Construction of US$1.2 billion tower halted

A US$1.2 billion project in San Francisco, US, has been halted as the company looks to de-risk it

The construction of a US$1.2 billion office and residential tower in San Francisco, US, has been halted by Global property group Lendlease as it looks to ‘de-risk’ the project.

The tower, known as Hayes Point, is the single largest investment in the US by Australian-based Landlease. The tower, expected to be finished by 2026, was set to be a mixed-use complex, with 333 residential properties on top of 290,000 square feet of office space.

In a media call after announcing the group’s full-year results, chief executive Tony Lombardo, said, “We have got A$260 million (US$166 million) currently invested in the project. It was a decision over the last couple of months to pause, but [we’re] really making sure we de-risk it appropriately before we’re prepared to put further capital in.”

Lendlease made an after-tax loss of A$232 million (US$148 million) in the year to June. The company was also forced to lay off about 10% of its global staff earlier this year as it looked to cut costs.

San Francisco recently embarked on an programme to revive some areas of the city by easing the process for office-to-residential conversions and cutting fees with the hope of kickstarting construction projects.