This article is from the Australian Property Journal archive
PROLIFIC luxury developer Gurner has secured a $1.75 billion fund for its build-to-sell business, after securing a $400 million institutional capital backing from a global institutional investor believed to be Singaporean sovereign wealth fund GIC.
The deal allows Gurner to add an additional $1.75 billion in projects to its $10 billion pipeline of build-to-sell projects across Australia, and is another step forward in founder Tim Gurner’s 10-year strategy to transform the company from a private Australian property business into an “institutional-grade developer, fund manager and multi-platformed lifestyle brand”.
While the “global institutional investor” was unnamed, the Financial Review has reported it to be GIC.
“This gives us huge dry powder now in the build-to-sell sector to focus on opportunities that arise out of the market dislocation that will occur in the next 12 months, specifically in Sydney as we grow our brand there while also supporting our Melbourne and Queensland endeavours,” Gurner said.
With approvals now in hand, Gurner is set to launch the first stage of its $1.7 billion private island resort-inspired project La Pelago on the Gold Coast, while earlier this month the company comes a week after, Tim Gurner bought into a $1.75 billion project in Melbourne’s Docklands, entering into a joint venture with the Liberman family-backed City Harbour.
“We believe the timing is ideal as the cost of capital and interest rates continue to rise, alongside substantial cost hikes in the construction sector, which we expect will create a lot of opportunities for us,” Gurner said of the new fund.
“We believe the next six to 18 months will be critical as many developers may struggle to hold onto sites due to rising construction and holding costs, which will create serious opportunities for those who have the capital to act quickly.”
Gurner said that “with a lot of dry powder” the company will “actively but carefully” pursue new sites across the eastern seaboard of Australia, with consideration to opportunities that fall anywhere within the $30 million to $200 million land bracket.
The funding announcement comes off the back of the developer’s $1.2 billion build-to-rent fund secured last year, in partnership with alternative real estate investment manager Qualitas for the Groups’ GQ BTR platform.
The GQ BTR platform has already secured four seed sites totalling over 1,350 apartments and commenced construction on two build-to-tent projects in Melbourne, with another Melbourne and Sydney site to commence construction in early 2023.
Melbourne-based Gurner has been expanding across the country in 2022, recently setting up offices in Brisbane and Sydney while making an entry into the Adelaide and Perth markets, while former Southern Cross Austereo CFO Nick McKechnie was just been made Gurner Group CFO.
