Following a detailed tour of residential assets in Queensland, we have no doubt Queensland residential property is starting to ramp up. Two of our favoured residential building plays are Simonds Group (SIO) and Villaworld (VLW). We floated SIO and recently conducted a placement for VLW - we're familiar with both businesses and very comfortable with how they are tracking. SIO has been held back due to it's vocational training business, with the whole sector getting attention thanks to VET's troubles. We've had discussions with industry players and believe that SIO's Building Academy Australia is a focussed and compliant business with strong growth potential. The uncertainty in this sector is holding back the share price of a great residential building business. VLW offers pure leverage to the cycle, has a good pipeline of stock and is funded after the recent capital raise. Affordable housing ticks over solidly in most markets. SIO is trading on 9.2x FY16 and a dividend yield of 7.1%. VLW is trading on 9.8x FY16 and has a dividend yield of 6.9%. We are happy buyers of both.



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