Avid Property Group’s Villa World merger timely: Cameron Holt

Avid Property’s Cameron Holt says the acquisition of Villa World has been well timed with a recovery in construction on the cards.

Avid Property Group chief executive Cameron Holt says the acquisition of budget home builder Villa World has been well timed with an expected recovery in construction through this financial year.

The $410m merger was approved by the Supreme Court of NSW on Tuesday following a unanimous 98 per cent shareholder vote at Villa World’s annual general meeting last week.

Avid’s portfolio will now grow from 10 to 37 projects, securing a gross revenue pipeline of $4.7 billion from 12,000 lots. Mr Holt said the current market conditions are creating fertile grounds for the sector to grow.

“Markets are generally improving. Obviously, we've had a relaxation of the APRA lending requirements more recently with an interest-rate cut, which has provided us a greater affordability proposition,” Mr Holt said.

“So, I think the timing to acquire a new business the size of Villa World is quite favourable to us as the market strengthens. Underlying that, we still have ongoing population growth, which is a real fundamental in our business.”

It is a position backed up by economists, who expect the construction industry to rebound into 2020

Housing Industry Association chief economist, Tim Reardon, said the bottom is nearing.

“We're not quite there yet (at the bottom), but certainly in terms of new home sales, we are seeing it pick up in terms of inquiries from customers following the three interest rate cuts and we’d expect the fiscal stimulus, if it starts to flow later in the year, to pick up a little there as well,” Mr Reardon said.

“That would mean from a construction perspective that we're looking at the bottom of the cycle. From a starts perspective, we see that occurring sometime early in 2020.”

The Avid deal is slated to be finalised by the end of the month. The takeover will extend the group’s capabilities as it envelops Villa World’s business arm.

“It doesn’t fundamentally shift what we do but it does offer an alternative product type. I guess, probably does expand our offering,” Mr Holt said

“This gives us back that housing capability and enters the market where we can actually offer full turnkey solution to our customers rather than a land sale and then connecting them up with a builder for a separate building construction contract.”

Mirvac Group announced yesterday it had acquired an 18-hectare parcel of land at Milperra, NSW, as it continues to grow its residential development pipeline.

Known as Riverlands, the former golf course was rezoned for residential in 2016.

In Queensland, Sydney-based developer Stan La Vin and the local Manera family, lodged a development application to Bundaberg Regional Council to reconfigure the first 170 lots in the $2 billion Southbeach project at Elliot Heads, near Bundaberg.