A LACK of suitable development sites is keeping Villa World (ASX:VLW) from beefing up its Gold Coast workbook, although that hasn't stopped the company from recording strong sales in the latest quarter.
The Broadbeach-based developer is only working on one project in its home town, with another in the pipeline, and is looking to expand its local footprint.
CEO and managing director of Villa World Craig Treasure (pictured) says the company has undertaken very few projects on the Gold Coast in recent years despite a solid revival in the local housing market.
"There is a limited supply of greenfield development land on the Gold Coast and if more land was available we would have larger exposure here," he says.
"We invest heavily in Brisbane and Melbourne where supply is much easier.
"Good forward planning for land availability and infrastructure provision is required (on the Gold Coast). There will be major new development areas released in the future so this should be brought forward."
Villa World's sole Gold Coast project, Parkside at Coomera, is selling strongly, helping Villa World record 598 sales across its national portfolio over the nine months to March 31. Sales in the March quarter alone accounted for 246 of those sales, or 82 sales a month during the quarter.
Treasure says low interest rates, strong employment and reasonable consumer confidence is driving sales with strongest performers being the company's bayside and north Brisbane projects.
The company is on track to achieve more than 800 sales in FY15 and is targeting more than 1000 sales in FY16.
"We have additional projects being released to the market late this financial year and early next financial year," Treasure says.
"This supply, along with our existing projects, will lift us to this target rate provided that the strong market conditions remain."
The developer has also announced it has added another site to its portfolio, purchasing a $16.5 million infill site at Redland Bay on Brisbane's bayside.
The site, known as Seascape, is expected to boast more than 200 dwellings, compromising attached and detached houses, villas and townhouses. Settlement of the first parcel is expected towards the end of this month.
Treasure says the acquisition increases the company's development footprint in the bayside region, where it is experiencing strong buyer demand.
"Our existing projects at Mt Cotton, Era at Capalaba and Waterline and East Ridge at Thornlands have all been major contributors to our positive sales results," says Treasure.
"The Seascape project will ensure our continued presence in this area and will provide diversity of product to attract a variety of buyer groups, including downsizers."
The new Redland project is expected to start contributing to revenue in FY17.
Villa World posted a net profit of $12.99 million for the first-half of FY15.
Villa World's shares are currently trading at $2.32.
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