Lendlease Group (ASX: LLC) shares are pushing higher on Wednesday morning.
At the time of writing, the ASX 200 stock is up 3.5% to $5.23.
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Why is this ASX 200 stock rising?
Investors have been buying the property developer's shares this morning after it announced a major contract win.
According to the release, the ASX 200 stock has secured the Sydney Metro Hunter Street West Over Station Development, which also includes construction of the new metro station beneath the site.
The project will see Lendlease deliver a 52-storey premium commercial tower on the corner of George Street and Hunter Street in the heart of Sydney's CBD.
Known as the West Tower, the building is expected to achieve a 6 Star Green Star rating and will feature up to 58,000 square metres of commercial office space and around 1,000 square metres of retail space.
It is fair to say that the scale of the project is significant. Lendlease estimates the West Tower will have a gross end value of approximately $2.2 billion, while the associated station construction contract is valued at around $1.5 billion.
Construction is targeted to commence in FY 2027, with completion expected in 2032. It notes that this aligns with the planned opening of the Hunter Street metro station.
Future earnings boost
Management highlighted that the project will contribute meaningfully to Lendlease's future earnings profile.
The group expects to receive development management and performance fees, as well as construction income, and noted that the development has been structured in a capital-efficient manner. Encouragingly, returns from the project are expected to be above the group's cost of equity, reflecting Lendlease's disciplined approach to new opportunities.
The ASX 200 stock's CEO, Tony Lombardo, said:
Growth momentum is building across our core segments. Securing the Hunter Street Over Station Development and 175 Liverpool St residential development during 1H FY26, we have added ~$5 billion to our Australian Development pipeline year to date. The award of the Hunter Street contract has resulted in ~$4 billion of new Construction work being secured in the first half.
Following strong progress to simplify the Group, our focus remains firmly on strengthening our balance sheet and developing opportunities for growth across our Australian operations and international investment management platform.
The Hunter Street win also represents another step in rebuilding Lendlease's Australian development pipeline. The company revealed that the project contributes to a goal of securing more than $10 billion of new opportunities in FY 2026, adding to an already secured pipeline of $10 billion.
In addition, Lendlease is progressing discussions on several other major projects, including the RNA Showgrounds redevelopment in Brisbane, which is set to host the Athletes' Village for the 2032 Olympic Games, and a large residential metro development in Melbourne.
