Lendlease has held on to its Australian Prime Property Funds (APPF) empire after superannuation giant Hostplus, backed by UniSuper, failed in its attempt to remove the developer as manager of the $2.8bn retail property fund.
According to The Australian, an Extraordinary General Meeting (EGM) called by Hostplus was adjourned after it failed to reach quorum — mirroring a similar outcome at Lendlease’s $2bn industrial property fund, where quorum was also not achieved.
Showdown with Hostplus and UniSuper
The push to oust Lendlease was part of a broader campaign by Hostplus and UniSuper to hand management of the funds to rival Mirvac.
However, industry sources suggest next week’s reconvened EGM may deliver the same result unless investor sentiment shifts dramatically.
Despite the failed attempts, the stoush has exposed deep divisions within the APPF investor base. Large stakeholders remain dissatisfied with what they describe as poor governance, delayed investor payouts, and asset sales at the bottom of the cycle.
Strategic Stakes for Lendlease
Retaining the funds is a significant win for Lendlease CEO Tony Lombardo, who has been under pressure to keep the $10bn platform intact as part of his pivot toward investment management.
- The retail fund is tipped to undergo a strategy refresh, with proposals for mixed-use developments at major shopping centres.
- The industrial fund is expected to double in scale to $4bn, potentially expanding into data centres.
- Lendlease also manages a $5.8bn office fund, and is linked to major pipeline projects including the Hunter Street Metro over-station development and the One O’Connell Street precinct.
Governance Tactics Under Scrutiny
Lendlease reportedly urged supportive investors to boycott the EGM, ensuring the quorum was not met. This tactic effectively prevented a vote from proceeding.
While the strategy has been effective, Hostplus has criticised the manoeuvre as undermining corporate governance, arguing that unitholders were denied a fair opportunity to vote.
Outlook: Redemptions and Asset Sales Loom
Although Lendlease has retained control, industry observers warn the fight has damaged the funds’ investor base. With liquidity windows opening, heavy redemptions are expected, which may force Lendlease to accelerate asset sales.
One key test will be the sale of the Erina Fair shopping centre, jointly owned with South Korea’s National Pension Service, with bids around $850m anticipated.
The outcome of the October 8 meeting, along with the scale of redemptions and sales, will be closely watched by the market.
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