Developers still wary in South Perth

Business News

17th February 2020.

Recent planning decisions have been positive for developers in South Perth, but several major players have cautioned that significant challenges remain in the near-city suburb.

Planning Minister Rita Saffioti says her decision to approve Finbar Group’s Civic Heart proposal has brought certainty to South Perth, but with changes to the suburb’s planning scheme yet to be finalised, developers are not entirely convinced of a clear pathway to launch new projects.

Earlier this month, Ms Saffioti intervened in normal planning processes in South Perth to approve Finbar’s proposal, after it was rejected by the Metropolitan Central Joint Development Assessment Panel in October last year.

The rejection came despite the $300 million project being recommended for approval by the City of South Perth following a comprehensive design review process.

Central to the minister’s approval announcement was the premise that it provided certainty to developers in South Perth, with Ms Saffioti expecting it to clear the way for a new round of major projects.

However, while Finbar managing director Darren Pateman welcomed the minister’s approval, he said the ASX-listed developer would likely be hesitant to launch new projects in South Perth until a more positive and consistent planning trend emerged.

“South Perth has very unique characteristics that suit apartment living, and naturally a northern aspect view to the city skyline and access to the foreshore is a significant drawcard,” Mr Pateman told Business News.

“Developers can’t, however, rely on a minister to step in every time a new project is thwarted by the planning approval process because of subjective opinions which are contrary to professional objective review and recommendation, or when approval panels are overly influenced by a vocal minority.

“There is a competition for developer capital all around Perth, and as attractive as South Perth is, we will still have to weigh up a new opportunity on its own merits.”

Continuing uncertainty since the City of South Perth relaxed height limits in 2011 resulted in several high-value proposals being stalled, as resident action groups rallied against the buildings’ collective scale, and the local council moved to again alter its planning guidelines.

The latest iteration of South Perth’s planning rules, Local Planning Scheme Amendment No.61, was approved by council in mid-December and has been referred to the Western Australian Planning Commission for approval.

In that context, Sirona Capital managing director Matthew McNeilly said he didn’t think it was necessarily clear cut that the minister’s announcement would bring certainty.

“There is still a scheme amendment that’s coming down the pipeline and my understanding is that’s got a ways to play out,” he said.

“For other developers, those will be the rules that they will have to play by, once that scheme amendment is gazetted.

“You could imagine that there would be plenty of consultation between WAPC and the City of South Perth to get that right, so I’m not sure the minister’s decision delivers certainty to other developers.

“It certainly does for Finbar, that’s fine, but others may still have some challenges ahead of them.”

Developers have sought to build under current guidelines at the same time as council has been formulating its changes, but have faced a series of decisions by the Metro Central JDAP that Edge Visionary Living managing director Gavin Hawkins described as inconsistent.

“We’ve been advocating for a long time that the decision-making has just been hit and miss and it’s really frustrating for the development sector when there are so many jobs on the line,” Mr Hawkins said.

“Just the financial implications of getting poor decisions is incredibly frustrating for the sector, so I would applaud the minister for coming in and having the confidence to come in and make that [Civic Heart] decision.

“I think it’s important for the sector that we get some of these projects approved.”

Following Ms Saffioti’s scrutiny of the suburb, however, it appears some consistency is emerging.

Sirona Capital and Singapore- owned developer NL Homes Melville were recently issued approvals for a pair of South Perth towers at JDAP, but only after both companies scaled back the height of their initial proposals.

Mr Hawkins said a State Administrative Tribunal decision due in March could also pave the way for a third project to start marketing alongside Civic Heart, in his company’s Lumiere at 74 Mill Point Road, a development that’s been in the works since 2015.

“We feel the demand is there for the right buildings in the right locations,” Mr Hawkins said.

“What’s been frustrating is it’s taken so long for these projects to get to market that people haven’t had that choice.

“Going forward, there are going to be three or four quality projects in the market; they will be competing as they should for buyers, but it’s great for the public that they are going to get plenty of choice in terms of location and quality.

“We think the transition to apartment living has only just started here in Perth, but we need the right product to entice people to move.”