This article is from the Australian Property Journal archive
EXCLUSIVE: MELBOURNE temperatures are plummeting in the middle of winter but investors and developers are done hibernating with over $2 billion of capital currently in play for development site opportunities, as cashed up private groups open their cheque books to compete toe to toe with institutional players.
B&S Land directors Andrew Egan and Callum Williamson told Australian Property Journal, that investors are ignoring headlines and looking at the long-term fundamentals in the Victorian property market.
They said the recent campaigns the agency ran indicate there is at least $2 billion of unsatisfied capital currently in the market chasing opportunities across industrial sites, childcare centre developments, medium density super lots and residential land subdivision.
“Developers are looking beyond the headlines and seen the long-term fundamentals in Victoria’s housing market,” said Egan.
“They are buying for the next cycle,” he added.
Egan acknowledged there were short term challenges but said buyers recognise the timing in the current cycle and are making a move before its too late.
“Whilst in the short-term we are seen adjustments such as an exodus of investors due to the land tax, Victoria is still a strong market.
“Population growth remains strong, Melbourne has overtaken Sydney as Australia’s largest city. Developers recognise that Victoria is still where you put your money,” he added.
“Despite the headlines there is a chronic shortage of housing and people need a place to live,” Williamson said.
B&S Land have closed the EOI campaigns:
- A 58 hectare subdivision at 575 McGrath Road Wyndham Vale, permit lodged for 335 residential lots;
- A 13.63ha infill site at 193 Golf Links Road Narre Warren with approval for 228 townhouses;
- A 2.02ha residential infill at 198 Chapel Road Keysborough with a concept plan for 92 dwellings;
Williamson said residential developments are not the only sought-after sites.
As previously reported by Australian Property Journal, the group are currently marketing seven childcare centre sites.
“We have been run off our feet for this campaign. Buyers have jumped at these opportunities,” Williamson said.
“We’ve seen three types of groups emerge in this campaign – the funds who plan to develop, hold and lease to a well-known operator; the childcare developers who plan to secure an operator, develop and sell; and the owner operators.
“The government wants more parents to return to the workforce, so we’ve seen childcare subsidies reach $120 per day per child – this is guaranteed income from the government,” he added.
Williamson said the underlying features of the portfolio have also played a big role in attracting buyers. These are seven sites located within Villawood Properties masterplanned communities within Melbourne’s growth corridors.
“These masterplanned communities have a minimum of 800 lots, many of homes will be occupied by households with young families so that is a captive market for these childcare centres,” he continued.
B&S Land are also handling the sale of industrial sites.
Egan noted that private groups are emerging as the main bidders in the fringe industrial market.
“We are seen more private groups compete at this higher level of $100-150 million-plus. This market was dominated by the institutional investors who were playing catch up, looking to scale up the portfolio as demand for logistics and warehousing soared during the pandemic.
“But now we are seen the privates, more cashed up, making a bid for these sites,”
Meanwhile B&S Land are currently marketing the sale of a 40.5ha site at 55 Manks Road Clyde, which closes 18 July.
Egan said the Clyde site has attracted significant interest.
“There’s over $1 billion of capital just looking at this site.”
“This is an exceptional opportunity to acquire one of the last remaining subdivisional opportunities situated amongst some of Australia’s best Tier 1 developers including Villawood, Pask Group, ID Land, Evolve, Dennis Family Corporation, AV Jennings and SIG Group.”
The property forms part of the Clyde South PSP and has a potential development yield of approximately 750 residential lots.
It is one of the last remaining major sites in Melbourne’s south east, 10 minutes from Cranbourne, where former AFL footballer Fraser Brown recently paid $190 million for a site. The 70.42-ha golf course rezoned for residential (circa 1.000-1,300 lots) was initially expected to fetch $150 million.
It has been a long time between drinks for major $100m plus sales market, the previous major transaction sale prior to Cranbourne was China’s Country Garden offloading Melbourne estate Windermere for a reported near-$250 million in October last year.
Prior to that, Bruce Chan’s company Growland divested a future residential subdivision in Fyansford for $109 million. It was the second back-to-back sale for Chan, with the developer pocketing almost $300 million across both deals.
He also sold a 128.70-hectare land Moorabool for $176 million after buying it three years earlier for $49.76 million. It was a stunning flip for Growland, making a 250% gain on an acquisition three months before it was due to settle.
