Australian mainstay, Lendlease Group, has struck a $21 billion deal – its largest ever – to develop Google’s Silicon Valley land into housing.
Denis Hickey, Lendlease’s Chief Executive for the Americas, worked with Group CEO & Managing Director Steve McCann for two years to secure the deal, which no doubt will position Lendlease as a key player across the world for urban regeneration projects.
The development deal will see as many as 15,000 homes built over 10 to 15 years, across three tracts of land acquired by Google in the San Francisco Bay Area. The project will boost Lendlease’s global development pipeline to almost $100 billion.
The deal couldn’t have come at a better time for Lendlease, whose reputation has come under scrutiny recently, after running into trouble on tunnel projects in Melbourne and Sydney, resulting in substantial restructuring costs and provisions.
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In June, Google announced a $US1 billion commitment to ease housing shortages in the Bay Area by creating 20,000 new homes on holdings across Sunnyvale, San Jose and Mountain View.
Lendlease, who are presently advising Google on its real estate holdings, will take control of a portion of the land to create residential, retail and mixed-use components of the new neighbourhoods.
Hickey calls the project “a landmark opportunity for Lendlease,” stating “it’s the biggest opportunity we’ve ever had as an organisation. It’s a real credit to the fact that Lendlease’s global expertise is highly valued by the leading companies in the world.
“Partnering with a company like Google is very significant for us”
A large portion of the land will be held by Google for future expansion of offices, although no agreement has been reached on who will win the development.
Hickey is hopeful that Lendlease’s relationship with Google will result in future involvement.
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