Lendlease strikes $21bn Silicon Valley deal with Google

Lendlease strikes $21bn Silicon Valley deal with Google

19 July 2019

Lendlease today announced it has entered into an agreement with Google to jointly undertake the master planning, entitlement and development of three major areas in the San Francisco Bay Area in California.

The development, which could start as early as 2021, will boost Lendlease’s global project pipeline from $74.5 billion to about $100 billion over the next few years and further strengthen its relationship with Google. Lendlease is building the tech giant’s European headquarters in London, due to be finished in 2021.

It also worked with Google on the mooted Australian headquarters at the White Bay Power Station site in Sydney’s own bay area, that was discontinued in 2017.

The Sydney Morning Herald also reported that Google is now reviewing a potential 90,000 square metre redevelopment site at the back of Sydney’s Central railway station to add to its offices at Pyrmont, Sydney.

Lendlease estimates that it will develop up to 15 million square feet of residential, retail, hospitality, and other associated community uses in the new neighbourhoods. Google will focus on developing its office space within these mixed communities.

Under the terms of the agreement, Google and Lendlease will work together for the next 10 to 15 years to redevelop the company’s landholdings in San Jose, Sunnyvale and Mountain View into vibrant mixed-use communities.

The residential, retail, hospitality and other associated civic components have an estimated end development value of approximately US$15 billion (AUD$21 billion). Subject to planning approval, development work could commence as early as 2021.

David Radcliffe, Vice President, Real Estate and Workplace Services, Google said: “Lendlease has a wealth of knowledge and expertise in residential, retail, and mixed-use developments. Today’s agreement expands on an existing and successful partnership that will help us deliver on two important objectives: our commitment to accelerate the production of residential units in the Bay Area, and our plan to build mixed-use developments. Lendlease will play a key role in helping deliver at least 15,000 new homes on our land.”

Denis Hickey, CEO Americas, Lendlease: “This joint agreement between Google and Lendlease will help address the need for new housing in the San Francisco Bay Area. We’re eager to contribute our world-class approach to creating unique urban communities, and we are focused on delivering outstanding places that redefine how people choose to live, work, connect and contribute to creating an active community.”

“It’s the biggest deal we have ever done as an organisation,” he said in an interview with The Australian.

Investor reaction was strong with the share price rising 5.25 per cent to $14.84 on Thursday.