Peet sees Queensland recovery as interstate migration pickup

Residential developer Peet Group announced an operating profit after tax for the half-year ended 31 December 2015 of $18.5 million – an 8% increase over the the previous corresponding period.

The national group’s managing director and chief executive officer, Brendan Gore, said the Group had achieved a good half-year performance that reflected the supportive conditions across the group’s key east coast markets, in particular Victoria and ACT/ New South Wales.

“The strong result was driven by price growth across the Victorian land portfolio as well as the group’s continued focus on operational efficiencies.

“It confirms that the ongoing disciplined implementation of our strategy is delivering improved operating performance, and underlines the benefits of Peet’s diverse national portfolio.has a record number of contracts in hand as the buoyant east coast markets helped it to an 8 per cent lift in its 2016 interim profit."

Headquartered in Perth, the listed developer's strength is its national portfolio with weakness still in WA. 

By the end of December last year, the developer had 2,318 contracts on hand with a gross value of $523 million.

That stockpile compares with the 2,061 contracts Peet had accumulated by the end of June last year, with a gross value of $441 million.

Peet has progressed preparations for the launch of sales at Flagstone in South East Queensland, and is also currently preparing to launch its next retail syndicate opportunity in Victoria.

As at 31 December 2015, the group’s gearing was 30.6%, following the acquisition of a 123-hectare developing residential estate in Tarneit (Vic) in December 2015, with settlement to occur over three years.

This acquisition followed the Group’s sale of its Arena residential estate in Greenvale (Vic) for $93.1 million with the settlement of that property also to occur in instalments over three years.

Part of the proceeds from this sale have been redeployed to fund the acquisition of Tarneit at a substantially lower cost base than the Greenvale land.

"“Conditions across Victoria, New South Wales/ ACT and South Australia are expected to remain supportive, while Western Australia and Northern Territory are expected to remain subdued through the 2016 calendar year,” said Mr Gore.

“Activity in the Queensland residential market continues to improve due to its relative affordability, which has seen a recovery in interstate migration.

"This market recovery is expected to support the launch of the Group’s 12,000-lot Flagstone project in 2H16.