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Devine and Leighton properties enter into joint venture to deliver $400 million Hamilton Harbour project
21 December 2007
Listed property developer Devine Limited (ASX: DVN) and Leighton Properties Pty Ltd have forged their first joint venture agreement to deliver the $400 million mixed-use Hamilton Harbour project in Brisbane's inner-north. Leighton Properties is a wholly owned subsidiary of Leighton Holdings Limited (ASX: LEI).
The 50:50 joint venture follows Leighton Holdings Limited's acquisition of a strategic 40 per cent shareholding in Devine in May this year for $95.6 million. Both parties announced at this time and subsequently, their commitment to secure joint opportunities on landmark projects and have been actively investigating projects along the eastern seaboard.
Hamilton Harbour is a mixed-use development that will comprise approximately 300 residential units, 30,000 square metres of office space, 1,500 square metres of retail space and 900 car parks.
Devine amalgamated the prime 21,045 square metre site in Hamilton through four separate transactions totalling $30.7 million in 2006 and 2007.
Located alongside the high-exposure intersection of Kingsford Smith Drive and Harbour Road, the well-known site is in close proximity to Brisbane's domestic and international airports, the Brisbane River and is four kilometres north of the Brisbane CBD.
Devine's founder and Managing Director, David Devine, said the joint venture demonstrated the two companies' commitment to grow and diversify through strategic partnerships.
"Leighton's investment in Devine has enabled us to accelerate our diversification and expansion program and since May we have progressed a number of new developments in Queensland, Victoria and South Australia," Mr Devine said.
"As we have indicated to shareholders on a number of occasions throughout the year, we are keen to further expand our partnership to incorporate strategic joint venture projects such as Hamilton Harbour that create value for the shareholders of both companies and harness the depth of expertise of our two organisations," he said.
"The size of our amalgamation allows us to provide greater exposure for the commercial and retail components of Hamilton Harbour and enhance the level of seclusion for the residences, positioned close to the Brisbane River," Mr Devine said. "Because of its scale and innovation, Hamilton Harbour represents the ideal first project for Devine and Leighton Properties to team up on.
"We are also focusing on a number of other joint venture opportunities currently on the drawing board in Brisbane, Townsville and Melbourne". Hamilton Harbour forms part of Devine's national pipeline of future work that, when fully developed and sold, will have an end value of more than $3 billion. Queensland Manager of Leighton Properties, Andrew Borger, said the project was an exciting opportunity for Leighton at a time when the south-east Queensland residential and commercial markets are forecast to enjoy up to three years of strong growth.
"The demand for quality residential apartments close to the Brisbane CBD, combined with the integrated commercial and retail offering at Hamilton Harbour, is expected to deliver strong sales results for both companies," Mr Borger said.
Hamilton Harbour will boost Leighton Properties' workbook in south east Queensland to $1.9 billion, he said.
"One of the reasons we are attracted to this project is the current wave of infrastructure being built is largely on Brisbane's northside and we believe this will support the strong opportunities for mixed-use projects."
Mr Borger said the combination of Devine's leading expertise in residential development combined with Leighton Properties' specialist knowledge of the commercial sector would result in an exciting and innovative project for the city.
"Significantly the balanced mix of uses on the site and the sheer size of the site will result in Hamilton Harbour being a catalyst development in the North Shore urban renewal precinct."
The first stage of Hamilton Harbour is expected to be granted Development Approval in the second quarter of 2008.
The first stage of the project is expected to start during the first quarter of 2009, with completion in the last quarter of 2012.
The major urban renewal project will transform the industrial area into a vibrant mixed-use development overlooking the Brisbane River and close to the popular Racecourse Road restaurant entertainment precinct.
