Lendlease Strategy Update...FY10-16 30-40% 10-20% FY18 FY20 3.1% FY19 2.2% HY20 2.3% 1.3% FY17 2.6%...

Lendlease Strategy Update

Attached is the presentation to be given today by Steve McCann, Group Chief Executive Officer and Managing Director, Lendlease and Tarun Gupta, Group Chief Financial Officer, Lendlease. The presentation will be webcast live at 10:30am (AEST) via www.lendlease.com

ENDS

FOR FURTHER INFORMATION, PLEASE CONTACT:

Investors: Media:

Justin McCarthy Stephen Ellaway

Mob: +61 422 800 321 Mob: +61 417 851 287

Authorised for lodgement by the Lendlease Group Disclosure Committee.

Lendlease Corporation Limited ABN 32 000 226 228 and Lendlease Responsible Entity Limited ABN 72 122 883 185 AFS Licence 308983 as responsible entity for Lendlease Trust ABN 39 944 184 773 ARSN 128 052 595

Level 14, Tower Three, International Towers Sydney Telephone +61 2 9236 6111 Exchange Place, 300 Barangaroo Avenue Facsimile +61 2 9252 2192 Barangaroo NSW 2000 Australia lendlease.com

31 August 2020

http://www.lendlease.com/

Looking ahead

Lendlease Strategy Update 31 August 2020

Sydney: Barangaroo South

Lendlease Market Briefing Strategy 2

As a developer, builder and manager of assets on land across Australia, we pay our respects to the traditional owners, especially their elders past and present, and value their custodianship of these lands.

Acknowledgement of CountryLendlease Market Briefing Strategy 2

Steve McCannGroup Chief Executive Officer and Managing Director

Strategy Update

Kuala Lumpur: The Exchange, TRX (Artist’s impression)


Strategy highlights

Leverage competitive edge

Global placemaking

End to end capability

Proven track record

Accelerate development

Scale investments

Improve earnings qualityHigher annuity earnings | Programmatic investment partnerships | Operating profit focus

$8+ billion of production p.a. uplift >80% on historical rates

c.90% of production for next 5 years planning

approved

$50+ billion FUM opportunity from secured development pipeline

New products and external opportunities

Higher capital allocation

Increased focus

Prioritise capital and people resources to Development

and Investments focus areas


June 2009

June 2020

Geographic focus

40+ Countries

17 gateway cities

Major urbanisation projects1

2 21

Urbanisation pipeline

$11 billion

$99 billion2

Total development pipeline

$30 billion

$113 billion2

Construction backlog

$12 billion

$14 billion

Funds under management

$10 billion

$36 billion

Transformational shift

1. Projects with an estimated development end value greater than $1 billion. 2. Remaining estimated development end value.

A decade of transformation

Singapore: Paya Lebar Quarter

5Lendlease Market Briefing Strategy

San Francisco• San Francisco Bay Area Project• 30 Van Ness

Chicago• Southbank• Lakeshore East

Los Angeles

New YorkBoston

Sydney• Barangaroo South• Sydney Place• Victoria Cross over station development

Melbourne• Melbourne Quarter• Victoria Harbour

Brisbane• Brisbane Showgrounds

Perth• Waterbank

Kuala Lumpur• The Exchange TRX

London• Thamesmead Waterfront• Euston Station• Silvertown Quays• International Quarter London • Elephant Park• High Road West• Deptford Landings

Milan• Milano Santa Giulia• Milan Innovation District Beijing

Shanghai

Tokyo

Singapore

Rome

Map illustrates 17 targeted gateway cities and highlights major urbanisation projects with an estimated development end value greater than $1 billion. 1. Remaining estimated development end value.

Assets under management

$29 billion

Funds under management

$36 billion

Construction backlog revenue

$14 billion

Development pipeline

$113 billion1

Our global footprint



Our business model is designed to withstand real estate cycles, while being agile to adapt to market changes.

COVID-19 stress testing of strategy confirms resilience of business model• Scenario planning undertaken to enhance

decision making during COVID-19 uncertainty• Fundamental assumptions that underpin the

strategy and strategic shifts tested• Increased focus on areas where competitive

edge strongest reinforced

This resilience is underpinned by our: • Placemaking, urbanisation depth and mixed use

capabilities providing a competitive edge – a proven track record of success

• Capital efficient land funding and delivery model • Ability and flexibility as a product creator, to adapt

as well as define products as markets and customer preferences evolve

• Depth and breadth of investment management skills • Access to quality investment partners

Resilience demonstrated in current environment: • CPP Investments New buildings launched• Aware Super within existing partnerships• PSP Investments • Mitsubishi Estate

New partnerships formed San Francisco: 30 Van Ness (Artist’s impression)

Strategy resilient to an evolving market environment

Industry • Fundamental drivers of urbanisation

to remain • Market dislocation anticipated to

provide opportunities • Digital disruption likely to accelerate • Capital allocations to real estate

anticipated to rise over time

Sectors Residential: • Strong growth in build to rent sector • Structural undersupply to drive

longer term performance• Quality and amenity key

Office: • Workplace design and innovation

key to corporate culture • Potential hub and spoke adoption

supports urbanisation footprint • Repositioning opportunities

Retail: • Structural headwinds for retail –

mixed use conversion opportunities


Expected real estate

trends

Strategy resilient to an evolving market environment

Sydney: Darling Square

Together we create value through places where communities thrive

Our purpose

The Lendlease purpose statement represents our organisational why.

It acknowledges our rich history and our future direction.


Leverage competitive

edge

Best practice construction

delivery


Scale investments

Leadership in sustainability

Employ our placemaking expertise and integrated business model in global gateway cities to deliver urbanisation projects and investments that generate social, environmental and economic value

Our strategy | the next decadeDevelopm

entInve

stm

ents

Integrated Business Model

Proven Track Record

Thrivingcommunities

Construction

Strategic priorities

10Lendlease Market Briefing Strategy

Proven track record


edge


Secured 2001

Secured 2010

Melbourne: Victoria Harbour

London: International Quarter London

Secured 2015

Singapore: Paya Lebar Quarter

Secured 2009

Secured 2015

Sydney: Barangaroo

Boston: Clippership Wharf

Secured 2010

Secured 2015

London: Elephant Park

Chicago: Southbank

Secured 2009

Sydney: Darling Harbour precinct


Placemaking is in our DNA


edge

We are placemakers and value creators

Place creation requires a combination of global competence with authentic local engagement. It means having the skill to not only define the best of all possibilities but the discipline to deliver that vision sustainably and in partnership with the community. Our investment in digital capabilities will enable us to enhance our customer experience.

We see value others overlook.

Place is not a product; it is an emotional attachment to a location. The places we create are meaningful, vibrant and enduring.

Brisbane: Yarrabilba

Boston: Clippership Wharf London: Elephant Park


edge End to end capability

Construction • Delivery capability supports integrated model • Specialist expertise and relationships in target sectors• Deep project management skills and experience

Investments • Access to institutional grade investment product from pipeline • Strong relationships with institutional capital partners • Differentiated real estate skills to add value at asset level• Trusted fiduciary and governance structures

Competitive edge to underpin substantial growth in strategic focus areas

Large scale mixed use urbanisation projects Leadership position as the partner of choice

Diversification across gateway cities and product type

Proven track record to unlock future opportunities

Prioritise capital and people resources to Development and Investments focus areas

Investments platform Global scale in real estate investment management

Development pipeline to provide significant growth opportunity

Launch new products and pursue market growth opportunities alongside investment partners

Development • Placemaking in urban environments • Capital efficient business model • Long term investment partnerships • Scale across gateway cities


Material uplift in production as projects enter delivery

• More than 60% of $113b development pipeline secured in the last 3 years

• Origination to planning approval typically 2-3 years • Recent planning achievements and progress:

– Milano Santa Giulia, South – approved – Milan Innovation District – approved – 30 Van Ness – approved – Silvertown Quays – phase 1 approved – San Francisco Bay Area project – phase 1 lodged2


Targeting $8b+ of production p.a., >80% increase on historical rates

Uplift supported by: • Pipeline planning certainty• Market size and absorption• Investment partner appetite

Planning milestones • Large market size of each city supports

production outlook • Pipeline of development projects across

12 gateway cities: – Sydney, Melbourne, Brisbane, Perth – Kuala Lumpur, Shanghai – London, Milan – San Francisco, Chicago, Boston, New York

Market absorption • c.150 institutional investment partners • Top 20 relationships account for two thirds of equity

in platform • Heavily weighted towards investors from:

– Asia Pacific, Middle East and Canada • Scope to attract additional US and European capital • Utilise larger programmatic investment partnerships

as production accelerates

Investment partner appetite

Annual Development production rate ($b)1

1. Represents project value delivered during a financial year (on a revenue recognition basis, representing 100% of project value). 2. To be lodged 31 August 2020.

New Target

$8b+

FY16-20 ave.

$4.3b>80%


Global capability to executeAccelerate

development

• Creating digital capabilities that support key strategic objectives

• Significant cost reduction potential from digitisation of development and construction, and supply chain automation

• Digital Twin design underway on major urbanisation projects

• Technology enhancements and data analytics to improve customer experience, safety and sustainability outcomes

• Autonomous Building Summit to be hosted by Lendlease in collaboration with global industry leaders

Digital leadership in real estateEnhanced operating structure

Enterprise wide mindset to improve decision making and production at scale

Global platform foundation in place to support growth and accelerate delivery of development pipeline

Global operating model

Development, Construction and Investments with regional execution capabilities

Global framework ensures consistency in approach and adoption of best practice

Project teams

Project Directors are empowered and supported by the global platform

Urbanisation and Construction Director programs – c.90 leaders participated to date

Global systems

Significant investment in global systems support governance and consistency

Global platforms implemented in Project Management, Asset Management, Finance, Safety, Human Resources and Sustainability


Strong foundation to scale Investments platform globally Scale

investments

• Five decades of experience: – Launched Australia’s first listed REIT

• Expertise spans multiple real estate sectors across both unlisted and listed funds and mandates

• Deep relationships with c.150 institutional investment partners • Key competitive strengths:

– Access to high quality and sustainable institutional investment grade product from urbanisation pipeline

– Ability to add value at the asset level given deep global capability in development, repositioning, and delivery across asset classes / sectors

– Investment management track record of managing products across sectors

– Trusted fiduciary and governance structures

Overview of Investments platform Funds Under Management ($b)

19 funds and mandates

Global leader in responsible property investments (GRESB)1

c.$19b new equity raised since 20102

c.150 institutional investment partners

1. APPF Commercial ranked first of 964 global participants, three other Lendlease managed funds achieved top 10 global rankings in the 2019 GRESB. 2. Across managed funds and mandates.

FY20FY15

$36b

$21b

FY10

$10b

CAGR of 14%

69%24%

4% 3%

$36b

Australia

Asia

Europe

Americas

Historical growth FY20 FUM by Region

Australia

Asia

Europe

Americas


Expand strategic investment partnerships globally

Europe Real estate FUM US$580b

Relationships with 15 of 39

Middle EastReal estate FUM US$78b


Asia Real estate FUM US$189b


Australia Real estate FUM US$57b


Canada Real estate FUM US$177b


United States Real estate FUM US$356b


Scale investments

• Existing scale investment partnerships with some of the world’s largest investors – CPP Investments, Mitsubishi Estate, ADIA, Aware Super, GIC, Future Fund, HKMA, QIA, NPS, APG, Host Plus

• Expect real estate allocations from the c.US$20 trillion of funds controlled by the world’s largest investors to rise over the coming decade

• Established relationships with 51 of top 100 existing investors across global platform

Strong relationships in Australia, Canada, Asia and Middle East

1. Source: IPE Real Assets, survey based on unlisted real estate exposures.

Opportunity to grow European and US relationships

Top 100 global real estate investors1


c.$20b

Growth of Investments platform globallyScale

Investments

• Continue to monetise secured development pipeline: – More than $50b of institutional investment grade assets anticipated to be created from secured pipeline1

– Target of $8b+ p.a. of development production activity to support ongoing strong FUM growth • Investments growth to be supplemented through new products and external market opportunities • Leverage strong existing relationships with global investors and broaden investor base • Expand product offering into select markets and sectors that leverage competitive edge • Increased global co-ordination: capital raising, product development, and strategy

Development pipeline to drive strong FUM growth

Scale global platform • Internal development pipeline:

– Greater use of larger programmatic investment partnerships – Residential for rent and commercial focus

• New products underpinned by competitive edge: – Establish Core and Value add products in Europe and Americas – Value add strategies in Australia and Asia

• External market acquisitions alongside investment partners• Opportunities arising from COVID-19 market related dislocation

Key sources of growth

1. Across FY16-20, c.80% of institutional investment grade product delivered has converted to FUM. 2. Remaining estimated development end value.

Investments strategy

Region Current state Future State

Australia Core Core / Core plus / Value add

Asia Core Core / Core plus / Value add

Europe Core Core / Core plus / Value add

Americas Value add Core / Core plus / Value add

>$50b1 institutional investment grade assets

Growth opportunity

FY20

$36b

FY10

$10b

c.$30b

Other growth

>$50b opportunity from Development pipeline

27%

52%

21%

$113b2

Resi-for-Sale

Resi-for-Rent

Commercial

Development pipeline ($b) FUM ($b)

Resi-for-Sale

Resi-for-Rent

Commercial

External opportunities

Mature Establishing


Delivery capability drives value Best practice construction

delivery

• Rich heritage with more than six decades of experience: – Global scale combined with local capability

• Project management capabilities critical for origination and delivery of urbanisation projects: – Fully integrated client proposition – Flexibility to adjust masterplan and delivery

• Project management, design and construction excellence across a range of sectors • Leading risk, safety, and sustainability processes and credentials

Strategic focus Lower contribution going forward

Differentiated capabilities Stable historical returns

• Target earnings contribution reduced in 2019 • Design and delivery capability:

– Strategy to deliver internal development pipeline and maintain steady backlog position – Focus on sector expertise, strong market positions and client relationships – Backlog position diversified by client, sector, geography and contract type

• Delivery model flexibility for internal development pipeline across gateway cities: – Key construction management capability to be controlled inhouse – Use of third party general contractors in selective international gateway cities

• Embed digital capability across delivery platform to drive productivity

1. Includes Engineering and Services businesses.

FY19+ (current)FY17-18

20-30%

FY10-16

30-40%

10-20%

FY20FY18

3.1%

FY19

2.2%

HY20

2.3%

1.3%

FY17

2.6%

FY16

2.4%1

Target range 2-3%

Construction EBITDA margin

Construction EBITDA mix targets

COVID-19 Impact


Our business decisions will be aligned to a world warmed by no more than 1.5ºC

Global leadership in environmental sustainability

Leadership in sustainability

To be responsible for creating $250m of measured social value

2000-2006 Australia’s first 5 Star Green Star building: 30 The Bond

First Australian property company to be listed in the Dow Jones Sustainability World Index

2007-2010 Secured Barangaroo South: targeting Australia’s first carbon neutral precinct

First property company as signatory to the UNPRI

2019 First globally in GRESB1, three other Lendlease managed funds ranked in global top 10

100% of total development pipeline achieved or targeting green ratings

First property company to join ResponsibleSteel Partnership

Lendlease Building Australia achieves net zero carbon neutrality

2020 Australia’s first carbon neutral precinct: Barangaroo South

Developed and published four climate scenarios in line with TCFD2

2017-2018APPF Commercial first 6 Star Green Star performance portfolio

First Singapore project to be awarded BCA Green Mark Platinum v2015: Paya Lebar Quarter

World’s first WELL Core and Shell Platinum project: International Towers Sydney

2011-2014Australia’s first 6 Star v2 Green Star building: Darling Quarter

Library at the Dock, first Public CLT building in Australia

Net zero carbon by

2025

Absolute zero carbon

by 2040

1. Global Real Estate Sustainability Benchmark. 2. Task Force on Climate Related Financial Disclosures.


21

Tarun GuptaGroup Chief Financial Officer

Financial Strategy

Chicago: Lakeshore East (Artist’s impression)


Our approachWe pursue an integrated business model – where two or more of the operating segments of Development, Construction and Investments engage on the same project – to create major precincts, new communities and important civic and social infrastructure.

We pursue an integrated business model – where two or more of the operating segments of Development, Construction and Investments engage on the same project – to create major precincts, new communities and important civic and social infrastructure.







Financial strategy to enhance strategic direction

• Greater operational leverage – larger programmatic investment partnerships • Capital efficient land management models• Flexible funding models for delivery

Accelerate development activity $8b+ p.a.

• Increase capital allocation to Investments >50% • Increase co-investment positions• Enhanced product offering

Strong growth across Investments platform globally

• Increase Investments earnings contribution from c.30% towards 40% • Shift to Operating profit as key earnings metric • Redirect >$1b of capital to focus areas of urbanisation and investments

Enhance annuity income and quality of earnings

Lendlease Market Briefing Strategy 22Lendlease Market Briefing Strategy 22


Development production to accelerate

Production target of $8b+ p.a.

• c.2.5x growth in development pipeline since FY15 • Production has averaged $4.3b in recent years2 • Targeting >80% increase on historical rates2 • c.90% of five year production has planning approval3 • Acceleration to drive returns and support growth in

FUM platform • Significant improvement in operating leverage expected:

– Production multiple on invested capital: – Historical average c.1.1 x – Target average >1.4x

• Increased production to be supported by larger programmatic investment partnerships

Conversion of development pipeline to drive >80% increase in production activity

Development pipeline ($b)

FY20

$113b

FY15

$45b

c.2.5x

1. Development production represents project value delivered during a financial year (on a revenue recognition basis, representing 100% of project value). 2. Across FY16-20. 3. Represents target production with masterplanning approval from secured pipeline.

FY16-20 ave. New target1

Forward looking production > 1.4x invested capital

Development production

Development production

$4.3b

$8.0b+

Invested capital

Invested capital

$4.0b

$5-6b

Strategic priority

Historical production c.1.1 x invested capital


Capital efficient business model

$1.7b of invested capital in land and infrastructure controls $113b development pipeline

FY20 development invested capital FY20 development pipeline – land payment structure

64%

36%

$4.8b

Production

Land and Infrastructure

71%

20%

9%

$113b

Land management

Staged payment

Upfront payment

>90% capital efficient

• Pricing at drawdown or completion of individual plots• Revenue share based on projected revenue• Staged infrastructure contributions to manage capital

at risk• Downside protection:

– Residual land value flexes – Share in upside value creation

• Land owner shares value capture of ‘placemaking’

Master plan flexibility

• Stage by stage drawdown of land• Pause development in uneconomic or weak market

conditions• Ability to remix master plan in partnership with

land owner• Milestones and sunsets structured to provide flexibility• Ability to enhance master plan yield in partnership

with land owner over time

Land management model

Production

Land and infrastructure

Land management

Staged payment

Upfront payment


>50%

Group capital to fund strategy

Group capital sufficient to fund business plan

• c.$12b of invested capital sufficient to fund Group strategy: – Accelerate delivery of development – Higher investments allocation

• Invested capital growth underpinned by retained earnings and additional debt capacity

• Redirection of >$1b of capital to focus areas: – Exit US Telecommunications (sale agreement signed) – Down weight Retirement – Exit Services – Other recycling initiatives

Indicative growth of invested capital base of c.$3-4b (next 5 years): Illustrative only

Development

• $5-6b of Development capital: – Supports $8b+ p.a. in production – Production >1.4x invested capital, higher operating leverage (c.1.1x in recent years3)

– Investment partners to support acceleration

Investments

• $6-7b of Investments capital, c.$3b increase

• Scale Investments platform globally via capital reweighting towards >50%

– Co-investment stakes to increase from current c.5% of FUM

Retained earnings1

c.$2b

<50%

Implied invested capital profile

c.$12b

56%

44%

FY20 segment capital

$8.5b

c.$3b incremental capital to Investments segment

1. Analysis is illustrative only. Assumes delivery of Operating ROE at mid-point of target range (i.e. 9.5%, refer slide 32) applied to Securityholder equity base, with distributions at mid-point of target range (i.e. 50%). 2. Reflects c.$1.2b equity raise completed in FY20, assumes completion of Engineering divestment, and application of mid-point of target gearing range (i.e. 15%). 3. Across FY16-20.

Development

Investments

c.$1.5b

Additional debt capacity2


Partnering approach evolving to accelerate delivery

• Historically investment partners introduced on a ‘single asset’ basis

• To support accelerated pace of development production and FUM growth, strategic priority to result in greater use of programmatic and partnership execution models

• Key features of these capital execution models include: – Capital raising efficiency through pre-agreement of terms – Security and predictability of future capital – Visibility and certainty of future annuity income and FUM growth

– Aligns with larger capital appetite of potential investment partners across global strategic relationships

Investment partner execution models

Historical approach Greater future utilisation

Model Single asset basis Programmatic Partnership

StructureInvestment partner

secured as individual buildings are de-risked

Investment partner secured for initial phase

with key terms agreed for future phases

Investment partner secured for whole project

Negotiation basis Repeated by building Entire project at start Entire project at start

Example projects Victoria Harbour (Commercial) Milano Santa Giulia Paya Lebar Quarter

Scale benefits

Velocity

Partner appetite

Certainty

Strategic priority - utilise mix of all models


Potential Dev. pro�t +revaluation

Dev. pro�t on retained stake

Development management fees

Lendlease co-investmentEnter delivery

FUM fees

FUM fees

Projectcapital

FUM

Lendlease capital

Performance fees

Investment partner capital

Planning Development Investment

CA

PIT

AL

TIME

Investment partner funding model – exampleExample assumes Lendlease retains 25% stake during Development phase

Overview• Introduce investment partner prior to entering delivery:

– Profit upfront on sell-down and potential revaluation of retained stake under single asset and programmatic models

– Typically no or limited profit upfront under partnership model approach where Lendlease and partner originate the deal together

• Under all models, potential for Lendlease to earn development management fee and FUM fees during delivery

• Typically small Lendlease co-investment post-completion and earn FUM fees

• Structure adopted on: – International Towers Sydney, Barangaroo (commercial): Single asset model

– International Quarter London (commercial): Single asset model

– Milano Santa Giulia: Programmatic model – Paya Lebar Quarter: Partnership model

Case study: International Towers Sydney, Barangaroo South (Towers 2 & 3) • Secured in 2009 to regenerate large mixed use precinct • Concept plan approved 2010• Tenant pre-commitment of c.70% across two towers• c.$2b Lendlease International Towers Sydney Trust

(LLITST) created to forward fund the towers in 2012: – Investment partners 75% – Lendlease 25% co-investment

• Profit streams through the lifecycle of project: – Upfront sell-down profit – Development management fees – Performance fees – FUM fees for managing LLITST

• Investment partners received attractive returns: – Value from additional leasing – Above market rents through placemaking – Cap rate compression on completion of towers

• 2020 – 10 years after securing the project: – All development profit converted to cash – Co-investment 3.9% (c.$150m) – FUM of $4.8b


Earnings quality to improve

• Group to report Operating profit as primary earnings metric going forward:

– Statutory profit excluding Investments segment revaluations1 • Continue to report revaluations in the Development segment,

converts to cash over time• Clearer measure of profitability:

– Improves quality of reported earnings – Supports focus on underlying operating cash conversion – Comparable to key real estate groups

• Drives management behaviour: – Decision making focused on underlying fundamentals – More controllable and transparent – Employee incentives aligned to value creation

Operating profit – key earnings metric

Operating profit

$1.2b

Statutory profit

$1.3b

45%

19%

36%

49%

20%

31%

Operating profitStatutory profit

Group Operating EBITDA (FY16-20 ave.)

Operating profit

7.7%

Statutory profit

10.2%

Investments ROIC (FY16-20 ave.)

EBITDA mix (FY16-20 ave.)

Operating profit

9.4%

Statutory profit

10.8%

Group ROE (FY16-20 ave.)2

1. Refer appendix for detailed definition and reconciliation. 2. Analysis excludes Non-core segment in FY17-20 (Engineering and Services businesses).

Development Construction Investments

Impact of revaluations1


Distribution policy

Previous New

Statutory Operating

Payout ratio 40-60% 40-60%3

Capital allocation

Previous New

Development 40-60% 40-60% (<50%)

Investments 40-60% 40-60% (>50%)

Australia 50-70% 40-60%

International (per Region) 5-20% 10-25%

Portfolio Management Framework

Revised targets

Maximising long term

securityholder value

1

2

3

45

Business model – EBITDA mix

Previous New

Statutory Operating

Development 40-50% 40-50%

Construction 10-20% 10-20%

Investments 35-45% 35-45%

Target returns

Previous New

Development ROIC 10-13% 10-13%

Investments ROIC 8-11% 6-9%3

Construction Margin 2-3% 2-3%

Group ROE 10-14% 8-11%3

1. Investments segment capital mix c.44% as at FY20. 2. Investments EBITDA mix average of c.31% (Operating profit basis) across FY16-20. 3. Operating profit based measure.

Capital structure

Previous New

Gearing 10-20% 10-20%

Investment grade credit rating

Contribution to rise c.10%2

Shift from lower to upper end1

No change

Change


Portfolio Management Framework Capital allocation

• Targeting Investments capital allocation reweighting to upper end for higher annuity earnings

• Medium term target supports growth across Investments platform globally

• Investments growth through external market opportunities in addition to monetisation of development pipeline

• Higher target allocation to International regions • Provides flexibility in delivery of

development pipeline1

• Development pipeline c.75% international

Reweight to Investments and International

Capital allocation – Segment (target range)

Previous New FY20

Development 40-60% 40-60% 56%

Investments 40-60% 40-60% 44%

Capital allocation – Segment (medium term target)

New Target reweighting

Development 40-60% <50%

Investments 40-60% >50%

Capital allocation – Regional (target range)

Previous New FY20

Australia 50-70% 40-60% 42%

Asia 5-20% 10-25% 17%

Europe 5-20% 10-25% 22%

Americas 5-20% 10-25% 19%

Strategic priority

1

1. Since PMF establishment, the international composition of the Group’s development pipeline has grown from c.40% in FY16 to c.75% in FY20.


Portfolio Management Framework EBITDA mix

Higher weighting to Investments and annuity earnings

Key changes to EBITDA mix

• Segment earnings mix targets based on Operating profit going forward • Investments effective target range +c.5% under new target mix • Mid point of target range represents c.10% increase in EBITDA contribution1

• Medium term capital reweighting towards Investments: – Higher Investments earnings mix and annuity earnings – Improved earnings quality

Key drivers of Investments growth

• More than $50b in institutional investment grade assets to be created from development pipeline

• Co-investment stakes to increase from current c.5% of FUM • Launch of new Core, Core plus and Value add products where competitive

edge is strongest • Increased focus on external market opportunities alongside investment partners • Explore potential opportunities that may emerge from current market volatility • Targeting increased FUM in Europe and Americas

Business model – EBITDA mix

Previous (Statutory profit)

New (Operating profit)

FY16-20 ave. (Operating profit)

Development 40-50% 40-50% 49%

Construction 10-20% 10-20% 20%

Investments 35-45% 35-45% 31%

2

Strategic priority

1. Compared to FY16-20 average.


Portfolio Managment Framework

Portfolio Management Framework Target returns

Target returns – reflects shift to Operating profit and Investments reweightingPrevious

(Statutory profit)New

(Operating profit)FY16-20 ave.

(Operating profit)

Development ROIC 10-13% 10-13% 10.4%

Investments ROIC 8-11% 6-9% 7.7%

Construction EBITDA Margin 2-3% 2-3% 2.4%

Group ROE 10-14% 8-11% 9.4%1

1. Refer appendix for detailed reconciliation. Analysis excludes Non-core segment in FY17-20 (Engineering and Services businesses).

No change to underlying hurdle rates

Target Investments ROIC Reconciliation of change in Group ROE target

Impact from Operating profit

New (Operating profit basis)

c.1% c.1-2%8-11%

Previous (Statutory profit basis)

Impact from Investments

strategic priority

10-14%

Impact of Operating profit

Impact of target reweighting to the

Investments segment

No change to underlying hurdle

rates despite decline in Cost of Equity

New (Operating profit basis)

Previous (Statutory profit basis)

8-11%

6-9%

Impact of Operating profit reflecting exclusion

of revaluations

No change to underlying hurdle rates

3


Portfolio Management Framework Capital structure and Distribution policy

Capital structure – no change to current target

Previous New FY16-20 ave.

Gearing 10-20% 10-20% 8.5%

Investment grade credit rating

Distribution policy – based on Operating profit

Previous (Statutory profit)

New (Operating profit)

Payout ratio 40-60% 40-60%

4

5

• Key capital structure objectives:

– Investment grade credit rating – Sufficient buffer to manage cycles and risk – Minimise Weighted Average Cost of Capital

• Capital structure to be reassessed over the medium term as the Group re-weights towards Investments

• Distribution policy based on Operating profit going forward• More predictable distributions • No change to target payout range (40-60%)• Closer alignment to underlying operating cashflow• Increased retained earnings will support future growth

Strategy highlights

Leverage competitive edge

Global placemaking

End to end capability

Proven track record


Scale investments

Improve earnings qualityHigher annuity earnings | Programmatic investment partnerships | Operating profit focus

$8+ billion of production p.a. uplift >80% on historical rates

c.90% of production for next 5 years planning

approved

$50+ billion FUM opportunity from secured development pipeline

New products and external opportunities

Higher capital allocation

Increased focus

Prioritise capital and people resources to Development

and Investments focus areas


Appendix

Chicago: Southbank

Lendlease Strategy Update 31 August 2020

Major urbanisation projects summaryTo view Lendlease’s major urbanisation projects summary presentation, please click here.

1. Includes forecast commencement dates, subject to change in delivery program.

2. Based on expected completion date of underlying buildings, subject to change in delivery program.

3. Floor space measured as Net Lettable Area. 4. Remaining estimated development end value. 5. Formerly Circular Quay Tower.6. Formerly The Timberyard, Deptford.7. Commercial in confidence.8. Planning approval obtained for Milano Santa Giulia South.9. Refers to masterplanning approval.

Region ProjectProject secured

Delivery commenced1

Completion date2

Residential backlog units

Commercial backlog sqm ‘0003

Remaining end value ($b)4

Land payment model

Planning achieved9

Australia Barangaroo South, Sydney FY10 FY12 FY26 849 1 4.1 Staged payment Y

Brisbane Showgrounds FY09 FY11 FY33 2,275 67 2.2 Land management Y

Melbourne Quarter FY13 FY16 FY26 1,186 124 2.0 Land management Y

Victoria Harbour, Melbourne FY01 FY04 FY27 2,043 - 2.0 Land management Y

Sydney Place5 FY12 FY17 FY22 - 59 1.9 Upfront payment Y

Waterbank, Perth FY13 FY21 FY29 1,308 12 1.4 Land management Y

Victoria Cross over station development, Sydney FY19 FY20 FY25 - 58 1.2 Staged payment Y

Asia The Exchange TRX, Kuala Lumpur FY14 FY17 FY28 2,326 168 3.6 Staged payment Y

Europe Thamesmead Waterfront, London FY20 FY25 FY40+ 11,500 82 15.1 Land management N

Euston Station, London FY18 FY26 FY40+ 2,000 400 10.9 Land management N

Silvertown Quays, London FY18 FY21 FY33 3,000 440 6.6 Land management Y

Milano Santa Giulia FY18 FY20 FY34 2,558 232 3.8 Land management N8

Milan Innovation District FY19 FY21 FY32 1,125 338 3.7 Staged payment Y

International Quarter London FY10 FY14 FY29 351 212 3.4 Land management Y

Elephant Park, London FY10 FY12 FY26 1,775 50 2.3 Staged payment Y

High Road West, London FY18 FY22 FY30 2,501 14 2.1 Land management N

Deptford Landings6, London FY14 FY16 FY28 1,300 9 1.4 Upfront payment Y

Americas San Francisco Bay Area project FY20 FY22 FY37 15,000 n/a7 21.8 Land management N

Lakeshore East, Chicago FY19 FY20 FY26 1,197 2 2.2 Staged payment Y

Southbank, Chicago FY15 FY16 FY27 1,526 24 1.9 Upfront payment Y

30 Van Ness, San Francisco FY17 FY21 FY25 333 25 1.5 Upfront payment Y

Other urbanisation projects 2,072 98 3.7

Total urbanisation 56,225 2,415 98.8


https://www.lendlease.com/au/-/media/llcom/investor-relations/presentations/2020/lendlease_fy20-major-urbanisation-projects_final.pdf

Reconciliation of Operating profit1,2 DefinitionOperating profit adjusts Statutory earnings for:• Property valuation related movements:

– Fair value adjustments on investment properties and other financial assets in the Investments segment

– Fair value adjustments attributable to investment properties in associates and JVs after tax in the Investments segment

• Other non-cash adjustments or non-recurring items

– Impairment losses relating to Goodwill and other Intangibles

Reconciliation of Statutory to Operating earnings (FY16-20) ($m)

FY16 FY17 FY18 FY19 FY20 Average

Statutory EBITDA2 1,246 1,319 1,638 1,493 563 1,252

Add / (less): Investment properties revaluations3 19 4 (10) (37) 26 -

Add / (less): Financial assets revaluations3 (16) (54) (259) (106) 16 (84)

Add / (less): Equity accounted investments revaluations3 (32) (12) (31) (68) 105 (8)

Add / (less): Impairment losses relating to intangibles - - - - 13 3

Operating EBITDA 1,217 1,257 1,338 1,282 723 1,163

Less: Group Services and Treasury (191) (184) (176) (165) (158) (175)

Group Operating EBITDA 1,026 1,073 1,163 1,117 565 988

Group Operating PAT 655 664 708 632 206 573

Add / (less): Post tax adjustments 43 61 252 172 (110) 84

Group Statutory PAT 698 726 960 804 96 657

1. The reconciliation of Operating profit is unaudited and the tax impact of adjustments has been estimated by applying weighted average tax rates. 2. Analysis excludes Non-core segment in FY17-20 (Engineering and Services businesses). 3. Assets in the Investments segment only.


• Population of 9 million• Premier global city• Property fundamentals:

– c.1,800,000 apartment stock, c.19,000 estimated annual apartment completions over last five years – c.14 million sqm office stock, c.313,000 sqm completed in the last 12 months (Central London) – c.37 million sqm office stock, c. 375,000 sqm completed in the last 12 months (Greater London)

• Average transaction volume for all property types over last three years: – Central London c.$US20b p.a., Greater London c.$US30b p.a.

Market• Residential markets in London has been consistently undersupplied. Household growth of c.38,400 p.a. projected

over next decade compares to completions of c.20,600 p.a. over the last decade with a maximum in any one year of c.24,000

• Strong residential for rent thematic with an ongoing decline in home ownership rate – 52% from a peak of 60% at the turn of the millennium. The proportion renting privately has risen from 15% to 26% since 2000

• Office take up remained resilient, heavily supported by the business services sector, TMT (technology, media & telecommunications), and co-working operators expanding or entering the market, albeit at a slower rate. Rental growth was stronger in prime markets with the war on talent leading many occupiers to trade-up on the quality of their office space in a consolidation / relocation play

Lendlease pipeline• Seven major urbanisation projects – $41.9b estimated development end value• c.16,600 residential for sale units• c.5,900 residential for rent units• c.1.2m sqm commercial

Gateway city overview

Source: ONS, PMA, CoStar, Real Capital Analytics www.rcanalytics.com, Lendlease Group Research.

LondonLendlease Market Briefing Strategy 4


• Population of 4.7 million• High growth market underpinned by technology sector• Property fundamentals:

– c.396,000 multi-family and condo stock, c.6,100 annual completions over the last five years – c.27 million sqm office stock, c.172,000 sqm net completions in the last 12 months

• Average transaction volume for all property types over last three years: – San Francisco c.$US30b p.a.1

Market• Property market fundamentals are supported by a strong economy, flowing through to the household sector.

In the five years to 2019, employment grew by 2.8% p.a. with earnings growth of 4.2% p.a. augmented by 6% p.a. household income growth

• San Francisco is a tight, supply constrained residential market. This has led to affordability challenges with the mortgage affordability ratio at c.40% (median mortgage payment to income)

• This has led to a high proportion of renters – 47% share of total households renting vs. 53% owner occupiers across the metro area

• Office demand in San Francisco has been buoyant during the past five years with annual net absorption of c.297,000 sqm p.a. (to 2019) while vacancy has averaged 7.4% over the past five years to 2019

Lendlease pipeline• Two major urbanisation projects – $23.4b remaining estimated development end value• c.4,700 residential for sale units• c.10,700 residential for rent units• c.25k sqm commercial

1. Note: San Franciso data does not include San Jose except for average transaction volume for property. Apartment and office market size includes San Francisco and East Bay markets. Economic, demographic and property market metrics are from different sources and their geographic definitions of the metro areas or markets may differ.

Source: US Census Bureau, Bureau of Labor Statistics, IHS, CoStar, Real Capital Analytics www.rcanalytics.com, US Fed Reserve, Zillow, Lendlease Group Research.

San FranciscoLendlease Market Briefing Strategy 5


• Population of 3.3 million• Key contributor to Italian economy, underpinned by high value add industries• Property fundamentals:

– c.1,300,000 apartment stock – c.12.5 million sqm office stock, c.139,000 sqm completed in the last 12 months

• Average transaction volume for all property types over last three years: – Milan c.US$4.7b p.a.

Market• Milan has a larger share of its economy in faster-growing industries than the rest of Italy. These include financial

and business services (37%) and transport, storage and ICT services (12%). Milan has seen population growth of 0.5% p.a. for the last 5 years (c.16,600 people p.a.) vs. national falls of 0.2% p.a.

• Office vacancy remains high due to the large share of stock functionally obsolete and old. Lower vacancy and higher rents are being achieved in Porta Nuova and the CBD as tenants opt for new, modern and efficient buildings

• Moderate mortgage affordability and positive employment growth have supported house prices and residential transaction volumes. The average mortgage repayment accounts for 31% of household incomes, in line with international norms, although deposit constraints remain. The average mortgage rate on new loans is 1.3%, a record low

• Milan accounted for over 40% of total Italian institutional property transactions during last 3 years

Lendlease pipeline• Two major urbanisation projects – $7.5b remaining estimated development end value• c.2,600 residential for sale units• c.1,100 residential for rent units • c.570k sqm commercial

Source: IStat, CBRE, Real Capital Analytics www.rcanalytics.com, Oxford Economics, Lendlease Group Research.

MilanLendlease Market Briefing Strategy 6


• Population of 5.3 million• Australia’s financial centre• Property fundamentals:

– c.980,000 detached house stock, c.17,000 estimated annual completions1 over last five years – c.550,000 apartment stock, c.28,000 estimated annual completions1 over last five years – c.5 million sqm CBD office stock, c.73,000 sqm completed in the last 12 months

• Average transaction volume for all property types over last three years: – Sydney c.US$15b p.a.

Market• There is higher density in the Sydney residential market vs. the rest of nation. Apartments accounted for two-

thirds (66%) of dwelling approvals in past five years vs. 47% nationwide. This has underpinned c.28,000 apartment completions annually in Sydney over this period

• There has been expansion of the CBD Office footprint to the West and through Southern fringe with the technology sector becoming a key occupier (20% of leasing deals in 2019). Coming phases of CBD development to benefit from changes to height restrictions enabling construction of super towers

• Significant infrastructure investment (roads, rail & airports) in Sydney – c.$47b over 10 years to 2025 – creates opportunities for new property sector hubs as connectivity increases (e.g. Sydney Airport, North Sydney)

Lendlease pipeline• Three major urbanisation projects – $7.2b remaining estimated development end value• c.850 residential for sale units• c.117k sqm commercial

1. Annual completions are estimated by assuming 2 year lag from apartment approval and 1 year lag from houses approval. Source: ABS, JLL, Knight Frank, Real Capital Analytics www.rcanalytics.com, Lendlease Group Research.

SydneyLendlease Market Briefing Strategy 7


• Population of 9.5 million• Scale market at the epicentre of the US mid-west• Property fundamentals:

– c.661,000 multi-family and condo stock, c.8,600 annual completions in past five years – c.46.0 million sqm office stock, c.447,000 sqm net completions in the last 12 months

• Average transaction volume for all property types over last three years: – Chicago c.US$16.4b p.a.

Market• The revitalisation of the inner city is a key trend in Chicago. There has been a large number of corporations

relocating from the suburbs to the inner urban areas, including McDonalds, Kraft Heinz and Motorola Solutions• The multi-family market in downtown Chicago has roughly doubled in size from c.25,000 to c.50,000 units over

the past decade, compared to 14% growth for the broader Chicago market. Chicago as a major urban centre supports apartment completions of c.8,600 p.a. Around three quarters of the apartment stock in Chicago are multi-family rentals

• Chicago is a more affordable market which underpins housing demand over the longer term. Mortgage affordability is an attractive 14% (median mortgage payment to income). Robust household income growth (3.4% p.a. in 5 years to 2019) provides additional support

Lendlease pipeline• Two major urbanisation projects – $4.1b remaining estimated development end value• c.1,400 residential for sale units• c.1,300 residential for rent units• c.25k sqm commercial

Note: Economic, demographic and property market metrics are from different sources and their geographic definitions of the metro areas or markets may differ.Source: US Census Bureau, IHS, CoStar, Real Capital Analytics www.rcanalytics.com, US Fed Reserve, Zillow, Lendlease Group Research.

ChicagoLendlease Market Briefing Strategy 8


• Population of 5.1 million• Fastest population growth in Australia and across Lendlease Gateway Cities• Property fundamentals:

– c.1,150,000 detached house stock, c.26,000 estimated annual completions1 over last five years – c.300,000 apartment stock, c.19,000 estimated annual completions1 over last five years – c.5 million sqm CBD office stock, c.159,000 sqm completed in the last 12 months

• Average transaction volume for all property types over last three years: – Melbourne c.US$7.8b p.a.

Market• Strong population growth (2.6% p.a. past 5 years) underpins demand for housing, both in the inner city and on the

city fringe. Dwelling approvals in Melbourne have increased by 24% over the past 5 years (2015-19 vs. 2010-14)• The Melbourne office market has seen healthy take-up of space, given a backdrop of a strong and growing

economy. Over the 5 years to end 2019, net absorption as a proportion of office stock was 2.5% p.a.• Relative affordability is a key positive for Melbourne vs. Sydney in attracting households and businesses to the

city. Dwelling prices in Melbourne are 16% cheaper than Sydney, while rents are 13% lower. For CBD office, gross effective Grade A rents are 43% lower compared to Sydney

Lendlease pipeline• Two major urbanisation projects – $4.1b remaining estimated development end value• c.3,200 residential for sale units• c.124k sqm commercial

1. Annual completions are estimated by assuming 2 year lag from apartment approval and 1 year lag from houses approval. Source: ABS, JLL, Real Capital Analytics www.rcanalytics.com, Corelogic, Lendlease Group Research.

MelbourneLendlease Market Briefing Strategy 9


• Population of 8.3 million• Young and growing population with competitive workforce• Property fundamentals:

– c.750,000 Condo and Serviced Apartment stock, c.26,000 annual Condo and Serviced Apartments completions in last five years

– c.880,000 detached stock, c.6,500 annual detached completions over last five years – c.9.1 million sqm office stock, c.270,000 sqm completed in the last 12 months

• Average transaction volume for all property types over last three years: – Kuala Lumpur c.US$2.3b p.a.

Market• The underlying demographics are favourable. 52% of the Malaysian population is aged under 30, while Greater KL

as the country’s focal point and capital, has seen its population grow at 1.3% p.a. in the past five years. Household formation in Greater KL has been growing at even faster rate of 2.2% p.a. as nuclearization of households play out

• Strong household income growth underpins household spending and housing demand. In Greater KL monthly urban incomes have increased by 5-7% p.a. over the past five years to 2019

• Employment growth was 2.8% p.a. in Greater KL over the 5 years to 2019, along with 9% p.a. retail sales growth across Malaysia in the past five years. These are some of the strongest growth rates in the Asia-Pacific

Lendlease pipeline• The Exchange TRX – $3.6b estimated remaining development end value• c.2,300 residential for sale units• c.168k sqm commercial / retail

Source: ABS, JLL, Real Capital Analytics www.rcanalytics.com, CEIC, NAPIC, Lendlease Group Research.

Kuala LumpurLendlease Market Briefing Strategy 10


• Population of 2.5 million• Combination of affordability and strong population growth• Property fundamentals:

– c.640,000 house stock, c.2,000 estimated annual completions1 over last five years – c.130,000 apartment stock, c.9,500 estimated annual completions1 over last five years – c.2.3 million sqm CBD office stock, c.56,000 sqm completed in the last 12 months

• Average transaction volume for all property types over last three years: – Brisbane c.US$4.6b p.a.

Market• Strong net interstate migration (c.19k p.a. for Qld) has underpinned Greater Brisbane’s population growth of 2.0%

p.a. over the five years to 2019• Brisbane’s residential market is relatively affordable with median dwelling prices 23% below the capital city

average in 2019. Median residential rents were 7% below the capital city average• The Brisbane office market has seen solid take-up of space, underpinned by demand from the public sector. Over

the 5 years to end 2019, net absorption as % of office stock was 1.6% p.a.

Lendlease pipeline• Brisbane Showgrounds – $2.2b estimated remaining development end value• c.2,300 residential for sale units• c.67k sqm commercial

1. Annual completions are estimated by assuming 2 year lag from apartment approval and 1 year lag from houses approval.Source: ABS, JLL, Real Capital Analytics www.rcanalytics.com, Corelogic, Lendlease Group Research.

BrisbaneLendlease Market Briefing Strategy 11

• Population of 2.1 million• Resilience of resources sector drives local market• Property fundamentals:

– c.570,000 house stock, c.15,000 estimated annual completions1 over last five years – c.60,000 apartment stock, c.4,000 estimated annual completions1 over last five years – c.1.8 million sqm CBD office stock, 0 sqm completed in the last 12 months

• Average transaction volume for all property types over last three years: – Perth c.US$1.5b p.a.

Market• Strong economic growth in Western Australia over the past decade (3.6% p.a.), underpinned by resource sector

strength, has attracted workers to Perth with population growth of 1.8% p.a. over the 10 years to 2019• There is a high home ownership rate in Perth – 70% vs. national average of 65.5% (2016)• Household incomes are also 14% higher than the national average, reflecting higher participation and value added

jobs• Perth is primarily a detached housing market with detached accounting for 73% of dwelling approvals over the past

five years (2015-19) vs. 54% nationwide

Lendlease pipeline• Waterbank – $1.4b estimated remaining development end value• c.1,300 residential for sale units• c.12k sqm commercial

1. Annual completions are estimated by assuming 2 year lag from apartment approval and 1 year lag from houses approval.Source: ABS, JLL, Real Capital Analytics www.rcanalytics.com, Corelogic, Lendlease Group Research.


PerthLendlease Market Briefing Strategy 12


• Population of 19.2 million1

• Global business centre• Property fundamentals:

– c.1,600,000 multi-family and condo stock2, c.24,000 annual completions in past five years – c.88 million sqm office stock, c.464,000 sqm net completions in the last 12 months

• Average transaction volume for all property types over last three years: – New York c.US$50b p.a.

Market• Scale benefits of New York city market sees significant level of apartment completions (c.24,000 p.a. over past

five years), more than double the level seen in other key urban markets, including Chicago, San Francisco and Boston• High income levels (with growth of 3.8% p.a. in 5 years to 2019) but affordability challenges persist in New York

with the affordability ratio (mortgage payments to income) at 25% for the metro and much higher in inner urban areas. This underpins strong demand for multi-family rental product

• New York condo market challenges have been worst at the high / luxury end, dependent on ultra-wealthy and foreign buyers. Liquidity is better at relatively lower price points

Lendlease pipeline• 100 Claremont avenue – $700m estimated remaining development end value• c.165 residential for sale units

1. Greater New York Metropolitan Area Population; 2. Relates to CoStar’s New York Metro Market size; Note: Co-ops not included in apartment market statistics. Economic, demographic and property market metrics are from different sources and their geographic definitions of the metro areas / markets differ.

Source: US Census Bureau, IHS, CoStar, Real Capital Analytics www.rcanalytics.com, US Fed Reserve, Zillow, Lendlease Group Research.

New YorkLendlease Market Briefing Strategy 13


• Population of 4.9 million• Strong growing city, benefiting from higher education and technology exposure• Property fundamentals:

– c.264,000 multi-family and condo stock, c.8,600 annual completions in past five years – c.33.0 million sqm office stock, c.250,000 sqm net completions in the last 12 months

• Average transaction volume for all property types over last three years: – Boston c.US$14.7b p.a.

Market• Boston has seen strong economic performance, given impetus from the technology sector and R&D related to

nearby Ivy league colleges. This generates above-average employment growth (1.8% p.a. for 5 years to 2019), wages growth (3.4% p.a. for 5 years to 2019) and household income (3.8% p.a. in 5 years to 2019)

• Boston has seen solid house price growth of 26% (4.7% p.a.) over the 5 years to Dec-19• The multi-family rental market has experienced strong growth, increasing in size by 31% in the 10 years to Dec-19

Lendlease pipeline• Clippership Wharf – $200m estimated remaining development end value• c.110 residential for sale units

Note: Economic, demographic and property market metrics are from different sources and their geographic definitions of the metro areas or markets may differ.Source: US Census Bureau, IHS, CoStar, Real Capital Analytics www.rcanalytics.com, US Fed Reserve, Zillow, Lendlease Group Research.

BostonLendlease Market Briefing Strategy 14


• Population of 24.3 million• Landmark Asian city and focal point for Asian regional trade• Property fundamentals:

– c.7,700,000 residential stock1, c.200,000 annual completions1 over last five years – c.175,000 senior living units stock2, c.7,000 estimated annual senior living units additions2

• Average transaction volume for all property types over last three years: – Shanghai c.US$42.5b p.a.

Market• Ageing population in Shanghai, with those over the age of 60+ growing at 5.4% p.a. over the last 5 years vs. 0.2%

p.a. for total Shanghai population• There are currently c.5.3 million people (registered population) aged over 60 in Shanghai, providing a potentially

deep pool for the emerging retirement living sector• Care for the elderly structurally changing towards operator provided care. Traditionally, care is provided for

by children, however given the 1 child policy and an increasing number of young workers seeking work outside their home town, care for the elderly has become increasingly difficult and providing a structural backdrop for the continued ascendancy of the sector

Lendlease pipeline• Ardor Gardens – $500m estimated remaining development end value• c.900 residential for sale units

1. Derived from total floor space in square meters and assuming an average unit size of 81 sqm (which includes the common area). 2. Senior living units proxied by non profit beds (actual) + for profit institutions beds (estimated).Source: CEIC, Shanghai Govt, DBS, Real Capital Analytics www.rcanalytics.com, Lendlease Group Research.

ShanghaiLendlease Market Briefing Strategy 15

50 years’ experience, over 50 communities developed

Strategy• Deliver market leading offering for our customers, underpinned by a scale national platform• Secure additional sites in key growth corridors• Unlock value at various phases – acquisition, rezoning, planning and delivery

Competitive advantage• Scale• Track record • Exceptional customer insights and service• Place and product leadership • Community partnerships

Key metrics• $13.6b pipeline• 16 projects across five states• c.46,000 lot pipeline• Target settlements: 3,000 – 4,000 lots p.a.

Communities

Northern Territory

Tasmania

South Australiac.50 land units• Blakes Crossing

Victoriac.6,800 lands units• Atherstone• Aurora• Harpley

New South Walesc.7,350 land units• Bingara Gorge• Calderwood Valley• Figtree Hill• Jordan Springs• The New Rouse Hill• Kings Central

Western Australiac.1,650 land units• Alkimos Beach• Alkimos Vista

Queenslandc.30,150 land units• Elliot Springs• Springfield Lakes• Yarrabilba• Shoreline


Disclaimer

This document has been prepared and is issued by Lendlease Corporation Limited (ACN 000 226 228) (Lendlease) in good faith. Neither Lendlease (including any of its controlled entities), nor Lendlease Trust (together referred to as the Lendlease Group) makes any representation or warranty, express or implied, as to the accuracy, completeness, adequacy or reliability of any statements, estimates, opinions or other information contained in this document (any of which may change without notice). To the maximum extent permitted by law, Lendlease, the Lendlease Group and their respective directors, officers, employees and agents disclaim all liability and responsibility (including without limitation any liability arising from fault or negligence) for any direct or indirect loss or damage which may be suffered, howsoever arising, through use or reliance on anything contained in or omitted from this document.

This document has been prepared without regard to the specific investment objectives, financial situation or needs of any recipient of this presentation. Each recipient should consult with, and rely solely upon, their own legal, tax, business and/or financial advisors in connection with any decision made in relation to the information contained in this presentation.

Prospective financial information and forward looking statements, have been based on current expectations about future events and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from the expectations expressed in or implied from such information or statements.

All figures are in AUD unless otherwise stated.


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