Lang Walker makes suburban shift as profits roll in

After turning in a record profit, property tycoon Lang Walker says his empire has shifted in the wake of the Covid-19 pandemic and he will deliver more suburban projects.

Walker Group will keep Parramatta Square to reap the benefit of long-term tenancies.

Billionaire property tycoon Lang Walker says his empire has shifted in the wake of the Covid-19 pandemic and he will deliver more suburban projects after turning in a record profit.

Mr Waker’s private operation is benefiting from the move to suburban offices, with his Parramatta Square in western Sydney near complete and another project at Bankstown almost done.

“You’ve got to move with the times,” he told The Australian on Monday. “I think post-pandemic you’ve got people coming into work closer to where they live.”

Mr Walker said that over the next 10-15 years growth was going to be centred around Sydney’s western suburbs, and predicted other projects would thrive.

Lang Walker’s Parramatta Square development is near completion.

His Walker Group is also making good sales in its residential estates, especially in South Australia, although they have been affected by higher interest rates hitting in Sydney.

“Certainly in Sydney they’ve slowed down,” he said. “In Adelaide, your price points are a heck of a lot cheaper than the East Coast … it’s still, even with higher interest rates, it’s still affordable.”

Rising interest rates are in the tycoon’s commercial calculations as he approaches new deals. “Of course we’re concerned about where they’re headed; it’s a big input into our projects and also the investment projects,” he said.

But he is optimistic about their ultimate direction. “In a year or 18 months, we’re going to see some stabilisation and they will probably not be as low as they were, but certainly getting back to something that’s affordable,” he said.

The Albanese government has pledged to help build one million homes over the next five years and Mr Walker called for planning reforms to hit the goal.

“It’s a big ask and I just hope that they can do something about the approval process. If they’re going to deliver that many houses they really have to do something about approvals, otherwise they will never get there,” he said.

Lang Walker.

Mr Walker noted that the government would also need to work on infrastructure “if they‘re going to achieve the numbers they’re talking about”.

Walker Group posted a $675m after-tax profit for the June 2022 fiscal year. The profit was a 226 per cent jump on last year and revenue grew to $1.13bn, coming from the Walker development and investments portfolio.

The company pushed through the current local and global difficulties to increase total assets by 21 per cent to $8.2bn, with cash reserves of $394m and the investment property portfolio increasing to $6.6bn.

It benefited from a $635m net lift in the value of its investment properties, up from the previous year‘s $235m rise. It got revenue of about $178.9m from property development sales and rate rental income of $242.9m from rental income from investment properties. The company will keep Parramatta Square and reap the benefit of its long-term tenancies with major companies which have shifted their workforces out of the Sydney CBD.

“Walker is targeting a stronger year in 2023 with initial forecasts predicting more growth based on financial strength, a very strong team and first-class assets that are being delivered during the financial year,” the company said.