Investa Property Group (“Investa”) now owns 100% of the 1,000 lot Georges Fair residential development at Moorebank in Sydney, following a buy out of its joint venture partner in the project, Urbex.
The project has an end value of $600 million which will provide a significant revenue contribution to Investa Land and bring the end value of Investa’s land projects to just under $3 billion, providing further scale to the company’s national land development portfolio.
Commenting on the transaction, Group Executive Investa Land NSW, QLD and VIC Cameron Holt said: “The acquisition represents a significant opportunity to grow Investa’s residential business and provides a prime opportunity to deliver increased returns to our investors.”
On the site of the former Boral Brick quarry in Sydney’s south-west, Georges Fair is one of the largest infill projects in Australia.
The opportunity to purchase Urbex’s 50% stake in the project will enable Investa to deliver an expected return that is above the level that would generally be expected for a project of this nature, providing a considerable contribution to Investa Land’s revenues over the next four years.
“Due to consistent demand and the continued limited supply of new land releases in themiddle ring of Sydney, land prices at Georges Fair have continued toprovide strong investment returns for us as a developer, and strong capital growth for our purchasers,” Mr Holt said.
“Whilst the residential market has slowed this year, discerning buyers are seeing value in well located and high amenity projects such as Georges Fair where sales have been as high as 25 lots per month.”
According to Mr Holt, purchaser sentiment in the housing sector will become more positive as NSW experiences a broader economic recovery with the strengthening resource sector and business investment flowing through to the rest of the economy.
“The residential market will gradually improve as employment levels remain high and interest rates remain stable, or see only modest rises. As Georges Fair has a strong track record across multiple market segments including second and third home buyers and investors, we are confident it will continue to perform,” said Mr Holt.
Commenting on market conditions going forward Mr Holt said: “Sydney continues to experience solid underlying demand for quality land releases. Continued population increases driven by household formation and high levels of migration, coupled with a constrained land release environment, particularly in Sydney’s middle ring, mean that Sydney is well positioned to be one of the strongest residential markets in the country in the next few years,” he said.
Nationally Investa has more than 25 residential and industrial developments underway or in the pipeline which incorporate in excess of 12,500 lots and over 450 hectares of industrial land.