Leading Perth residential apartment developer Finbar International Ltd has just completed the $21 million purchase of two new inner metropolitan sites, as its high density apartment model continues to benefit from the state’s property boom.
Leading Perth residential apartment developer Finbar International Ltd has just completed the $21 million purchase of two new inner metropolitan sites, as its high density apartment model continues to benefit from the state’s property boom.
The John Chan-led Finbar has 10 projects under construction (almost 1,000 apartments), with sales approaching $500 million.
“We acquired a number of good quality sites in the past two to three years which has placed us in good stead, and sales for projects for the next three years are all but done,” Mr Chan told WA Business News.
Earlier this week the group paid $8.5 million for 175 Adelaide Terrace and has plans to build a nine-storey residential complex with up to 200 apartments.
The previous week, with joint venture partners Wembley Lakes Estate, City Regency and Kalgang Pty Ltd, it bought the Nutrimetics site on Albany Highway, Victoria Park for $12.5 million. It will build 66 apartments on the property after the lease expires in June 2007.
The latest acquisitions cap a particularly busy time for Finbar, with Mr Chan predicting further opportunities in Perth’s high density property market.
“Inner city apartments are our core business and we see Perth as an infant market with a lot of catching up to do to reach critical mass, so we have no intention to move outside of WA,” Mr Chan said.
Last month the company announced plans for a $12.36 million capital raising, by way of 15.45 million shares at 80 cents per share, to provide working capital and pursue additional property developments.
Also in May, Finbar concluded sales on its biggest project to date, Reflections Waterfront Apartments at Langley Park, and sold out its most recent release, Domus apartments on Hay Street, East Perth, in the first weekend on offer.
Domus, another of the company’s joint ventures with Wembley Lakes Estates, comprises 80 two-bedroom apartments and one commercial lot, and generated sales of $32.3 million. It is expected to deliver $7 million in profit.
Reflections, a Finbar joint venture with Singapore-based Ventrade Asia, has recorded off-the-plan sales of $118.7 million. Construction on the complex has commenced and the project is scheduled for completion in late 2008, with profits expected to exceed $24 million.
The group also recently paid $3.48 million for two Lake Street properties in Northbridge, and $6 million for a site on the corner of Milligan and Wellington Streets, Perth.
Finbar uses a partnering model in many of its developments to help provide the capital needed to sustain the projects.
Typically, joint venture partners contribute to land acquisition and construction costs and then share in profits with Finbar.
Finbar began life as a shipping company before being reinvented as a property developer and listing on the Australian Stock Exchange in 1995, enjoying 12 years of continuous growth and the confidence to operate successfully in quieter market times.
“There is no sales risk at present and, with increasing fuel prices and lifestyle advantages of inner city living, we believe there will always be a demand for our product,” Mr Chan said.
Finbar is not resting on its current success that has seen its share price more than double from the start of the year to 95 cents at start of trade on June 13. It is mindful of upcoming players in the apartment development space.
International property developer Frasers Property Group, through its Australian arm, recently purchased the old MTT bus depot site in East Perth, and has plans for a 300-apartment complex and hotel, while Sydney-based Mirvac is also active in WA, with developments at Burswood and Bunker Bay, among others.
