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Sunland to wind down its property projects over next three years

Sunland to wind down its property projects over next three years

The luxury Queensland property developer, Sunland Group, has announced plans to wind down its business operations.

It will take place over the next three to five years following the completion of its current projects. The objective of the strategy is to return to Sunland Group’s shareholders current net asset value, where possible, of $2.56 per share by way of progressive dividend and capital payments.

It reflects a premium to the 30 day volume weighted average price of $1.33 per share.

The board described its share trading price as lacklustre.

The share price reached a low of $0.55 in July 2011 and a high of $2.00 in March 2015.

The ASX listed company announced to shareholders it would repay it liabilities before the company goes private and potentially ceases operations.

The company is looking to offer shareholders a fully franked dividend payment, with $81 million credit balance available at the end of last financial year.

Sunland has been operating below its net tangible asset value for 11 years after coming through the Global Financial Crisis.

It currently sits at an estimated $2.56 per share.

The company was founded in 1983 by Iranian businessman Soheil Abedian and Foad Fathi and has is now run by Abedian’s son, Sabah Abedian.

It created Gold Coast landmarks such as Q1 and the Palazzo Versace.

Sales activity for the recent financial year totalled 357 lots for a value of $236.9 million (FY19: 237 sales for value of $214.6 million).

Its contracted presales for projects released across the development portfolio as at 30 June 2020 totalled 260 lots with a combined value of $296.0 million (FY19: 177 lots for a value of $192.4 million).

The group generated revenue from property sales of $159.8 million (2019: $277.6 million) during the financial year period, generated from settlements of 236 lots (2019: 382).

Following the Tuesday 9.30am announcement, the share price rose to $2 and closed the day at $1.95.

The strategic plan was devised with input from Morgans.

Approximately 70 percent of the group’s inventory value is currently under development and programmed to be completed over the course of financial years ending 30 June 2021, 2022 and 2023.

Sunland currently anticipates there will be a limited number of further projects which will commence development including Lanes Retail and Lanes Residences (West Village), which are both at Mermaid Waters, Queensland and the site at 154 Marine Parade, Coolangatta, Queensland.

“The board does not intend to reinvest surplus cash in replenishing the development portfolio of Sunland Group

“This means various roles associated with certain business segments of Sunland Group may become redundant, in which case the group will be required to pay appropriate entitlements to employees.”

Its balance sheet capacity as at 30 June 2020 was $13.1 million in cash and $139.9 million in undrawn working capital.

Its directors include Ron Eames, Christopher Freeman, Rebecca Frizelle and Vahid Saberi.

This article is republished from propertyobserver.com under a Creative Commons license. Read the original article

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Brisbane

Mirvac Sells Golden Triangle Tower for $87m

Golden Triangle Tower

Melbourne-based property fund manager Forza Capital has picked up a prominent office building in Brisbane’s “Golden Triangle” from Mirvac for $86.7 million.

The property, located at 340 Adelaide Street—on the corner of Adelaide and Wharf Streets, comprises 12,800sq m of B-Grade office space across 17-levels, together with a ground floor cafe and parking for 100 cars.

In recent years, Mirvac has refurbished the building, upgrading the lobby and repositioning the external ground plane and retail.

Mirvac chief investment officer Brett Draffen said the proceeds from the sale will be redeployed into prime and A-grade commercial assets as well as its $22.4 billion development pipeline across the residential, office and industrial sectors.

The deal, negotiated by CBRE’s Flint Davidson, Tom Phipps and Bruce Baker, represents an 11 per cent premium to its book value in June.

“As the first major, post-Covid capital markets transaction in the Brisbane CBD, this deal highlights the demand from onshore investors for quality office assets,” Phipps said.

Golden Triangle Tower1

The building is 93 per cent leased to tenants Covermore, Cerebral Palsy League and Oracle, and has a weighted average lease expiry of 3.8 years. Image: Supplied

“As travel restrictions ease we expect the market to awaken in the first half of next year fuelled by historically low financing costs and Brisbane’s attractive yield spread.”

Forza Capital director Ashley Wain said the asset represented exceptional value, given the building’s comprehensive refurbishment program, and was transacted with a high degree of certainty over a period of one month.

“Shortly after Covid struck, [we] identified the opportunity to prepare our investor base of sophisticated investors for opportunistic property investments.

“Speed to transact was anticipated to be critical and we believed getting early capital commitments and being able to transact quickly would be paramount to securing new investments on attractive metrics,” Wain said.

The acquisition represented $52.5 million of equity from Forza’s client base of family offices, high net worth advisory groups and individuals, and will now sit in the newly-established Forza 340 Adelaide Street Fund.

“The uncertainty in office investment markets has created really attractive investment metrics which, when combined with highly competitive debt funding, results in a target 8 per cent per annum distribution yield over the first five years of the investment,” Wain said.

Last week, Dexus listed a neighbouring A-grade office tower, located at 10 Eagle Street, with price expectations of $300 million.

 

The post “Mirvac Sells Golden Triangle Tower for $87m” by Ted Tabet appeared first on the theurbandeveloper.com Blog

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Brisbane

Yeronga trophy home fronting the Brisbane River listed

Brisbane River

A riverfront Yeronga, Queensland trophy home has been listed without a price guide.

The five bedroom, five bathroom abode is being marketed by Heath Williams and Nick Hurwood of Place.

Situated at 363 Brisbane Corso, the tri-level home fronts the Brisbane River.

Set on 916 sqm, it features two swimming pools and a private boat pontoon.

Other features include full-height stacked glass sliding doors opening out to a covered balcony which capture sweeping Brisbane River views as well as a ground-level rumpus or games room equipped with a bar, a projector and a linked balcony.

It is located seven kilometres from the CBD.

 

The post “Yeronga trophy home fronting the Brisbane River listed” appeared first on the propertyobserver.com.au Blog

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Brisbane

Mirvac offloads Brisbane office building for $87m

Mirvac office building

Mirvac has offloaded a 17-storey office building in Brisbane to Melbourne-based property fund manager Forza Capital for $86.75 million in one of the first institutional grade office deals to take place in the city since COVID-19 struck.

The building, which is in Brisbane’s ‘Golden Triangle’ at 340 Adelaide Street, had undergone an extensive refurbishment by Mirvac and sold at an 11 per cent premium to its last book valuation in June.

The property, which is 93 per cent leased to tenants such as Oracle, Cover-more Insurance and the Attorney General’s Office, has a 3.8 year weighted average lease expiry.

Brett Draffen, chief investment officer at Mirvac, said proceeds from the sale would be redeployed to grow its asset creation business and would allow the group to “capitalise on opportunities to create Australia’s next generation of workplaces, residential communities and mixed-use precincts”.

The office tower is the first asset to be acquired by Forza Capital following a $240 million capital raising from its client base of family offices and high net worth advisory groups in September and will sit in the newly established Forza 340 Adelaide Street Fund.

Forza Capital director Adam Murchie said they had advised their investor base to be prepared for opportunistic property investments shortly after COVID-19 had struck.

“Speed to transact was anticipated to be critical and we believed getting early capital commitments and being able to transact quickly would be paramount to securing new investments on attractive metrics.”

Forza Capital director Ashley Wain said the uncertainty in the office market had created attractive investment metrics.

“When combined with highly competitive debt funding [the metrics] result in a target eight per cent per annum distribution yield over the first five years of the investment.”

The deal was negotiated by CBRE’s Flint Davidson, Tom Phipps and Bruce Baker, and Matt Lawrence arranging the debt.

“As the first major, post-COVID capital markets transaction in the Brisbane CBD, this deal highlights the demand from onshore investors for quality office assets,” Mr Phipps said.

“As travel restrictions ease we expect the market to awaken in the first half of next year fuelled by historically low financing costs and Brisbane’s attractive yield spread.”

 

The post “Mirvac offloads Brisbane office building for $87m” appeared first on the afr.com Blog
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