)
National developer Cedar Woods Properties (ASX: CWP) has upgraded its FY25 profit-growth target to 15 per cent year-on-year following a sharp increase in pre-sales to more than $700 million in the third quarter.
The profit target is up from a previously forecast 10 per cent increase in the wake a strong performance by the Perth-based company’s land subdivisions in Queensland and Western Australia.
Cedar Woods posted a net profit after tax of $40.5 million in FY24, a result that was 28 per cent higher than the previous year.
The latest target puts the group on track to deliver a net profit of more than $46 million in the current year, although Cedar Woods says the final result will depend on the number of settlements made prior to 30 June 2025.
“Sales volumes at the company's Queensland and Western Australian projects increased compared to the prior two quarters whilst South Australian sales remained stable,” says the company in its March-quarter update.
“Sales volumes at projects in Victoria were consistent with the previous four quarters, though the sale of 103 affordable housing units in Q2 boosted the result for that quarter.”
Cedar Woods says its Flourish project in Queensland, along with WA projects Millars Landing and Eglinton Village, recorded strong sales during the quarter.
Overall, Cedar Woods reported a 23 per cent surge in presales to more than $700 million at the end of the March quarter compared to the previous corresponding period.
During the quarter, Cedar Woods began construction at its Vera apartments project in Wooloowin, in Brisbane’s inner north-east, after achieving strong presales for the 58-apartment project since its launch in early 2025. Construction is expected to be completed in late 2026.
The company also secured development approval for the first stage of the Robina Quarter project on the Gold Coast, a joint venture with Queensland Investment Corporation (QIC) that will deliver 414 townhouses and apartments.
The project, announced in 2023, is located next to QIC's Robina Town Centre and in walking distance to Robina train station.
The partners are currently seeking to lock in a builder for the project before launching presales for the first stage.
Cedar Woods notes a continued stabilisation of the construction sector during the quarter, particularly in civil construction for its master-planned communities, although construction costs for apartment projects remain elevated, especially in Western Australia and Queensland.
“The vast majority of the company's portfolio is currently master-planned communities, which were the focus of acquisition efforts in recent years,” says the company.
In Western Australia, the $13 million sale of the Eglinton Village shopping centre site to Fabcot Pty Ltd, the development arm of the Woolworths Group (ASX: WOW), settled during the quarter.
Fabcot is developing the shopping centre on the 2ha site within the master-planned community which will be anchored by a Woolworths supermarket and expected to open for trade in 2026.
Cedar Woods paid $49.5 million for the 86ha land holding in Eglinton, located north of Perth, in November 2021 and it has more than 1,000 lots yet to be developed and settled.
Meanwhile, Cedar Woods has revealed that while the residential property market reacted cautiously to the RBA's cut to the cash rate in February, the company is optimistic that further interest rate cuts will support sales volumes.
“The upcoming federal election is likely to result in policy settings that are favourable for the new housing sector with both major parties recognising the housing affordability challenge and the need for significant measures to boost supply,” says the company.
“Both parties understand the economic benefits from ongoing population growth and are expected to maintain net overseas migration at around long-term average levels.
“State and local governments are also implementing policies that support residential housing supply. Examples occurring in multiple jurisdictions around the country include faster approval pathways, openness to increased densities and financial support for enabling infrastructure.”
Cedar Woods says it has implemented a “more assertive acquisitions strategy” on expectations that further interest rate cuts and government policy settings will drive up demand.
“The type and location of sites acquired will be in line with strategy and with some expected to be made under joint venture structures,” the company says, adding that it expects positive residential market conditions to prevail for the medium term.
Shares in cedar Woods were trading 5 per cent higher at $5.50 shortly after the market opening.
)
