Progress on getting new loans settled continues to be frustratingly slow. Welcome to life with COVID!
The team at GPS are persevering and we are getting better traction.
Historically, GPS has run a loan book with around 70% of the projects we fund being within Brisbane City Council. The residue would be spread around other areas within South East Queensland.
Due largely to changes in Brisbane City Council planning laws, I expect there will be a dramatic falloff of new projects in Brisbane. The new parking requirements for apartments and Council’s dislike of townhouse developments has made development within Brisbane unviable.
The only viable projects GPS has coming through loan pipeline for apartment projects in Brisbane have Development Approvals which were issued prior to the implementation of the new rules.
Things change. GPS adapts as we only want to fund viable projects. Fortunately, there are plenty of other local authorities within South East Queensland who embrace development.
I expect that Brisbane City Council will eventually realize that big projects such as Casinos and Olympic Games are not enough.
They need the engine room of typical GPS projects.
I have looked into my crystal ball to see what the GPS loan book will look like in 12 months’ time.
It indicated that only around 15% of GPS funded projects will be located within Brisbane City Council. The majority of GPS funded projects will be spread around South East Queensland. There was the expected representation of the Gold and Sunshine Coasts and for Ipswich and Moreton Bay.
The surprise was that Redland Bay looks like being a category in its own right.
In the past, Redland Bay was grouped in with Ipswich and Moreton Shires. I have now spent a bit of time in Redland Bay and been pleasantly surprised at how much is going on there and the maturity of the sales market.
It is all about good lending at GPS to best protect the interests of the GPS investors. If we must travel a bit further, then so be it.
Richard Woodhead | Managing Director