- 40.7 hectares of land south of Brisbane was acquired for $12.5M
- CWP anticipates that investor interest will grow across 2021
- Presales hit new record high of $426M
Cedar Woods Properties (ASX: CWP) has recently acquired 40.7 hectares in south-east Queensland.
The land in South Maclean will eventually see 500 residential lots built. CWP said approvals are “already in place” and the area is about 40 minutes south of the Brisbane CBD.
Whilst a distance away from the heart of Brisbane, Cedar Woods said the site is “located in a growth corridor… and is set to play an important role in accommodating demand for detached housing in South East Queensland.”
In recent months, Queensland was one of the states with record low housing stock for sale and for rent, with high demand in areas such as the Gold Coast seeing vacancy rates drop below 1%.
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Cedar Woods said the purchase was from a private land owner for $12.5 million with the settlement expected to occur in July this year.
“The South East Queensland market is very attractive due to its relative affordability compared to Sydney and Melbourne and this South Maclean site will be one of the last remaining large-scale residential projects in the area to commence development, meaning it will benefit from the existing amenity in surrounding communities”
Patrick Archer, Chief Operating Officer, Cedar Woods
Among other sweeteners, South East Queensland is the odds on favourite to host the 2032 Olympic games, as announced in March this year.
Only yesterday, McGrath (ASX: MEA) announced its update to market with an expected 350% increase in earnings before interest, taxes, depreciation, and amortization (EBITDA). This comes as quarterly reports begin to trickle in, continued confidence in the residential market, despite reduced government housing stimulus and following extensions to HomeBuilder deadlines and continued low-interest rates, among other things.
Cedar Woods has seen confidence in the market, the company “upgraded its forecast FY21 full year NPAT to approximately $32 million ($29 million forecast at the half year), representing an increase of 53per cent over FY20.”
CWP also saw record presales of $426 million, up from last years $363 million.
Whilst the presales figures do not eclipse prior highs, the increase in presales on the previous corresponding period is 17%, and 12% up from the previous company high on presales.
In other financial updates, the company said it is in a strong position with a “corporate finance facility [providing] security of funding with tenure to 30 January 2024 (for approximately 80 per cent of the $205 million limit) and 30 January 2026 (for the balance).”
“We expect the improved buyer confidence and low interest rate environment which have underpinned our performance to endure for some time,”
Nathan Blackburne, Managing Director, Cedar Woods
Success has been found in medium density, said CWP, with multiple townhouse projects across Western Australia, Queensland, South Australia, and Victoria.
Cedar Woods also said, “The Company anticipates that market conditions may soften slightly in the short term as government stimulus measures end, before recovering to more normal levels later this year… the Company anticipates that investor sales will increase through the remainder of 2021.”