Lendlease to Develop $1.9 Billion Project in U.K.'s Second City

By Jack Sidders

(Bloomberg) -- 

Lendlease Group has won the bidding for a major development in the U.K.’s second city of Birmingham, bolstering its sizable project pipeline in the country.

The company will partner with Birmingham City Council to build about 2,000 homes, plus markets, offices, stores and leisure spaces on the 17-hectare (42-acre) Smithfield site in the city center. The project will have a total value of about 1.5 billion pounds ($1.9 billion), according to a statement.

Lendlease has landed a string of major projects in the U.K. in recent years, including several jobs close to big infrastructure developments that are likely to be less vulnerable to Brexit. Birmingham Smithfield is near to the planned High Speed 2 rail route, which will link London with the north of England with the aim of spreading wealth throughout the country.

LendLease Group’s Smithfield development in Birmingham.

The Sydney, Australia-based company was chosen last year to redevelop London’s Euston neighborhood at the other end of the HS2 route, and is in the process of buying the development rights for the Silvertown project in East London. Large office and residential projects in the capital’s Elephant and Castle and Stratford districts are well underway.

“We are committed to the U.K. for the long term,” Dan Labbad, chief executive officer for Lendlease in Europe, said in an interview. “And as a long-term scheme running over 10 to 15 years, we reinforce that commitment, not just here” in Birmingham, “but what we are doing across the U.K.”

The company will now focus mainly on executing the projects it has already won in Britain, rather than seeking new mandates, Labbad said.

Lendlease was selected as Birmingham’s development partner ahead of a rival bid from a consortium of sovereign and pension funds led by Delancey.

More details of the Birmingham Smithfield project:

• Planning application due later this year, with the 15-year construction program expected to start in 2022
• Project will have 1 million square feet (92,900 square meters) of leisure and commercial space
• There will be office space for start-up technology companies
• The council will provide land for the venture
• The site was previously home to many of the city’s markets