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Anthony Lombardo: Good morning, and thank you for joining the Lendlease 2026 Half Year Results Presentation. I'm Tony Lombardo, Group Chief Executive Officer and Managing Director of Lendlease. With me is Simon Dixon, Group Chief Financial Officer. Sitting here at Barangaroo in Sydney, we're on the land of the Gadigal people, and I extend my respects to their elders past and present. Today, I'll provide an overview of our half year 2026 results. Simon will talk through the financials, and I will then cover the outlook and strategy. We'll then open for questions. Starting on Slide 4. FY '26 is a transitional year for Lendlease as the strategy reset announced in May 2024 continues to be executed. There are 3 core components of the strategy that I want to highlight today. The group is being repositioned to focus on our market-leading Australian operations and international investments platform, reported as Investments Development and Construction, or IDC. These businesses have historically delivered double-digit returns on equity through the cycle and continue to show strong operating momentum. The other core element of our strategy was the establishment of the Capital Release Unit, or CRU, to facilitate the recycling of capital from underperforming or non-core parts of the group. At the May 2024 strategy update, we announced that $2.8 billion of CRU assets were on the market alongside a further $1.7 billion of CRU assets identified as being available for sale. We have now announced or completed the exit of $2.8 billion of CRU assets. In addition, we've made strong progress with advancing the remaining asset pool with a further $1.5 billion of assets targeted for the second half. In May 2024, we also announced our intent to launch a securities buyback subject to specified preconditions. The main outstanding condition is achieving a clear contractual visibility to a sustainable underlying gearing level of 15%. In the first half, we've increased that contractual visibility through the signing of the announced TRX transaction and are progressing the satisfaction of conditions precedent for both the joint venture with the Crown Estate and the sale of our TRX interest. The divestment process for Keyton Retirement Living, the U.K. build-to-rent assets and the recapitalization of APPF Retail are all now in exclusivity. Capital recycling initiatives for our Victoria Cross investment and many other assets are also underway. We are targeting the completion of $3 billion in announced and active transactions in the second half of 2026 across both IDC operations and CRU. The 15% gearing threshold is assessed on a forward-looking basis and requires a degree of contractual certainty on the receipt of sale proceeds translating into net debt reduction. As that certainty increases, we should be in a position to commence the buyback. The group maintains a strong financial position with $3.3 billion of liquidity and flexibility provided by the recent hybrid issuances. This position enables us to take a measured approach to capital recycling. Turning now to Slide 5 and our half year financial performance. As anticipated, with limited completions in development and lower transaction earnings in investments, the IDC segment EBITDA of $204 million was down from $341 million with an improved performance from the Construction segment being a highlight. Moving to CRU. As we have stated, the segment's primary purpose is capital recycling with $500 million of further progress made in the period. At the group level, a statutory loss for the half of $318 million was recorded, including $118 million of noncash negative investment property revaluation and impairments, primarily in the U.S., U.K. and Singapore. The group operating loss after tax of $200 million included a positive $87 million contribution from IDC and a loss of $287 million from CRU. The CRU operating loss included a $95 million write-down of community land parcels as previously flagged last calendar year, and that is after tax, $95 million, and a further $44 million provision in relation to tail risks in the exited international construction businesses. Reported statutory gearing was 25.8%, benefiting from the hybrid issuance. The group continues to target underlying gearing of 15% by the end of FY '26 subject to the completion of targeted recycling initiatives across both CRU and IDC. Simon will talk to our balance sheet position and capital management later in the presentation. Our Investment segment earnings highlighted on Slide 7 are derived from funds under management and contributions from our directly held co-investment portfolio. Our team's focus is on performance, liquidity and growth to drive positive outcomes for our investors. Funds under management was stable at $48.7 billion and included $1.5 billion of additions. The group held $2.9 billion of co-investment capital at the half. We continue to actively manage this position to support an appropriate balance between capital alignment and our role as manager of third-party capital. Portfolio movements in the period included increasing our investment in the APPF Industrial Fund and downweighting ownership in LREIT. The co-investment portfolio remains well diversified with a primary weighting to workplace and retail assets. The co-investment yield driven by underlying asset performance remained consistent with a gross yield of 4.4%. Our investments platform continues to grow with more than 80 investors. We have $2.8 billion of capital available to deploy across existing mandates. And we have $4.7 billion of capital being raised for a Japan value-add mandate, a new Australian private credit partnership and existing funds and develop to call product. We remain highly active in the market, completing $4.4 billion of gross property transactions across our investment platform in the period. Turning to development on Slide 8. There were $1.3 billion of development completions this half, including Victoria Cross in North Sydney. Across our residential business, gross apartment presales increased to $3.3 billion with settlements weighted to FY '27, expected to deliver gross cash proceeds to Lendlease of circa $1 billion. We've made strong progress growing the Australian development pipeline with more than $4.7 billion of new projects secured in the half, and we remain well positioned to achieve our $10 billion target for this financial year. Sydney Metro Hunter Street West Over Station development was secured as was the luxury residential project 175 Liverpool Street in Sydney, alongside existing partners, Mitsubishi Estate Asia and Nippon Steel Kowa Real Estate. We are focused on unlocking $12 billion of future development opportunities from balance sheet holdings at the RNA Showgrounds in Brisbane and our Roselle Bay site in Sydney. We currently have 2 residential opportunities that we are pursuing in Melbourne, representing a further $4 billion of project and value. In the half, we secured a role as Master Development Manager for C Capital for the rezoning of land in Victoria for industrial use, leveraging Lendlease's development planning capabilities. Lendlease expects to earn new development management fee streams with rezoning targeted by FY '28. Lendlease has the option to secure all or part of the industrial land post rezoning, which is expected to have an end value of around $4.5 billion. Our origination efforts remain focused in Australia, deploying a capital-light joint venture partnering model. Together with our strong liquidity position, this enables us to remain well capitalized to pursue new development opportunities as we continue to replenish the development pipeline. Moving now to the Construction segment on Slide 9. Revenue growth for the half was strong, up 22%, driven by new project commencements such as the new Melton Hospital and multiple data center projects. Disciplined project execution saw an EBITDA margin of 3.7% recorded for the half. There was $4 billion of new work secured, another very strong result led by the Hunter Street West Over Station development contract following $3.8 billion secured in the prior period. New wins contributed to a strong Australian backlog revenue position of $8 billion, up 36% on FY '25, with an existing social infrastructure and defense backlog. We continue to pursue and win high-quality work with an additional $9 billion of active bids underway, including major transport, social infrastructure and data center projects. This backlog revenue, together with a preferred work book of $6.9 billion places the business in a strong position to increase its future revenues and earnings with circa $15 billion of secured and preferred work. Before I hand over to Simon, I'd like to make a few remarks. Today's financial result will be Simon's last for Lendlease, with Simon finishing in his role as Group Chief Financial Officer at the end of February as he relocates to Asia. I'd like to take this opportunity to thank him for his dedication and contribution to the organization and wish him every success in his future endeavors. I would also like to welcome Andrew Nieland into the role from the 1st of March. I look forward to working with him in his new capacity. I'll now hand over to Simon to talk through the financials.
Simon Collier Dixon: Thanks, Tony, for your kind words, and good morning, everyone. I'd like to acknowledge what a privilege it has been to spend the last 4.5 years working at Lendlease. I firmly believe the strategy that we have in place is the right strategy for the benefit of our security holders, customers and our people, and I wish the team every success in continuing to execute it. Starting with the group's financial performance on Slide 11. As Tony mentioned earlier, limited completions in development and lower transaction earnings in investments led to a lower IDC segment EBITDA of $204 million, down from $341 million with an improved performance from construction. In Investments, segment EBITDA of $101 million reflected a stable underlying operating performance with the prior period including transaction earnings associated with the formation of the Vita Partners joint venture of $129 million. In Development, segment EBITDA of $34 million reflected the timing of major completions with the prior period including $118 million from Residences Two, One Sydney Harbour. In Construction, segment EBITDA of $69 million was driven by 22% higher revenues and improved project performance. The CRU segment reported an EBITDA loss of $284 million, down from a prior period gain of $34 million, reflecting previously mentioned noncash write-downs and provisions and the limited completion of capital recycling transactions. Group corporate costs decreased 4% to $55 million, reflecting cost savings from downsizing and productivity improvements, partially offset by elevated costs of finance transformation. Operating EBITDA fell to a loss of $135 million compared with a gain of $318 million in the prior period. Depreciation and amortization reduced materially as IT amortization wound down and tenancies were exited following the simplification of the group. Net finance costs decreased to $85 million, reflecting a lower average cost of debt and lower average net debt levels. The group recorded an OPAT loss of $200 million compared to a gain of $122 million in the prior period. This includes an $87 million positive contribution from IDC operations, representing $0.126 per security. Moving to a summary of segment performance on Slide 12, beginning with the Investment segment. The segment performance was stable across key measures. Total EBITDA of $101 million reflected a stable underlying performance. Management EBITDA from funds management activities reduced modestly to $48 million, reflecting lower fees and margins in Australia, offset by a stronger performance in Asia. Management EBITDA margin of 40.7% reduced from the prior period, although was comparable to FY '25's full year margin of 40.6%. Co-investment EBITDA of $42 million was lower due to a lower level of co-investment as a result of asset divestments and recapitalizations. In the Development segment, a return on invested capital of 3.2% was achieved as there were limited completions in FY '26 to date as anticipated. Capital was also transferred to the segment from CRU in the period in relation to the announced development joint venture with the Crown Estate and the Comcentre project in Singapore, which is a joint venture with Singtel and along with production capital spend during the period resulted in a $1 billion increase in the development capital balance to $2.1 billion. In the Construction segment, revenue increased by 22% on the prior period, reflecting a higher level of project activity, including commencement of the New Melton Hospital and a number of data center projects. EBITDA increased to $69 million. The segment achieved an EBITDA margin of 3.7%, demonstrating continued strong performance from the second half of FY '25. Turning now to Slide 13. The primary role of the Capital Release Unit is to accelerate the release of capital. To date, we've completed or announced $2.8 billion of CRU capital recycling initiatives, including $500 million of new asset sales this half. CRU recorded an EBITDA loss of $284 million, which included the write-down of Communities development land of $136 million pretax, provisions taken in relation to tail risks in the exited international construction businesses of $44 million and the underlying cost base, which includes people costs, IT costs, legal costs, insurance and other overhead. The segment loss for the period compares to first half FY '25 gain of $34 million that included profits on capital recycling and land sales of $160 million that were not repeated this half. The CRU cost base is expected to reduce progressively as capital recycling completes and retained risks are resolved, although it is expected to remain elevated in the second half of FY '26. As we complete the remaining CRU initiatives, the release of capital will be a key enabler for our capital management priorities. This includes further reducing gearing, returning capital to security holders and creating capacity for disciplined reinvestment in accordance with our capital allocation framework. Moving now to Slide 14, which highlights our cost savings achievements. Net overheads reduced $58 million to $197 million, a run rate of below $400 million. This reflects the full run rate benefit of FY '25 cost savings and the early impact from further cost initiatives actioned in FY '26. In the half, we actioned pretax run rate savings of $21 million with further cost savings to be actioned by the end of FY '26. The full benefit of our $50 million in savings target is expected to be realized in FY '27 with a targeted exit run rate for overheads of circa $350 million at the end of FY '26. This will be achieved through the completion of asset divestments and productivity initiatives, including the removal of technology costs. Turning now to net debt on Slide 15. We have provided a walk summarizing key cash flows for the period, rounded to the nearest $100 million and outline the key cash inflows and outflows for each of the IDC segments and CRU segment. Reported net debt, excluding capital from hybrid securities, closed the period at $3.3 billion. Net debt is anticipated to reduce in FY '26 due to $3 billion of CRU and IDC transactions that are announced and underway. These include the targeted completion of announced TRX and The Crown Estate transactions. Transactions under exclusivity for Keyton Retirement Living, U.K. build-to-rent assets and the recapitalization of our APPF retail fund and capital recycling on Victoria Cross Tower. Offsetting these inflows across CRU and IDC are expected net production spend, interest costs, corporate costs and other. Achievement of our group gearing target of 15% by the end of FY '26 is subject to successful completion of these outlined initiatives this year. Turning now to Slide 16, covering group debt and liquidity. Half year '26 reported gearing was 25.8%, including the benefit of hybrid issuance in the half. Excluding this benefit, underlying group gearing was 32.9%. The group maintained strong available liquidity of $3.3 billion, comprising $2.7 billion of committed available undrawn debt and $600 million of cash and cash equivalents, providing balance sheet flexibility as further capital recycling is progressed. Debt maturities are well balanced with an average maturity of 2.5 years. Maintaining our investment-grade credit ratings remains a priority. I'll now hand back to Tony.
Anthony Lombardo: Moving now to Slide 18, the FY '26 financial outlook. FY '26 remains a transitional year with IDC earnings guidance maintained at $0.28 to $0.34 per security. The second half of earnings for IDC is expected to be stronger than the first half, supported by a similar underlying performance and anticipated transactional profits. IDC earnings are expected to further recover in FY '27, supported by major development completions, a strong construction pipeline and growth initiatives across investments. As transactions complete, CRU earnings volatility and associated financing costs are expected to reduce progressively, supporting the strengthening of the balance sheet. As such, no guidance has been provided for CRU earnings per security in FY '26 as the segment's focus remains accelerating capital recycling while balancing value realization and speed of execution for security holders. We are well progressed on our capital recycling initiatives and are targeting a total of $2 billion of CRU capital recycling in FY '26. Additionally, the group's strong liquidity position enables us to balance executing our recycling program with realizing value for security holders. Underlying group gearing is targeted to reduce to 15% by the end of FY '26, subject to the completion of our capital recycling initiatives. On costs, we are targeting an exit run rate of $350 million at the end of FY '26, reflecting $50 million of targeted cost-saving initiatives to be actioned throughout FY '26. Our current priorities remain strengthening our balance sheet, returning capital to security holders and importantly, redeploying capital for future growth in earnings in our IDC segment. Moving to Slide 19 and our medium-term growth and earnings profile from FY '27 onwards. In Investments, we expect to see management EBITDA margins above 40% in FY '27 and growing towards 50% by FY '30. We anticipate average FUM growth of 8% to 10% annually through the cycle, delivering scale benefits across the platform. We currently have $2.8 billion of available capital to deploy in the near term. We are raising more than $4.7 billion of further capital, supporting FUM and future earnings growth. Investor demand remains strong in a number of our key markets and sectors, including our core funds and mandates, where we have demonstrated capabilities and a proven track record, allowing Lendlease to deliver differentiated investment products. In Development, we're looking to secure more than $5 billion of development projects in the second half of FY '26 to achieve our $10 billion-plus target. We expect this momentum to continue with $4 billion of origination targeted per annum in FY '27 and beyond. In FY '27, we're on track for $4.5 billion of development completions, expecting to receive cash and profits from the settlement of One Circular Quay in Sydney and the Regatta in Victoria Harbour. We'll also generate new development management fee streams as a capital-light Master Developer on both the joint venture with the Crown Estate and Victorian Northern Freight Project for C Capital. In FY '28, there are $3.9 billion of completions targeted, including Comcentre in Singapore and One Darling Point. Lendlease should earn ongoing development management fees from its joint venture with the Crown Estate once completed. The JV also expects to earn profits from plot sales and will unlock potential development opportunities from its $50 billion development pipeline. This includes more than $20 billion of future investment product. In Construction, annual revenues are expected to reach over $4.5 billion in FY '27, stepping up to over $5 billion by FY '28, supported by strong backlog revenues and preferred work. We also expect to sustainably deliver EBITDA margins within the target range of 3% to 4% while pursuing both a disciplined approach to pricing and risk profile of future work. Additionally, the group will benefit from working capital inflows as the business grows. These key drivers provide confidence in the outlook for the group. Moving to Slide 20. In closing, my management team and I remain committed to delivering on our May 2024 strategy and our stated FY '26 objectives. We continue to build momentum across our investments, development and construction segments. Throughout the half, we continue to execute on strategic initiatives that we announced in May 2024. And we continue to lay the groundwork for FY '27 and beyond and have strong visibility to earnings in coming years. The group's strategic direction remains unchanged with a continued focus on disciplined execution, performance and long-term value creation for our customers, investors and security holders. Finally, I want to thank our hard-working and talented Lendlease people for their ongoing commitment to turning this great company around. Their efforts in delivering on our strategic priorities are vital to the future success of the business. And I'm personally committed to doing my part to ensure we achieve our FY '26 targets and continue building the momentum needed for long-term success. We'll now open up for analyst questions.
Operator: The first question will come from David Pobucky with Macquarie Group.
David Pobucky: And best of luck to you, Simon, going forward. Just in relation to the guidance range for IDC, the $0.28 to $0.34. If you could just talk to the moving parts between now and the end of the year that kind of drives the top and the bottom end of that range, please?
Simon Collier Dixon: Perhaps I'll have first go at that. The -- in the first half, IDC delivered $0.126 per security. To achieve the $0.28 to $0.34 per security range for IDC, mathematically, the second half has to deliver $0.154 to $0.214 per security. So the outcome of that range is primarily dependent on firstly, the continued underlying operational delivery across Investments, Development and Construction, completion timing of TRX and the completion timing of the Crown Estate joint venture. So the bottom of the range assumes more conservative settlement timing whilst the top of the range assumes those major completions occur in FY '26.
David Pobucky: And my second one on the provisions and the write-downs announced in the period. Firstly, could you just reiterate how much of that is noncash? And then secondly, in terms of the Communities land parcel, have discussions with the land parcel owner stopped in terms of negotiating an outcome?
Anthony Lombardo: So the noncash was $180 million. So it was $136 million for the Communities parcel pretax and $44 million in provisions on the international construction. In terms of the land parcel, we continue to have discussions with the landowner.
Simon Collier Dixon: And I would note that the write-down of the Communities parcel is absolutely noncash writing down of the existing balance. The provisioning on the international construction provision whilst there will be a timing difference, that will flow into cash outflows in the future.
Operator: Your next question will come from Simon Chan with Morgan Stanley.
Simon Chan: There was a lot of detail in the presentation regarding asset sales, et cetera, and you called out a $3 billion number, right, for the second half. But if I were to get you to dumb it down for me guys, and split the $3 billion just into 3 simple buckets. Can you give me an indication as to how much of the $3 billion is locked in and you just need to wait for the cash to come in through the door? How much of the $3 billion is in the final stages of discussions? And how much of the $3 billion is probably closer to the start or the middle of the sale campaign?
Anthony Lombardo: So firstly, the joint ventures with Crown Estates and TRX are contracted, and we're working through the CP. So that's some $640-odd million there. We've announced 3 exclusive transactions. So that is Keyton, the U.K. build-to-rent and the recapitalization of APPF, which will deliver over $1 billion. And then we've called out Victoria Cross, which we've now completed around looking to recycle some of our capital in that asset and a number of other investments. So that other group makes up the remainder. All those transactions are underway at the moment.
Simon Chan: Okay. That's quite clear. Next question, just on the actual results, there are 2 things I was hoping to get some more details on. One, I think you called out there was an interest expense benefit as a result of the hybrid in the first half. Can I just get an indication as to the P&L impact of that benefit? And part 2 of my question, I saw that there was a $47 million benefit from a reversal of a prior period impairment that came through in the first half. Can you give me some color as to what that is?
Simon Collier Dixon: So for the -- Simon, thank you. I'll take the first part. The hybrid benefit in the first half is $9 million. That was kind of relatively late issuances in terms of the -- during the second quarter that we issued.
Simon Chan: Okay. That's fine. And $9 million was booked through as a dividend rather than interest.
Simon Collier Dixon: That's right. Yes, just like all the other hybrids in the market.
Anthony Lombardo: And just on development, as we're progressing a number of unlocking our different development projects, there has been some provisions which have reversed through the period. And as we continue to progress those, we'll keep the market informed.
Simon Chan: So did the $47 million increase your NPAT -- I guess, sorry. So your NPAT increased by $47 million in the first half because of that reversal. Is that a fair way of looking at it?
Anthony Lombardo: That's the way to look at it.
Simon Chan: And just a final one, just a follow-up on the previous guy's question, Simon. I think when you were talking about the outcome for the second half, you talked about continued underlying operational delivery across investments and completion of TRX and Crown Estate, I thought TRX was in Crown. Am I wrong?
Anthony Lombardo: No. So CRU, we flagged that once the TRX completes, it will then move across as a funds management product. There was negligible profits as we called out on the asset. It was on the ASX slide.
Simon Collier Dixon: That's right. And it's part of it comes down also to timing around capital and the impact that has on interest expense. The Crown Estate JV is now clearly in IDC. You're right, the bulk of TRX sits within CRU, but the residual element of that will transfer into IDC. So in terms of ordering, it would be, firstly, continued underlying operational delivery across IDC; second, completion timing of the Crown Estate JV; third, completion timing of TRX for the kind of the 3 major components.
Operator: The next question will come from Ben Brayshaw with Barrenjoey.
Benjamin Brayshaw: I just got a question for Simon. Could you clarify the construction provision of the $44 million post tax, what does that relate to? And secondly, is that a net number inclusive of reversals of prior provisions?
Simon Collier Dixon: It's not a net number. It's a new provision. It relates to a long-standing project that have previously been delivered where we had ongoing liability. We've been able to assess and quantify that liability sort of late in the period.
Benjamin Brayshaw: And secondly, on APPF Retail, there's obviously been a lot of media commentary on the current situation with respect to providing unitholders with liquidity. Could you just give an update on the situation and also comment on whether Lendlease intends to retain its $200 million stake in the fund?
Anthony Lombardo: Yes. So we flagged today that the team had been working through liquidity. We're pleased that we have now in exclusivity with the party to recapitalize the APPF fund. And we intend to, as part of that, sell down our stake in that fund as part of the recapitalization, as I noted earlier.
Benjamin Brayshaw: And could that come through, just to clarify, in the second half? Or is it just too early to say of transaction timing?
Anthony Lombardo: We're anticipating to complete the recapitalization in the next few months.
Operator: The next question will come from James Druce with CLSA.
James Druce: Simon, best wishes with your new endeavor. I just want to get a sense what's the -- with CRU, what's the underlying expenses per annum if you see that in capital profits that you just need to sort of bear, like it looks like it's sort of over $100 million for the half. How do we think about that if you're not actually -- just literally the expense, if you're not actually delivering any capital profit through the year?
Simon Collier Dixon: I think a couple of -- yes, you're right, that's roughly the number if you back out the provisions. About 3/4 of that really is kind of direct expense, which is relates to employees, tenancy-related overhead. There's another sort of allocation, central allocation. Clearly, there's a lot of involvement from the center in managing out CRU. Those balances are required or those costs are required to manage the capital. There's still substantial capital and very large sort of projects being delivered within CRU and risk being managed within CRU. But clearly, we're watching that very closely. And one would expect progressively that will be managed down as capital is recycled. Tony, I'm not sure if there's anything you want to add.
Anthony Lombardo: No. Look, I think the key focus there is they are people, as to Simon, people, insurance, legal, technology costs that are making that up. As we round down and aim to complete the CRU divestments over the next coming 6 months, we will be progressively be targeting that cost base. We've already targeted costs to come down overall by another $50 million, and we'll continue to work through that as we progressively execute on CRU.
James Druce: Yes. So you provided a pretty helpful sort of medium-term thinking -- or '27, '28 thinking in your prepared remarks, Tony. So for CRU next year, you're talking about an aggressive cost reduction. Is that sort of what we should take away just from your comments then?
Anthony Lombardo: Yes. I think, CRU, the purpose of the CRU was intended for capital recycling. So that's its primary purpose. So we're very focused on completing that. We set ourselves a target this year of $2 billion. As we talked about, we've progressed $500 million. We've got $1.5 billion to still complete and so there's the focus. At the same time, we're completing that, we are looking at progressively taking that cost out. And so we are focused as a team to get that cost down to a more manageable base for next year going forward.
Simon Collier Dixon: James, this is Simon, we're acutely aware, obviously, of the holding costs associated with CRU and those management costs. We're also acutely aware of our cost of capital, which is why we are looking at any way possible really to accelerate that capital recycling through CRU through FY '26 and FY '27.
James Druce: Okay. And my second question is just around sort of management changes at the leadership level. Obviously, it's been publicly announced, Simon and Tony. But you've also had the Head of CEO of Construction move on, I believe, the Chief Risk Officer, the CEO of Development as well. Is there anyone else at that senior leadership that I'm missing there? And I'm just trying to get a sense of the confidence in the turnaround, some of this challenging sort of turnover that you guys have had?
Anthony Lombardo: Look, each of the executives that we've announced, there's either been retirement, personal or exploring other opportunities. So we've got a great depth of talent. I would say our new CFO, Andrew, spent over 18 years in the business. He was previously the Controller, and he's currently the CFO of the Investment Management. So he now steps up into the CFO role. Construction, Steph Graham has been in the organization for greater than 20 years. She actually had been running the Australian Construction operations for the last 18 months. Of course, as we've exited all international construction, that was the right time for Steph to now step up to the CLT in that role. Claire Johnson, who was running the CEO of the U.S. and as we finish up those, she was looking to relocate back to Australia. And pleasingly, Claire now steps into the role as our Head of Development for the organization. So there has been a number of moves in terms of leadership, but we've got the right leadership in place to take the business forward for many years to come. Simon will stay on in a capacity as an advisory role. He's going to help chair the CRU, as we called out, just to make sure we continue that focus on executing our capital recycling plan.
Operator: Your next question will come from Richard Jones with JPMorgan.
Richard Jones: Gearing is, I think, pretty consistently been higher than where you've guided. Can you provide some color as to what production spend and interest and overheads you anticipate in the second half?
Simon Collier Dixon: Sure. Thanks, Richard. I'll have a go at that. So we obviously didn't guide so much to kind of the half year until we gave a bit of an update sort of pre-blackout. We've kind of landed pretty much where we said we would in terms of the balance sheet. Clearly, it's very linked to the timing of the capital recycling transactions, many of which will progress, as Tony has alluded to. If we kind of roll forward to -- and again, this sort of is how to sort of think about the confidence levels around on a forward-looking basis of getting down to 15% gearing, excluding the benefit of the hybrids. But clearly, we have the $3 billion of CRU and IDC transactions, which are announced or underway, which we'll benefit from when they settle. On the -- in terms of the outflows, within IDC and CRU, it's pretty -- within IDC, it's a relatively standardized sort of outflow for the second half. In terms of net production spend, it's expected to be approximately $400 million. On the CRU side, we've got net production spend of approximately $200 million going out the door. Those amounts are fully incorporated into our gearing forecast. So there's nothing particularly unusual about those. The key is in terms of that forward-looking gearing is really around capital recycling and making sure that we continue to progress those transactions.
Operator: The next question will come from Suraj Nebhani with Citi.
Suraj Nebhani: Firstly, a quick one on the impairments, this period. Can you just talk a bit more about that? And also...
Anthony Lombardo: Suraj, can you please just repeat because it just broke up.
Suraj Nebhani: Sorry, can you hear me now?
Anthony Lombardo: Yes.
Suraj Nebhani: Yes. Sorry about that. So just the impairments in Amenities and the Construction division, Simon talked about earlier. Looking forward, can you give us a bit more comfort around the non-recurrence of this? And firstly, give us a bit more detail on what drove the Communities impairment, please and whether you sort of sure this is it?
Anthony Lombardo: So I will just repeat that question just to make sure because it's come a bit broken up. You've talked about the provisions that we have taken, in particular, the Communities, gross provision of $136 and the Construction -- international construction provision of $44 million. So just in relation to both of those, Suraj. So firstly, Communities, we did flag, we talked about we're in the courts on a parcel on Communities for the land in Gilead. The courts have found adversely against that. And therefore, we had flagged the risk around that $136 million. So we have now taken a provision against that, which is a noncash item. What we are doing is we're still in discussions with the landowner as we are trying to come up with a position to work that forward. So that's the Communities land parcel. On the International construction, we did call out, as Simon mentioned earlier, there was a risk around a project in the sold and exited parts of the business. We've now taken a provision of $44 million against that based on those known risks as of today. So that's the 2 key matters and the provisions we've taken in this period.
Suraj Nebhani: And Tony, just looking forward, how do you think about the provision-related risk in the business? Obviously, things can be uncertain, but just keen to get a sense of whether there's any potential businesses where you see some risk maybe something on that?
Anthony Lombardo: Look, again, I think it is breaking up a bit, Suraj. But in terms of you're asking of go-forward risk, what I would say is based on the known risk we know today, we've taken the known and appropriate provisions for the organization to cover that risk. What I would say is as we complete out a number of those contracts and different things that are ongoing, I'd say that risk is diminishing. Calling out that we recently completed the Melbourne Metro main part of the project. There is still some works that are ongoing there. But again, that's remained within the provisions that we had provided for as a group. So...
Simon Collier Dixon: Similar with the Building Safety Act in the U.K., similar story. Through the passage of time, those risks do diminish. But clearly, we'll continue to monitor and assess any other emerging risks in the balance of the portfolio as we move forward. But through the passage of time, these risks either dissipate or they become real and accessible.
Operator: The next question will come from Richard Jones with JPMorgan.
Richard Jones: Sorry, just a follow-up. Is 15% gearing target, is that predicated on $2 billion or $3 billion of divestments?
Anthony Lombardo: It's predicated on $3 billion, of which $2 billion is in the CRU and $1 billion in our IDC. But as I think there was a question asked is that it's broken into 3 categories: $640 million relating to contracted JVs with the Crown Estate and then the TRX we're completing CP, $1 billion related to the exclusivities of both 3 things that was Retirement Living, Keyton, APPF R recapitalization, U.K. build-to-rent. So that was over $1 billion. And then we are looking to recapitalize Victoria Cross now that's completed and a number of other transactions that make up that $3 billion.
Richard Jones: Okay. Can I then just ask on Slide 42, you've got the breakdown on the CRU invested capital. There seems to be limited progress on international land and inventory international JV projects looks like you've invested about $500 million once you adjust for the moving of the Crown Estates and Comcentre to development. And then the team projects and other haven't shown any progress either. Can you just provide some color as to what's happening in each of those buckets and when you might start getting some of that capital back as well?
Anthony Lombardo: Yes. I mean there are a number of projects that we called out at the Strategy Day that said we needed some $1 billion of further capital that needed to be invested and they related to things like Habitat, that related to 1 Java, that related to the Italian joint ventures that we've got underway, where we've got various things occurring at MIND in partnership with capital partners and also Elephant Park. So it's not a static balance. So you can't look at it that way, Richard, because there's capital and production capital that's being spent. Simon called out a further $200 million of production capital in the CRU that needs to be spent in the period. So as we've called out previously, in this period alone, there was some $100 million of capital that we recycled from land holdings that sit within the joint ventures. Now as a number of assets do complete like Habitat and Java, we will be looking to work out ways to best recycle some of that capital, same with some of the assets that are under development at MIND.
Richard Jones: Okay. Can you maybe give a bit more color just in terms of when the timing on more of that capital is going to get released because it's obviously a big drag on group earnings. Yes, so I don't know whether you can give us any more color...
Anthony Lombardo: So Richard, as we previously announced in the guidance, $2 billion of accrued capital that we're aiming to recycle this year, $500 million of that we've already announced in the period, and that was $400 million relating to TRX and $100 million relating to other land sales. So that was the $500 million we've achieved. We're targeting another $1.5 billion in the second half of this year.
Operator: There are no further questions at this time. I would like to hand the call back over to Mr. Lombardo for any closing remarks. Please go ahead, sir.
Anthony Lombardo: Again, thank you for joining today's half year results call. And again, I just wanted to thank Simon for his support over the last 4.5 years, and I look forward to catching up with our investors and analysts over the coming weeks. So thank you.