The Finbar Group Limited (ASX: FRI) share price closed marginally higher today following an update on its Civic Heart project.
Shares in the property developer closed only slightly in the green, up 0.69% at the close of trade. However, on release of the news earlier today, the Finbar share price jumped as much as 3.4% to 74.5 cents.
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Earthworks development
According to the update, Finbar advised that earthworks on the company's landmark Civic Heart project will commence in January 2021.
The decision by the company to begin significant works comes off the back of a strong sales momentum recorded across its portfolio. Finbar received 60 sales for Civic Heart apartments, worth $59 million, prompting it to begin development works.
During October, Finbar had secured the sale of 47 apartments to the value of $31.3 million. This translates to more than $1 million in sales per day. The company noted that the sales achieved in October reflect its highest on record since 2017. This is extremely positive news, according to the company, given the circumstances of how COVID-19 has affected the Western Australian housing market.
The Civic Heart project is located on a site 8,208 metres squared, situated in one of South Perth's most anticipated mixed-use developments.
Once finished, the building will feature two towers housing 309 residential apartments, four penthouses, and 25 ground floor commercial tenancies.
The entire project's end value is estimated to be around $408 million.
What did Finbar's Managing Director say?
Finbar Managing Director, Mr Darren Pateman, made comment on Perth's rental market, which has seen its lowest vacancy levels in 30 years. Mr Pateman said that while this was driving buyer demand, investors were cautiously returning to the market.
After a prolonged absence from the Perth market, we are currently seeing the return of investors as a result of the tight rental market and more buoyant conditions across the market in the wake of the pandemic.
This rental market tightening coupled with record low interest rates is also encouraging tenants to enter the market as buyers which is helping with the sale of our entry level product.
The return of investors is also a key element in addressing the current rental shortage across Perth which is predicted to increase in 2021.
In addition, Mr Pateman went on to talk about the improved sales activity across the sector as a result of new and existing arrivals. This includes returning West Australians, interstate and overseas migrants seeking a COVID-free state.
Finbar share price summary
The Finbar share price has been climbing higher over the past few weeks, gaining more than 15%. Shares in the property developer fell to 52 cents in March after achieving a 52-week high of $1.01 in February. The company has a market capitalisation of $202.7 million and a price-to-earning (P/E) ratio of 31.
