Perth Development Playbook Not What Eastern States Expect

The Swan River mania that brought about 4000 settlers to Western Australia in the 1820s was built on an overly rosy picture of the colony as a new-world paradise. The reality proved considerably harder. Almost 200 years later, developers entering WA are finding their own version of that gap between expectation and reality, as familiar eastern-states development models encounter a very different operating environment. Sydney’s Perifa and Wollongong-based Blaq Projects are among the developers making the move west, with both building pipelines across Perth despite the challenges of labour, supply chains and establishing local networks. Blaq has broken ground on its third WA project at Mosman Park and has a pipeline spanning about 1000 apartments, 500 PBSA beds and 23,000sq m of retail, commercial and medical space across six projects. For Perifa, part of the Versatile Group, the move will soon lead to its largest WA project yet: a boutique hotel and 47 homes at Claremont, being delivered through a joint venture with landowners JJ Leach. Versatile Group co-founder Fabrizio Perilli, who lived in Perth for a number of years, understands the market’s quirks. “It operates to the beat of its own drum,” Perilli says. “But we’re here to stay. We don’t want to be just doing one or two projects, we want a sustainable, stable business that adds to the local economy.” Entering the WA market Blaq Projects managing director Jared Beneru says that for their first WA project, 85 units plus retail on Orchard Terrace at Subiaco, a big part of the attraction was a familiar scale and feasibility compared to projects at Blaq’s core business in Wollongong. ▲ Perifa received planning approval for its 10-40 Bay View Terrace project at Claremont in March this year. “That gave us a logical entry point into WA, but we quickly learned that familiar project metrics did not mean the market would be straightforward to operate in,” Beneru says. “Establishing the local team, subcontractor relationships, consultant network and supply chain required considerably more time, capital and direct involvement than the initial feasibility could reflect.” Perilli says that its strategy was initially opportunistic, teaming up with landowners JJ Leach for the Claremont project. “They were looking for someone with residential mixed-use experience, which we could obviously provide,” he says. “But the key thing in today’s market is really that delivery skill set… that gives [a project] certainty. “ Labour shortages among the challenges While the labour shortage is universal in Australia, in WA it’s “massive” says Perilli. Master Builders Western Australia said last week that the state may face a shortfall of 10,000 key construction workers by 2030—mining projects are a big drain on local labour. Perifa is aiming to bring its trade business over to WA, with Versatile Construction taking on its projects in the West. ▲ Versatile Group managing director Fabrizio Perilli. “That’s not to say they’ll be doing all our projects, but because we want to work with the locals very much. But I think there’s an opportunity to introduce some new trades.” And attracting trades, while difficult, has not been surmountable when you have a strong reputation, Perilli says. “I think we do the right thing in terms of that promise to subcontractors. We provide them with good environments to work in. We pay on time. Things like that make a hard industry a little bit easier.” Perth’s mixed-use and middle-market Beneru says that the team is “bullish” about the Perth market, specifically developing “blue-chip” areas with mixed-use projects, despite them creating greater complexity from planning to operation. Each component needs to be assessed on its own fundamentals, he says, and is not necessarily a silver bullet to feasibility challenges. “Student accommodation and selected health and medical uses can be supported by genuine demand, while retail and commercial space must be appropriately scaled and respond to its local catchment. Diversification is valuable, but it does not make an otherwise marginal project viable.” Perilli says WA is an expensive place to deliver projects, which is why developers lean towards Perth’s western suburbs. ▲ Blaq Projects’ ALTO Residences at Mosman Park comprises luxury apartments plus a retail component. Its Bayswater shoptop project is aimed at the mid-market, and proved to be a golden “gentrification” opportunity with a new metro station, Perilli says. Perili says the team will “stick to its knitting” with mixed-use opportunities. “I like to think when we go into an area, we end up making the area better once we leave, and that we’ve added value to the area. That’s ultimately, I think, what most developers would like to think that they do. With mixed-use precincts, you definitely get a chance to do that. “[In Perth] if you’re not a developer builder, you’re probably at a disadvantage, and if you haven’t done mixed use, probably the same,” Perilli says. Perth as a long-term proposition Beneru says the mistake of new entrants would be “treating Perth as a short position”. “[That means] buying land when it appears inexpensive and expecting an eastern-states operating model to transfer directly. “We view development as a 10-year cycle, not a sequence of isolated projects. That means investing in people, systems, trade relationships and local knowledge that may take years to establish but can support an enduring business across changing market conditions.” ▲ A rendering of Perifa’s plans for a 73-unit tower above medical and retail uses at South Bayswater. Having construction capability in-house gives direct visibility over its WA projects, Beneru says. “But vertical integration only provides an advantage if the business has the local resources and management depth to execute. “WA has been a good strategic decision for Blaq, but it has not been quick or easy. It has required substantially more personal time, travel, capital and management effort than we initially anticipated. “[But] that investment is also why we believe we are now positioned to operate here over the longer term.”

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Clare Burnett
Thu 24 Sep 26

Perth Development Playbook Not What Eastern States Expect