Ladies and gentlemen, thank you for standing by, and welcome to Lendlease's 2023 half year results briefing. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer section, at which time if you wish to ask a question, you will need to press star one on your telephone keypad and wait for your name to be announced. I must advise you that this call is being recorded today, Monday the thirteenth of February 2023. I would now like to hand the call over to Mr. Tony Lombardo, Global Chief Executive Officer. Thank you, Tony. Please go ahead. Good morning, thanks for joining the Lendlease 2023 half year results presentation. I'm Tony Lombardo, Global Chief Executive Officer and Managing Director of Lendlease. Joining me today is Simon Dixon, Global Chief Financial Officer. Sitting here at Barangaroo in Sydney, we're on the land of the Gadigal people. I extend my respect to their elders past and present. I'll provide an overview of our strategy and results and an update on our operations. Simon will talk through the financial results. I will finish with the outlook. We'll open up for questions. Turning now to our five year roadmap on slide four. FY 2023 marks the start of the two year create phase of our five year reset, create, thrive roadmap. The reset phase, which you'd be familiar with from our prior updates, successfully recalibrated the business in FY 2022 by reducing costs and streamlining management. Our focus is now on executing the strategy in order to return the group to sustained, profitable performance. This includes growing funds under management to AUD 70 billion by FY26, achieving scale in developments with more than AUD 8 billion of completions in FY24, and maintaining execution excellence in construction. We'll also continue to progress our ESG targets and importantly, invest in our people. Moving now to the key achievements for H1 2023. Against the challenging global business environment, we made steady progress in the first half. Growth in funds under management was underpinned by a new office partnership in London and asset acquisitions for our value-added Real Estate Partners 4 fund in Australia. We partnered with QuadReal to launch our first build-to-rent building in Australia at Brisbane Showgrounds. The apartment building provides 443 units for rent and is expected to be complete in FY25. Our global workplace assets comprise more than AUD 25 billion in funds under management and are 95% occupied. This reflects our leadership in delivering and managing modern, sustainable places and precincts. More than 50% of our product from our urban development pipeline comprises workplace and residential for rent assets in prime locations, ripe for attracting investment partners and contributing to funds growth. In the development segment, we added the iconic Sydney Harbour project, One Circular Quay, to our pipeline. The AUD 3.1 billion project, a joint venture with Mitsubishi Estate, comprises 158 apartments for sale and a luxury 220-room hotel. During the half, we completed AUD 2.8 billion of projects, including Sydney's tallest building, Salesforce Tower at Sydney Place. We commenced AUD 2 billion of projects, including 30 Van Ness in San Francisco, which is being rebranded to Hayes Point. The team in Asia achieved strong leasing results at Kuala Lumpur's The Exchange TRX. As of today, the project is approximately 80% pre-leased to dynamic array of tenants, including iconic flagship stores set to open in FY 2024. We secured leasing at Blue & William in North Sydney, with Equifax taking a third of the building. We're also seeing strong sales momentum from our Sydney residential portfolio. Following the topping out of One Sydney Harbour Residences One and the continued construction of Residences Two and Watermans Residences, the buildings are collectively 88% pre-sold, representing approximately AUD 3.8 billion in sales. The new One Circular Quay residential tower, which is due to commence in the second half of FY23, is already 30% pre-sold, representing approximately AUD 800 million in sales. In the construction segment, we continue to do a good job managing supply chain and inflationary risks and delivered a steady result given the challenging backdrop. Backlog revenue remains solid at AUD 9.6 billion, and the business is also preferred for AUD 9.8 billion of projects. As always, getting our people home safely each day remains our highest priority. Tragically, a subcontractor in New York lost his life in a work zone under subcontractor management. Our thoughts are with the worker's family, friends and colleagues, and everyone impacted by this tragic event. Improvements have been made across our key safety indicators, which are at record performance levels. Being a leader in sustainability has always been a strategic differentiator for Lendlease, and it continues to be. The most recent global real estate sustainability benchmark, Lendlease topped the global ranking for the world's most sustainable office fund. In addition, three of our funds were in the global top 10. We also published extensive portfolio data through the launch of an expanded ESG data book, which reports our progress towards eliminating Scope one, two, and three emissions. Our people continue to be the backbone of Lendlease, bringing our purpose and culture to life. We've launched a number of employee programs, including the relaunch of our flagship Springboard program and pro-programs focused on gender and racial equity. Moving to our financial performance on slide six. The group recorded Core Operating Profit after Tax of AUD 105 million for the period. This was up substantially from AUD 28 million reported in the same period last year. Highlights that our strategy to reset the business is now contributing to more sustainable operating performance. Core operating earnings per security was AUD 0.152, with a return on equity of 3.1%. The interim distribution of AUD 0.049 per security is paid from the trust and represents a payout ratio of 32%. Disappointingly, we recorded a statutory loss after tax of AUD 141 million after being required to take a provision of AUD 200 million against potential liabilities for U.K. residential building remediation. This is before anticipated recoveries from third parties, including insurances and supply chain. This is a consequence of retrospective action by the U.K. government, requiring developers to commit to remediate residential buildings looking back 30 years. The liability relates to buildings primarily developed by Crosby entities which were acquired by Lendlease in 2005, including buildings completed or in construction prior to the acquisition. I'd note there have been no informal claims directed to Lendlease in relation to this matter. However, the government department dealing with building remediation has received claims relating to some buildings in the Crosby portfolio. We remain in dialogue with the U.K. government on this matter. It is expected any cash expenditure relating to the provision would be spread across a period of at least five years. This expense has been excluded from Core Operating Profit. I wanna emphasize this has no impact on Core Operating Profit or our target operating metrics. In a challenging environment, good progress has been made against most of our key operating metrics. Funds under management, as well as the directly held investment portfolio, all increased. Work in progress at AUD 18 billion is in line with the prior period. Completions were up, the development pipeline increased to AUD 121 billion with the addition of One Circular Quay. Construction revenue was higher, while new work secured was marginally below the prior corresponding period, with lower origination in Australia. Backlog revenue remains solid, consistent with our objective of maintaining at approximately AUD 10 billion. Globally, we manage AUD 48 billion for investment partners across 40 funds and mandates. The projects listed represent our 21 major urban projects, each with an estimated development end value of more than AUD 1 billion. Our construction capability provides the delivery capability for our integrated model as well as design, project management, and construction services to our external customers. Turning now to each of the operating segments in more detail. Beginning with investments on slide nine. Funds and assets under management are the key operating metrics that drive our management earnings. We are targeting funds under management of greater than AUD 70 billion by FY26. The product created from our development pipeline is expected to be the primary contributor to this target, as well as investing alongside partners in our existing funds and the launch of new products. The 8% first half growth in funds under management was driven by a new office partnership with existing investment partner TCorp and a Japanese institutional investor which acquired 21 Moorfields in London. The premium grade office development will complete in the second half of FY23 and is 100% leased on a 25-year term to Deutsche Bank. Our value add Real Estate Partners 4 Fund, which was launched in FY22, acquired three commercial assets in Melbourne and Perth. The fund is now 75% allocated. The group's urban development pipeline has AUD 60 billion of investment product embedded within it, including AUD 27 billion in each of workplace and build-to-rent sectors. Our focus is to work with our investment partners to realize these assets and grow funds under management. Assets under management have increased on the back of the 21 Moorfields acquisition and the completion of our build-to-rent building Cascade at Lakeshore East. After completing in FY22, Cascade is now 96% leased and strengthens our portfolio in the U.S. Moving to our investments portfolio on slide 10. Our strategy is to become an investments-led business by reweighting the group's capital to more stable and recurring income streams. Our target is to have 60% of our group's investor capital in the investment segment by FY 2026. This includes retaining a large proportion of completed assets from the development pipeline to demonstrate alignment as required and investing alongside our partners in new products such as 21 Moorfields. The significant driver in earnings for this half came from the investment partner acquiring part of the asset management income stream from the mature US military housing portfolio. The group's investment portfolio of AUD 4.2 billion is well diversified across workplace, residential, retail, data centers and industrial. Moving now to the development segment on slide 11. Work in progress, the lead indicator for future completions, is steady at AUD 18 billion. Approximately AUD 4 billion of completions are targeted for FY 2023. In FY 2024, we expect a substantial upward trajectory in completions to greater than AUD 8 billion. Projects underpinning this include Tower One Sydney Harbour, the Melbourne Quarter Tower, and The Exchange TRX in Kuala Lumpur. While lot sales in Australian communities business were subdued at 766, reflecting current high interest rates and inflationary pressures, strong margins were achieved. As a result of production issues and weather-related delays, FY23 settlements are anticipated to be below the annual target of 3,000+. The conversion of our existing pipeline is key to achieving the AUD 8 billion of annual completion in future years. One Circular Quay is already master planned and due to commence in the second half of FY23. Elsewhere, we've progressed planning at a number of key pipeline projects, thereby moving them closer to the master plan phase. At Silvertown, a planning application has been submitted for the first phase of the project following extensive consultation with local residents and businesses. This will include approximately 1,250 new homes as well as affordable homes and approximately 82,000 sq m of commercial space. In Birmingham, designs for the regeneration of Smithfield have been submitted to the city council. If approved, 600 sustainable homes will be delivered in a green setting as part of the first phase of work, with around 3,000 homes planned for the whole site over the coming years. We anticipate AUD 6 billion of commencements in the second half of FY 2023. Moving now to the construction segment on slide 13. Our construction capability remains a key component of our integrated model and the delivery of our urban projects. The Australian region is expected to be the main contributor to earnings. It is a strong workbook with AUD 6 billion in backlog revenue. The U.S. has backlog revenue of $2.9 billion below historical levels, primarily due to a pause in projects coming to market during the pandemic and selective bidding on new work. The significant increase in new work secured for the period underpins confidence that the backlog revenue will recover. The overall business is preferred for AUD 9.8 billion in new projects, including AUD 4.1 billion in social infrastructure and AUD 3.7 billion of office projects. I'll now hand over to Simon to talk through the financials. Thanks, Tony, and good morning, everyone. Turning now to our financial performance on slide 15. Core segment EBITDA of AUD 354 million was up 34%, supported by higher contributions from the investments and development segments. The investment segment delivered EBITDA of AUD 197 million, up 40%. Investment portfolio EBITDA was for AUD 140 million, up from AUD 82 million. Asset level performance was subdued, with an annualized investment yield of 3.3% across the portfolio, down from 4%. This was partially due to the denominator effect of assets under development, including 21 Moorfields, which is not expected to contribute to income until the second half of FY 2023. Profit included AUD 54 million from the disposal of a further 13% of the asset management income stream of the U.S. military housing portfolio. Funds Management EBITDA was AUD 37 million, down from AUD 40 million. Revenue increases driven by base fees growing in line with higher funds under management were more than offset by higher expenses due to additional headcount hires to support growth in FUM and the launch of new products. This has impacted margins in the current period ahead of expected growth in revenue. Asset Management EBITDA was AUD 20 million. Revenue was higher with improved retail leasing activity in Asia, offsetting the decline in US military housing residential management earnings following the partial sell-down. The Development segment delivered EBITDA of AUD 89 million, up from AUD 39 million, driven by an improved contribution from the Australian communities business. There were AUD 2.8 billion of completions during the period, including AUD 2.5 billion from the urban portfolio and AUD 300 million in communities, compared with AUD 200 million in the prior corresponding period. The Australian communities business generated AUD 32 million, compared with a loss of AUD 6 million. While settlements more than doubled from the prior corresponding period to 1,022, the result was hampered by production issues and weather-related delays. More than AUD 1 billion of pre-sales will carry into the FY 2024 financial year. Construction delivered EBITDA of AUD 68 million, down from AUD 84 million. The result was impacted by settlement of a claim on a past non-residential project in the U.K. dating back to 2015. This has given rise to an EBITDA margin of 1.8%. Excluding this claim, the EBITDA margin would have been 2.3%. Corporate costs of AUD 76 million were 25% lower, reflecting savings achieved during the FY 2022 reset phase. We expect to be able to maintain these savings, and we'll continue to optimize the business through disciplined cost management. Net finance costs were lower despite the rise in interest rates, with savings on canceled committed facilities and higher interest income, more than offsetting a modest increase in interest expense in the period, assisted by a well-positioned hedging strategy with the majority of our drawn facilities on fixed rates. Core Operating Profit after Tax recovered significantly on the prior corresponding period to AUD 105 million or AUD 0.152 per security. The group recorded a statutory loss after tax of AUD 141 million. This includes the AUD 200 million provision due to retrospective U.K. government action, a loss of AUD 39 million relating to property revaluations in the investment segment, and a non-core segment loss of AUD 7 million, reflecting overhead costs associated with managing the retained elements of the engineering and services business. Moving now to our portfolio management framework on slide 16. As most listening to this call would be aware, we announced refinements to the PMF at our strategy presentation in November last year. I'll start by emphasizing that target returns across each of the operating segments and our gearing range were not changed. The amendments which are highlighted on the slide were made to support and expedite our transition to becoming an investment-led organization, to enhance capital efficiency, and to retain more capital to provide funding capacity. Notably, we have lifted the invested capital target range for the investment segment by 10 percentage points and reduced the development segment by the corresponding amount. Over time, we expect capital allocation to be at the midpoint of these ranges, implying a 60/40% allocation to investments development. The target EBITDA mix across the three operating segments shifts due to the change in capital allocation and the desire to maintain our construction revenue at current levels. Investments and development are targeted to each contribute 40%-50% to earnings, with construction reducing to 10%. A slight narrowing of the group ROE range to 8%-10% is primarily due to the change in capital allocation between investments and development. To reflect being in a period of growth, the distribution policy has been revised to a payout ratio of 30%-50% of Core Operating Profit. Segment returns are measured against the targets in our PMF. At the FY22 results presentation, we provided anticipated ranges for FY23. First half ROIC of 7.1% for the investment segment was within the anticipated FY 2023 range of 6%-7.5% and the segment target range of 6%-9%. As previously noted, the return was lifted by the partial sell-down of the U.S. military housing asset management stream. The development segment ROIC of 1.9% was below the lower end of the expected range for FY 2023. A challenging macroeconomic environment and few urban completions had a negative impact on returns. The construction EBITDA margin of 1.8% was within the anticipated FY 2023 range of 1.5%-2.5%, but was negatively impacted by the settlement in the U.K. Moving now to net debt on slide 17. The increase in net debt from AUD 1.1 billion at FY 2022 to AUD 2.6 billion at the period end includes investments growth of AUD 700 million, underpinned by the co-investment acquisition of 21 Moorfields and acquisitions by the Real Estate Partners 4 fund. It also includes development acquisitions and production spend of AUD 800 million on key projects, including One Circular Quay, which is anticipated to commence in the second half of FY 2023, The Exchange TRX, which is anticipated to complete in FY 2024, One Sydney Harbour, which is anticipated to complete in FY 2024 and 2025, and Hayes Point, which commenced this period. There are a number of capital recycling initiatives in progress, we expect our full year net debt position to be at or near the midpoint of our target range. Now to the group's invested capital position on slide 18. Invested capital of AUD 9.7 billion is allocated AUD 4.4 billion to investments and AUD 5.9 billion to development. Other includes construction, which benefits from negative working capital and non-core, which comprises both provision balances and negative working capital. As previously flagged, capital will be increasingly directed towards co-investment positions in product derived from the development pipeline, as well as new products and partnerships. Investment segment capital is expected to climb to approximately AUD 7 billion by FY 2026. We aim to operate a capital-light development model. Currently, there is AUD 5.9 billion controlling our AUD 121 billion development pipeline. The AUD 700 million increase in the development segment predominantly relates to production expenditure ahead of higher completions anticipated for FY 2024, such as the projects I've just referred to on the previous slide. We are targeting a reduction in development invested capital to approximately AUD 5 billion by FY26. This will be facilitated via a number of capital recycling initiatives, including introducing a joint venture partner for our Australian communities business and partnering or introducing capital earlier in the development cycle on projects. Over time, we'll be working to rebalance the regional capital mix, targeting to increase the allocation to Australia to 40%-60%. From a treasury management perspective, the balance sheet remains in a strong position with gearing at 16.8%. As highlighted at the FY22 results presentation, gearing was expected to rise to the midpoint of the target 10%-20% range during FY23. The group remains in a strong liquidity position with AUD 2.4 billion of available liquidity. The average drawn debt maturity remains greater than five years, providing the group with access to longer-term capital. The group continues to diversify its sources of financing and has extended a number of bank facilities. The proportion of the group's total facilities that are sustainable financings has increased to 74% from 60%. Investment-grade credit ratings continue to form an important component of our financial strategy, and these were recently reaffirmed. We continue to focus on growing our balance sheet profitably. Gearing remains a focus, and as noted, we expect to continue to be at or near the midpoint of the range for the full year. I'll now hand back to Tony. Thanks, Simon. Moving now to the outlook on slide 21. We've now entered the two year correct phase of our five year roadmap, well-positioned to deliver improved operating returns. As Simon noted, there are several initiatives underway to optimize the portfolio and recycle capital. While we expect better performance in the second half, current market risks, including inflation and interest rates, continue to temper the pace of recovery. We continue to target a return on equity of 8%-10% by FY2024. Our Core Operating Profit after Tax are expected to improve in the second half. However, as indicated at our strategy update in November last year, return and margin outcomes for the three operating segments will be challenged. We expect the investment's ROIC to be at the lower end of the anticipated FY2023 range, reflecting a subdued market outlook and portfolio returns impacted by higher funding costs. The ROIC for the development segment is anticipated to be at the lower end of the expected range of 4%-6% for FY 2023, and well below the target range of 10%-13% with few completions. The segment is also still in a transition phase where profitability is subdued due to the change in approach to joint venture partnerships, which has shifted the timing of profit recognition. The EBITDA margin for the construction segment is expected to be in the range of 1.5%-2.5% for FY 2023 and potentially lower than the target range of 2%-3%. This is due to cost pressures and supply chain constraints. While these risks continue to be proactively managed, their persistence may impact performance. Accelerating our transition to being an investments-led company is our priority. The high quality and sustainable product from our development pipeline will be a key driver of funds growth to more than AUD 70 billion by FY 2026. We'll now open up to questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Sholto Maconochie from Jefferies. Please go ahead. Oh, hi, Tony and the team. Just a quick one on the. It's maybe a nuance in the, in the wording, but on the outlook, it said FY 2024 target of 8%-10%. Before I think you said it'd be at the lower end of that range. Has that changed at all, to be at the low end of that range, or is it gonna increase? I think it's the same as we've previously stated, Sholto. The only things we adjusted at November was really around FY 2023 to say that, returns across those three segments were at the lower. We still feel we're tracking quite well to achieve our ROE target of that 8%-10% target range in 2024. Yeah. Thanks. Just on the gearing, like if you look at the profile, you've got completing about AUD 1 billion, which will help, and there'll be starting AUD 6 billion. I know that the CapEx spend is sort of back-ended, how do you... What sort of capital management initiatives are you looking at to get that gearing down? Is that introducing a capital partner to communities, or what will you sort of anticipate to get that down over the next sort of one to two years? Yeah, I think. Aside from the- I think we've been calling out that we will be at that midpoint and as we've stated. I think Simon did flag that we are looking for recycling initiatives around communities that we are looking to bring a JV partner into the portfolio. I mean, we will look towards using, again, organically, a source capital by recycling certain investments we have. We still got some capacity around net debt, and then we'll assume we'll be using some retained earnings. You know, we've flagged to the market for some time that through 2023, 2024, we'll be at that midpoint to elevated level as we've ramped up production across the board. You know, we are tracking to achieve that AUD 8 billion of completions in 2024, which has meant we've had to use additional capital, of course, to get to that point. Some of that capital starts to recycle and complete, especially the big towers on One Sydney Harbour, one and two. Then how much was the TRX contribution this period? Sorry, just if I can add to that, I mean, just to kind of reiterate that sort of, you know, looking forward in our business plan, we remain comfortable that, very much organic capital generation does fund the business plan. To be very clear, that's a mixture of retained earnings, incremental net debt as our metrics improve, in the coming years, and also, realizing assets currently on the balance sheet over and above their balance sheet value. Taking all of that into account, and some of that does include capital recycling. Tony's called out the communities business. There remains a number of other capital recycling initiatives that are in progress that we won't go into detail about. Taking all that into the mix, we're comfortable with where net debt is currently sitting, and we're comfortable to make the statement that we expect net debt to be sort of at or near that sort of midpoint of the target range as we approach the end of FY 23. Oh, that's great. Thanks for that clarification. Then on the TRX, how much did that contribute in the profit this half? I think it was around that AUD 15 million-AUD 16 million, that sort of magnitude. On a, on, yeah, at an EBITDA line. Okay. On the U.S. apartments, when they're in September, I think Lakeshore was at about 23% pre-sold. I mean, mortgage rates are up a bit. How's the presales on that project on the Lakeshore East condo? I think Lakeshore is at that sort of level at this point. I think where we see just the market, with interest rates, I would say the condo markets have been a bit more subdued, but again, that project is in partnership, and Lendlease has about a 42.5% equity interest in that project. All right. Just finally, just on the business in the U.S. construction business, any change, post new management there that you'll look to sort of lower the exposure to certain markets in the U.S. to reduce costs there and just focus on your core strengths in that market? Yeah, I think Claire's been in the role just coming up to 90 days. We are just looking at where the US heads in strategy. A large part of the future of that business is around the delivery of the Google projects and working closely with that, our key customer there. Claire's just working through that. Sholto, what I intend to do is as we get to the full year, we'll give a bit of an update on where we see all the different businesses moving. I know the project has got different milestones, but the office sort of has to start before the resi, but there's some nuances with the resi can start drop dead date. Does that impact the timing of the Google project with the apartment side of things and then Lendlease is doing with sort of job market that Google sort of outlined in the last few weeks? I think the key for us in working with Google was firstly to get all the four projects master planned. Pleasingly, we've done that on San Jose and Middlefield. The team's very focused now to get the master planning for both North Bayshore and Moffett Park complete. We're working very closely there. The key for those projects has always been to deliver build to rent and build to sell products because there's a real shortage of residential product in Silicon Valley. We are working very closely with Google on sequencing and timing and working when we first launch which project. Still more work to be done. I think as the market slowed, for a lot of different players and their needs for real estate are changing, we are just going to work with our customer and work out the best sequencing and timing for all the four projects. Great. Thanks very much, Tony and Simon. Appreciate your time. Thank you. Thank you. Your next question comes from James Druce from CLSA. Please go ahead. Hey, good morning, Simon and Tony. Just following on from Sholto's question, can you say that gearing will be lower second half than it was first half? Is that the message that we're hearing? No, I think that the message you're hearing is we expect gearing to be sort of, you know, at or near the midpoint of the range for the full year, which it was at the interim effectively. I'm not expecting net debt to substantially increase, but we're guiding towards that sort of at or near the midpoint of the range. We've got a range of 10%-20%. We're at 16.8%, you know, for the half. Exactly where we land in terms of if we can sort of bring it down lower, will be partially dependent on some of these capital recycling initiatives, you know, which may slip into the following year, which may occur this year. The, without those, I'm very comfortable saying that we believe that the, you know, the net debt will land at or near the midpoint. Of our target range. That's not taking into account some of these larger, you know, capital recycling initiatives that we're talking about. If some of those were to land, pre-30 June, then clearly, that would bring down the level of net debt, potentially quite substantially. Okay, that's clear. Just on the Barangaroo Resi Towers, as you sort of mentioned that the waiting 2024, 2025, is that a late 2024 story in terms of the completions? No, we are still on track as planned. We topped out on tower 1. We're 88% sold across all 3 towers. They're on track for their completion. They will complete around the middle part of FY 2024. Okay. It could be first half or more like at the semi-year end. It will be in the second half of the FY 2024 year when, that first tower completes. Right. That's clear. Then just on Metro Tunnel, I think you sort of drew down maybe AUD 100 million on the, on the provision. What was the drawdown and what is the run rate of cash outflow for the next couple of halves, do you think? I've got that number for you. It's. Just bear with me. It's. Look, I'm gonna circle back. I've got a number in my mind which is different than what the team's showing me. I do have that. I'll come back to you and then after the next question and then cover that one off. Thank you. Your next question comes from Simon Chan, from Morgan Stanley. Please go ahead. Hi. Good morning, Tony and Simon. First question is just on the Google project. I've noticed that the end value of Google project got marked up by $1.5 billion to $21.8 billion now. What's changed there? I think the predominant thing there would be more exchange rate, just in terms of how we're converting. I think we're holding that project and working through with Google just on the scale of what we're doing, overall. I guess I saw 2FX. That was pretty big, pretty big movement just for FX. My next question, you guys mentioned capital light several times in the presentation. Obviously, to execute that strategy, you're gonna need capital partners across various projects. Just wondering if you can get us through a feel as to, you know, how things are going at Van Ness. Also, you know, your strategy in terms of capital liberation at TRX and potentially bringing someone new in at One Circular Quay. Just how's discussions going with potentially interested parties? I mean, the new One Circular Quay, we've already brought in Mitsubishi Estate for 66% of the project. That's what we mean by being capital light. That project, we secured Mitsubishi up front as our partner to deliver that project. Lendlease has taken on a third of that project. At TRX, we've always said once we get to a position that the asset gets completed in the early phase of stabilization, then we'll look to realize value and we'll work with the right partners. I know the team are talking to both local and international capital on that. Van Ness, we've just kicked off the development there, we'll look to bring in a capital partner over the next sort of 12-24 months at the right time. I think like everything we're doing, we're flagging, we're moving to more of a capital light, with some of the projects that we are putting in delivery. As you know, with IQL in the UK, we brought in the Canadian Pension Plan to deliver the first three buildings on mine. Same thing, we brought in the Canadian Pension Fund. On 60 Guest, we've brought in Ivanhoé Cambridge to partner on that, and they're 75%. You can see a fundamental shift over the last 18 months on how we execute and fund the projects requiring less Lendlease capital and bringing more of our capital partners alongside us earlier in the development. Can I ask a question on the Chicago Southbank? The office components seem to have disappeared. They're replaced by more, replaced by a much bigger resi component. Can you perhaps talk through the rationale there, if this similar strategy could be rolled out across some of your other projects where you scrap the office and put more into residential? I think we look at all our projects over time and we're looking at the best way to optimize and look at the market demand for different products and determine what's the best and suitable best use for that project. On that, where we've seen softer demand on commercial space, we do see elevated demand for build to rent product. We do have a preference to really push that product going forward. The team, again, there's always planning restrictions and requirements that we need to follow within our master plan envelopes, but where possible, we are looking to optimize and focus on all build to rent going forward. Just my final question this morning, Tony. Your investment yield, 3.3%, it's rather low. I know Simon Dixon in his presentation blamed it on the denominator effect of Moorfields. What would the investment yield be like at an underlying 5% where it was pre-COVID, or like, is there still a drag due to whatever reason? Look, I think there's a I mean, we'll come back with the actual detail, but Simon's right. We did put a significant investment into 21 Moorfields for the period where that asset's not yielding at this point, and we flagged that that asset will complete, but it's a 100% leased to Deutsche Bank. There, that is part of it. I mean, as we've repositioned and reconstituted that portfolio, we've got different assets in different markets around the world that earn different yields. For instance, our PLQ assets in Singapore earn closer to that 3% to 3.25% yield because it's just that's the market there in Singapore in terms of the office assets do have that lower yield. We've got other assets that are at the higher level. What we are trying to do is get a blended portfolio to circa four and a half% over time. Yeah. Can I just add to that, Simon? If you kind of adjust the denominator effect for some of these early-stage assets, then you're looking more like 4%. We need to keep sort of working to push that up over time. Yeah. I mean, before COVID, it was always averaging 5%, right? Then COVID hit, and you guys blamed it on rent collection and all that, which was understandable. It just seems to struggle to get back up to the pre-COVID level and hence my concern. I think part of it's due to portfolio composition I'm pointing out. Part of it is, as you've got developments, it does take a little bit more time for those assets to stabilize and generate that right yield. Some of the assets that complete can take anywhere from 18-24 months to stabilize. It's very clear. Thanks, guys. Thank you. Your next question comes from Stuart McLean with Macquarie. Please go ahead. Good morning. Thanks for your time. Just continuing on the, looking at the investment portfolio there and the margins in funds management seem to have come down to 40% from 50%. Asset management margins a little bit down, and maybe AUD 20 million of cost has gone in versus PCP, so called AUD 40 million annualized. Like, are we now at a run rate on that cost increase coming through in investments and just that drag that we're seeing in this half performance, or do you need to continue to invest in people and costs there? No, I think we flagged at the strategy day again. I think I flagged that the margin was gonna be at that 40% as we were making some investments into the global team. We have brought in new people to the business in Australia, Europe, and we are intending to bring some talent into our U.S. platform. We see that margins will be at that sort of level over this next sort of 12-18 month period as we're growing out the team. Have we had flagged that, I would say, Stuart, back in November when we had the strategy day? Yeah. Yeah. Okay. Let's say around 40%. Do you expect growth from there, and where do you want to get to maybe by FY 2026 when you have that AUD 70 billion of FUM? Where would you like to see that? I think where we wanna be by 2026, we're targeting to get our margins back into that 50% range is where we'll be striving to because we'll have built out the team, and then it's about growth and being able to scale up that workforce over the next few years. Okay, great. Thank you. Second question is just around the $6 billion commencement in the second half. Appreciate circa $3 billion from One Circular Quay. Can you just discuss maybe the other $3 billion and how much the L.A. project is of that other $3 billion, please? Yeah I think is the other big one there. I think circa from memory, that's about AUD one and a bit billion, but I'll come back with the exact number. Stuart, we can give you some more detail on the rest 'cause it's made up of a number of other smaller projects. Okay. What sort of conditions do you need to see to that L.A. project to commence? Is capital there at the moment, near the tenant or vice versa? Just what are you looking at there to start that? Would you start on a spec basis, and you build each other as you go? No. We've already got a capital partner on that project, so we're just trying to make sure we get through the final phases of design and planning, and then we look to launch. We're just in the market on procurement, from a construction perspective and the like. There is a component of build-to-rent and office in that precinct. Okay. Thank you. Then just as we think about FY24 development earnings, just what are the key milestones that are needed, do you think to achieve that ROIC of at least 10% there? Do you need progress on Melbourne Quarter leasing? Is it TRX residential? Like, what are the key indicators that we should be looking for over the next 6 months to de-risk FY24 earnings, please? Yeah. I think 2024 earnings, I mean, there's, of course, we call out the One Sydney Harbour completion because that's gonna be a large proportion. There'll be TRX, there'll be Melbourne Quarter, and of course, communities are gonna be the big, probably four elements to the profit. We do need to see, you know, communities settling closer to that 3,000 of settlements next year. There's some of the big things that are gonna make up the profit for 2024 in development. Okay. Maybe just on that one, with settlement annualized, sorry, sales annualizing at 1,500, how do you ramp that up to 3,000 by FY 2024? I think currently we still have circa 3,000 of pre-sales that we're anticipating to settle. What we have seen is slower volumes, but we have pushed back a little bit just due to production, and weather delays, some of the completions this year into next year. We're very focused on getting to that 3,000 next year. Sorry, last one. Melbourne Quarter and leasing, any leasing discussions and progression on Melbourne Quarter, please. There's a number of tenants that we're talking to, but there's nothing at this point that I can point to. We're just in ongoing negotiations with a couple of key tenants. Great. Thanks very much for your time. Thank you. Your next question comes from Ben Brayshaw from Barrenjoey. Please go ahead. Good morning. Thanks for the presentation. I was wondering if you could give an update on just the impairment to the U.K. operations in a little bit more detail. Just interested in how you've arrived broadly at the AUD 200 million as the gross provision, and whether it exclusively relates to fire and cladding, or whether there are other risk factors there that, you know, you've also taken into account. Look, it's a complicated matter, and it's something where the government has changed the rules for defects and liabilities from 6 to 30 years, and it does apply to changes that the building safety regulations on completed buildings. What I would say, these buildings, when they did complete, they actually were compliant at the time. What we have done is take a gross provision that does cover all the Crosby portfolio, which is 56 buildings. That was acquired back in 2005. We have extrapolated and taken a view across all those 56 buildings when we have come up with our provision. And again, I'm calling out it's gross because we do anticipate some recoveries from third parties, supply chain and insurances, because we do have a pretty good insurance program in place. They're the key things. It's based on available information we had to date, and we do believe that provision's sufficient and appropriate. I think the other thing I'd add, Tony and Ben, is that it's clearly unusual because it's, you know, a result of this sort of retrospective government action. We've really stepped it out in a lot of detail. If you look at the financial statements, in note 18, and we also pulled that out and included that as an appendix to the ASX announcement. You'll see there's a lot of detail in there around the background, and also we touch on the calculation there. Just finally, just I think you raise a point, is it relating to it is part cladding, but it's also interpretations of fire standards today versus those in the past, and that's what we're having to potentially remediate to. We've been working pretty hard to come up with what we believe is the most appropriate provision and sufficient provision today. Appreciate that, Carlo. I was just wondering if you could clarify as well, just the three non-core development projects. I think you've touched on Showgrounds and that being, you know, build-to-rent or at least part of that site earmarked for production. Could you just perhaps also give an update or provide any comments in relation to those two projects? Working through on selling off a number of plots. I think we do have interest in a couple of those other plots. Hopefully we can give a bit of an update there. As you said, the RNA, we've managed to, we're working with finalizing a key deal there on the RNA. We have managed to kick off the build to rent, which is some 443 units, and we are focused on really doing more of those type of funds through build to rent type projects. I think we flagged last year, Waterbank, we've dealt with and that's now fully settled. Terrific. Thank you for your time. Thank you. Your next question comes from Tom Bodor from UBS. Please go ahead. Morning, Tony and Simon. I just was wondering about the longer-term plans for the retirement business, whether you intend to hold the 25% long term, or you think that's a potential opportunity for capital recycling? I think, Tom, on that one, we always said for the first couple of years, we'd work with our partners to bed down the business. We've sold down, as you know, just under 75%. I think the final 25%, that's probably something that we would look towards recycling at the right point in time. It is something that we would do over the next sort of 12, 18 months. Okay, thanks. Just on the other provision you talk around the Elephant Park rent guarantee, can you talk to the leasing and performance on that project, whether it's ahead of that expectations in the provision, and if there's any scope for that provision to be written back? I think we've had very good, strong performance. I think the portfolio is now all above 95% leased. We're seeing good rental reversions from upwards anywhere from 4%-6% over the last sort of six months, which is a positive. We also completed another building, and I understand that that building's leasing ahead of its commercial assessment. I think, at the full year, we'll provide a bit of an update, but what I would say, I think we're comfortably, we'll reassess that provision and potentially there could be some release of that. Okay, thanks. On the sort of potential communities JV, could that also be supportive for the development ROIC in either 2023 or 2024, depending on when that transaction might happen? Yeah, I think that's right, Tom. I think that's the portfolio as we flagged, that we would like to bring in a partner to manage some of our capital. If we manage to do that 2023, 2024, I definitely think that will help our return metrics when we execute that deal. Okay, thanks. Just a final one on the cost savings program, which was obviously completed in the last period. Has there been further cost savings targeted across the business, or would you say that cost savings piece is now broadly complete? I'd say we've managed to bed down and extract that value from what we did last year, and that savings is embedded in the future performance. What we are doing is constantly looking at ways on our cost of sales to drive more productivity, and we continue to look at ways to drive more operational efficiency. You know, we'll continue to do that going forward as we look to improve our business model and our operating model. Okay, thanks. Is there any sequential benefit into 2024 from the cost savings or is it largely reflected in the 2023 results? I think you'll see that in 23, but as a management team, we're looking at the slower market environment and again, just thinking of ways on how to optimize costs. We'll update the market at the full year if there's anything material that's changed. Okay, thanks. Thank you. Your next question comes from Richard Jones from J.P. Morgan. Please go ahead. Hi, Tony. Just further to the 3.3% investment yield, are you able to clarify how much of the invested capital is non-income producing? Look, I don't have that on hand, but I'm happy for the team to come back to you with that. Okay. Just in terms of TRX. Sorry, in your comments, I think you said it was 80% committed, the deck says 70. Is that what you said, sorry? That is correct. Post the 31st of December, which is the 70% as of today, an update as of the weekend. We've had another good level of progress on leasing. We've added another 10% lease until we're above that 80% target now. Okay. When what month will that complete? It's aiming to complete and be open, for Christmas in FY 2024. It's about got another 8 or 9 months. We're going to, I think, completion certificates in the next month or so, and then it goes through a commissioning phase where all tenants come in, so I think we commission that over a 6, 7 month period post that. Okay. That's it from me. Thanks. Thank you. Your next question comes from Alex Prineas from Morningstar. Please go ahead. Morning. Thank you. Just wondering on the development margins, you know, clearly with bond yields higher than a year ago, there's potential for movements in land prices and prices of finished products. I know you sort of mitigate that with, you know, a lot of the land being held on capital efficient terms or you don't own the land. It's held by a land holder. I was wondering if you could provide a bit more commentary on exposure to sort of just movement in the price of land or price of end product. Our portfolio, a large proportion, as you point out, is around land management. If you look at the way, the capital is deployed, we've got about AUD 400 million of capital against conversion. We've got about AUD 2.4 billion of capital, across the master plan phase and then circa another AUD 3 billion in... Excuse me. Across, across, the condition you wanna pick that up. Sorry. I think Tony's needs to have a glass of water. It's apologies. I think if the question goes to concerns around the impact of the current sort of inflationary environment and rates on, I guess, the overall commercial assessments on our development book, I think it's with existing projects, we have a large proportion of those do have land management agreements in place, so they will adjust. There's good protection there. Clearly when we're looking at new opportunities at the moment, we are factoring in some of these additional risks in our CA and looking for additional margin in that before proceeding. You know, to that extent, it's factored in on new projects, really through the commercial assessment of margin, existing projects through the land management agreements by and large. Yeah, I think I was gonna say the same thing. To Simon's point, about 70% of the projects are in land management. If I look at one of the new projects, I mean, One Circular Quay, we were targeting where we bought the land outright, again, for a 20% plus margin on that project. Where we are looking to acquire land upfront, we are looking for that 20% margin. In terms of the portfolio, we'll time things depending on market circumstances and also, you know, what the rental outlook is for certain sectors when we time those projects. You know, each year we go through every six months a pretty comprehensive review of all our commercial assessments and update the market on anything that needs to take a valuational devaluation. To be very clear, one must remember that development ROIC that we report is a segment development ROIC across the portfolio. It doesn't mean the underlying projects are low returning projects. It's really a matter of scale. We don't have enough projects producing or completing to deliver profits to cover the overhead embedded in that business. That's why the primary reason why the development ROIC is low. It's not due to the underlying projects. Yes. that all makes sense. I guess at some point, you know. The sort of developer risk has to transfer to you because you're, I guess, you're responsible for the, you know, achieving the end price. Does that risk generally sort of come across of risk and, you know, potential upside, I suppose, as well? Does that come across to you at the point at which you typically start construction or is it, does it depend on the deal? Can you just provide some comment about what? It's on a project-by-project basis where you look at whether or not you start. I think as we've pointed out as a business, the goal is to always commence circa AUD 8 billion of projects in any given year. When we are launching those projects, we do make sure there's a level of de-risking or there's a capital partner brought in. We're assessing the market at a point in time. You only see the final outcome is when you complete a project, because some of these things depend on final leasing, that we need to achieve when we're completing those respective projects. There's a number of factors that go into generating that final margin. Okay, thanks. Thank you. Your next question comes from Chirag Udani from Citi. Please go ahead. Hi, everyone. Thanks for the opportunity. Two quick ones. Firstly, on the investment division, are there any more opportunities for divestment profits like the one that was generated this period with the military housing sale? I think we'll always keep looking at the portfolio and see if there's opportunities to divest various assets. I think that's what we're always looking at, and I think Simon did flag, we've always got a number of initiatives going on. We'll just update the market when we're successful on executing those initiatives. I think I'll just flag in that sector segment, we've also got the retirement living, so that's something we've clearly flagged that we're looking to divest. Okay. Thank you. Second one is on the payout ratio. Obviously, you know, the business requires more capital as it's growing, like you pointed out, Tony, but is it fair to say that the payout ratio stays towards the lower end of your target range? I think, you know, the dividend policy is at 30%-50%. That's always a board matter. You know, this period, we paid a 32%, which was completely out of the trust as a distribution. You know, each period, depending on the profits we generate at the core line, will determine the right adequate dividend, but the policy is 30%-50%. Okay. Thank you. Thank you. There are no further questions at this time. I'll now hand back to Mr. Lombardo for some closing remarks. Thank you. Thank you all for attending the call. It's actually quite pleasing in terms of, where some of our core operating metrics have moved to in terms of really the focus is pivoting the group to an investment-led business. Our funds under management have grown to that AUD 48 billion. We feel we are on track to ensure we deliver that AUD 8 billion of completions in 2024. From an operational standpoint, we moved and progressing quite well on a number of these key metrics. Thank you for attending. Simon just wants to say one last comment. I do. Thank you, Tony. Apologies to James at CLSA. Just to get back to you on your question around Metro Tunnel cash flows very quickly. AUD 125 million spent in the first half. Expecting about AUD 180 million in the second half. Second half FY23, 180. Thank you. Okay. Thank you all.