02/09/2014 - 14:01

Developers lift earnings

02/09/2014 - 14:01

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Property developers have reported substantial earnings growth during the 12 months to June as low interest rate settings foster a transition from resources to dwelling investment.

Property developers have reported substantial earnings growth during the 12 months to June as low interest rate settings foster a transition from resources to dwelling investment.

Perth’s largest listed developer, Peet, achieved a 23 per cent increase in revenue to $296.7 million, citing strong sales and improved margins as key factors.

Asset divestment and cost management also contributed to an increase of more than 3,300 per cent to net profit after tax, to $30.3 million.

The company highlighted Victoria and Western Australia as the strongest performers in residential property, driven by low interest rates, population growth and stable employment markets.

Peet announced a final dividend of 3.5 cents per share, the company’s first distribution since 2011.

Cedar Woods Properties also performed strongly, with revenue up by 24.1 per cent to $214.5 million and net profit after tax up 11 per cent to $40.3 million.

Strong ongoing population growth, relatively low unemployment, and positive consumer confidence underpinned the WA market for Cedar Woods, which said demand from first home buyers had given way to ‘upgraders’ and investors in the middle and upper markets.

Cedar Woods delivered a record full-year dividend of 27.5 cents per share, a growth of 6 per cent.

National player Stockland, which has a strong interest in WA commercial and retail property, achieved a 400 per cent rise in net profit after tax to $527 million, saying positive residential market conditions and a strong growth strategy played a significant role.

Stockland’s 2013 report was hit by a $318 million impairment.

Underlying earning per security grew 7.1 per cent, ahead of guidance, while distributions were unchanged at 24 cents per share.

Revenue was up 12.2 per cent to more than $1.9 billion, and acquisitions totalled $390 million, with $224 million in the commercial division.

Mirvac Group, another national major with a WA presence, achieved strong occupancy levels, with its retail division at 99.1 per cent by area, and offices at 96.1 per cent.

The company said that, despite signs of improvement in retail, leasing conditions remained challenging.

About $3.4 billion of commercial development is in the Mirvac pipeline, including Perth’s Treasury Building and a joint venture at Perth City Link.

Mirvac’s revenue increased by 28 per cent to just under $1.9 billion, with net profit after tax up 219.7 per cent to $447.3 million, following $273.2 million in impairment costs last year.

In its annual report, Mirvac said the transition from mining investment was under way and being supported by accommodative financial conditions.

“A strong expansion in housing construction, a lift in consumer demand to modest levels and signs of improvement in investment intentions of other sectors are emerging,” the company said.

Mirvac announced a $169.8 million half yearly distribution, worth 4.6 cents per share, taking its total for the year to $331.1 million.

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