Cedar Woods has boosted its land supply in Melbourne’s western growth corridor, acquiring 54 hectares for $63.5 million.
The two separate transactions were for a 14.6ha site at Fraser Rise and a 39.7ha site at Fieldstone.
The acquisitions will add a further 725 lots to Perth-based Cedar Woods’ pipeline, and are expected to be a part of the company’s earnings over an eight-year period, from 2023 to 2030.
Cedar Woods managing director Nathan Blackburne said the acquisitions would be part of a sequential staged release to market.
“Both sites provide exposure to Melbourne’s western growth corridor with Fraser Rise set to benefit from continued demand for housing lots and Fieldstone’s launch anticipated in the 2024 or 2025 financial years,” Blackburne said.
“With our strong balance sheet, the support of our financiers and finance facility headroom of $94 million at the end of the 2021 financial year, Cedar Woods remains well positioned to continue our strategy of diversification, bolstering our portfolio with quality product that meets the strong appetite for new housing in Australia.”
Blackburne said the sites were acquired from private vendors in off-market transactions.
The Fraser Rise site, 25km north west of Melbourne’s CBD, was purchased for $30.5 million with all planning permits in place for a 225 lot subdivision, with potential upside in yield.
The Plumpton Precinct Structure Plan also includes the development of a recreational park and a proposed non-government school in the area.
Settlement is due in October, 2021 and is expected to contribute to Cedar Woods earnings from 2023.
Cedar Woods spent $33 million on the Fieldstone site on deferred terms and is subject to Cedar Woods receiving approval to subdivide the site from its parent title, which is anticipated in 2023.
The Fieldstone development is expected to yield more than 500 lots in the future Rockbank South Precinct Structure Plan.
According to first half year results released in February this year, the ASX-listed company had $550 million in market capitalisation with more than 8400 lots in the pipeline and 30 projects in Victoria, South Australia, Western Australia and Queensland.
Cedar Woods managing director Nathan Blackburne said low interest rates and government stimulus packages had underpinned the strong demand for house and land sites.
Victorians accounted for 29 per cent of all HomeBuilder applications with close to 30,000 new build applications.
Melbourne’s growth corridors in the north and west were earmarked for an additional 284,000 dwellings in Melbourne’s Urban Growth Boundary.