Future Fund, Peet pair up

LISTED property developer Peet expects to expand its land holdings by as much as 30 per cent over the next five years after partnering with the Future Fund to buy and develop large, residential land holdings in Australia.

The agreement gives Peet access to the Future Funds’ capital to invest in large parcels of residential land and represents the funds’ first foray into residential property development.

The Future Fund is an independent investment fund set up by the federal government to meet future public sector superannuation payments.

Peet’s landbank is currently sitting at 52,000 lots after its $45 million investment in a 50 per cent share of the Flagstone West landholding in south-east Queensland.

Peet will either co-invest in the purchase of the land, in which case it will share in the profits, or the Future Fund will entirely fund the land purchase with Peet taking development management and project management fees as well as a share in the profits.

Peet chief executive Brendan Gore said Peet could push into new markets such as NSW and South Australia with the capital backing of the Future Fund.

“The big challenge for developers at the moment is access to capital, either equity or debt,” he said.

“With our retail syndication and our wholesale partnerships with the Future Fund ... we can now look at very large projects or portfolio projects.”

Peet would not estimate what the agreement with the Future Fund could be worth but Mr Gore said it was expected to run for at least 10 years and was unlikely to take acquisitions worth less than $20 million to the fund for consideration.

Peet is close to making its first acquisition with the Future Fund and will be actively seeking holdings in Australia’s key growth corridors that could be developed for the ‘affordable’ end of the market.

“That is our core market anyway so it is a good fit for both parties,” Mr Gore said.

“We are seeing some compelling investment opportunities particularly in WA and Queensland at this point in time.”