Health good for Lang Walker’s wealth

Property magnate Lang Walker is embracing the lifestyle revolution that is sweeping the commercial property sector.

Billionaire Lang Walker, founder and executive chairman of Walker Group. Picture: Bloomberg.

Billionaire property magnate Lang Walker is embracing the lifestyle revolution that is starting to sweep the commercial property sector, and is set to open new health and wellness studios at two of his huge projects in Sydney and Melbourne.

Walker, who owns the ­Kokoko luxury resort in Fiji, is partnering with two wellness ­operators, Wellineux and Universal Fitness, which will offer services such as hot yoga, remedial massages, zumba, oxygen chairs and meditation rooms at Parramatta Square and Collins Square.

The news comes as financial accounts lodged this week with the corporate regulator show his privately held Walker Group made a bumper $502m pre-tax profit in the 2019 financial year.

Revenue for the business reached $776m, including a $366m gain on the value of the investment properties Mr ­Walker holds in his portfolio. Walker Group has net assets of $1.7bn on its balance sheet, including $3.8bn worth of investment properties.

Rental income for the group rose almost $20m to $120m, ­exceeding the $76m Walker Group made from property ­development sales — which was down from $96m a year ago.

The results show just how much focus Walker has put on the commercial property sector. While he still has major residential subdivisions across the country and in Malaysia, he says the commercial sector has good prospects.

“I am still very confident about the commercial real estate sector, with vacancy rates still at record lows in many areas, particularly in Parramatta and CBDs in Sydney and Melbourne,” he told The Australian on Tuesday.

The $2.7bn Parramatta Square in Sydney’s west is now a larger development than Barangaroo and the total project is close to 80 per cent pre-leased, with more than 185,000sq m of high-quality office space committed and space running out fast.

The first of its towers is to open within weeks.

Melbourne’s Collins Square is the country’s second-largest commercial mixed-use development, with six office towers and an extensive ­retail and food space in the growing Docklands district.

Collins Square’s 200,000sq m of lettable area across its office, retail and entertainment space is now fully leased, with Wellineux’s new wellness studio, Mellobarre, to be launched inside the precinct next month.

Mellobarre has been designed to provide wellness programs such pilates, naturopathy consultations, acupuncture, remedial massage, hot yoga, and aromatherapy and nutrition workshops.

At Walker’s Parramatta Square development, Universal Fitness recently signed a 10-year lease at 4 Parramatta Square and is set to provide a new concept gym with a cutting-edge fitness and wellness offering for tenants and visitors.

The facility will also offer ­energiser and sleeping pods, oxygen chairs and meditation rooms. “The future of the commercial ­environment goes beyond sustainable development to deliver an all-encompassing holistic ­approach to workplace health and wellness for tenants,” said Walker Group chief operating ­officer David Gallant.

Walker’s focus on commercial property is part of a pipeline of at least $25bn worth of projects coming over the next 15 years, though that also includes major residential subdivisions such as a large housing project the group recently secured planning ­approval for at South East Wilton, 80km southwest of the Sydney CBD.

But the Walker Group balance sheet shows how much of a focus commercial property is for the billionaire, with his company now having $3.82bn worth of ­investment property among its assets, up from $2.9bn last year.

The group has about $2.56bn of investment properties that are completed, and a further $1.25bn under construction.

After paying almost $140m in tax, the company recorded a $363m net profit, up from about $305m in 2018.

However, the business was hit by an almost $120m loss on a change in the value of interest swap derivatives it holds.

Walker is a member of The List — Australia’s Richest 250, published by The Australian, with estimated wealth of $3.58bn.

His group’s financial report also revealed it has secured a further $1.065bn in additional debt facilities since the start of the 2020 financial year.

It also has $53m in loans ­secured to three corporate jets, including one for $39m tied to a Global Express plane.