At GPS Investment Fund (GPS) we’ve seen many changes to the South East Queensland project landscape already this year. Namely, while demand for developed stock is high (driven by still-booming interstate & international migration) a looming undersupply is further threatened by development-halting government policy.
Many mooted projects that have crossed our desk this year are rapidly deemed ‘unviable’ due to increased construction costs and policy pushbacks.
A recent example is Toondah Harbour, a proposed 3,000-unit project in the Redlands region. While the project ultimately didn’t pass government ecological regulations, the need for housing in the region remains.
When news like this hits our desks, our proactive response is to lean on our longstanding and carefully crafted industry relationships to see where we can be a part of the solution. We always say that we lend because we want to lend – responsibly and strategically.
Our approach is anchored in a deep understanding of market dynamics within South East Queensland, where we diligently select projects to address the region’s evolving needs.
We’ve been aware of the Redlands region as a growth corridor for some time now and actively fund projects in this area, such as our current project, White Street at Victoria Point, with trusted GPS borrowers, Provincial Building. Considering the recent Toondah Harbour disruption, we’re now in continued discussions with our builder and developer network to find further opportunities in this space, which will help fill the residential demand still present in this, and similar, areas.
As a result of these conversations and existing relationships, we have the next project in the pipeline for Provincial Building, slated to start construction right in the Redlands region later this year. In light of current government policy and the rising cost of construction, we also see an extension to the boundary of GPS’s lending options. While units and townhouses directly address the market’s current undersupply of housing and are, of course, our bread and butter, we’ve also been opening discussions to new projects that suit the broader scope of our capabilities.
The future of our chosen market involves meeting the residential undersupply, but also supporting the community needs that come with it. This is why we extended our capabilities last year to involve limited, non-residential projects, so that when the right opportunity hits our desks, we’re actively able to move forward. By strategically expanding our potential lending scope for the right borrowers, we can further support the development of much-needed housing and the infrastructure required to create thriving communities.
All of this is to say that, in the wake of a turbulent market kickoff this year, it feels as though nothing is beyond the strength of our builder and developer relationships, and our internal experience. We can see where the market is heading and we’re on top of the curveballs thrown, but demand is still high, and undersupply is still the looming threat driving us forward. We look forward to the outcomes our projects will provide this year and will continue to lend with the best intentions of our Investors as our top priority.
