Residential recovery under way as Lend Lease posts 10% profit increase

Historically low interest rates are driving signs of an improving residential market, according to Lend Lease which just posted a 10% increase in statutory profits for the year to $551.6 million.

It has construction backlog revenue of $17.3 billion and $15.0 billion of funds under management. The estimated end value of its development pipeline is $37.4 billion – the largest in the company’s history.

“While the market outlook presents challenges, the depth of our pipeline provides Lend Lease with significant earnings visibility and a platform for a strong growth trajectory over the next three years,” the newly reappointed Steven McCann said in a statement.

It says the domestic environment is challenging but says there are early signs of an improving residential market given low interest rates.

“(The) Australian interest rate environment should provide more favourable outlook for residential markets,” Lend Lease said in its results.

It says it had increased residential enquiry levels as well as strong pre-sales at key urban regeneration projects.

It made progress on six major projects in Australia during the 2012-2013 financial year.