Lendlease Annual Report 2021

Thriving communities across gateway cities Our gateway cities strategy is founded on the premise that the most desirable cities will continue to be the driving force of economic, social and cultural life. We select cities with the most favourable prospects for long term outperformance. Indicators we monitor to assess and rank the performance of cities include economics and demographics, business climate and capital market metrics, real estate fundamentals and policy and planning frameworks. Our global reach and capabilities, combined with our partnering approach, provide unique insights into the likely evolution of the urban landscape. This offers scope to lead reinvigoration, renewal and reinvention. Placemaking that meets the needs of the local community is our contribution to solving urban challenges. Our role is to select the cities that outperform and create environments that resonate. Through the places we design, build and curate, we aim to create destinations where people want to be. Improved liveability, environmental sustainability, inclusion, affordability, connectedness, wellbeing and a sense of community are important elements we incorporate to create Place. Our approach is underpinned by leading safety and climate policies, and the adoption of technology. Workplace flexibility will be critical to provide a compelling proposition for both employers and employees. We expect requirements for space to be replaced by demands for ‘Place’ where the workplace is centred on collaboration and innovation, and health and wellbeing. Cities are destined to remain the centrepiece of modern society. They have been the lifeblood of innovation and advancement for millennia. The value to society of people interacting in close proximity has cemented the dominant role that cities play in the global economy. This is the future workplace we are planning for, one that is sustainable, agile, connected, inclusive and digitised. A greater range of living options are required to enhance dynamism across gateway cities. Higher density, done well, will play a key role in improved liveability, addressing issues including affordability, congestion, sustainability and social isolation. We have the capabilities to offer apartments for sale and rent in amenity rich environments that provide experiences as well as access to employment opportunities. Our Melbourne Quarter project, the regentrification of a site which sat dormant for decades, is an example of placemaking in action. A new vibrant inner city precinct with a diverse mix of workspaces, living, hospitality, retail and green public realms, is being created. Further detail on this project is provided on page 28 of this report. As the powerhouse of the modern economy, cities account for more than 80% of global GDP but only 55% of the world's inhabitants. 1 The benefits of agglomeration are as compelling today as they have ever been. Think London and New York’s finance sectors, Milan’s high end manufacturing and fashion scene and Silicon Valley’s technology smarts. The extensive social infrastructure and amenities that cities offer make them people magnets. Population density enables the best educational institutions and healthcare facilities as well as cultural attractions such as museums, galleries and theatres. The strong desire for social interaction and experience spurs vibrancy across the retail, tourism and hospitality sectors. Periodic challenges are inevitable Disease has been the great scourge of city life with terrible death tolls from periodic plagues, influenza and other diseases. The enforced lockdowns and isolation from the COVID pandemic has thrown the primary purpose of cities – that is, interaction and collaboration – into some disarray. Their very nature is being challenged. COVID is having significant ramifications for the way societies live, work and play. This has been reflected across real estate with workplace occupancy, retail vacancy and, in some cases, population decline. Despite these and other challenges, including crime, civil unrest and pollution, cities have rebounded with their growth largely unabated. Resilient cities adapt To be sustainable and liveable, cities of the future need to provide solutions for numerous challenges. These include: workplace innovation, carbon emissions, climate change adaption, housing affordability, social inclusion and income inequality. To achieve desired outcomes governments, organisations and communities will have to work collaboratively. The striking difference during the current pandemic has been the ability for large sections of the labour force to work remotely. The attraction of talent will be key to organisational success, and talent will be attracted to the most liveable cities and desirable workplaces. The past year has reinforced the need, desire and benefits of social interaction, collaboration and knowledge sharing. The yearning for experience and human interaction is clearly evident across communities and workplaces as cities reopen and societies recover. In essence, people want to connect with other people and places. Cities are the future 1. https://www.worldbank.org/en/topic/ urbandevelopment/overview#1 2. William Shakespeare (Coriolanus, Act III Scene I). 3. https://lendlease.cc/innovationdistricts 4. https://lendlease.cc/waterfrontregeneration 5. https://lendlease.cc/transitorienteddevelopment The future is about workplace innovation rather than remote working. ‘What is the city but the people.’ 2 Additional insights into our approach to creating Place include: Innovation districts and rethinking workplaces 3 Waterfront regeneration 4 Transit oriented development 5 23 A sense of place 22 Lendlease Annual Report 2021 A Sense of Place