Athletes' Village builder Lend Lease's full-year results this morning were rounded off with a management slide show tagged "Cautious but Confident".
It's hardly a surprise given the way that the business has extricated itself wisely from risky equity positions on major property developments while picking up lucrative fee paying contracts on building out schemes - most notably of course on the Athletes' Village.
The group saw a 29% fall in operating profit to A$307.5m (£154m) in the year to 30 June, hit by writedowns and a failure to meet its asset sales targets. It reported writedowns of A$179.3m for the second half.
On the plus side however its European contract management and construction business saw profits rise to A$39m from A$21m, with the key contributors the Athletes' Village, Media City and BP Global Alliance.
All of which brings me to the most interesting and confusing line Olympics-wise. Lend Lease was of course selected as development partner, not just for the Athletes' Village, but for all of the post Olympics work on the giant Stratford City site.
I reported around about this time last year that London & Continental Railways would drop Lend Lease as its development partner on the remainder if it does not produce funding by a July 2010 deadline.
Lend Lease signed up to build 1,500 homes, more than 1m sq ft of offices and 400,000 sq ft of retail and leisure on this part of the 130-acre site.
Clearly earlier this year Lend Lease was unable to reach agreement on financing the athletes' village. Here is the group's comment today on the situation:
"In August 2008, Lend Lease was appointed as Development and Construction Manager for the first phase of Stratford City, a mixed-use development on 54 hectares of land with an existing planning consent of 9.4 million square feet. This first phase involves building the Athletes' Village for the London 2012 Olympic and Paralympic Games for the Olympic Delivery Authority (ODA). Over the past two years, Lend Lease has been in negotiations with the ODA and London and Continental Railways on the terms of the development and financing of the whole of Stratford City. These negotiations ended in May 2009 when the ODA decided to fund the project itself, having assessed Lend Lease's financial offer. Lend Lease continues to act as Development and Construction Manager."
It's a confusing paragraph. Does it mean Lend Lease has ended talks to finance just the athletes' village, or the entire site? Will certainly try to find out and report back.
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