Lendlease takes top gong, Meriton makes most profit in IBISWorld Top 1000

While Lendlease made the most revenue among the property companies that appeared on the list – just over 60 out of the list of 1000 – it did not post in the best profit after tax.

Sydney apartment builder Meriton, run by Australia’s richest man Harry Triguboff, posted the best after-tax profit of just over $1.7 billion, followed by ASX-listed residential developer Mirvac at just over $1 billion. Both companies only made about $2.9 billion in revenue compared with Lendlease’s $15.4 billion.

There were strong performances too by Vicinity Centres and Brookfield Multiplex with $961 million and $756 million in after-tax profit respectively.

The bulk of growth in real estate has come from rising residential property prices, IBISWorld said.

Correspondingly, those companies involved in the production of housing have risen in rankings except for Laing O’Rourke, ABN Group, Hansen Yuncken, Schiavello, Sekisui House, JWH Group and Grocon.

Revenues for these companies fell between 12 and 48 per cent.

Real estate rises

Real estate agencies did well. Ray White and LJ Hooker rose up slightly in the ranks, but IBISWorld did not provide their profit after-tax results.

“Real estate agents work on commissions, so revenue generally rises as property prices increase. However, many agents have not increased their commissions due to strong competition in the industry,” IBISWorld said.

Other property operators and agencies such as JLL, CBRE and Colliers International and investors like Cromwell Property also performed well, rising in the Top 1000 and posting a positive increase in revenue and profits.

Cromwell Property Group entered the list at rank 600, following significant fair-value gains from its investment properties, IBISWorld said.

“Sluggish growth in traditional investment streams has caused many investors to turn to other assets, such as commercial property. This has increased interest in commercial property investments, which are typically managed by non-residential property operators,” IBISWorld added.

“Australia’s increasing white-collar workforce and transition to a service-based economy have boosted demand for office property operators, as many businesses rent office space through property operators.

“Online shopping has created strong demand for warehouses and other supply chain-related property, increasing demand for industrial property and boosting revenue for related operators.

“Rising rent costs for retail property have helped lift revenue for retail property operators.”

Brookfield Global Integrated Solutions was a newcomer on the list, coming in at 735 after it acquired the remaining share in Brookfield Johnson Controls Australia, previously a joint venture with Johnson Controls Inc.