Medium-Density Projects Anchor KDL Growth

Builder-developer KDL has topped up its war chest as it turns its attention to a medium-density play. --> Off-market deals and partnerships are underpinning builder-developer KDL’s latest $1.2-billion land expansion. The medium-density specialist has stockpiled 2150 lots across 10 newly acquired sites, adding what it estimates to be $1.2 billion in value to a pipeline that is now valued at $2 billion. The sites are at Burpengary, Joyner and Waraba in the Moreton Bay Region, as well as Yamanto, Ripley and South Ripley in the Ipswich growth corridor, Logan, and Meringandan in the Toowoomba growth corridor. Its total active pipeline has more than 3100 lots and 300 townhouses. Medium-density move Adding a building division, Ryse Construction, to the group in 2022 was a calculated move to increase efficiency, KDL founder Kent Leicester said. “As a land developer, we now know who our builder is going to be, what they need and we build land in accordance with what the builder requires,” he said. Adding Ryse Construction had also been instrumental to its move into medium density, he said. “Greenfield subdivision is becoming more expensive to construct—it’s becoming harder to find and with the authorities, connections and infrastructure, it’s becoming a lot more time intensive to deliver,” Leicester said. ▲ KDL secured a Housing Australia Future Fund partnership to deliver 359 homes in Moreton Bay and Logan. “There’s a need to activate medium-density sites that might be a little bit closer in and provide that [more diverse] product range, as well as house and land.” KDL now has medium-density proposals in progress in Logan and Moreton Bay that propose townhouses of two to four bedrooms. “We started the construction business to be more efficient and be able to control the cost structures and timeframes a bit better and we’re always looking for ways to improve the construction methodology,” Leicester said. “We were able to sit down with that building division next door and say, how do we build these efficiently? What do they need to look like? “[This approach] allows us to sort of double the density on a site compared to some standard lot housing, which is something we should be considering so we can get more homes out of the door in a housing crisis.” Geographic reach As sites are getting hard and harder to find, KDL said its approach was to develop relationships with landowners and negotiate terms in off-market deals. “From a feasibility perspective, we still find it really challenging to find good sites for the right prices. There are some very high expectations on price levels from landowners at the moment. “But we’re in constant acquisition mode and we found that a lot of our recent acquisition work started to all come together in the last 12 months and sites started to really work. “The SEQ area has been very buoyant for the past 24 months and movements to price levels that we probably weren’t expecting helped make those sites work a lot better now.” Infrastructure charges in emerging areas and Priority Development Areas could still be high, Leicester said. ▲ KDL founder and managing director Kent Leicester. “So we have spent a considerable amount of time building those relationships with the landowners and being transparent with the process around our costs to construct,” he said This approach has been key for KDL, which added 1100 homes to its South-East Queensland pipeline not two years ago. “We’ve found our sweet spot on the market is around that 300 to 400-lot size, which allows us to work on providing a product that we can see the market wants.” Government support such as Queensland’s Residential Activation Fund had also been key to unlocking sites, Leicester said, and recognises the challenges facing developers. “We want to still keep doing what we’re doing and find more efficient ways to do what we’re doing,” Leicester said. “We’re certainly busy for the next few years, so we’re getting down to it.”

Medium-Density Projects Anchor KDL Growth

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