Increased Interest from Development Groups For Residential Sites
The announcement of the appointment of development and site acquisition specialist, Michael Bevan to McGrath Projects reflects busy times ahead.
Mr Bevan was appointed to the newly created role of General Manager - Developments.
“We are seeing a renewed level of enquiry from development groups seeking both DA Approved and Raw Sites," said Adam Sparkes, General Manager of McGrath Projects when he announced the appointment.
At a glance:
- Past two years the general development market has seen a significant downturn in off-plan sales
- Latter part of 2019 the general residential markets recovery has seen the ‘developer’ community look at acquisitions again
- NSW State Planning also has mandated councils to produce a new Local Environmental Plan over the next two years
"In particular smaller and medium size developers are increasingly on the lookout for redevelopment opportunities, many of whom are cashed buyers not requiring bank funding.
“A common theme amongst the groups we have been in discussions with is the appetite for ‘off-market’ redevelopment opportunities and in particular, sites that represent unique attributes in growth corridor areas, surrounded by good access and infrastructure.
Mr Sparkes said the site acquisition component is an important part of the Projects business and McGrath anticipates an uplift in market conditions with renewed appetite for quality off-plan sales over the next two years.
“Michael’s appointment is a significant addition to our Projects team as it strengthens our capabilitity to provide a complete full service offering," said Mr Sparkes.
"Michael has been able to specialise in site feasibility analysis through to acquisition, design and approvals, construction company appointment and ultimately full delivery, so such wide expertise is a value-add for both our clients and our agents servicing their vendors at a local level.”
With over 25 years’ experience in the property industry, both as a sales agent and managing a successful development management consultancy business, Michael has focused on development site acquisitions throughout the Sydney Metropolitan area.
In 2010, he joined McGrath’s Smollen Group team as the Head of Development Sites and Project Marketing based at Lindfield on Sydney’s North Shore.
Over the past eight years Michael has overseen and directed more than $1 billion worth of projects, including the acquisition of in excess of $400,000,000 worth of development sites, including many large scale site consolidations, most recently as GM NSW for Goldfields Group.
Most recently, Michael was involved in the amalgamation of three significant properties with development potential in Pymble, with careful analysis and scoping with architects, town planners and engineers.
Further sites were also acquired at Chatswood, located in the Willoughby Council new strategy area whereby a mixed use upgrade to the Local Environmental Plan was proposed allowing for increased height and floor space ratios.
Mr Bevan said during the past two years the general development market has seen a significant downturn in off-plan sales.
"Both major developers and the small to medium sized privately owned companies have been reluctant to secure new sites," said Mr Bevan.
"However during the latter part of 2019 the general residential markets recovery has seen the ‘developer’ community start to strongly look at acquisitions again creating pipeline for
“Further, the NSW State Planning Department now requires all councils to have exhibited their Local Strategic Planning Statement by 1 st October 2019."
The Local Planning Statement outlines how councils will deliver new areas for development.
NSW State Planning also has mandated councils to produce a new Local Environmental Plan over the next two years.
Mr Bevan said this will mean new zonings, upgrades to current zonings and better/clearer gateways to new development.
“During the downturn over the past couple of years, we have seen bank funding become tighter, especially for smaller less sophisticated players," said Mr Bevan.
"Likewise many of the overseas companies that didn’t have direct Australian offices or partnerships have left the market almost entirely as capital inflows have tightened dramatically.
"Consequently this has resulted in the rise of the more stable and sophisticated companies into an acquisition phase.
"Likewise the private players who are well funded are also starting to look harder at site deals.
Mr Bevan said the downturn in lending by the major banks has seen substantial growth in the secondary lending market.
"This has seen better access to funding for experienced and successful developers open up," said Mr Bevan.
"This will further push the focus towards new site acquisitions."
This article originally appeared in The Real Estate Conversation (Jan 29, 2020)