- BRW Lists
Published 14 March 2013 00:01, Updated 14 March 2013 07:10
The eyes of the political world were trained on the Rooty Hill RSL this month during Prime Minister Julia Gillard’s widely publicised expedition to Sydney’s western suburbs. But Australia’s business community should be looking a little further south from Rooty Hill, towards a precinct that will shape Sydney’s future. The south-west growth area promises to provide over a hundred thousand desperately needed houses and ease Sydney’s affordability woes. And building is in full swing.
Kick-started by wealthy families and the NSW government’s development arm, this vast area of former dairy farms and chicken sheds will soon host thousands of homes, commercial buildings and community facilities.
One new suburb where building has moved into full swing is the area surrounding the former Oran Park racetrack, where BRW Rich-lister Tony Perich’s Greenfields Development Company owns land that will eventually host 12,000 homes, spreading across three precincts. In the suburb of Oran Park alone, his land will yield 5500 homes.
“I believe this area is going to end up like Parramatta because it’s so big,” says Perich, looking down on to a table-sized map divided into myriad rectangular lots. “[The south-west growth area] is going to be as big as Canberra. We haven’t got the harbour, but we’ve got the mountains.”
We’re upstairs in a solitary cluster of new commercial buildings that are the beginnings of the Oran Park Town Centre, surrounded by sprawling fields of corn and cattle. Within a decade or two, there will be houses and apartments as far as the eye can see.
This town centre will have a 50,000 square-metre shopping centre and dozens more commercial buildings. The frames for a primary and high school went up this month. “It’s not just about building houses,” Perich says. “If you’re only going to do houses, it’s OK if you’ve only got 200 lots.”
But building 12,000 homes is more complicated. The first lot sold in January 2010 for about $240,000, but came with associated costs of about $50 million to cover lead-in roadworks, utilities and sewer infrastructure. In a $165 million voluntary planning agreement with Camden Council, Greenfields and joint venture parther UrbanGrowth NSW (formerly Landcom) will build a district leisure centre, several parks, a library and a range of other community facilities.
To give an idea of the scale of the Perich family’s operations, listed property giant Stockland – the country’s largest developer – announced the beginnings of its nearby East Leppington master-planned community in late 2011.
Dubbed the developer’s “most significant residential investment in NSW in over five years”, it will ultimately have 3000 homes. Perich’s plans are four times that size.
Born of Croatian immigrants who began as market gardeners, the Perich family’s Leppington Pastoral Company runs 3000 cows and supplies a lot of Sydney’s milk. Including Oran Park and surrounding precincts, such as Marylands and Lowes Creek, the Perich family controls a total of 12,000 housing lots.
They also own land in the Bringelly precinct, which could yield several thousand more lots at a later date. Much of it is still being used to raise cattle and grow pasture.
But as the housing frontier grows, the fences are set to be shifted.
While the upfront costs are steep, pay day is getting closer. More than 800 homes have been sold and there are 350 homes and a retirement village in the building pipeline.
The Badgerys Creek airport, if it comes, will boost employment in the area, Perich says.
“We’ve accepted it’s going to come here, and that’s going to create jobs,” he says. “When the federal government owns the land, and everyone knows that’s what it was bought for, no one can complain.”
The Perich family is not alone in the development game in the South West Growth Centre. After the NSW government in 2005 laid out its vision with the South West Structure Plan and designated farming areas that would be progressively rezoned, a number of land-rich families stepped forward.
The Vitocco family is teaming up with the Perich family to develop 2500 homes on land owned by the Marist Brothers at Gregory Hills. The Vitocco’s development company Dart West has also developed 45 hectares of land, which has become the Central Hills Business Park, and is close to planning approval for a 30,000 square-metre bulky goods centre. It plans to expand an existing 35,000 sq m shopping centre at Narellan to 90,000 sq m pending approval, which would make it a $300 million investment and by far the largest, wholly privately owned shopping centre in the country.
The Vitoccos are also partnering with businessman David Hazlett on two big residential projects at Emerald Hill and Marylands which could yield close to 4000 more homes.
And Lady Mary Fairfax is pressing forward with her upmarket Harrington Grove development which will ultimately have around 1200 homes. After that she will build another 3000 or so nextdoor at a project called Catherine Park. The housing projects have been complemented by big investments from the state government such as the $2 billion South West Rail Link project and the Camden Valley Way upgrade.
But the role of state-owned developer UrbanGrowth NSW has been pivotal. In the case of Oran Park, the Perich family provided the land while Landcom did the physical works and project management. The two parties will ultimately share the profits.
One of the biggest obstacles to development in the south-west has been fragmented land ownership, and UrbanGrowth general manager Mick Owens says the state-owned developer looked to the vast holdings of families such as the Perichs as a chance to kick-start development in the area.
“We recognised we could get this area going,” Owens says. “The south-west sector is important for housing supply, and is an important part of the housing supply equation. It takes effort to get these things up and running, and we also want to make sure people get amenity there.”
The momentum has brought bigger developers like AV Jennings, Sekisui and Stockland into the area. DartWest general manager David Taylor says eventually the vast numbers of fragmented small farm holdings will also start to be developed.
“At some point people will come long, it will be the second and third tier developers who will pull together and do 100 blocks. That’s happened in Sydney over history, it just takes a lot longer.”