MELBOURNE developer Villawood Properties has decided to share part of a lucrative $1 billion project earmarked for a major infill site at Helensvale on the Gold Coast.
The Melbourne-based developer has teamed up with the might of industry super fund Hostplus to deliver more than 600 lots at the Elandra project, adjacent to Westfield's Helensvale Town Centre.
The $400 million deal eases some of the risk for Villawood for its biggest Queensland project to date, and helps the company bring the project to the market next year to meet rising demand.
It is the second time Villawood has teamed up with Hostplus in the past eight years, after the $11 billion super fund joined Villawood in 2007 to deliver the master-planned Alamanda project in Melbourne's Point Cook.
Although details of the 2000-lot Helensvale project have yet to be disclosed, it is expected to have an end value of more than $1 billion and include a mix of medium-rise apartments and residential lots.
"The signs are highly positive for new residential development in south-east Queensland and we're particularly excited about our Helensvale project," says Villawood co-executive director Tony Johnson (pictured).
"This partnership will position us even more strongly to deliver in what are already strong market conditions and with the benefit of such a favourable location."
Johnson told Business News Australia earlier this year that Elandra was expected to be a long-term project for the group, although he conceded it could be wrapped up within five years if buyer appetite continues to grow on the Gold Coast at the pace seen in Melbourne in recent years.
The project received a significant boost recently with the announcement that the Gold Coast light rail system would be extended to Helensvale Railway Station with the possibility that the stage two could service the new estate with a dedicated stop.
Elandra is being developed on an 89ha site formerly occupied by the Gold Coast Country Club. The site was formerly owned by the late Paddy Buckler.
Villawood, which was founded founded by Rory Costelloe in 1989, has ramped up its Queensland development activities over the past year and has another smaller Gold Coast project under way, at Kingsholme to the north.
The company has spent $60 million on acquisitions in Queensland this past year, including the Helensvale site, and has since established a new Queensland base in Southport's CBD.
Costelloe says the Hostplus joint venture is a 'good commercial and cultural fit' for Villawood Properties
"This partnership is a logical next step as we continue to expand the scale and the scope of our projects and it will be among the highlights of what promises to be a momentous 2016 for Villawood Properties, with 10 new communities planned for launch along the eastern seaboard," he says.
The Helensvale joint venture will be managed by ISPT, one of Australia's largest unlisted property fund managers, as part of its residential mandate with Hostplus. This the fourth investment managed by ISPT for Hostplus in the past year.
David McFadyen, the fund manager of ISPT's Development & Opportunity Funds, says the Helensvale project is backed by 'strong demand fundamentals in the south-east Queensland market'. He says the location, close to amenities and transport, also underscored the investment.
Villawood, which delivers about 1200 lots a year across its portfolio and considered the fifth-largest residential developer in the country, plans to launch Elandra in mid-2016.
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