Lendlease Europe Slumps To £21M Loss Over Covid-19 And Weak Office Leasing Market
Covid, lack of sales and a "weak" office leasing market hit Lendlease Europe hard last week after posting a £21M loss in its latest financial results.
Filing its results for the year-end of June 2021, Lendlease Europe's holding company warned that more pain could follow with further losses for 2022. Its latest filings saw revenue slump by 8% to £764M from £832M in the previous year.
The developer, which has major schemes in London, Manchester and Birmingham, said that limited activity in the office leasing market, Covid-19 and weakened demand for new apartments dented its performance.
"The pandemic has had significant consequences for real estate markets across the cities in which the Group operates and expects there to be some disruption in future periods," according to a statement. "The financial year ended 30 June 2022 is proving to be another challenging year, particularly for the Development segment."
Lendlease Europe operates primarily in the UK, but controls assets in Italy and South America. Major projects include the new Google HQ in Kings Cross, the oversight development at Euston for HS2, which saw Lendlease appointed master development partner in 2018.
Lendlease completed 240 residential units at Elephant Park in Deptford and form a strategic joint venture with CPP investment for the long-term redevelopment of the Milan Innovation District.
Other UK schemes included a development agreement signed with Birmingham City Council for a 3,000 home £1.9B scheme at Birmingham Smithfields.
Last month, Bisnow reported that the £1B High Road West redevelopment adjacent to Tottenham Hotspur's new stadium was delayed after the football club threatened the local council with legal action if it approved the proposals.
Revenue from property sales fell by £54.5M due to a lower volume of completions. The group finished the year with a development pipeline of £28.5B and a backlog of construction revenue that topped £1B.