The growth of Papua New Guinea’s non-resources economy is giving major developers the confidence to invest in projects outside of Port Moresby, an expert panel told the recent Business Advantage Papua New Guinea Investment Conference.

‘Three builders’: Rupert Bray, Managing Director, Steamships Trading Company [left],
George Constantinou, Chief Executive Officer of Monier and Managing Director of Hebou Constructions, Lamana Group of Companies [centre], and
Paul Sayer, Chief Executive Officer, Nambawan Super [right] at the Papua New Guinea Investment Conference 2022. Credit: BAI/Stefan Daniljchenko

‘For Steamships, all our strategic planning is predicated on no new resource projects going ahead. As a country, we focus on the LNG and the mining projects but, when we do our planning, we assume none of them are going ahead,’ Rupert Bray, Managing Director of Steamships Trading Company, told a panel discussion at 2022 Business Advantage Papua New Guinea Investment Conference.

‘We are reliant on the underlying economy growing. The non-extractive [part of the economy] is growing at three per cent, so we need policy stability for that and we need to take the longer-term view.’

Steamships has a busy forward investment plan. It is looking to develop the Portside Business Park on a 40-acre site adjacent to Port Moresby’s port at Motukea, build a 40,000-square-metre integrated mixed development in Mt Hagen, and rebuild the Melanesian Hotel in Lae.

It is also finishing off Harbourside South, the K250 million addition to its Harbourside Precinct, with 21 levels of residential, retail and commercial spaces, including the newly-announced Marriott Executive Apartments Port Moresby (the first time the US-owned hotel chain – the world’s largest – has had a presence in PNG).

Mixed use

PNG’s largest superannuation fund, Nambawan Super, is another major real estate developer, recently completing the Rangeview Heights development in Port Moresby and is building a new head office in Waigani.

Chief Executive Officer Paul Sayer said projects like Harbourside revitalise neglected areas, inspiring others to take on large projects. He believes these mixed-use projects allow developers to hedge against just relying on the resources sector.

‘For the first time since I have lived here the investment climate is giving us confidence to invest not just in Port Moresby and not just in resource-based industries.’

‘We want the whole economy to lift. We are looking at how the rest of the economy is coming together and where does it makes sense to position those buildings so you can get a flow on and make a better city for Port Moresby,’ Sayer said.

For the Nambawan Super executive, another key issue is how to attract other big players to invest in this area. ‘Some of these investments are K500 million, so who is going to buy us out of that?’ he asked. ‘How can we make it a better environment to make other [international] people invest?’

One solution is the creation in PNG of listed property trusts as investment vehicles.

The future of regional projects

Another key change in the large-scale projects space is that Port Moresby is no longer the only place for big investments, showing a maturation of the regional areas.

‘We have just under one billion kina worth of projects in the investment pipeline and three quarters of that is outside Port Moresby,’ said Bray adding the most were mixed-use projects.

‘For the first time since I have lived here, the investment climate is giving us confidence to invest not just in Port Moresby and not just in resource-based industries, but in the underlying economy in the other cities.’

Like Nambawan Super and Steamships, the Lamana Group of Companies is member of the recently-established Real Estate Developers Association. George Constantinou, Chief Executive Officer of Monier and Managing Director of Hebou Constructions at Lamana observed that the recent success in large-scale projects is helping grow PNG’s skills base.

‘It is very important to deliver on quality and that is what a lot of our business is focused on,’ Constantinou said. ‘We always try to develop the local content and skills because the nationals will be there forever. But we [also] recognise there has to be passing on of knowledge and skills sets, so we do import particular skills.’

The construction boss says that there are some key challenges around supply chains post-COVID that require a lot of planning.

‘If it’s a critical item and it is going to hold up the project in any way shape or form, what we have done in the past is procure as much of that item as possible at the outset because if you don’t have it arriving on time, on site, it will push the whole project out,’ he said.