Three partially developed subdivisions, including Dorchester Place in the heart of Covington, were purchased in 2013 by The Drapac Group, an Australian land investment and development company looking for good buys in the Atlanta market.
Drapac USA, the company’s American arm, has been aggressively purchasing properties in a handful of major American markets such as Atlanta, including the Dorchester Place subdivision in Covington (off Conyers Street) and the Magnolia Park (Covington Bypass Road) and Bailey Glynn (Brown Bridge Road) subdivisions in unincorporated Newton County.
Jeremy Quinn, Drapac USA’s director of property, said the company began investing in Atlanta in 2011 because of the city’s prior housing demand.
"We’re looking for areas that have historically good demand, where people have been building homes going back to the boom years of 2005-2006 and even prior to that, 2000 and 2001. We look at where people are living and moving to and we came to Covington," Quinn said Friday.
"One of the other factors is we look for places with community spirit and character, which obviously Covington has plenty of. We’re trying to match areas where people have lived before and where people will want to live."
The company is also targeting land in the Charlotte, N.C., Chicago, Los Angeles, Orlando and Phoenix
markets, but its heaviest investment has come in Atlanta, where the company currently owns 17 developments surrounding Atlanta.
According to its website, the company plans to manage and develop its land investments primarily with the goal of selling them to national home builders and developers. Drapac sees land as a particularly low-risk investment as the U.S. housing market recovers from its 2008 collapse. The company believes "the existing conditions of the US market mirror that of the Australian property market in the early 1990’s."
The company’s biggest purchase, Dorchester Place, is also the only one where the deeds have yet to be recorded, meaning there is no easily publicly available information on the total amount of land purchased and the purchase price.
However, according to data on the Multiple Listing Service, 108 of the development’s 128 total lots were sold for $8,518 apiece, lower than the asking price of $14,200 apiece. Drapac’s website said the company purchased the subdivision in July.
At those numbers, the total purchase was $919,944. Lots range from just more than a tenth of an acre to half an acre in size.
Dorchester only has eight actual homes, with the rest vacant lots.
The subdivision has roads and utilities installed throughout and is ready for more home building. Hamilton State Bank, which acquired The First State Bank’s assets, owned most of the lots in Dorchester, which is located off Conyers Street, next to Academy Springs Park.
"(Dorchester is a community built in the heart of the city, a community within a community. It’s got so much character and is well-designed with great homes in there. As soon as you drive in there, you have a good feeling, and we have no doubt people will want to live there as the market recovers," Quinn said, noting Drapac will look to maintain the development’s integrity and eventually sell lots to builders.
Bailey Glynn and Magnolia Park
Located off Brown Bridge Road, just east of the new Walmart at the Salem Road intersection, Bailey Glynn is a partially built out subdivision with a 37.71-acre unfinished phase.
Drapac purchased the unfinished phase and 22 developed lots in the first phase, off Halibut Circle, for a total of $710,000.
Magnolia Park is a 26.48-acre development off the Covington Bypass Road, east of Flat Shoals Road, which Drapac purchased in March for $126,000.
The development has all the roads and utilities installed, and Quinn said he expected Drapac will work to improve the subdivision layout and eventually work with a builder to put homes on the ground.
Quinn said Drapac is still adding land to its portfolio and hasn’t yet started adding value, or developing, the land. He said Drapac is still actively buying properties in Atlanta and will continue to look at Newton County.
Quinn said the company is looking to quickly offload lots to make a profit, but plans to invest in its land assets over time.
As far as home building, Quinn said it remains slow in Newton County, but he said there’s a lot more activity in Henry County, which would bode well in the near future for Newton.
"It’s slowly picking up, but we’re seeing the first signs of development," Quinn said.