Lendlease has secured a key victory after investors in its $2.8 billion Australian Prime Property Fund Retail (APPF Retail) voted against a proposal from superannuation giant Hostplus to replace it with rival Mirvac. As The Australian Financial Review reports, only 35% of investors supported the proposed management change, with the remainder voting against or abstaining. The hybrid meeting, held both online and in person, marks the first of four Hostplus-called investor meetings to successfully reach a vote.
The push by Hostplus to remove Lendlease follows a broader campaign across the APPF platform. Hostplus (backed by UniSuper) had earlier attempted to oust Lendlease from both the retail and industrial trusts, but failed to muster sufficient support for change.
“We ran an independent process and unit holders have decided to retain Lendlease Real Estate Investments as the responsible entity for APPF Retail,” a spokesperson for the Lendlease Real Estate Investments Limited board said. “This decision by unit holders ensures we are able to continue to work on behalf of all unit holders.”
While this result is a win for Lendlease, tensions remain unresolved. The fund is slated to open a redemption window next month, giving investors an opportunity to exit. To ready itself for expected redemptions, the fund has already listed one of its five assets—Erina Fair, valued at around $850 million in New South Wales—for sale. Credit analysts have cautioned that such a sale could heighten the risk of a credit downgrade, due to the resulting reduction in portfolio scale and diversity.
Following the Erina Fair listing, the remaining APPF Retail assets include Sunshine Plaza (QLD), Macarthur Square (NSW), Tweed City (NSW), and Lakeside Joondalup (WA).
This isn’t the first time that APPF Retail has executed major divestments under pressure. In 2023, the fund sold Craigieburn Central for approximately $300 million; the fund had also divested non-core assets such as CS Square, underscoring a pattern of active asset management under stress.
The vote outcome also moderates near-term challenges for Lendlease across its broader APPF platform, including the $5.8 billion Commercial Fund. It remains uncertain whether Hostplus will renew its push to replace Lendlease there. Meanwhile, Lendlease had earlier proposed—but subsequently withdrew—governance reforms, such as introducing quarterly redemption windows and removing pre-emptive rights, following resistance from major unitholders.
“We are continuing to engage with unit holders and remain focused on execution of the fund’s strategy and outperformance on behalf of unit holders,” a Lendlease spokesperson said.
In sum, the decision reinforces Lendlease’s capacity to retain investor backing, at least for now, amid ongoing scrutiny over governance, liquidity pressures, and structural change in the management of large, pooled property funds.
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