In an interview with Singapore-based Lianhe Zaobao, CEO Asia Justin Gabbani shares Lendlease’s ambitions for Asia. The English translation of the article is available below. Click here for the original article in Mandarin.
Lendlease Asia CEO Gabbani: Lendlease to inject A$2b capital within 5 years as it expands its presence in 4 Asian markets including Singapore
Lendlease CEO Asia Justin Gabbani said the Group will focus more on expanding the two new areas of life sciences and data centres.
The Group hopes that it will not only be involved in contracted construction through cooperation in the field of life sciences, but also integrate investment and development management.
The COVID-19 epidemic has completely changed the way people live and work, accelerated the digitalisation process, and boosted the demand for the life sciences. Australian real estate giant Lendlease is adjusting its strategic direction and focused on the development of assets in the new areas.
In addition to commercial and residential properties, Gabbani said that the Group will focus more on expanding the two new areas of life sciences and data centres, and will place emphasis on the four Asian markets, of which Singapore is the most important.
In an interview with Lianhe Zaobao, he disclosed that Lendlease has set a goal of injecting A$2 billion (approximately S$1.9 billion) into Asia within five years. At present, A$1.5 billion has been invested, and Singapore accounts for the largest proportion of capital.
Singapore is well-established in the field of life sciences, attracting many global pharmaceutical companies, including BioNTech, Sanofi and Thermo Fisher Scientific, to invest locally to set up facilities. More than 90% of the biotech facilities in the 280-hectares Tuas Biomedical Park are, in fact, built by Lendlease.
The epidemic drove the demand for pharmaceuticals. Not only did Lendlease undertake some projects for existing customers to expand their facilities and increase production capacity, it is also building a new large-scale vaccine production facility at Tuas Biomedical Park. However, due to confidentiality reasons, Gabbani could not disclose the name of the new facility.
According to Gabbani, Lendlease's business in Singapore can be divided into three categories, namely construction, investment and development projects. The construction of vaccine production facilities is classified as a construction project. However, the Group is trying to break the boundaries between projects.
For example, Lendlease and Ivanhoe Cambridge, a Canadian real estate company, spent A$800 million to build a new life science hub in Boston, USA, spanning an area of 320,000square feet.
Gabbani revealed that the Group hopes to not only be involved in contracted construction through cooperation in the field of life sciences, but also integrate investment and development management. “We will develop the land with large institutional investors after we’ve obtained it, and then lease it out to life science companies."
Construction, development and asset management
Three competencies that are preferred by local businesses
Lendlease’s competencies in construction, development and asset management have gained preference by the local market. It has been awarded many redevelopment projects, including Shaw Tower at Beach Road and Certis CISCO Centre in Paya Lebar.
Shaw Tower, built in 1975, originally had 260,000 square feet of office space and 100,000 square feet of retail space. After redevelopment, it will become a 450,000-square-foot Grade A office building with retail space on the first floor. It is expected to be completed before the end of 2024. Certis CISCO Centre will be transformed into an office building of approximately 320,000 square feet, and is also a green and sustainable development project.
Gabbani said that in addition to redevelopment projects, the development of integrated projects has always been Lendlease's expertise. Take the integrated project Paya Lebar Quarter (PLQ) that was completed at the end of 2019, for example. With a total floor area of 1.8 million square feet, it consists of office buildings, retail malls and residential buildings.
PLQ is jointly developed by Lendlease and Abu Dhabi Investment Authority at a total development value of S$3.6 billion dollars. The office space covers three Grade A office buildings, and the residential part, Park Place Residences, has a total of 429 units, of which 215 units were sold on the first day of market opening in March 2017, exceeding the sales target for the first phase.
Gabbani revealed that the Group has been committed to increasing the occupancy rate of PLQ. Office buildings and retail malls currently reach 99% and 97% occupancy rate. Park Place Residences has been sold out and handed over to buyers.
The land resources in Singapore are limited, and developers are generally thirsty for land. According to Gabbani, the Group looks to the Government Land Sale Plan (GLS) to find new development opportunities, especially white sites.
A white site refers to a multi-purpose comprehensive development lot that allows developers more flexibility in choosing a combination of uses. For example, the white site of Kampong Bugis, which is included in the government's land sales plan for the second half of this year, has an area of 990,000 square feet, can build 4,000 residential units, and provides 538,195 square feet of space for retail, office, sports and leisure facilities and more.
2021 fiscal year net profit
Up to A$222 million
Founded in 1958, Lendlease is listed on the Australian Securities Exchange. The Group is recovering from the impact of the epidemic. As of the end of June this year, the Group posted a net profit of A$222 million in 2021 financial year, reversing the previous fiscal year’s net loss of A$310 million.
In addition, Lendlease Global Commercial REIT, which is listed locally, is sponsored by Lendlease. The most important asset of the REIT is [email protected] located along the shopping belt of Orchard Road.
Travel restrictions during the epidemic hindered the Group's development of new markets
Following the promotion of the former CEO of Lendlease Asia Tony Lombardo to global CEO in June this year, Justin Gabbani, who had previously served as the Group’s Asia Chief Financial Officer, took over as CEO Asia.
In the past four months, Gabbani stated that he would re-adjust his personal mindset and also actively meet with staff from various departments to gain a deeper understanding of the Group's business. Gabbani, now 40, joined Lendlease in 2003 and has worked in Brisbane and Sydney, Australia, but he is no stranger to Singapore. He settled here 10 years ago, married a Singaporean wife, and has two sons.
Gabbani shared, “It is difficult for us to develop new markets during the epidemic due to travel restrictions. In the medium term, we will focus on the current four markets in Asia. Among them, Singapore is the most stable. After all, we have already been operating here for more than 40 years."
The other three major markets in Asia are Malaysia, Japan and China. In August this year, Lendlease announced that it would build its first hyperscale data centre in Japan. The Group is also optimistic about the prospects of China's elderly care market and built its first retirement village, Ardor Gardens, in Shanghai.
Source: Lianhe Zaobao © SPH Media Limited. Permission required for reproduction.