Housing and tourism at vanguard of Hedland’s post-boom transition

Port Hedland investors and developers are proving to be resilient and opportunistic, but it remains to be seen how the Pilbara town will successfully diversify from its resources-reliant economy. 

The Pilbara town of Port Hedland continues to offer investment opportunities, despite the challenges of its transition to the new post-boom environment.

Several local business owners have stepped up, taking advantage of new, simplified proposal requirements to buy land for new developments and enter into exclusive working arrangements with LandCorp to build housing estates.

A host of new dining options has popped up and long-term investors are continuing to pump millions of dollars into retail, residential, commercial and industrial developments across the Port Hedland and South Hedland region.

Bunnings is set to open its first store in the Pilbara in Port Hedland, and the town has also welcomed two new social enterprises, which are showcasing community development and financial opportunities.

Port Hedland has also become the unlikely home of arguably Dome Coffees Australia’s biggest and most expensive cafe in Western Australia, estimated to cost between $5 million and $6 million.

While it’s been suggested Dome may have overcapitalised on the redevelopment of the historic building, which once was home to Royal Flying Doctor Service staff and now seats 230 guests, there’s no doubt it has brought new life to the area.

It is one of only a few businesses to have taken advantage of the beautiful sea views in its location near the port entrance.

Dome is sure to attract more visitors if a planned marina, housing and commercial development is approved along the adjacent coastline.

Known as the ‘spoil bank’, the area is uniquely characterised by the sight of giant iron ore carriers passing by beaches that regularly welcome nesting sea turtles.

The major development, which initially aimed to include up to 250 boat pens as well as a hotel, has undergone several changes over the past few years, with the first aspect finally set to get under way. Earlier this month, construction group Finbar Group received development approval to build the first of a four-stage project in the area which will demolish the old hospital to make way for a first stage of 109 apartments and six commercial lots, valued at $390 million.
Meanwhile, The Town of Port Hedland has also chalked up an asset sale, finalising a total $205 million deal with an AMP Capital-led consortium last week for a 50-year lease of the town’s international airport.

According to the council, which has not been able to run the airport at a profit, the arrangement has the potential to deliver almost $389 million in community investment over the life of the lease.

LandCorp East Pilbara regional manager Brad Pawlenko told Business News there were several potentially game changing developments, besides the spoil bank, occurring in Port Hedland.

A big focus has been put on redeveloping the South Hedland town centre, where a $75 revitalisation plan is under way, including a new row of shops at the Charter Hall-owned shopping centre.

Building is about to begin at BHP Billiton’s $51 million Quattro project, a short walk from the shopping centre and nearby new hospital, which will include 50 townhouses, 30 apartments and 50 square metres of commercial space.

Other housing and commercial developments nearby are also under way or have been recently completed.

Mr Pawlenko said plans were also in place to develop several stages of housing estates a few kilometres east of the spoil bank near Pretty Pool in Port Hedland, with homes likely to be on bigger lots.

“If you live in Port Hedland you love your caravans, you love your four-wheel drives and boats, so a lot of people are saying they’d like to see some bigger lots,” he said.

Hedland First National Real Estate principal Morag Lowe told Business News that, despite a number of older commercial properties becoming vacant, the market remained hot.

Ms Lowe said older homes that had not been renovated were also increasingly vacant, including some on the market for $350,000, but east coast investors were coming on board to redevelop them.

This kind of renovation investment may grow, with the cost of labour in the town normalising to make hiring tradies for casual jobs affordable again.

The new Bunnings store is another factor in this trend.

“There’s this myth that this town has come to an absolute standstill,” Ms Lowe said.

“We’re busier than we’ve ever been. The macroeconomics have changed dramatically, but they were never sustainable in the first place.”

Pilbara Development Commission acting chief executive Terry Hill said Port Hedland was adjusting to life after the mining boom, which subsequently led to housing prices at its peak being 150 per cent higher than in Perth and health and business costs up to 30 per cent higher.

Mr Hill said as prices normalised businesses, politicians and local organisations had responded with a united approach to developing the town and surrounds.

“I think one of the things that characterises the Pilbara is there’s no consideration of failure as an option,” he said.

“That energy that we’re going to make this happen, we’re not going to fail, we don’t think about failure, we think about what we’re going to do and how we’re going to drive the Pilbara, is incredibly impressive.”

More to do

Significant challenges remain, however, particularly in terms of developing new housing to match ambitious population targets. Ongoing effort is also required to make the town more liveable all while diversifying the economy from its traditional reliance on resources to include sustainable new income streams from industries such as tourism.

Local member and former Nationals WA leader Brendon Grylls said he had been incredibly frustrated by the opposition’s reaction and others to the state’s investment, and financial losses, on Finbar’s Pelago high-rise housing development in the Pilbara town of Karratha.

CRAFTS: Port Hedland's West End markets are a lively addition. Photo: Form

Mr Grylls told Business News the whole point of the state investing in the Pelago project, whose twin towers are now a striking landmark at the end of the main street, was to bring prices down and help normalise the market.

He said he hoped the state would also invest in Finbar’s Port Hedland project near the proposed marina, in which developer Mirvac Group initially showed interest before pulling out about two years ago.

“It’s very important and Hedland people should demand that the government works closely with Finbar to deliver that outcome,” Mr Grylls said.

“Some of the negative politics of that project in Karratha, in my opinion was complete rubbish”

For its part, Finbar is also keen for the state to reinvest.

AEC Group senior consultant Michael Campbell, who was visiting Port Hedland as part of a council-led economic summit, said despite controversies, continued investment was crucial.

“It’s not like the world opened up and ate us because the iron ore price went below $US50 a tonne,” he said.

“We’re still here; you look at the investment that Finbar is making in the community. Companies don’t make those investments unless they’re confident about the area and too many people don’t know that story outside of the Pilbara.”

Tourism

While there appears to be a more strategic approach to developing housing, tourism ideas have been slower to come to fruition

Creative arts group Form, which has transformed Port Hedland’s indigenous arts scene as well as set up one of the new social enterprise, Provedore, as the only restaurant in Pretty Pool, is in the midst of establishing a tourism pilot.

Form executive director Lynda Dorrington told Business News it had invited Tourism Council of Tasmania chairman Simon Currant to experience the Pilbara and help inform potential tourism endeavours.

Mr Currant, who played an integral part in developing a number of ecotourism hotels and experiences, including Cradle Mountain Lodge and the Spirit of Tasmania ferries, said the Pilbara had a rich indigenous culture and incredible places of natural beauty, such as Karijini National Park.

However, he said unless developers could provide unique experiences, as opposed to just beds, they wouldn’t be able to compete against other outstanding nearby tourism destinations.

An alternative attempt to improve tourism, which hasn’t required any new infrastructure, has been the Town of Port Hedland’s recent trial aimed at capitalising on the town’s strategic location.

The council has opened up a free short-stay area for self-contained grey nomads, who travel across the top end in their caravans, to encourage them to spend time in the town instead of just passing through.

Mayor Kelly Howlett said the overflow area and the recent installation of a grey water dump point were aimed at complementing existing caravan parks.

Surveys of the visitors showed almost half had not planned on stopping until they heard about the initiative.

Once in town, receipt collections showed the visitors were spending their money in more places than anticipated.

Grocery stores and petrol stations noticed a boost, but the most significant spend was at small businesses, including hairdressers, newsagents, restaurants and mechanics.

“Feedback was extremely positive,” Ms Howlett said.

• The writer travelled to Port Hedland as a guest of The Town of Port Hedland.