Larry Schlesinger | 23 November 2012

Devine to develop first NSW project for nearly a decade with brighter residential outlook

ASX-listed residential developer Devine will return to the NSW market after an absence of nine years with plans for an apartment development in Turramurra.

At Devine’s AGM on Friday, managing director and CEO David Keir announced Devine had secured an option over a 5,900 square metre site at Turramurra on Sydney’s upper north shore, which has been earmarked for an 86-apartment development.

In his address, Keir also said “lead indicators present a strong case that the Australian residential housing market is and will continue to recover over the next 12 months".

Keir said lower interest rates had contributed to improved housing affordability while other positive factors pointing towards a recovery include “low vacancy rates in most capital cities, steady unemployment figures, rising rental costs, increased immigration levels and wage growth”.

The Sydney development is expected to commence in about 12 months’ time, pending achievement of appropriate planning approvals.

A spokesperson for Devine tells Property Observer, the last time Devine had a presence in NSW was under the Devine Pioneer Homes brand, developing house and land packages.

"The operation was shut down due to the lack of available developable land at the time. It was an industry-wide problem with the NSW government restricting the release of land.. after we closed it down Devine started focusing on the Queensland market and then we it wanted to expand again we went to Victoria because it was a much better environment at the time."

“It is the first time in nine years that Devine will again have operations in Australia’s most populated State,” Keir told shareholders.

In his address, Devine chairman Peter Dransfield said one of the company’s growth priorities for the year ahead would be to re-entering the Sydney market.

Keir also announced a number of milestones including the settlement of 425 apartments at Devine’s signature Hamilton Harbour project and deliver of the first two residential towers at the same project by Devine Constructions, ahead of time and under budget.

Devine has also began marketing three master planned communities including in the Queensland mining town of Gladstone, Queensland; Bacchus Marsh in Victoria and Evanston Gardens in Adelaide, which will deliver over 5,000 new residential allotments over the years ahead.

“Strategically, we will continue to focus on diversifying our operations by entering new markets and developing new products while leveraging our strengths in core markets to grow market share,” said Keir.

He also announced that Devine had sold a Brisbane CBD development site at 111 Margaret Street “above the current book value of the asset” with the price not disclosed.

Devine recorded an underlying operating profit after tax and before impairments of $11.1 million for the year to June 30.

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