Docklands apartment sales help Lend Lease weather challenging residential market conditions

The practical completion of the Convesso and Serrata apartment projects in Victoria Harbour at Melbourne's Docklands helped push up Lend Lease apartment sales over 2012, but the overall residential outlook remains challenging with residential lot settlements down 10%.

Settlements on Victorian apartments rose from 351 to 523 over the 2012 financial year ending June 30, 2012, with the average price paid decreasing by 12% to $1.05 million.

Just 15 units remain available for purchase in Convesso, which features 220 one-, two- and three-bedroom units, one half of Lend Lease's flagship Convesso Concavo development.

Prices range from $530,000 for a one-bedroom apartment to more than $5 million for a 329 square metre three-bedroom marina home apartment.

Only seven remain available in Serrata, a joint venture project with Japanese developer Sekisui House, featuring 83 two-bedroom apartments and 61 one-bedders, with one-bedders priced between $425,000 and $465,000.

Lend Lease also recorded strong sales at Silk and Antias at Jackson's Landing on the northern peninsula of Pyrmont, in inner Sydney.

“The current year includes a high proportion of mid-market apartments settled at Serrata and Antias,” added Lend Lease.

The developer settled 2,059 land lots in the year to June with a value of $461 million, down from 2,299 settlements in the previous financial year worth $497 million, with the average price per residential land lot increasing by 3% from $216,300 to $223,600. The company says this is "reflecting a change in the product mix compared to the prior year".

Lend Lease said the drop in settlements was principally the result of fewer settlements in Victoria and South Australia, “reflecting current market conditions and a number of projects approaching completion”.

Pre-sales (contracts that had not settled prior to June 30) totalled a further 1,369 units, with a combined value of $278 million.

Lend Lease has a pipeline of 70,500 units in its various residential projects, including joint venture projects.

The developer says “weak consumer sentiment continues to impact the residential market in Australia, resulting in lower enquiry levels, longer conversion times and lower trading levels”.

Lend Lease is looking to increase its presence in Western Australia, having being selected by the Metropolitan Redevelopment Authority (MRA) as the preferred proponent for the $1 billion Waterbank mixed-use redevelopment in Perth.

Lend Lease reported operating profit after tax of $507.2 million for the 2012 financial year, a 4.5% increase on the prior year.