An incredible Quest for M/Construction

The City of Kalgoorlie-Boulder is progressing with the sale of land to M/Group for their proposed new $158 million residential housing development in Kalgoorlie-Boulder.

Following Council’s Ordinary Council Meeting resolution on 24 April and the subsequent public notice period, Chief Executive Officer Andrew Brien, and Mayor John Bowler on behalf of the City signed and executed an option agreement with M/Group to sell the City owned freehold land to M/Group for the market value of $3,409,540.

Integrated property group M/Group is proposing to build a 400-home residential development in a staged three-year development on 17.2-ha site – Lots 9003, 9004, and 9005 Hart Kerspien Drive.

Mayor John Bowler said M/Group’s proposal strongly aligns with the City’s strategic objectives to make land available for residential development, target population growth, and enhance liveability in Kalgoorlie-Boulder.

“The City is proud to have made land available for development, and we are looking forward to this high-quality residential development coming to Kalgoorlie-Boulder.”

“Housing residential workers is always a priority for the City and given the current accommodation shortage, exploring options for housing development and investment is imperative to ensuring a strong local workforce for the future.”

“The residential lifestyle village model similar to that proposed by M/Group has been used at Osprey Village in Karratha to provide affordable housing and accommodation and could see housing developed and available on the site in a staged format within 12-18 months.”

“The development supports a family-friendly community for essential workers and their families to call home, and in turn supports the economic growth of our city.”

Mayor Bowler also confirmed the proposed development aligns with the residential housing shortage evidenced in the recent Land and Housing Position Paper, which the City partnered with the Kalgoorlie-Boulder Chamber of Commerce and Industry and other key organisations to produce.

The position paper confirmed a future need of approximately 410 dwellings per annum to support a residential population growth of 3.1% and major project investment signaled over the next decade.

M/Group Managing Director Lloyd Clark said it was exciting to be able to bring such a high quality residential development to Kalgoorlie-Boulder.

“Our lifestyle village will consist of one, two, three, and four-bedroom homes in a modern, family-friendly community. It will feature significant landscaping and public open spaces and is designed to integrate with and add to the amenity of the surrounding area.”

“M/Group has a strong track record of providing high-quality residential development, and we are thrilled to be able to help meet housing demand in Kalgoorlie-Boulder.”

M/Group estimates their spend on the project to be approximately $152 million, of which it estimates half would be spent locally in Kalgoorlie-Boulder.

Economic modelling shows the total output including all direct, supply-chain, and consumption effects, is estimated to increase by up to $126 million. The project is also expected to support 100 jobs in the first year and over 80 in each of the subsequent second and third years.

To further support the proposed development the City has submitted a $4 million funding application to the WA State Government’s Infrastructure Development Fund to assist with the required sewerage network expansion.

The City owned and operated sewerage network is currently at capacity due to continuing growth in the region, and without expansion works the proposed residential development will not be able to proceed.

An expansion of the City’s sewerage network is estimated to cost $5.6 million, with the application  for funding being in addition to a proposed $1.6 million co-contribution by M/Group and the City.

The City’s application is for stream three of the Infrastructure Development Fund Unlocking Regional Worker Accommodation Opportunities. This fund aims to remove infrastructure constraints for residential housing development and assist with the provision of housing for key workers in regional towns.

Mayor Bowler said at present, infrastructure servicing costs in regional Western Australia are a major constraint for greenfield sites, and without funding support, projects that need significant new infrastructure are not financially viable.

“If the application for funding is successful the sewerage system expansion would also allow future residential development to occur on an additional 49.7ha of nearby land.”

Construction of the sewerage expansion is estimated to be complete within 8-10 months of commencement, with M/Group advising housing could be developed and available in a staged format within 12 months of securing the land.

M/Group is already seeking expressions of interest from parties who may wish to purchase or rent a property in the new residential development.

Standard City development application notifications, applications, and approval processes will apply prior to works commencing, this may include further public consultation as per development legislation requirements.

Read the full article here.

A modular village aimed at housing essential workers and easing regional Western Australian housing pressures has been greenlit by the Kalgoorlie-Boulder Council.
The project in the state’s central south drew 89 objections. It will now go to the Joint Development Application Panel in Perth for its final hurdle.
The plans for the 16ha inland site at Hart Kerspian Drive, Broadwood, comprise 393 new modular homes, with up to 100 modular homes to be delivered in the first stage in the next 18 months. It also includes a caretaker’s residence, communal facilities and a pool.

A report to the council indicated there would be a shortfall of 4000 homes in the next decade, with a current gap of 168 homes.
The development would be delivered by M Group, a Western Australia-based developer that has delivered housing estates in other parts of the state.
Mayor Glenn Wilson said the proposed development was aimed at ensuring accommodation for essential workers such as teachers, nurses, doctors and police.
“We envisage that this much-needed development will assist with alleviating the pressures of the current accommodation shortage by providing fast availability of housing,” he said.
“We received 89 submissions during the public consultation period and whilst we have read and appreciate the concerns raised, council voted to endorse the proposal to ensure more housing is made available to sustain the growing needs of our city.
“Overall this development proposal aligns with our vision for securing a sustainable community into the future and we will work closely with JDAP, pending their decision, to ensure a responsible and beneficial outcome for all stakeholders.”

Read the full article here.

What are some of the biggest advantages for the development industry in undertaking adaptive reuse, especially when compared to demolishing and starting with a new design?

It was actually Perth’s ‘knock down and rebuild’ mentality some two decades ago that motivated my business partner and I to start our company.

At the time we witnessed the constant dilapidation of magnificent structures throughout the City to make way for bland ‘cookie-cutter’ builders, with no foresight for the visual impact or surrounding aesthetics.

We believe the development industry has a responsibility that extends far beyond built structure. It’s about maintaining the integrity of our streetscapes and understanding that the built form is something that is enduring and plays a significant role environmentally and culturally.

Adapting heritage form for modern-day use captures a story from the past and creates a unique and unreplaceable space, and this makes good sense socially and commercially.

What are some of the biggest challenges involved with the process?

Certainly, the biggest challenges when taking on an adaptive reuse project are those that can’t be immediately identified. This is largely the reason why so many developers have historically shied away from taking them on.

While X-ray technology has improved our capacity to assess a building’s structure, in most cases issues are only uncovered during the development process, which can impact significantly on the budget.

It is an incredibly rewarding challenge to explore ways of introducing modern day requirements into early design, when items such as electricals, plumbing and energy efficiencies had not been a consideration during construction historically.

We introduced a false floor methodology in our Heirloom building to accommodate services in order to maintain the ascetics of the Jarrah beams and exposed timber throughout.

Do you think the process of adaptive reuse is undertaken enough in Western Australia? If not, why not and what more can be done to encourage it?

We have come a long way from the early days when buildings were deliberately left so derelict that demolition was ultimately the only options. It is devastating to think of all the lost opportunities.

We are in different time now and I believe the industry is well across the intrinsic value heritage fabric can bring to a project and its surroundings.

That said, not every heritage property can be justified in a competitive marketplace, and returns need to be factored into each project. It is unquestionably more expensive to take on heritage work and navigate the development limitations.

Financial and process incentives would certainly compensate the developer and encourage more work in this area.

Of the projects you have worked on, from an adaptive reuse basis, which is your favourite project and why?

Without question, “Heirloom by Match” in Fremantle holds such significance as a community icon with an incredible depth of history. Being able to reactivate this site for modern-day use after so many decades of deteriorations truly an honour, and our success in retaining over 85% of the heritage fabric is an incredible achievement by my team.

However, “Home” in Perth represents a real turning point for adaptive reuse in Perth. We were more or less the only company taking on projects of this magnitude at the time and it really allowed us to demonstrate what could be achieved.

When we started this project, the building was locked up and covered in graffiti. Our work uncovered an architectural masterpiece that was nothing short of impressive. It created streetscape presence that helped to shape the west end of Perth’s CBD.

After its opening, there was a real industry shift towards our cause. I will always be very proud of our work on that property.

Aside from the heritage/historical significance of utilizing existing buildings, what other benefits to adaptive reuse are there?

While there is a a great deal of benefit affiliated with historical significance and heritage features, any project must also make financial sense.

We find that people ultimately buy into these projects for their uniqueness. There is no comparison to a modern building and these factors allow for a pricing model that can adequately cover additional development costs.

The boutique nature of these projects mean they hold a strong market value, and as consumers are are buying a piece of history, it is perceived as priceless.

Any further comments you would like to make around adaptive reuse and its benefits for the Western Australian development industry?

I truly believe Perth now fully realised the value of our heritage structures.

The City is extremely fortunate to have such a strong Heritage Council body to partner with developers and ensure each project has the best outcome, and local government stakeholders appreciate the significance of our work within their jurisdiction.

The level of collaboration required to bring these projects to fruition cannot be understated.

Comments for UDIA attributed to Lloyd Clark, Managing Director of Match parent company M/Group
Read UDIA’s full article here

With the wall of cash dividends hitting investors’ accounts over the coming months due to surging iron-ore prices, there is one question top of mind: What to do with the cash?

Industry analysts are predicting the dividend windfall from BHP Limited (ASX: BHP), Rio Tinto (ASX: RIO) and Fortescue (ASX: FMG) could top $65 billion over the year, in addition to the $7 billion from the Big 4 banks. With the current cycle of almost zero cash rates, the race is on to find sustainable income-producing investments.

Amid the noise of an exciting investment market, there are solid, high-yielding investment opportunities in the periphery of the action that offer both security and good returns.

How to find property assets that stack up

Australians love affair with property has become even more pronounced since the initial shock of the COVID-19 pandemic panic set in. We are both staying and investing locally. House prices from the east coast to the west coast have sky-rocketed and commercial and industrial assets are in hot demand with a raft of banks and non-bank lenders ready to lend money.

The level of appetite and competition in this space is highlighted in Stamford Capital’s latest Debt Capital Markets Survey, which tracks lender sentiment and the latest trends in the real estate debt market.

Based on responses from over 100 lenders, including banks, non-banks and private financiers, the survey found a “dramatic swing from the bleak outlook a year ago” when capital dried up, leverage levels decreased and lending criteria tightened.

Carried out in March this year, the survey found lending appetites were back at pre-COVID levels with increasing deal competition from a growing pool of non-bank lenders expected to compete more heavily on price and force down interest margins.

Private capital chasing higher yields in the booming property market has seen a large increase in the number of new non-bank lenders offering construction and investment loans this year.

While the pool of debt is available, and still relatively cheap, the trick is trying to find the property assets that stack up. This is where an experienced property fund manager can sort the wheat from the chaff. Sourcing the asset is one thing, knowing if you are paying too much is another. Selectivity is the key.

Mining the macro and geographical factors

Looking at macro factors and geographical location is also vital. Where are the industrious activities happening? City or regional, coastal/ports or mining? The mining industry for example has seen a significant uptick since June 2020. Mining exploration in Western Australia is almost at record levels and the capital raising pipeline is strong.

The Australian Securities Exchange notched up 42 IPOs in mining-related businesses over the past 12 months to April 2021 and despite the Covid-19 pandemic, is well ahead of other hotspots including Toronto, with 28, and London with two, according to data compiled by Bloomberg.

 

A brand new opportunity to invest in an income asset fund and partner with M/Group in the acquisition of a newly constructed, fully leased, large format retail property.

Learn more about how this property and its tenants will service their community, while providing investors with a target distribution of 8% p.a paid monthly by visiting: www.boulderpropertytrust.com.au