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Development and construction giant Lendlease Group (ASX: LLC) has reached an agreement with Japan's Sojitz Corporation to sell its stake in Capella Capital for $235 million, adding to a raft of capital recycling initiatives including sales of its $1 billion master-planned communities and US military housing business.
Capella Capital was formed as a partnership between Lendlease and senior Capella management in 2009, and has become a leading infrastructure investor in Australia.
Capella Capital has taken part in consortia behind such projects as the Frankston Hospital Redevelopment, the Ravenhall Prison, the Darwin Marine Supply Base, the Sydney Light Rail, and the Sydney International Convention, Exhibition and Entertainment Precinct.
Under the terms of the sale, Sojitz will acquire Lendlease’s interests in Capella’s infrastructure platform comprising asset origination, asset management and principal equity investments, with approximately 80 Capella employees to transfer with the sale.
Lendlease plans to continue working closely with Capella to complete projects currently in delivery with no impacts expected as a consequence of the sale.
Upon completion of the sale, expected by the end of FY25 provided it receives Foreign Investment Review Board (FIRB) consent, both parties have agreed to continue to cooperate on current and future Capella projects where Lendlease has capability, such as construction or development services.
Lendlease has also entered into a limited transitional services agreement with Sojitz to ensure a smooth ownership transfer and to prioritise its client relationships.
The group has also confirmed the completion of a $516m (US$320m) sale of its US Military Housing business to Omaha Beach Investment Holdings, an entity managed by Guggenheim Partners Investment Management.
The latest news takes Lendlease's announced transactions under for capital recycling to $2.2 billion.
"The announced Capella Capital and Military Housing divestments progress our strategy to simplify the Group, as we work towards becoming less complex, more focused and ultimately more profitable," says Lendlease CEO Tony Lombardo.
"The sale of Capella Capital accelerates the release of capital while also reducing the Group’s future funding commitments, allowing Lendlease to focus on its core Australian operations and international Investments platform."
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