- In an earnings call Monday, Lendlease Global CEO Tony Lombardo said that the COVID-19 pandemic has significantly impacted the Australian-based firm's markets and projects and that the effects will be felt into 2022.
- Construction activity has been constrained by delays in new projects, site shutdowns and lower productivity, Lombardo said in a press statement. These delays have also affected sales and leasing of the firm's multifamily projects. In total, the impact of social distancing protocols across the company's jobsites has led to a 16% decline in revenue and a 9% decline in hours worked, the company said.
- Despite the coronavirus-related impacts, Lendlease reported profit after tax of AUD 222 million ($161 million) for fiscal year 2021, following a loss of AUD 310 million in 2020.
The company, which is leading the construction of a $15 billion campus for Google in the San Francisco Bay Area, added three new projects to its U.S. portfolio this fiscal year. They are:
- The 60 Guest Street life sciences building in Boston.
- The 1 Java Street apartment complex in Brooklyn.
- The La Cienega mixed-use development in Los Angeles.
The company's projects in Australia have been impacted by recent government lockdowns aimed at curbing an outbreak of the COVID-19 delta variant. The country reported record daily numbers of new coronavirus cases this month as the highly infectious delta variant spreads through some of its largest cities.
About 15 million people in three states, or 60% of the population, has experienced strict lockdowns in recent weeks, according to Al Jazeera, including in the cities of Brisbane, Melbourne and Sydney.
New stricter rules that began this week in Melbourne limit major construction jobs to 25% of their usual workforce, while smaller projects will have a cap of five people on the job at a time, The Age reported. The restrictions will affect tens of thousands of construction workers, with the loss of up to AUD 63 million a day in wages, while about AUD 455 million in revenue will be lost daily to the industry more broadly, according to The Age.
In Sydney, which is under its sixth government-imposed lockdown since the pandemic began, some construction workers have recently been allowed to return to their jobs, if they are vaccinated.
Australia has fared much better than many other countries in the developed world during the pandemic, with just under 37,000 COVID-19 cases and a death toll under 1,000, according to Reuters.
"The enforced lockdowns from the pandemic continue to have significant ramifications for real estate markets across the global gateway cities in which the group operates," Lombardo said. "While we are confident these cities will rebound strongly over the medium term, FY22 is expected to be a challenging year."