Western Australia's long-established residential developer, Peet, has officially entered the elite ranks of the State's billion-dollar companies. This significant milestone comes as the firm benefits from a combination of intense corporate takeover speculation and a fiercely competitive property market that shows no signs of cooling.
A Historic Achievement for a 130-Year-Old Firm
Founded in Perth back in 1895 by immigrant English surveyor James Thomas Peet, the company has grown from its humble beginnings into a major force in land development. Throughout its history, Peet has played a crucial role in opening up extensive tracts of Perth for residential housing, shaping the urban landscape of Western Australia.
Share Price Surge and Market Valuation
On Friday, Peet's shares reached a remarkable 16-year high, hitting $2.17 during trading before settling at a close of $2.14. This represents a gain of three cents and values the entire group at an impressive $1 billion. With this achievement, Peet joins approximately 50 other Western Australian-based companies listed on the ASX that boast billion-dollar valuations.
Over the past twelve months, Peet shares have experienced a substantial uplift of more than 47 per cent. This surge is directly attributed to rising demand and increasing prices for the company's land and home packages across Australia. The nation's ongoing and pressing shortage of housing continues to drive this upward trajectory.
Corporate Speculation Fuels Investor Sentiment
Adding to the positive momentum is widespread speculation about potential corporate activity involving Peet. The company's board took a significant step last year by engaging investment bank Goldman Sachs to conduct a comprehensive strategic review. This move has further spurred investor sentiment and contributed to the share price appreciation.
Revival and Strategic Transformation
The company's current revival marks a dramatic turnaround from earlier challenges. In 1985, property developer Tony Lennon injected new life into the struggling firm by purchasing a 51 per cent stake for $100,000. Partnering with Warwick Hemsley, Lennon worked to stabilise the previously loss-making group.
Peet eventually listed on the Australian Securities Exchange in 2004 at $1.20 per share, with Lennon realising $60 million from the initial public offering. The shares reached even greater heights during the first mining boom of the 2000s, topping $4 in 2006 as demand for homes and land soared.
Favourable Market Conditions Drive Growth
According to chair Greg Wall, who addressed the annual meeting in November, the company is currently experiencing a powerful revival. He attributed this success to what he described as a "unique confluence of favourable macro conditions in the Australian residential sector."
Wall highlighted several key factors driving this growth:
- Strong population growth across the nation
- Constrained housing supply creating demand pressure
- Growing appetite for investment from overseas capital partners
- An increasingly favourable borrowing environment for developers and buyers
As of mid-November, Peet had accumulated more than $750 million in sales contracts for projects spanning Western Australia, Victoria, Queensland, and New South Wales. This substantial pipeline demonstrates the company's national reach and strong market position.
Shareholder Movements and Institutional Interest
The Lennon family capitalised on the stock's impressive comeback by cashing in more than $56 million of their Peet shareholding in October. This transaction reduced their stake to 14.8 per cent, which was still worth nearly $150 million at Friday's closing price.
Other significant shareholders include Warwick Hemsley, who holds $37.4 million worth of stock according to Peet's most recent annual report. Former chief executive Brendan Gore departed the group in July with $13.3 million in shares.
On the institutional front, Regal Partners has been actively increasing its position in the company. This week, the investment firm declared an increased holding of 11.4 per cent, indicating strong confidence in Peet's future prospects.
The combination of fundamental housing demand, strategic positioning, and corporate speculation has propelled this historic Western Australian developer into an exclusive financial league, positioning it for continued growth in Australia's dynamic property market.
