Lend Lease residential pre-sales up 15% but settlements down in weak market
Lend Lease recorded strong growth in off-the-plan sales of residential lots in the six-month period to December 31, 2011, but operating profits after tax remained steady at $220 million due to a slump in settlements.
The developer recorded a 15% increase in residential lot pre-sales from 1,870 lots to 2,335 lots.
Pre-sales represent contracts entered into before December 31, 2011 that have not settled and do not part of profit after tax in the current interim results.
The number of residential land lots settled decreased by 28% compared with the previous period to 805 units, “principally as a result of fewer settlements in Victoria and South Australia, reflecting current market conditions and a number of projects approaching completion”.
Lend Lease group CEO and managing director Steve McCann says residential sales are now taking 12 weeks from inquiry to conversion into sales.
“Slower trading is occurring in Queensland and South Australia, while Victoria is also heading down,” says McCann.
Strong sales were recorded in the Caroline Springs and Laurimar residential communities in Victoria and Springbank Rise in the ACT.
Lend Lease reached settlement on 805 residential land lots over the period valued at $196 million, compared with 1,116 lot settlements worth $250 million in the corresponding period in 2010.
Over this period, the backlog of zoned residential units decreased marginally from 73,580 to 72,735.
The average sales price per residential land lot increased by 9% to $243,850, reflecting a change in the product mix compared to the previous period.
Eight residential communities will commence trading in the next 12 months.
The company has 37 residential community projects in various stages of construction, including the mixed-use RNA Showgrounds redevelopment in Brisbane and Rocky Springs, a master-planned community 15 kilometres south east of Townsville.
Over the six-month period to December 2011, Lend Lease secured interests in a number of major residential and mixed-used developments.
Lend Lease was selected as the preferred proponent for the Waterbank site redevelopment in Perth.
The project is a four-hectare mixed-use precinct on the banks of the Swan River and is proposed to include more than 700 residential apartments, a hotel, commercial offices, retail and substantial public spaces for residents and visitors. The project will be staged over 10 years and has an end development value of about $1 billion.
The group also signed the development agreement for the Atherstone master-planned urban community project in Melton, Victoria.
The project will comprise about 4,500 dwellings with an estimated end value of $1.2 billion.
Lend Lease also reported that the Queensland government had gazetted the Yarrabilba Development Scheme, “clearing the way for a new community of more than 45,000 people”.
Yarrabilba is a master-planned urban community located south east of Brisbane, Queensland, which will comprise 14,185 residential land lots.
The group also acquired an urban development site at Logan Reserve, south east of Brisbane, Queensland. The site is 48.3 hectares and will deliver approximately 500 lots.