Finbar wins tender to build $300m serviced apartment project in Port Hedland

High-flying WA residential property developer Finbar has been selected as the preferred developer to turn the former Port Hedland Hospital site in the iron-ore rich Pilbara region into 367 serviced apartments.

The $300 million project will overlook the state government’s $152 million Spoilbank Marina Precinct in Port Hedland and is part of its "Pilbara Cities" initiative, which aims to turn Karratha and Port Hedland into sustainable and attractive cities of 50,000 people each by 2035 as well as grow the population of Newman to 15,000 by 2035.

Finbar’s shares on the ASX were placed in a trading halt today $1 per share ahead of the announcement.

Trading has since re-opened with the share price rising to $1.06 following the announcement.

In choosing Finbar, the WA government would have taken account of Finbar’s successes in the Pilbara to date.

The developer recently completed stage one of its $225 million Pelago project in Karratha and has since commenced work on stage two.

The project features 292 residential apartments and 22 commercial lots.

The completed Pelago West component comprises 114 apartments while Pelago East will comprise 184 apartments, upon completion.

Following the Port Hedland appointment, Finbar will now enter into an exclusive working period with WA’s land and property development agency Landcorp.

Finbar will firm up design concepts for consideration by the relevant authorities followed by the intended purchase of the site from the state government for redevelopment.

Subject to approvals, Finbar plans to proceed to market and commence construction on the Port Hedland site early in 2013.

The former Port Hedland Regional Hospital site is a 3.15 hectare parcel of land located on Sutherland and Morgans Streets in Port Hedland, situated directly opposite the Port Hedland Yacht Club.

Aside from the 367 short stay serviced apartments along, the project will also feature ground floor commercial office and retail units, which will reflect the requirements for the State Government funded $152 million marina and tourism precinct.

The former hospital site is next door to Mirvac's $125 million hotel and residential project which will consist of 178 hotel rooms and 116 residential dwellings.

“Port Hedland represents a significant opportunity for Finbar and allows us to demonstrate further innovative housing in the Pilbara area,” said Finbar managing director, Darren Pateman following the announcement.

“The Spoilbank Marina project itself will be a milestone for the Port Hedland area and will provide real relief to local residents and businesses that are crying out for alternative recreation and accommodation options.”

“Accommodation in the North West is certainly in strong demand and Finbar’s agility will enable us to respond quickly for the benefit of the town, its businesses and our shareholders."

“Ideally, the Spoilbank Marina precinct will enliven the Port Hedland community and become a destination which workers would prefer to call home.”

“From what we have witnessed, there is a pent up demand for cosmopolitan living and we believe that Spoilbank Marina will become the prime Port Hedland location.”

In its most recent Pilbara Cities Newsletter update for Port Hedland, LandCorp said will release development sites this year will have the potential to accommodate an additional 1,200 dwellings.

The Pilbara – the epicentre of WA’s iron ore boom – has a total of $175 billion committed to new resource and resource related infrastructure projects.

According to the WA state government, the total value of minerals and petroleum production in the Pilbara by 2018 will be approximately $211 billion.

The WA government identifies the key challenges for the Pilbara due to growth in recent years are:

• Housing is less affordable due to unmet demand.
• Infrastructure upgrades/expansion are not keeping pace with growth.
• Small business numbers have declined partly due to rising costs.
• Education and health services are below expectations.
• Community services facilities are aging and inadequate.
• Sense of community is in decline, adversely impacted by workforce fly-in, fly-out rosters and 12 hour shifts.