Qube defies downturn

BOUTIQUE developer Qube Property Group has continued to defy market trends, with 27 projects currently under way throughout Perth with a book value of more than $1.5 billion.

Qube's current projects range from a 10,000 square metre office building in the CBD at 999 Hay Street, to a 1,700-lot sub-division adjacent to the Kwinana Freeway at Mandogalup.

The group has been responsible for a number of residential developments throughout the metropolitan area, including mixed-use developments in East Perth, apartment buildings at Northbank in North Fremantle, and the Cottesloe Flour Mills apartments conversion.

Qube recently announced it had obtained 70 per cent pre-commitment from tenants for a 1,870sqm Subiaco office development, despite negative economic pressures.

The group's success despite the harsh development climate was a result of its diverse investment structure, Qube managing director Mark Hector said.

"The benefit of how we structure our projects is that each development is a stand-alone entity,' Mr Hector told WA Business News.

"We generally don't use debt to acquire development opportunities, so in times like this when the market slows we don't generally have an excessive interest bill for each project chewing its head off.

"We're generally quite conservative and as a result have been able to get though this downturn relatively unscathed on the basis that our projects are just delayed, and there are no significant interest costs as a result of the delay, or pressure from banks to make something happen prematurely."

Qube acquisitions director James Collis said Qube's diversity extended beyond its structure to its scope of projects.

"We're quite unusual in the fact that we're diversified across most sections of the market, whereas our competition is usually specific to one area of development," Mr Collis said.

He referred specifically to a 1,200-lot subdivision at Bennett Springs Estate in Beechboro as an example of the group's diversity

"We've completed the land subdivision, we're developing the shopping centre, and we've presold and are constructing a group housing site of 18 units, all from the original parcel of land, and able to facilitate these three sectors under the one Qube roof,'' Mr Collis said.

"A lot of people would just sell that commercial site, and another developer would come in and develop it, so being able to see that opportunity is part of the whole vision of the business."

Qube plans to remain parochially Western Australian, with no plans of eastern states expansion.

"From an economic and financial viewpoint WA certainly appears to be one of the better placed states,' Mr Hector said.

"We're comfortable with the size of our organisation, we're comfortable with the diversity of projects, and at this point in time it'd be right in saying that we have no ambitions to expand east."