Lend Lease Appoints Outsider to Revive Fortunes

LONDON-Australian property developer Lend Lease has appointed a Briton, with no experience of property, construction or fund management to head up the company and with a brief to revive its flagging fortunes.

Greg Clarke is the former chief executive of the telecommunications specialist Cable & Wireless where he delivered strong shareholder returns through a break-up of the company and the sale of assets. His appointment to replace David Higgins has sparked speculation that a review of the US Real Estate Investments business, due to be completed in January, will lead to a breakup of the company.

Higgins built Lend Lease into a global real estate and construction player but since the sale of MLC in 2002 the share price has halved and the company has suffered several profit downgrades. In May Higgins announced that he would cut short his term.

Despite the profit downgrades Lend Lease’s development prospects particularly in the UK look good. The company was behind the development of one of the most successful shopping centres in Britain, Bluewater, in Kent and has recently entered into a joint venture agreement with the UK government and two other partners to redevelop the Greenwich peninsula on the River Thames into a £4 billion ($6.3 billion) residential estate.

But analysts have warned investors not to expect a rapid turnaround in the company’s fortunes. One added: “Clarke clearly has a good reputation for growing businesses globally. But it is going to take him time to get to grips with the new markets and he has no experience in property and construction.” He added: “Having said that, Lend Lease has a very strong property team already.”