Lendlease will increase its exposure to the North American telecommunication sector with the development of 423 new rooftop towers to get a slice of the massive digital communications market.
In a presentation to US investors, Denis Hickey, Lendlease's chief executive, Americas, said the group will leverage off its telco business in Japan with the carrier Softbank, into the US. He said with Softbank's takeover of Sprint, it has given Lendlease an entry to the US market.
Lendlease has completed 135 towers with a further 288 in development. In the Lendlease annual report the value of the towers is about $83 million.
"We see an opportunity for Lendlease to play more of a development solution in the broader sector, not just with the Sprint and Softbank business, but also with other carriers in the US," Mr Hickey said in the market update.
"When you look at the dynamics that are happening in the telco business and the amount of data usage that's happening as we move forward, being the rollout of 5G, driverless cars, all of these 'internet of everything' elements, as they start to be rolled out, the quantum of data that's going to be transmitted is growing exponentially."
Mr Hickey said the need to put an infrastructure solution around all that "is clearly evident".
The economics is also compelling, according to Mr Hickey. He said the industry average was to have two carriers using a tower, but over time Lendlease will look to bring in multi-tenants to the assets.
The ground leases are about 25 years with rolling options while the carrier leases are about 5-10 years with rolling options.
"Lendlease has group scale and integrated platform with strong relationships with the major carriers. The strategic intention is to co-invest in a long-term ownership vehicle," Mr Hickey said.
He also told investors that Lendlease is undertaking a shift to become "development-led", in line with the group's overall strategy.
"We will consolidate and extend the construction business and the military housing businesses," Mr Hickey said
"There is an opportunity to grow the lodging portfolio across airforce, navy and marines, which are not yet privatised."
Lendlease will also focus on its urbanisation platform in target gateway cities with focus on large-scale, mixed-use developments. These include the multifamily developments that are the new build-to-rent sector.
Lendlease chief executive Steve McCann said the build-to-rent sector will be a focus for the group in Australia.
CBRE has estimated the sector is worth about $300 billion in coming years.
