Japan’s Asahi Kasei Homes takes 40% stake in builder McDonald Jones
Japan's Asahi Kasei Homes has bought a 40%t stake in detached home builder McDonald Jones Homes, though the deal value was not disclosed.
McDonald Jones Homes is Australia’s sixth biggest detached home builder and the biggest in NSW with a turnover of almost $500 million a year, The Australian Financial Review reported.
The stake purchase by AKH is part of a trend where major Japanese developers are buying into Australia’s housing boom.
The list includes Sekisui House (Central Park Sydney), Sumitomo Forestry Group (majority owner of home builders Wisdom Group and Henly Group), Obayashi Corporation and construction giant Kajima (majority owner of Melbourne builder and developer Icon).
Newcastle-based MJH Group includes Queensland builder Mojo Homes, Tasmania's Wilson Homes, Hayman Homes and medium-density builder MJH Multi.
It is one of the country's fastest growing residential builders, according to the HIA Housing 100 Report.
AKH said in a statement that the NSW market "holds the greatest promise in Australia fuelled by a continuously growing population".
MJH Group is expected to generate $620 million in revenue in FY17, up from $486 million in FY16. Profits rose 57% to $10.5 million in FY16.
AKH is a subsidiary of listed Japanese conglomerate Asahi Kasei Corporation.
It delivers more than 8,000 homes a year and aims to reach net sales of ¥1 trillion ($11.3 billion) by 2025.
MJH Group’s founder Bill McDonald, chairman Peter Durbin and managing director Andrew Helmers will each retain 20% shares in the company while AKH will get seats on the company board.
Helmers said Australia, New Zealand and Canada were at the "top of the list" for investment by successful Japanese building businesses like AKH, given the more limited opportunities at home due to "negative population growth and almost negative economic growth".
"The expansion into the Australian market by AKH enhances our already robust financial position, and provides new opportunities in research and development, home design and construction which will be of great benefit to our customers," Helmers was cited as saying by the AFR.
"The housing market has come off it its peak, but there's an under-supply of homes in Australia and NSW so it will settle at a much higher level (than in the past)."
MJH also hopes to expand into Victoria. It has built up a 15.9% stake in Victorian building group Simonds Group and used it to block a buyout by the family of founder Gary Simonds in November.
Last year, to celebrate International Childhood Cancer Awareness Month, the Children’s Cancer Institute, PRDnationwide Newcastle & Lake Macquarie, McDonald Jones Homes and McCloy Group joined forces to undertake the challenge of building a house in 21 days.