earth
There is one more ambition on Mr Lombardo’s horizon, as he prepares to don his new boots as Group CEO.

With a portfolio of 22 major urbanisation projects across 10 cities (spanning Australia, Malaysia, the UK, Italy and the US) and about A$110 billion (S$113.7 billion) of projects in the development pipeline, one can already call Lendlease a major multinational developer.

But Mr Lombardo has his sights set a notch higher – aiming to turn the group into a true global champion. 

“There’s no one in the real estate industry that has ever really conquered that space,” he muses. “There are regional champions, but you don’t have a big global player. And I think we’re in a position where we could strive to own that space.”

That sounds like a big dream for Mr Lombardo to take on, following what has no doubt been a seismic year for him. He has had to grapple with the Covid-19 disruption that began in Asia; and on the personal front, his mother’s passing. Now, he must take on the most major chapter of his career.

Still he appears resilient and resolved, describing himself as a grounded person. His wife is his confidante, and he remains close to his siblings and friends. The family also adopted a stray dog this year: a “Singapore Special”, which will follow them home to Australia.

“You can’t change history,” he mulls, on what keeps him on an even keel despite life’s brickbats. “I can only change the future. That’s how I try to reset myself each day. I do focus on how I could have done things better. But let’s do that better tomorrow.”

Source: The Business Times © Singapore Press Holdings Limited. Permission required for reproduction.   

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