THE property market around Mandurah may be in the doldrums, but major land developers have taken the breathing space provided by the global financial crisis to prepare for the next wave of growth in the sector.
THE property market around Mandurah may be in the doldrums, but major land developers have taken the breathing space provided by the global financial crisis to prepare for the next wave of growth in the sector.
To Mandurah’s north, listed Western Australian property developer Peet is doing the early work on the next stage of its Lakelands development, H&N Perry has just completed work on 74 blocks at its Madora Bay subdivision, and Mirvac continues to roll-out land sales at long established Meadow Springs.
Land developments have been fairly low key in central Mandurah, but a scan of recent city council town planning documents show new projects are still going through the approvals process. A notable one is Pindan’s Mandurah Quay, which wraps around the Aqueous apartment block.
LandCorp, too, has a new project – Mandurah Junction – a mixed-use development aimed at developing land near the local railway station.
To the south the action has moved from the coast to the eastern side of the Peel Inlet, where the new Forrest Highway has significantly improved accessibility. Several developers have grabbed land in the area that is part of the Murray Shire rather than Mandurah proper. Major developers like Satterley Group, Peet and Cedar Woods have been attracted to an area known as Nirimba.
A host of smaller players have positioned themselves around future growth communities such as Ravenswood and Yunderup. As a result, there have been some major fights over the speed and scale of development to take place in the area, part of which has spilled into the courts as a fight for compensation from landowners whose property was resumed for the highway to Bunbury.
Among the most advanced developers operating in this area, Port Bouvard is pinning its hopes on the Point Grey site and Satterley is marketing its Austin Cove estate.
While some suggest developers in the south have shirked the area to concentrate on easier pickings to the north, the big players deny this.
Acknowledging that it was a very competitive marketplace, Nigel Satterley said that there were about 600 lots available in the Mandurah-Peel area, nearly half a year’s supply in a region his group’s research suggests such sell around 1,450 lots in an average year.
Like many developments, those living close by are Austin Cove’s principal market, and Mr Satterley echoes the sentiments of many in the real estate market across WA.
“The demand is there,” he said.
“The biggest problem down there is people can’t sell their existing lots.”
Mr Satterley said his group was attempting to mix up the offer to find product that would sell in the current market. Austin Cove has 2,850 lots approved and a further 2,500 yet to receive the tick from the various authorities.
Satterley is one player that had a compensation claim over some Austin Cove land resumed by the Department of Main Roads to build the Forrest Highway.
Mr Satterley, who acknowledges the highway has brought benefits to the development, said the parties agreed to a satisfactory price on the eve of formal proceedings starting in the State Administrative Tribunal.
Across at listed property group Port Bouvard, managing director Johnno Wroth is keeping his plans close to his chest for the same reason.
Mr Wroth said he expected to be marketing the first stage of Port Bouvard’s Point Grey development this spring. The development is critical for the company, which has had its debt woes exposed while many of the region’s private developers have been able to deal with their financial problems away from the public eye.
To stabilise its financial position, Port Bouvard has disposed of a host of smaller development sites to concentrate on Point Grey as a major master plan community along the lines of its signature estates abutting the Dawesville Cut.
Mr Wroth dismisses much of the negatives raised by various rivals, such as the price Port Bouvard paid for the land and the cost of connecting it to existing road and utilities infrastructure.
The Como-based property developer bought the 275-hectare site at Point Grey for $92 million in late 2006. Rivals have long suggested Port Bouvard’s offer was well above the nearest price but Mr Wroth disputes this. Furthermore, with 3,080 lots planned, he points out the cost per lot was around $30,000 each.
He points more than half of the $62 million raised last year was ring-fenced to be used to develop the Point Grey site.
Mr Wroth also highlights the group’s innovation at the project, pitching for the state’s first privately owned water treatment and sewerage plant as a way of not just reducing costs but providing the company with future opportunities.
Nevertheless, Mr Wroth acknowledges the marina proposed for the site is fundamental to the project’s economics.
On the map the likes of Point Grey and Austin Cove look like outliers at the fringe of suburbia’s southern growth, but local authorities believe there is significant demand for land in the area, which has been held up by the state government, not the after-effects of the global financial crisis.
Murray Shire executive manager strategic development, Brett Flugge, believes the state government’s obsession with infill development since the mid-1990s has distracted it from providing the land that people want, especially in his area, which is not only linked to Perth via the new highway but has its major employment via resources projects.
Mr Flugge said the infill targets set by the conservative state government in Directions 2031 had been watered down from Labor’s Network City, but still remained too high for industry or the current bureaucracy to cope with.
“We are saying to government we have willing land owners and investors who want to develop their land but they can’t so unless the state government takes its foot off the hose,” Mr Flugge told WA Business News.
“They want to hold back development on the fringe because they want increase infill development in Perth.
“Our argument is greenfields development, albeit budgeted at much lower density, is easier to roll-out.
“It might be costly to extend various services but, compared to infill, it is actually cheaper. The standard 600 square metre residential block that Satterley and Peet churn out, that is what the market is demanding and that is not going to change in a hurry.’’
