SPECIAL REPORT: The head of a new boutique land developer believes difficult market conditions provide the perfect opportunity for the business to make a splash in the market.
The head of a new boutique land developer believes difficult market conditions provide the perfect opportunity for the business to make a splash in the market.
Boutique development and construction firm M/Group (BNiQ: MGroup) has rolled out its first residential subdivision in Secret Harbour, the first project for a new division headed up by former Port Bouvard boss John Wroth.
Mr Wroth was recruited to lead M/Land about 18 months ago, following a decision by M/Group managing director Lloyd Clark to create a more diversified property offering.
Formerly known as Match, M/Group has been active for 15 years in the Western Australian property sector, developing and constructing more than 30 developments, mainly comprising apartments and commercial offices.
Mr Wroth said M/Land’s first project at Secret Harbour would comprise 67 lots, with the estate to be developed according under M/Group’s boutique model.
It is expected first titles of the 25-block initial stage at Secret Harbour will be issued in April.
Mr Wroth said M/Land would target estates in the middle tier of land development, sized between 50 and 250 blocks.
“What we’ve deliberately done is kept the model that Match or M/Group have done so well to date and applied that to land,” Mr Wroth told Business News.
“We’re not out there looking at the master-planned 2,000-lot sites that need to go through a rezoning process; we’re more focused on strategic infill sites in established areas where we can leverage off existing infrastructure, being transport, schools, shopping centres etcetera.
“From the apartment point of view, Match started out looking for more boutique sites that could have been too complex for a standard developer, and the same applies back to the land.
“We target a minimum of 18 per cent return per annum for our investors so we’re not just out there putting sites under contract and trying to work out the project later.
“We certainly take it through a detailed amount of due diligence with our consulting team to make sure we have ticked all the boxes and assessed all the risks prior to committing investor funds and our own funds to the project.
“This is all along the same lines of what M/Group or Match in the past has done to date.”
While 2016 was widely considered to be one of the toughest years on record for land developers, Mr Wroth said the difficult market conditions provided the perfect opportunity for M/Land to enter the market.
“Because the majority of people think it’s not an ideal time to launch, that’s where there is more opportunity for us,” he said.
“A successful land development company, whether it be big, medium or small, is usually based upon their projects and buying those projects at the right price.
“And right now out there in the englobo land selling environment, that’s where the opportunity is.
“Providing you have got a reputation, you have got a skillset and investors behind you, there are some very good buys.
“And if you’re buying in this market, where the opportunity is, you’ve got yourself a pipeline for the market as it starts to improve and turn.”
Mr Wroth said the group’s construction arm, M/Construction, would not be expanded to include single-dwelling construction. Instead, M/Land had partnered with some of WA’s biggest builders, including ABN Group and Summit Homes Group, to deliver house and land packages.
“We’ve worked closely with them to ensure that the product is befitting what a coastal development requires down in Secret Harbour,” he said.
“Land subdivision, you can overthink it, but at the end of the day it’s the builder package and the way the developer works with the builder that will make or break the deal and make it that one bit more attractive to the buyer.
“In the final rollout, because we do have a built form background, I would expect we would put more attention towards the type of build and how good for its location it is, and what the target market is looking for, beyond what the majority of competitors probably produce.
“It doesn’t have to be too much, it can just be different materials and finishes on the outside; it could be different solar principles and sustainability concepts into the design.”
