Swedish construction firm enters WA market
Serneke has acquired a one-third stake in the local business, with an option to acquire a majority stake in two years. The balance has been retained by local directors Andrew Abercromby said Mark Swann.
Mr Abercromby said he and Mr Swann shared Serneke’s focus on high-quality, sustainable residential infill developments. The Swedish group has tangibly demonstrated its commitment to the local market. “They have injected money into the business, provided a loan facility and dramatically boosted our balance sheet,” Mr Abercromby said.
Serneke’s head of business development, Robin Gerum, in Perth for the changeover, affirmed the Swedish group’s aspirations. “From a financial perspective, there won’t be any hindrance taking on projects that align with our strategy,” Mr Gerum told Business News. “We will make sure there is capital whenever there is a project we want to develop.” Mr Gerum also envisaged opportunities for staff secondments to and from Sweden. The Australian investment is the first international move by Serneke, which has achieved rapid growth since being established in the Swedish city of Gothenburg in 2002. It has more than 1,000 employees with construction, civil engineering, project development and property management divisions throughout Sweden. "We consider this a pilot project and a first step in our long-term strategy to establish operations in other countries,” Mr Gerum said. The connection to Perth came about because Consortium had a Swedish member of staff who knew of the group’s growth aspirations.
Mr Abercromby and Swann have also worked in Europe and travelled to Sweden. Discussions commenced in the middle of last year, when Mr Abercromby spoke to Serneke founder and chief executive Ola Serneke. “We started off talking about values,” Mr Abercromby recalled. “The first thing he wanted to do was establish a trust network.” Mr Serneke and some of his staff subsequently visited Perth to meet industry and government representatives and assess opportunities.
Mr Abercromby said Serneke was known for delivering medium and high-density developments into existing communities and is seeking to bring new levels of environmental and social sustainability to projects in Perth. “The Swedes have developed technologies that take sustainability from a principles-driven ideal for project development, to a pragmatic set of benefits that enable developments which would not otherwise be feasible, while also improving liveability,” he said.
The group will initially focus on multi-residential and community projects in Perth, marking a step-up from the single residential projects Consortium has worked on. Mr Abercromby added Serneke was keen to be involved with local developers from the earliest stage, as part of the design team and possibly taking an equity share in stand-out projects. He sees big opportunities in Perth, particularly in regard to the state government’s plan for higher density developments around Metronet rail projects, as well as LandCorp’s desire for edgier residential infill projects. “Serneke has proven competence and experience in delivering exactly the sort of product they want here,” Mr Abercromby said. “The proof is that they are really activated, healthy communities.” Mr Abercromby said Serneke was keen to take on flagship, standout projects.
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Interim report January-June 2020
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Serneke received consent from the bondholders in the written procedure to amend the terms and conditions and extend the maturity of its senior unsecured bonds 2018/2021
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