Lendlease unveils $400m TRX sale and FY26 capital recycling update

The Lendlease Group (ASX: LLC) share price is in focus today after the company announced a ~$400 million sale of its interests in The Exchange TRX in Malaysia, and gave investors an update on its Capital Release Unit (CRU) for FY26.

What did Lendlease report?

• Binding agreement to sell a 40% interest in The Exchange TRX retail mall and full 60% interest in the adjacent office tower for ~$400 million
• Lendlease retains a 20% interest in the retail mall and 60% stakes in the adjoining hotel and residential land plots
• Targeting $2 billion in capital recycling from the CRU during FY26
• Net debt reduction target: 15% Group gearing by the end of FY26, excluding hybrid benefit
• CRU expected to post a loss in 1H FY26 due to transaction delays and higher holding costs

What else do investors need to know?

Lendlease’s $400 million sale to Malaysia’s Valiram Family Office forms part of a broader push to recycle capital and strengthen its balance sheet. The transaction—which is still subject to financing and third-party approvals—is expected to complete in the second half of FY26.

The company continues to pursue exclusive negotiations for the sale of its remaining share in Keyton, with further ~$1 billion in CRU asset sales in progress. However, delays in transaction timing mean anticipated cash inflows of ~$1 billion, initially expected in the first half, are now forecast for the second half of FY26.

On the back of these delays, Lendlease expects higher than previously forecast gearing in 1H FY26, reaching the mid- to high-30% range (excluding a 7% hybrid securities benefit to statutory gearing).

What did Lendlease management say?

Lendlease Group CEO Tony Lombardo said:

We are pleased to announce further progress on our capital recycling initiatives, with $400 million to be released from the high quality Exchange TRX retail mall and office assets.

We continue to be highly active on capital recycling, with more than $3 billion of transactions underway for the second half of the financial year. This includes $2 billion of announced or advanced stage capital recycling initiatives across our segments.

What’s next for Lendlease?

Lendlease says it remains focused on its ~$2 billion capital recycling target from the CRU in FY26, including asset disposals already announced and ongoing sales processes. The group has also flagged significant planned capital expenditure on growth projects like One Circular Quay and Victoria Harbour, which are expected to deliver more than $1 billion in proceeds upon settlement in FY27.

No specific earnings guidance has been provided for the CRU segment for FY26. Management is balancing speed of execution with achieving value for shareholders as it completes these transactions.

Lendlease share price snapshot

Over the past 12 months, Lendlease shares have declined 20%, trailing the S&P/ASX 200 Index (ASX: XJO) which has risen 6% over the same period.

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The post Lendlease unveils $400m TRX sale and FY26 capital recycling update appeared first on The Motley Fool Australia.

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Motley Fool contributor Laura Stewart has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips. This article was prepared with the assistance of Large Language Model (LLM) tools for the initial summary of the company announcement. Any content assisted by AI is subject to our robust human-in-the-loop quality control framework, involving thorough review, substantial editing, and fact-checking by our experienced writers and editors holding appropriate credentials. The Motley Fool Australia stands behind the work of our editorial team and takes ultimate responsibility for the content published by The Motley Fool Australia.