STOCKLAND has splashed out $105 million in some last minute Christmas shopping, picking up 89.5 hectares of land in the Donnybrook growth precinct in Melbourne’s north and demonstrating more confidence in the housing market recovery.
About 1,500 new homes will be developed on the land at 975 Donnybrook Rd, as well as open spaces, a large recreation area and a school.
The land is located within the approved Donnybrook Woodstock Precinct Structure Plan, one kilometre east of the Donnybrook train station and 30 kilometres from the Melbourne CBD.
“This acquisition extends our long-term presence in the northern growth corridor of Melbourne, which is one of the fastest growing corridors in Australia,” Stockland chief executive officer of communities, Andrew Whitson said.
“The northern corridor will play a key role in the future economic and employment growth of Melbourne, and is expected to be home to over 260,000 people over the next 30 years.”
He said the acquisition aligns with Stockland’s strategy to restock its residential pipeline with new projects projected to achieve returns above hurdle rates.
Multiple master planned communities are in the pipeline for the northern metropolitan fringe. They include Stockland’s own Cloverton Estate, as well as projects by Wolfdene, Peppercorn Hill by Dennis Family Homes, and Satterley Property Group.
Last year, Boral reached an agreement with Mirvac to develop its 278 hectare Donnybrook property, to go with Mirvac’s Olivine master planned estate, taking the total development site to 465 hectares.
“This opportunity further strengthens our capacity to deliver affordable new homes in desirable locations as Melbourne continues to grow, and with approvals in place, allows us to bring affordable new land to market quickly – increasing opportunities for first home buyers and families to enter the property market,” Whitson said.
Stockland has had a strong start to FY20, recording its strongest residential communities quarterly result this calendar year amid a recovery in the housing market, and growing its logistics portfolio by purchasing two Brisbane sites with an end value of $140 million as it pivots away from the troubled residential sector.
The diversified developer’s residential communities business recorded its strongest quarterly result this calendar year, and is on track to deliver over 5,000 lot settlements in FY20, including around 500 townhouses.