Lendlease sells MSG North in $250M deal

Lendlease Group (ASX:LLC) has made further progress on its capital recycling strategy by entering into a definitive agreement to sell its development rights for the Milano Santa Giulia mixed-use project, known as MSG North.

The deal, struck with an investment group sponsored by prominent local developer Bizzi & Partners, carries a gross transaction value of approximately $250 million.

Under the agreed terms, the purchaser will acquire Lendlease’s units in the Heartbeat Fund—the vehicle holding the specific development rights—for $90 million in cash proceeds while assuming roughly $160 million in existing project debt.

The divestment is being executed at a discount to book value, prompting Lendlease to forecast a post-tax operating loss of approximately $175 million, which will be formally recognised within its capital release unit for the 2026 financial year.

Completion of the transaction remains subject to standard conditions precedent, including necessary third-party regulatory approvals.

Despite the short-term financial loss, corporate leadership emphasised that the strategic divestment successfully frees up capital from long-dated, complex international projects.

By offloading the site, the ASX-listed developer completely removes its future capital obligations, ongoing development costs, and associated holding liabilities.

At the time of reporting, Lendlease's share price was $2.66.