14/10/2010 - 00:00

Cedar Woods tips top profits

14/10/2010 - 00:00

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PERTH-BASED residential developer Cedar Woods has announced the acquisition of a significant parcel of land in Forrestdale.

PERTH-BASED residential developer Cedar Woods has announced the acquisition of a significant parcel of land in Forrestdale.

The purchase comes as the company predicts a solid year of profit after strong first quarter sales results.

Cedar Woods managing director Paul Sadleir said the company had in place $115 million worth of sales that either occurred in the first quarter of the financial year, or were scheduled to settle during the latter three quarters of the year.

As a result of the forecasts, Cedar Woods anticipates a record first-half profit, with a full-year net profit after tax of $24 million for financial year 2011.

“We’ve been able to upgrade our forecasts given that prices for pre-sales are essentially set and locked in, and that’s taken out a lot of the market risk around this current year’s profit number,” Mr Sadleir told WA Business News.

“We’ve obviously still got to complete construction, title and settlement, but half the battle is on the market side and we’re well advanced on that.”

Mr Sadleir said the strong economic fundamentals emerging from Western Australia’s resources sector, and the continued strong performance of the Melbourne property market, where Cedar Woods has significant exposure, contributed to an increasingly buoyant outlook.

“Perth had a very strong lead-up to the global financial crisis and it’s been a little bit flat for the 12 months coming out of the GFC, then it had a pretty good year last year,” he said.

“The fundamentals are there in terms of population growth and income growth and employment numbers are very strong this week, pushing the Aussie dollar close to parity, so we are pretty upbeat about the future outlook for both WA and Victoria.”

At Forrestdale, Cedar Woods announced its latest project, the $7.4 million acquisition of 10 hectares of land in new suburb Piara Waters.

Cedar Woods plans to develop 135 residential lots of approximately 430 square metres, subject to development approvals.

Cedar Woods WA state manager, Stuart Duplock, said the price-growth performance of nearby suburbs Canning Vale, Harrisdale and Southern River gave the Piara Waters land solid medium-term development potential.

“The reason this is a good acquisition for us is we already have a 15ha landholding close by, so we know the market,” Mr Duplock said

“We’re happy with the price that we paid and there will be some economies of scale in managing the two together.”

The Piara Waters news follows Cedar Woods’ sale of 30 lots within the first fortnight of marketing Harrisdale Green, which has been developed through a joint venture with the Department of Housing.

 

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