Property and infrastructure group Lend Lease said it is increasingly looking offshore for development opportunities as Australia's rising land costs are making it less attractive to build locally.
Lend Lease said today at the Macquarie Investment Conference, that residential demand in Australia remained strong, with the growth in demand for apartments signalling the urbanisation trend in the country.
But the group said its share of the Australian apartment market remained "modest" -- totalling only around 2 per cent of the sector.
Lend Leasesaid it was increasingly looking offshore for opportunities for new building projects, after rising land prices in Australia made it less attractive for local project origination.
Despite strong housing demand, especially in Melbourne and Sydney, Lend Lease said its medium term focus was on international markets, particularly Asia and the Americas.
The group said dwelling completions had not kept pace with housing demand since 2011, even though strong population growth and low interest rates have triggered a supply response in the housing market.
Lend Lease said, in Australia, foreign buyers represented between 30 and 35 per cent of recent apartment sales. The remaining domestic buyers are split evenly between owner-occupiers and investors, the group said.
The company also said there would be no material impact to its full-year earnings after the axing of the Victorian East West Link road project. Once finalised, the deal between the project consortium and the government will result in a $1.4 billion reduction in the group's construction backlog, and the release of Lend Lease's $115m committed equity.
However, Lend Lease said it was expecting a rise in pre-sales revenue by the end of the financial year, with new apartment launches in Melbourne and London over the last six months, and further launches in Sydney and Brisbane over the coming year.