QUBE closes ROIs for strategically located infill project in Perth’s southeast within 90 minutes
QUBE has settled the acquisition of a strategically positioned infill site on Southern River Road in the City of Gosnells from the original landholder who has owned the undeveloped site for more than four decades.
The 4.22-hectare land parcel fronts on to the Southern River with established housing to the north and east of the site.
QUBE Managing Director Mark Hector said that the call for Registrations of Interest (ROIs) from QUBE’s investor base was extremely strong for the development site, with the company closing ROIs within 90 minutes of opening.
While he said the size of the capital raise – just under $6million – was relatively small, it represented a strategically positioned infill opportunity in an affordable but fast-growing location surrounded by existing amenity and within 20 kilometres of the Perth CBD.
Recent figures from the Real Estate Institute of WA show a 10.7% sales growth for property in the City of Gosnells in the past 12 months almost double that of Perth more broadly at 4.6%.
“The average cost of properties in this location is generally at the more affluent end of the first homebuyer market where we are currently seeing low supply and significant and ongoing demand,” he said.
Mr Hector said he wasn’t surprised by the strength of the investor appetite for this asset, because it has a very favourable risk, return profile and a relatively short development time frame of under three years which is rare for most residential development.
The transaction was settled in June 2023 QUBE intending to submit a subdivision application for the land for the construction of 58 residential lots averaging 450sqm and starting from 375sqm.
“This site appeals on a number of fronts for us and for our investors. It can be readily serviced from existing adjoining infrastructure, is well serviced by public transport, a five-minute drive to Gosnells Train and well connected to major arterial roads such as Tonkin Highway.
“Our economy and population growth continues to strengthen backed by a resilient resources sector which continues to attract those from the eastern states and overseas to Perth because of our strong employment opportunities and because our property market remains the most affordable compared to the other states.
“The gradual easing of inflation and predicted flattening of interest rates as we head into 2024 is a positive for the market and we anticipate will help normalise construction costs over the next few years,” he said.
Mr Hector said although QUBE had been particularly prudent in its acquisition activity over the last 18 months to two years due to market volatility and external issues continuing to impact markets, the company had made several key acquisitions in the past six months with further positive activity set to be announced before the end of the 2023 calendar year.
“We are always strategic in our evaluation and acquisition process and are rewarded by strong loyalty and support from our investor base as was the case with this opportunity.
“The speed with which this offer was taken up and the fact that we had to cut back on some allocations shows a strong appetite for certain asset classes and I think this infill project ticked a lot of investor boxes.
“We continue to seek out development opportunities across Perth that make sense for us and for our investors and look forward to a further ramp up in activity in 2024.”