Family-sized apartment strategy outlined by the highly profitable Central Equity

Family-sized apartment strategy outlined by the highly profitable Central Equity
Family-sized apartment strategy outlined by the highly profitable Central Equity

One of Melbourne's most prolific private developers, Eddie Kutner's Central Equity, has recorded a record $131 million profit for the 2016 year.

Central Equity's 2015 profit was $10 million. In 2014 the profit was $76 million.

Kutner and his partners John Bourke and Dennis Wilson are considering a potential sell-down or outright sale of the business they founded in the 1980s.

"Central Equity is a highly profitable and sustainable business that has been developed over more than three decades to become a 'second generation' enterprise," a spokesman said on Monday. 

The 2016 profit was achieved on $586 million in sales revenue, compared to $120 million in the previous year.

Central Equity also develops residential land lots and has a project in Queensland.

In the directors' report for its 2016 financial results, obtained by The Australian Financial Review, the company outlines the prospect of strong revenues ahead, with more than $1 billion in sales contracts in hand.

Its Southbank Place in Kavanagh Street, which was released earlier this year, is expected to generate more than $400 million in sales.

Central Equity also noted it had acquired a major site on Lonsdale Street.

Central Equity's annual report addresses concerns about Melbourne's over-supply potential.

"Large-scale projects can take five-10 years to complete and over these timeframes many projects are either delayed or abandoned," it said.

"Accordingly, long timeframes, delay or abandonment and the dynamics of off-the-plan sales and bank requirements, have a 'self-regulating" effect on the physical supply of completed apartments to the market."

Central Equity also noted it is boosting the proportion of "family-sized apartments" in its projects, including larger two-bedroom units and more three-bedroom apartments.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

Tags: 
Apartments Residential Market

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