Australia’s new homes market has not only driven stronger-than-expected GDP growth but propelled the country’s largest construction companies up the rankings in this year’s Top 500 Private Companies.
While Sydney developer Meriton held fifth position – and that of the top-ranked property company – as revenue ticked 0.4 per cent higher to $2.78 billion, and Perth-based BGC was steady in sixth place even as revenue rose 5.2 per cent to $2.68 billion, Brisbane-based jumped up two places to seventh.
The privately owned builder that focuses on private developments and the education and health sectors jumped as revenue rose 14.7 per cent to $2.65 billion.
It enjoyed a 20 per cent increase in work in both Sydney, where its projects include stages 3 and 4 of Stockland’s Elara residential development in the north-western suburb of Marsden Park and Melbourne, where it is building the Harbourtown Supermarket and Market Lane in Docklands and has been working on Rich List developer Paul Little’s VIP jet terminal.
But the slowdown in residential development that was likely once the current slew of east-coast residential projects came to a close meant the recent buoyant performance was unlikely to be repeated, chief executive Greg Quinn said on Wednesday.
“What we haven’t experienced until very recent times is a decline in the high-density residential market,” Mr Quinn said. “We’re now starting to see that come through, which will be reflected no doubt in our work in future years.”
Diversifying
Gross domestic product rose 3.4 per cent over the 12 months to June, its fastest pace in nearly six years, as a buoyant construction sector, high corporate profits and consumer spending drove growth, official figures on Wednesday showed.
Other builders also performed strongly, such as Melbourne-based Metricon, which enjoyed a 10.1 per cent jump in revenue to $1.58 billion that took it to 22nd place on the list from 48th last year. Contractor Built jumped to 25th place from 43rd as its revenue soared almost 41 per cent to $1.45 billion. In NSW, an 18.3 per cent rise in revenue saw Richard Crookes Constructions rise to 36th place from 42nd.
As residential work slows, Hutchinson Builders is diversifying. The company won the contract to build The Star Entertainment Group’s first mixed use residential and hotel tower at Broadbeach Island on the Gold Coast. Work will start next month.
Hutchinson was predicting revenue of $2.7 billion in the current financial year, a figure Mr Quinn said reflected a stabilisation as revenue from southeast Queensland slowed and revenue from its newly opened Adelaide office started boosting the top line.
“It’s a slight increase, but reasonably stabilising over the next 12-month period with a slight shift geographically,” he said.
The full Top 500 Private Companies list appears on pages 42 and 43, and at afr.com.