Stockland lifts local presence

NATIONAL property developer Stockland has boosted its Western Australian residential land holdings by almost 40 per cent to close the big gap between it and local leaders, Satterley and Peet.

Stockland announced last week it paid $271 million to buy 340 hectares of land in two estates from construction group Brookfield Prime Property Fund, part of the Brookfield group which took over Multiplex.

In the deal, Stockland also sold its half share in Bankwest Tower to Brookfield for $130 million. Brookfield now owns the whole building.

The acquisition of 3,900 lots at The Vale and Whiteman Edge takes the Sydney-based developer above 10,000 lots in WA, more than half the holdings of Peet, which owns or manages 19,240 lots in the state, based on estimates from its half year presentation, and Satterley which claims around 25,000.

Listed developer Cedar Woods has boosted its WA land holdings to about 5,070 lots when a 68ha, 800-lot acquisition in Baldivis is added to its estimated holdings at the end of the 2009-10 financial year.

At least two other significant land parcels are available in the Baldivis area, including a 27ha site held by a syndicate linked to the Watson Property Group and a 76ha site that was owned by the Oswal family behind the financially troubled Burrup Fertilisers. The Oswal land was put up for sale by external administrators and it is understood that the tender process has been completed.

The last other major acquisition in the greater metropolitan area was by the Satterley Group, which paid $90 million for about 105ha of land from a deceased estate at Harrisdale in the south-east corridor.

Stockland said it still held four office properties in Perth valued at around $350 million, which meant it had exposure to upside from the mining and resources sector. Bankwest Tower, an A-grade office building, is currently undergoing refurbishment.

Its major tenant is Bankwest, which extended its lease after delays to Luke Sareceni’s Raine Square development where it was both the financier and anchor tenant. Raine Square is in the hands of external administrators but the move by the bank is subject to legal action from Mr Saraceni.

Brookfield said it would fund its acquisitions through a combination of available funds, bank debt and an extension to its existing $372 million debt facility, to a three-year, $525 million fund.

The move, which effectively swaps a mature office asset for development land, signals a change of emphasis for Stockland in WA, where its landbank is now considerable.

After the deal was announced, along with a more complex land-for-office swap with Walker Corporation in four major east coast centres, Stockland managing director Matthew Quinn told the market last week that the deal reflected the group’s strategy.

“We have repeatedly signalled our intention to reweight our portfolio towards our three-R strategy, focusing on residential, retail and retirement living,” Mr Quinn said.

“Both transactions involve asset swaps, and the reinvestment of capital from non-core, management intensive assets into projects that fit Stockland’s long-term strategic growth objectives.”

The two estates it has bought are located in the fast-growing eastern corridor, which property player Nigel Satterley estimates is the fourth most active of Perth’s major areas of residential development.

Stockland said the two land parcels were within 4km of each other, which allowed it to focus on different areas of the new homes market.

The Vale is the bigger of the two parcels, with about 2,700 lots remaining for sale, having initially started trading in 2005.

Whiteman Edge has yet to be sold to the public and will yield about 1,200 lots.

The most active growth corridor is along the northern coast from Burns Beach road to Yanchep, with several major developers opening up land along Marmion Avenue.

LandCorp recently put out for tender a joint venture opportunity to develop half of its 240ha land parcel at Eglington, just north of Alkimos.

The Eglinton project sits next to Martin Copley’s 561ha Eglinton Estate.

Last year, multinational property developer Delfin Lend Lease said it would use the first stage of its Alkimos joint venture with state lands agency LandCorp to build its business and expand its presence in WA.

In July, LandCorp and Lend Lease announced they had finalised negotiations for the 224ha first stage and master planning for the Alkimos coastal development.

The first stage of development will include about 2,500 homes, with the first land scheduled to be released for sale in 2011.

LandCorp’s entire Alkimos plan, to be developed over 20 years, comprises 710ha and will include a town centre, coastal village and a possible marina.