Stockland, Supalai Split Melbourne Housing Estate

Stockland has secured a 50-50 residential deal worth $105 million with Bangkok-listed Supalai PLC to develop a masterplanned community north of Melbourne.

The ASX-listed property company purchased the 89-hectare site at 975 Donnybrook Road on capital-efficient terms last year, with parcel one expected to settle in the 2021 financial year.

This is the first international partnership for Stockland, which has been impacted by the Covid-19 pandemic, leading to the company cutting second-half distribution and withdrawing guidance.

Through the joint venture with Supalai, Stockland plans to develop around 1,500 affordable homes in the new Katalia community, located near a large recreation area and a proposed future school.

The pair are the latest major property players to move to the region, following Mirvac in partnership with Boral, Gibson Property Corporation together with MAB Corporation and private developer Satterley.

Construction is due to commence on the Katalia community in coming months, with first settlements expected in July 2021, and Stockland’s share of funds from operations to be recognised in the 2022 financial year.

In the meantime, Stockland will manage the development and delivery of the community, including infrastructure, and receive an ongoing management fee from Supalai.

Stockland communities chief executive Andrew Whitson said the move was in line with the company’s strategy to grow its capital base with quality capital partners.

“Partnerships like this enhance our project returns and balance sheet capacity, to invest in other growth opportunities across our diversified portfolio including our workplace and logistics development pipeline, and further re-stocking our residential pipeline,” Whitson said.

Supalai chief executive Prateep Tangmatitham said he was “equally delighted to be partnering with Stockland in this high quality, high-profile development and looks forward to co-operating in future acquisitions with a view to developing a long-term partnership”.

Supalai has a number of upcoming residential and commercial projects with a market capitalisation of approximately AU$2 billion.

Established in 1989, the company first invested in Australia in 2014, and has developed 200 residential communities and apartments across Thailand.