Lend Lease’s head of property, Tarun Gupta, expects the company’s massive urban renewal pipeline will put it ahead of rivals in the race to take advantage of Australia’s housing recovery.
Mr Gupta told The Australian Financial Review before financial results on Wednesday that the company had received yet another development approval for 401 apartments at its $2.9 billion RNA Showgrounds urban renewal precinct in Brisbane.
He said The Yards project would be launched ahead of schedule after a faster sell-out of its neighbouring $350 million project The Green.
“Urban renewal is a key part of Lend Lease’s focus globally. It is a key plank to our strategy,” he said.
“The growing momentum at Brisbane Showgrounds is a great example of Lend Lease’s ability to regenerate inner-city precincts.”
Urban renewal would be at the forefront of local, state and federal government plans, putting Lend Lease in a perfect position for residential growth.
Lend Lease’s urban regeneration pipeline figures as of December last year included $17.4 billion in Australia, with developments such as Barangaroo in Sydney and Victoria Harbour in Melbourne.
“I’m not a demographic forecaster but Queensland is a core part of our portfolio. The Brisbane market is looking attractive.
“We are seeing much better volumes and demand coming through in Brisbane. Depending on the supply response, you will see price growth.”
Brisbane was the only eastern capital city where apartment yields dropped in the last quarter as higher apartment prices offset falling rents, said Australian Property Monitors. The average yield on apartment in Brisbane now stands at 5.27 per cent .
Mr Gupta said there were favourable macro-economic factors such as very low interest rates and population growth. “The sell-out of The Green and the ahead-of-schedule release of our newest residential offering, The Yards, confirm Brisbane city’s northern edge as one of Australia’s high-demand opportunities,” Mr Gupta said.
The Yards will front the precinct’s new high street, King Street, with a 1200-square-metre supermarket and up to 40 cafes, bars, street dining options and fresh food outlets.
Spread across two towers, North and South Yard, and 11 terraces, The Yards was designed by award-winning architects Hayball and features floor-plans that capitalise on breezes, views and natural light. The development will be launched next month.
Last week the $9.8 billion Stockland and the $6.8 billion Mirvac both revealed big increases in operating earnings and margins.
Lend Lease has been chasing residential exposure and has reportedly been negotiating with AXF Group to redevelop a full block on Sydney’s Circular Quay worth more than $1 billion.