Originally published on The Australian
Billionaire Maha Sinnathamby is seeing first hand the effect the global pandemic is having on all facets of the property market.
As chairman of the Springfield City Group he oversees, with long-time business partner Bob Sharpless, the building of an $88bn city from scratch on the fringe of Brisbane.
Springfield has been a tremendous success for the duo, who borrowed much of the almost $8m purchase price for 7000 acres (2832 hectares) of land unwanted by other developers almost 30 years ago and set about building the largest master planned community in Australia.
Their vision is only half complete, but already 43,000 people, with an average age of 29 years, live and work in Springfield, where Sinnathamby has built shopping centres, medical precincts, commercial districts and plenty of residential subdivisions.
It has given Sinnathamby a unique insight across all parts of the property industry, and he predicts there will be some tough times for parts of it for several years even if he has noticed an increase in inquiries for the uptake of additional commercial property space to accommodate new social distancing protocols.
“In terms of the residential market, my guess is it will start to recover by the end of the year and strengthen in the first quarter. The commercial market may however take a little longer to recover,” Sinnathamby tells The Australian.
“It is my prediction the commercial sector will need about 15-24 months to strengthen. Health, on the other hand, is an area I believe will provide the property industry a chance to reimagine new opportunities as we come out of COVID-19.”
Sinnathamby is particularly enthusiastic about the health and education sectors, which has important implications for his plans at Springfield.
At the moment, there are still 23,000 apartments to be built under the Springfield masterplan, about 2.6m square metres of commercial space and another 8000 traditional housing lots.
The sheer scale of the development is why the group has engaged Moelis to find a project partner, though they are pushing ahead with the construction of facilities such as “The Reserve” training facility for AFL club Brisbane Lions, including a stadium for its AFLW team.
Schools, healthcare, higher education
Sinnathamby says he is pleased the project will create local jobs, and is planned to be ready by early 2022.
There’s also an additional 15 more schools planned and better university and higher education facilities. The 52 hectare health precinct, which already includes a 1200-bed Mater Hospital and Aveo aged care facilities, also needs to be built out.
“The key learning from the 2020 health crisis is looking at how better prepared we may need to be in the future,” says Sinnathamby. “Solutions we should activate could include portable hospitals, enhancing our regional hospitals and stocking up on medical equipment in preparation for a potential second wave [of COVID-19].”
Sinnathamby is by nature an optimist, having survived the collapse of his first development business in Perth to then with Sharpless go on to buy a parcel of Queensland land that nobody else thought was worth developing, given its distance from the Brisbane CBD and lack of transport links back in the 1980s.
The duo were able to convince the state government to fund a highway and later the extension of the railway to Springfield. Sinnathamby is now calling for a similar combination of government and the corporate sector to help create more jobs and boost business.
“Just as Australia has led the way in response to the COVID-19 health pandemic, it is now time for us to lead the way in terms of the economic recovery. We must jump-start the economy, albeit with caution, and with that same strong, supportive leadership, both from government and private sectors.”
“I strongly believe in the saying ‘the darkest night brings the brightest dawn’. This phrase has carried me through some of the most challenging times in my career and applies to what we are all going through right now. I therefore have no doubt good times lie ahead for us all.”
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