Lend Lease Corp. today announced that it plans to exit its real estate investment operations in the United States and some European-based groups.
The firm announced the revised business strategy after completing a year-long review of its operations. According to Greg Clarke, Lend Lease managing director and CEO, the company intends to simplify its spread of operations and focus on its established strengths in each of the major regions.
"We are now in a position to move on a much more active capital management strategy designed to unlock the strength of our cash position, including a 10% share buyback and a significantly increased dividend payout ratio," Clarke said in a statement.
The review found a number of issues, including an "unacceptably poor outlook for U.S> real estate investments for the next few years at least"; too many disconnected business in the U.S. and a lack of synergies between the U.S. investment businesses and other parts of the firm.
Given these outcomes, Lend Lease will take a further write-down in respect of the real estate investment businesses up to $300 million, including a $30 million loss on the sale of CapMark and other real estate debt businesses.
"Given the issues determined by the review and having considered all conceivable options, I am not prepared to risk further shareholder funds, or expend further executive time on a promise of turning performance in these businesses around on any realistic timetable," Clarke said.