Lendlease confirms most Australian residential markets are past their peak

Lendlease confirms most Australian residential markets are past their peak
Lendlease confirms most Australian residential markets are past their peak

​Lendlease has officially reported a slowdown in its Australian residential sales.

Slowing sales in projects were highlighted by its Collins Wharf 1 project which sits at 89% sold.

The Melbourne project was at 87% sold a year earlier.

It is marketed as one of the city’s most esteemed addresses, designed by architects Bates Smart.

Located within the Victoria Harbour Precinct on Melbourne’s Bourke and Collins Streets, No.1 Collins Wharf is being marketed as poised to set a new benchmark in waterfront living.

It offers apartments on just a 5% deposits. 

Group chief executive Steve McCann conceded "most markets are past their peak" when he presented the latest annual report which triggered a 2% drop in its share price yesterday.  

Mr McCann said there was a tightening of credit due to higher debt costs, and regulatory impacts, partly from the banking royal commission, which had seen inquiries drop off recently.

“We are not calling a massive correction, but we do see a bit of a slowdown,” he told The Australian.

Luxury unit markets offshore had also been soft a for a while, he added.

Lendlease's local apartment completions nearly halved. Completions in the year to June fell to 1314 from 2533 a year earlier.

Apartment projects were completed in Sydney, Melbourne, Brisbane and London.

Presold lots in its big residential communities slowed to 3,231 lots in financial 2018 from 3,896 in the previous period.

Land lot completions across the Australian master planned communities portfolio sat at 3,912.

Key projects included Springfield Lakes in Queensland and Jordan Springs in New South Wales.

And its settlement failures increased. Earlier this year it advised Brisbane was the most challenging inner-city apartment market in the country.

"Inevitably there will be a rise in defaults in this market over the short term," the developer pointed out. 

"We are working through our relatively small exposure at our RNA projects in Brisbane, including identifying potential alternate buyers, or holding the residual units for a period and renting them out."

It has just 15 active projects, with its focus overseas. 

Major property developer Lend Lease is hedging against an Australian slowdown by expanding developments offshore.

In announcing a 4.5% rise in full-year profit to $793 million, Lendlease pointed to its full pipeline of projects in Europe, the US and Asia as driving medium term growth.

About 60% of Lendlease's $72 billion development pipeline is offshore.

The communities pipeline consists of an estimated 52,333 lots across four continents.

The backlog of apartments for sale has grown from 22,000 last year to 26,000.

The listed developer advised it was bracing for rising defaults in Brisbane's oversupplied apartment market.

Its chairman of the board, David Crawford departs following the 2018 Annual General Meeting, having served as chairman since 2003.

Michael Ullmer is his successor.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Lend Lease Residential Development

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