Cedar Woods meets demand for new housing
A suite of products across Australia, diversified by type and price point has seen Cedar Woods post positive first half year results, reporting a net profit of $14.1 million and presales at a record high of more than $560 million, up 47% than this time last year.
Despite challenging market conditions, Cedar Woods has been able to meet demand for new housing, moving through product at a rapid rate.
In recent months, Monarch Apartments in South Australia have sold out in record time after construction was brought forward by five months to accommodate demand and in Victoria, well connected, architecturally designed office space at Boston Commons in Melbourne’s west is 80% sold after launching last year, highlighting the demand for work facilities close to home in the Williams Landing lifestyle precinct.
Cedar Woods’ Managing Director Nathan Blackburne said with timelines accelerating, the company has had to ensure the pipeline was replenished to keep up with this demand.
“We have secured a pipeline of more than 10,000 lots to be developed across 33 projects in WA, SA, VIC and QLD,” Mr Blackburne said.
“Additional acquisitions and new stages have been introduced as part of this, including the recent launch of Clara Place in Victoria and imminent release of Burpengary Estate in Brisbane. We have also added another 400 lots to Bushmead Estate in Perth in a new stage release.”
Mr Blackburne said new developments would be launched in the first half of 2022 at the new 329 lot master planned community in Burpengary in Brisbane’s North and the 287 lot Clara Place estate in Fraser Rise, 25km northwest of the Melbourne CBD.
“We know the demand for housing in these growth areas is high, so we are working hard to meet demand to provide quality and diverse housing options for those looking to purchase a home in a thriving and connected community, Mr Blackburne said.
Burpengary forms part of Brisbane’s northern growth corridor and its population is expected to more than double over the next 15 years. Mr Blackburne said the estate would cater for a range of purchasers, from first time buyers through to families and downsizers.
Future residents at Clara Place will benefit from a planned neighbouring secondary school and a recreational park, while the estates first residents will benefit from the proximity to existing schools, shopping precincts and transport options, providing the opportunity for instant community connection.
These two new estates will contribute to a solid start to 2022 by Cedar Woods, which continues to be buoyed by strong demand for housing across the country. Future demand will be satisfied with continued acquisitions including recent additions - Eglinton in WA, Fieldstone in VIC and South Maclean in QLD.
Supply shortages addressed by Cedar Woods
Mr Blackburne said the company had positioned itself well to deal with the materials supply shortage currently impacting the industry.
“We have worked with builders to advance order materials to minimise project delays wherever possible,” he said. “We also maintain a very close working relationship with our building partners to ensure we have advance warning of any possible issue, and we deal with them promptly. Through these pre-emptive moves, we’re able to provide security for our customers and better manage supply issues along the way.”
Mr Blackburne said he believed disruptions caused by supply issues had likely peaked but that it would still be impacting programs throughout 2022.
COVID-19 translates to changing living trends and buyer behaviour
During the pandemic, we have seen buyers placing greater importance on products that provide community connection and open spaces.
“Initially at the start of the pandemic we saw people wanting to avoid high density living. However, while demand for low density remains strong, we are now seeing increased interest in medium and high-density properties,” said Mr Blackburne.
The half year results revealed that more than half of the current presales are represented by townhouses and apartments (51%), a reflection of how the business has changed as it broadened its product types to keep up with changing living trends.
He said apartment buyers were also realising the importance that natural light and access to private balconies played in high rise living. Queensland’s boutique apartment development, Francis, features expansive private balconies and courtyards that are in elevated positions providing residents will the full benefit of natural light breezes and ventilation.
“These designs are helping to meet the changing demands of today’s purchasers and are helping us stay top of mind for prospective buyers.”
Strong outlook for investors
As an organisation, Cedar Woods comprises 50% institutional investors, 25% retail investors and the remaining 25% board and management.
“We have a strong, very loyal base of investors who have spent significant time with Cedar Woods,” Mr Blackburne said.
“With the interstate and international borders re-opening, this is likely to spur additional investor interest as staff shortages are filled and migration recommences. Rental vacancies are very low, which is also stimulating the investor market.”
“We are confident in our ability to continue this positive momentum for our investors and we’re looking forward to welcoming new stakeholders to the portfolio.”
ESG at the forefront
Cedar Woods identifies sustainable and environmental design and build one of its key values. “We think about tomorrow,” Mr Blackburne said. “Increasingly, purchasers are becoming more and more discernible when it comes to their environmental footprint, and this translates to where and how they live.”
He said initiatives were being implemented across developments, such as the increasing use of solar energy and electric vehicle charging stations. “As a business we are committed to a carbon reduction strategy and we have commenced carbon footprint mapping across our corporate operations. The results will be used to further guide the company’s reduction strategy.”
Social responsibility continues is also a major driver for the business and Cedar Woods is proud of its national partnership with The Smith Family – Australia’s leading children’s education charity.
Quality projects in the pipeline
Conditions for the new housing sector are buoyant and the fundamentals supporting it are strong. The half year results show the success of Cedar Woods’ recent activity, with $560 million of presale contracts secured, an increase of 47% on the same time last year.
Key projects set to deliver first earnings in the second half of this year include Huntingdon and Aster Apartments in Jackson Green, Victoria and Monarch Apartments and Fletcher’s Slip Townhouses in SA.
Mr Blackburne said the growing number of new projects that would start to deliver first earnings in the short and medium terms was a result of the company’s successful acquisitions activity over the last few years, which had significantly added to its portfolio.
With a long pipeline of quality projects and backed by healthy presale figures, Cedar Woods was expecting continued growth in earnings in FY22 and have confidence in its future and ability to grow sustainably.