Finbar Group completes AT238 tower, ramps up $677m in projects amid Perth’s housing crisis

Prolific West Australian apartment developer Finbar Group (ASX: FRI) has achieved practical completion of its latest project, the $100 million AT238 located in Perth’s CBD amid reports that the city is facing one of the most acute housing shortages of any capital in the country.

The 32-level mixed-use development, which comprises 119 residential apartments plus two ground-floor commercial lots, has so far achieved 66 sales valued at $46.25 million. These sales are due to start settling in mid-April.

However, Finbar Group is expecting the project to be sold out before the end of this year now that the it is completed.

“Now the project is finished it tends to attract more owner occupier sales, particularly those who may need to sell another property as it allows them to seamlessly transition into their new property at AT238,” Finbar Group managing director Darren Pateman tells Business News Australia.

“That’s harder to achieve for those that need to sell another property when it is still under construction.

“With the lowest vacancy rate in the country we are also seeing frustrated buyers transition to ownership to escape the rental race, and rental yields continue to firm for investors despite the increase in cost of funds.”

AT238 has been developed on a 1,697sqm site at 238 Adelaide Terrace which formerly housed the Townsend Lodge site.

So far, 39 per cent of apartments in the project have been sold to investors, while the balance has been snapped up by owner occupiers.

The development is being undertaken in a 50-50 joint venture with site owner Ventrade Australia, the Singapore company that previously owned the former Australian Broadcasting Corporation site at 187 Adelaide Terrace in East Perth.

Finbar Group and Ventrade Australia had been joint venture partners in a proposed redevelopment of the ABC site prior to buying out Ventrade in 2018, although plans for this project are still some way off.

The completion of AT238 comes on the heels of Finbar Group gaining development approval last months for a 19-level tower comprising 143 apartments in the Springs precinct at Rivervale in Perth’s inner east. The $96 million project is being undertaken with long-time partner Wembley Lakes Estates.

Pateman says despite the challenges of inflation faced by the construction industry, the company has been able to complete AT238 at a profit.

“Finbar has seen a dramatic reduction in completed stock available for sale for immediate occupation, so it is timely to be able to bolster this book with an additional $54.3 million in unsold lots,” he says.

“Perth has a shortage of new and available dwellings which will allow us to maximise the sales value potential for this project.”

Finbar Group currently has three more projects totalling more than $677 million that it expects to complete in FY24.

These projects comprise the $427 million Civic Heart in South Perth, which will deliver 309 one, two, and three bed apartments plus 2,750sqm of commercial space. The project, currently under construction, is being undertaken in a 52.5 per cent joint venture with the landowner.

The $146 million Aurora, at Applecross in Perth’s south-west, is another 50-50 joint venture with the landowner that comprise 118 apartments and three ground-floor commercial units.

Finbar controls 65 per cent of The Point, a $104 million project that offers a similar mix of 167 one, two and three-bedroom apartments plus nine ground floor commercial units, is also being undertaken at Rivervale.

Four more projects are in the planning stages, including Lot 1000 which comprises 4,069sqm of absolute waterfront land in Perth CBD’s Stadium precinct.

According to a National Housing Finance and Investment Corporation report released earlier this month, Perth saw the biggest fall in housing approvals of any national capital since 2021. The report forecasts the city will have a shortfall of 25,200 dwellings by 2027, the biggest shortage of any state capital.