Lendlease faces $100m hit in Sydney land dispute

However, a handful of land parcels around Figtree Hill were excluded from that deal with Stockland as Lendlease remained in talks with individual owners of the sites, in a dispute that ultimately landed in the NSW Supreme Court.

Lendlease’s deal with the landholders was set up as a call and put option, through which the developer could compel owners to sell the parcels.

In a complex legal finding handed down this week, the court ruled Lendlease had lost the right to exercise its options to acquire the farmland.

Lendlease said it was still pushing for a revised agreement with the owners, but would also appeal the court ruling. Complicating the dispute were a number of environmental issues that had caused delays to the development, including the creation of movement corridors for the local koala population, it said.

Unless it was able to resolve the issue, Lendlease said it would have to write off about $100 million after tax to cover the cost of what it had spent over the past 10 years on planning, rezoning and infrastructure across the area.

However, the ASX-listed developer has not downgraded its full-year earnings guidance for this year, as it is still hopeful of resolving the issue before reporting its annual results.

The setback at Figtree Hill comes as the development giant, led by Tony Lombardo, presses ahead with a radical overhaul of its global construction and development business.

That plan involves reducing its global exposure and liberating capital to invest into Australia, its best-performing market.

In a series of major deals since last year, it has divested about $2.2 billion worth of the $2.8 billion target it had set for this year and says it is on track to meet its 2025 financial year target.

This month it finalised the previously announced sale of its UK construction business to Atlas Holdings, completing its exit from its global construction operations.