Commercial
DESIGNS TO TOWER ABOVE THE REST
Australian Financial Review - Monday 29 May 2006
Queensland's Devine wants to leapfrog from residential developer into the big league.
With plans for a funds management business as well as a move into commercial and industrial projects on the cards, the $117.5 million Devine is chasing larger, more diversified developers such as Mirvac, Stockland and Australand.
Devine's forward workbook has topped more than $1.5 billion and it is about to announce a $200 million mixed-use development in the Brisbane suburb of Hamilton, according to Queensland development sources.
Devine is poised to buy a development site in Hamilton's emerging Portside precinct for the project, which will include residential and retail, sources said. Company founder David Devine won't comment on the deal.
But in an interview with The Australian Financial Review, Mr Devine was more forthcoming about other aspects of the business. He said his aggressive buying spree in Queensland, Victoria and South Australia would generate more than $900 million in house and land development activity and he had set a three-year deadline to control a land bank of more than 5000 blocks spread through these three states.
The company is also moving into development areas outside residential such as commercial and industrial projects.
The company's move into commercial will be launched in Queensland and flow through to Victoria. Mr Devine has hired Jim Watson from Jones Lang LaSalle to scour both states for sites.
"Mixed-use development will play a big role in the future growth of planning of major cities," Mr Devine said. "We think highrise could consist of a mix of retail, offices and hotel."
Mr Devine said the company's funds management business was in place. "The division is set up. We are currently identifying opportunities that will suit a funds management business."
Mr Devine said the company's new construction division, which is now ranked as the seventh largest Housing Industry Association builder - up from the 13th largest last year - is also performing.
"We established a high-rise construction division last year. It has created opportunities to look at developments that otherwise may not stack up. By having a vertically integrated structure of development, construction, funds management and marketing, we are able to look at more opportunities.
"Devine's largest project is the $338 million Victoria Point Docklands development in Melbourne's central business district, comprising 447 apartments over 42 levels.
In its home state of Queensland, Devine will complete its Festival Towers apartment block in the Brisbane CBD by September. More than 390 units in the 401-unit apartment block have been sold.
At nearby Charlotte Towers, 402 of the 416 apartments on offer have sold, although construction won't be finished until September 2007.
At Casino Towers, also in the Brisbane CBD, Devine has sold all units in the 91-unit tower.
Devine has also recently secured development approval from the Gold Coast City Council for a 148 hectare, $500 million eco-resort at Currumbin comprising 530 lowrise dwellings. It bought a seven hectare site at Morayfield in Brisbane’s north for a $20 million 20-lot development.
In South Australia, Devine is developing lots at Andrews Farm. In Victoria, it is building a $200 million, 44 hectare master-planned residential estate at Deer Park with 619 dwellings.
Devine recently reported a net profit after tax of $10.69 million for the half year to December 2005, returning a fully franked interim dividend of 4¢ per share. Revenue in the same period was $253.8 million.
The company recently appointed former Queensland treasurer Terry Mackenroth to its board.
Lisa Allen
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