Wesfarmers plunges into construction with $100m joint venture to build apartments 50% faster

Key facts

• Wesfarmers and Built Group announced a 50:50 joint venture, Built Living, on Tuesday.
• Wesfarmers commits an initial $100 million to develop Australia's first advanced manufacturing facility for precast concrete apartments.
• The facility, in Western Australia's Neerabup Automation and Robotics Precinct, is expected to produce over 2,000 apartments annually.
• Construction of the plant is scheduled to begin in the second half of 2026.
• The venture aims to reduce build costs by 20% and construction time by 50% compared to traditional methods.
• Potential savings of up to $158,000 per apartment are projected.
• A portion of output is reserved for government-backed housing, including social and essential infrastructure.
• The Western Australian Government is providing a long-term land lease and development support.

A retail giant builds a new foundation

Wesfarmers, the parent company of Australian retail behemoths Bunnings and Kmart, is pivoting into construction with a radical bet on factory-built apartments. The conglomerate announced Tuesday a $100 million equity investment in a 50:50 joint venture with Built Group, creating a new entity called Built Living. The venture aims to industrialise high-density housing, promising to cut construction times by half and reduce costs by a fifth. Managing director Rob Scott framed the move as a direct response to Australia’s acute housing shortage. “Australia urgently needs more housing,” he said in a statement, positioning the venture as a supply-side solution that marries Built’s digital construction expertise with Wesfarmers’ capital and industrial supply chain capabilities.

The DfMA blueprint: apartments like cars

Built Living will employ Design for Manufacture and Assembly (DfMA) techniques, a factory-based approach already used in sectors such as automotive manufacturing. By standardising components and assembling them off-site, the partnership believes it can slash build costs by approximately 20 percent and reduce construction time by up to 50 percent compared to conventional on-site methods. These efficiencies could translate into savings of as much as $158,000 per apartment unit, according to the company. The model targets medium- and high-rise residential projects, a segment where traditional construction has struggled with productivity gains.

Western Australia’s factory of the future

The joint venture’s first advanced manufacturing facility will be located in Western Australia, at the Neerabup Automation and Robotics Precinct. Construction of the plant is scheduled to begin in the second half of 2026. Once fully operational, the facility is projected to produce more than 2,000 apartments annually. The Western Australian Government is backing the project with a long-term land lease and development support. A portion of the output has been earmarked for government-backed housing projects, including social and essential infrastructure, providing Built Living with a guaranteed demand pipeline from the outset.

From retail shelves to housing blocks

Wesfarmers’ entry into construction marks a significant strategic shift for a company best known for its hardware chain Bunnings and discount department store Kmart. Under Scott’s leadership, Wesfarmers transformed Kmart into a retail powerhouse over the past decade by overhauling its buying structure. Now the conglomerate is applying similar industrial logic to housing. Built executive chairman Marco Rossi said the company had spent years searching globally for solutions to Australia’s housing crunch. The partnership combines Built’s on-the-ground construction experience with Wesfarmers’ financial muscle and supply-chain know-how, a blend that both parties believe can scale beyond Western Australia.

Market signals and financial context

The announcement comes as Wesfarmers navigates a challenging retail environment. Shares in the conglomerate have recently traded near $72, sitting below both their 50-day and 200-day moving averages as the market weighs the company’s growth prospects amid shifting consumer spending. While the retail business continues to provide a broad earnings base, investors are watching to see whether the Built Living model can successfully replicate its efficiencies outside Western Australia. The partnership remains subject to final binding documentation and funding arrangements with the Western Australian government and various lenders. Wesfarmers’ move effectively positions the firm as a primary beneficiary of state-backed housing policy, diversifying away from reliance on retail consumer cycles.

What comes next for Built Living

The joint venture’s immediate focus is on establishing the Western Australian manufacturing facility and securing the necessary approvals. Construction of the plant is not expected to begin for more than two years, meaning the first factory-built apartments will not reach the market until at least 2028. Longer term, the partners will need to demonstrate that the DfMA model can deliver on its ambitious cost and time targets at scale. If successful, the venture could reshape Australia’s residential construction industry, but the path from announcement to production is fraught with regulatory, financial and operational hurdles.

The bottom line

• Wesfarmers is investing $100 million into a 50:50 joint venture with Built Group to build apartments using factory-based DfMA techniques.
• The venture aims to reduce construction time by 50% and costs by 20%, potentially saving $158,000 per apartment.
• A dedicated manufacturing facility in Western Australia, backed by the state government, is expected to produce over 2,000 apartments annually from 2026.
• A portion of output is reserved for government housing projects, securing early demand.
• The move diversifies Wesfarmers beyond retail into construction, leveraging its industrial supply chain and capital base.
• Success hinges on scaling the model beyond Western Australia and meeting ambitious efficiency targets.