Billionaire Lang Walker cruises to record $675m profit
Billionaire developer Lang Walker has barrelled through the disruption of the past year to post a record $675 million net profit for the 2022 financial year as land sales and office rents lifted revenue across his extensive property portfolio.
Those efforts helped Walker Group’s total revenue more than double on the previous year to $1.2 billion, a result that was also boosted by a $635.1 million gain in portfolio value.
The Walker empire stretches from office tower projects in Sydney, Melbourne and Adelaide, to a 30,000-lot land bank of greenfield housing across Australia, another 45,000 lots across three extensive housing estates under development in Malaysia, and the high-profile private island resort in Fiji, Kokomo.
In all, those opportunities amount to a development pipeline of $30 billion. Walker Group’s balance sheet is in good shape. Mr Walker has built so much real estate, with a solid $6.6 billion of investment property held on the balance sheet, giving the company in a net asset position of $2.9 billion.
That buffer will come in handy as Mr Walker steers through a choppy economy where interest rates are rising as the Reserve Bank of Australia seeks to tame runaway inflation.
A 15-year pipeline of projects
For Mr Walker, the current cycle is the fifth “hiccup” he’s been through in 55 years of developing real estate.
“They are hiccups that last for a couple of years and then you come out the other end,” Mr Walker told The Australian Financial Review.
“But one of the things that we’re starting to see now, because of inflation and interest rates going up, there’s a lot of projects that were on the drawing board that have come non-viable now. ”
That’s not the case though for Walker Group itself, which has more than enough work to get on with, a 15-year pipeline of projects. That includes a number of office tower proposals, along with major housing developments such as the $3 billion Riverlea across 1300 hectares in Adelaide – where 1,000 lots have been sold over 12 months – and the $5 billion Maroochydore city centre under development on the Sunshine Coast.
“So we’re probably not looking for a lot of new projects or opportunities, but they certainly are starting to emerge. The phone’s ringing a little more often,” Mr Walker said.
In Walker Group’s own construction projects, there were some signs of inflation easing in the “early trades” which handle the structure and services of a new building although costs for finishing trades are still high, he said.
Financial results lodged with the corporate regulator show the billionaire, the sole shareholder of Walker Group, collected a $3.65 million dividend for the 2022 financial year, up from $2 million a year earlier.
Among the other successes on the Walker platform in the past year is Parramatta Square in Sydney’s west, whose 250,000 square of lettable space makes is one of the largest single commercial projects in the country. It’s on track to be fully leased by Christmas, a significant achievement given headwinds facing the office market.
Further afield, Mr Walker is celebrating the return to strong occupancy rates of around 70 per cent – Christmas is booked out – at his Komoko private island resort in Fiji, after two years of upheaval in the tourism sector.
“I don’t know that I’d do another island. It’s probably the hardest thing I’ve tackled,” Mr Walker said.
