ACCC raises concerns over Lendlease sale of masterplanned communities to Stockland, Supalai

ACCC raises concerns over Lendlease sale of masterplanned communities to Stockland, Supalai

A render of Springfield Rise in QLD - one of the masterplanned communities included in the proposed sale. 

Australia's competition watchdog has raised concerns around Lendlease's (ASX: LLC) proposed sale of 12 residential masterplanned communities, claiming it may incentivise one of the joint buyers Stockland (ASX: SGP) to raise prices in the absence of its major competitor in four regions.

Lendlease is currently involved in a huge capital recycling project that is worth more than its own market valuation to free up liquidity, including the sale of 14 of its 16 communities projects for $1.3 billion.

12 of those communities are directly referenced in the planned $1 billion-plus sale to a joint venture comprising Stockland and its Thai partner Supalai, but it appears the $1.3 billion claim encapsulates a further two given the agreement also included an option to buy "additional parcels of land for up to $239 million".

Market feedback received by the Australian Competition and Consumer Commission (ACCC) found that Stockland and Lendlease compete closely as large developers with strong reputations and the ability to invest in high quality amenities, including education, parks, and town centres.

"We are concerned that the proposed acquisition would remove one of Stockland’s closest and largest competitors in the supply of residential masterplanned community housing lots in four regions - the Illawarra, North West Perth, Ipswich, and Moreton Bay,” says ACCC Commissioner Liza Carver.

"The ACCC is concerned that the proposed acquisition may increase Stockland’s incentive to raise the price, delay the supply, or reduce the quality of housing lots in these regions, to the detriment of prospective homeowners.

"“We are concerned that other developers of masterplanned community projects may not be able to compete sufficiently with Stockland after the acquisition in some regions."

The ACCC Commissioner says the preliminary concerns are strongest in the Illawarra region of New South Wales where the proposed acquisition would bring together the two largest masterplanned community projects in an already highly concentrated market.

The regulator is also considering whether the proposed acquisition may increase the risk of anti-competitive coordination by developers in relation to the pricing, supply, and/or quality of masterplanned community projects.

The ACCC has not reached a concluded view on any of the issues and invites submissions in response to its Statement of Issues by 18 July 2024.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

AI-driven Evitat platform creates pathway to a more sustainable building and renovation industry
Partner Content
Evitat, an AI-driven data platform, is empowering design and build professionals in the...
Evitat
Advertisement

Related Stories

ASX biotech minnow Hexima raising $4m to buy and become autonomous intelligence company RealThing

ASX biotech minnow Hexima raising $4m to buy and become autonomous intelligence company RealThing

More than two years after losing 87 per cent of its value in a sing...

South Australian expansion lifts revenue for distracted driver detection tech scale-up Acusensus

South Australian expansion lifts revenue for distracted driver detection tech scale-up Acusensus

Distracted driver detection technology company Acusensus (ASX: ACE)...

Would you pay to quit TikTok and Instagram? You’d be surprised how many would

Would you pay to quit TikTok and Instagram? You’d be surprised how many would

Social media is a problem for economists. They don’t know how...

JET Charge rolls out Australia's largest EV dealer charging network with Toyota

JET Charge rolls out Australia's largest EV dealer charging network with Toyota

Melbourne-based JET Charge has announced the successful supply and ...