July 2024: Investment Updates

The latest investment updates are set out below with most projects progressing steadily.

As an overview, residential projects/investments in southeast Queensland, SA and WA continue to benefit from relatively strong markets being driven by population growth and in respect of SA and WA affordability advantages compared with Melbourne and Sydney. Interestingly, the median house price in Brisbane recently surpassed Melbourne’s median house price, although demand for residential land remains strong in urban fringe markets. Likewise major regional markets in Victoria and New South Wales are benefiting from affordability differences when compared to their capital city counterparts.

Conditions in the Industrial sector generally remain sound with an ongoing underlying shortage of land; as well as the Social (health and childcare) sector where significant government support underpins occupiers.

View Updates:

Banks, ACT

The facility has been extended for a further 6-month term to provide the Borrower with additional time to complete the refinance.

Oakleigh, VIC

Construction works on site are progressing well despite inclement weather over July. The slab on ground is now 85% complete with strong progress made on level 1 & 2 slabs.

The project control group has opted to install a tower crane to assist in completing the front half of the site which will bring forward the project completion date from 17 April 2025 to 25 March 2025.

Morwell, VIC (Mezzanine)

Tatura
Stage 1 has achieved practical completion and works for Stage 2 are underway.

Considerable sales have been achieved, with the Borrower securing 99 presales out of 113 available lots in Stages 1 and 2.

A Section 173 agreement has now been approved and signed with VicRoads in June 24.

Morwell
The Borrower is progressing with the commencement of bulk earthworks for Stages 1, 2, and 3 at Morwell, having appointed a highly regarded civil contractor.

Sales are strong with 45 presales achieved in Stage 1.

Ballarat North, VIC

Gazettal of the Ballarat North PSP is anticipated to occur in mid-late 2025. The Borrower continues to work through the planning process. PSP amendment is expected Q4 2024, to include the Expanded PSP Area that includes the Property. Discussions held with the Victorian Planning Authority for the Ballarat North PSP gave the following updates:

Knowledge of whether the expanded area (that contains the Property) will be held within the PSP, is expected late 2024. Should Ballarat North PSP include the expanded area, amended zoning will be completed H1 2025. Finalisation of the Ballarat North PSP is expected late 2025.

Mount Cottrell, VIC

The facility was refinanced at the end of June and secured against the two remaining properties. The Oakbank PSP continues to progress through the due diligence phase.

Leakes Road, VIC

The facility was refinanced at the end of June. The property has been sold with settlement scheduled for September 2026 which should facilitate a straightforward refinance from ARK or an alternative lender on or prior to maturity to align with the settlement date of the incoming purchaser.

Gungahlin, ACT

The facility is likely to be refinanced at the end of September into a land facility for an additional 12 months.

This will allow the borrower to obtain a permit for the redesigned planning scheme to allow for over 500 apartments following the rezoning from council.

Burpengary, QLD

Works have been completed on site. The civil contractor has been demobilised from site.

The facility has been repaid three months ahead of the maturity date due to strong lot sales and settlements within the estate.

Sellicks Beach, SA

ARK refinanced the previous land facility into a construction facility on 4 June 2024.

To date, 14 of the 42 residential lots within the project have been presold with a further 8 on hold. Heightened interest is expected with a re-engagement of marketing channels.

Real estate agents are now conducting monthly Saturday open days, attracting 25-30 people, featuring a coffee cart, free food, etc., along with private inspections by appointment during the week.

Mont Albert, VIC

Following the strategic review of the group’s assets the borrower intends to sell the asset and has appointed agents to undertake a sale via EOI campaign.

Toowoomba, QLD

The civil contractor has now demobilised from site with the borrower advising that council’s inspection has been completed.

The practical completion letter is expected to be provided over the next week. Council’s on-maintenance letter is expected early September 2024.

Box Hill, VIC

Whitehorse council have unanimously approved the planning application for the development with a notice of decision being issued on 22 July 2024. Following this the planning permit will be issued within the next month.

As part of the review of the group’s assets, the borrower intends to take the site to market with the added value of the development approval. A joint sales agent is likely to be appointed in the coming weeks.

Newport, NSW

The project continues to receive interest with the largest allotment within the project on a agreed sale price of $12 million, which is 14% higher than the valuation. Formal execution of the sales contract is imminent, with plans and designs now finalised.

Over 90% of demolition and site clearing is complete, with the commencement of earthworks late July 2024.

Discussions continue with several interested buyers, who have made significant headway in the design for potential builds post settlement of the land.

Gawler East, SA

The refinance of the land facility into a construction facility is well advanced and is expected to occur imminently. There has been a slight delay in reaching financial close due to some documentation issues, which have now been resolved.

Deception Bay, QLD

Works continue to progress well onsite. Key milestones achieved this month are: internal civil works complete, footpaths and driveways under construction, electrical works/streetlights under construction, the civil contractor (Shadforths) site office being removed next week, and landscape works commencing next week.

Sales and marketing response has been positive with 37 contracts issued, 26 executed, of which 18 are unconditional contracts.

Munno Para, SA

The Borrower is currently collaborating with the Council to adjust the planning design scheme, anticipating the issuance of the permit over the next month or two. This will allow the Borrower to initiate a sales campaign in the final quarter of 2024, which is expected to generate interest in the estate before construction begins in 2025.

Morayfield, QLD

Works have largely been completed and the contractor has demobilised on site. There are only minor works remaining.

Shepparton North, VIC

Winslow have made strong progress on Sewer works, wetland construction and civil works since the completion of earthworks at the end of June for stage 1.

Practical completion for stage 1 is estimated at 8 November 2024.

Bracken Ridge, QLD

Works continue to progress well on site: earthworks completed, internal sewer and water works completed, roadworks underway with kerb installed, external sewer commencing next week, basin construction commencing next week, and the Energex Supply Agreement approved.

Sales and marketing response has been positive with 15 contracts issued, 7 contracts executed, of which 2 are unconditional contracts.

Wellington Street, WA

Development approval was received in March 2024 (DAP/23/02604) for a 33-storey, 835-bed student accommodation project.

To prepare for the future project, the Borrower has engaged a local builder to secure a construction contract.