Home sales still sluggish: Lend Lease
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Property developer Lend Lease says that while lower interest rates are encouraging more people to start house hunting, sales remain sluggish.
Security holders at Lend Lease's annual general meeting on Thursday heard that while the group expected a rise in property settlements this financial year, they would be struck at lower prices.
"We are beginning to see inquiry levels increase in response to lower interest rates, but the uncertain environment and the lack of impetus to buy in a market where valuations are not increasing, means this is not yet translating into sales," chairman David Crawford said.
"Lower valuations also translate into reduced availability of leverage."
Mr Crawford said Lend Lease was trying to offset market weakness by having a broad property portfolio, with a focus on homes in the affordable price bracket.
He added that while conditions in the group's markets around the world remained challenging, earnings growth would be underpinned by new projects.
"We have a significant project pipeline and clear priorities on where we will allocate our capital and are well on the way to delivering our target 15 per cent return on equity over the medium term," Mr Crawford said.
In Asia, Lend Lease says it will look for new opportunities in the retail and mixed use sectors with joint venture partners.
However, it expects uncertainty regarding the European debt crisis to continue to make trading difficult.
The group has begun to see early signs of recovery in the United States.
Lend Lease says it has been monitoring the slowdown in Australia's resources project approvals but is encouraged by recent infrastructure announcements by the NSW government.
It plans to start construction on its waterfront Barangaroo development in Sydney's CBD by the end of December.
Chief executive Steve McCann said the group hoped to invest between $1 billion and $1.5 billion in next three years in growth opportunities.
It also expects to realise the same amount in capital, including from the sale of some assets.