PROPERTY MARKET'S 'DIZZYING' HIGHS WON'T RETURN
Written on the 24 March 2012
ROD MacLeod (pictured) has experienced a spectrum of property cycles over the last 30 years, but he is doubtful the Gold Coast will ever experience the dizzying highs of 2007.
With a half year profit write down of almost 150 per cent to a $188,239 loss (year ending Dec ‘11) from $384,382 on the corresponding period, the developer has abandoned plans for a residential project on the Gold Coast and is instead focussing on its commercial operations in Hervey Bay and Gympie.
With half year revenue (Dec ’11) up 75 per cent to $3.7 million, AHC is capitalising on opportunities at Gympie, where it developed the Southside Town Centre.
The centre opened in December 2011 and houses Woolworths, discount variety store Flash Harry’s, a butcher, a bottle shop, a hair salon, a bakery, a cafe, a fruit shop, a newsagent and a pharmacy. The company has now finalised plans with Gympie Regional Council for an onsite Caltex service station. Works are scheduled to commence at the end of April on the $1.75 million project.
It is also developing a 26-hectare industrial site at Hervey Bay where it is finalising stormwater requirements before seeking DA with Fraser Coast Regional Council. It will commence civil works on a $30 million residential estate at Howard, near Hervey Bay. AHC paid Becton $800,000 for the 45-hectare site three years ago and is planning a 300-lot community pending approvals.
AHC’s star asset is the Worongary Town Centre on the Gold Coast. Despite a recent valuation downgrade from $31.5 million to $30.5 million, which hurt its half year balance sheet, the centre has boasted 100 per cent occupancy over the seven years under AHC’s ownership. AHC has indicated it will hold the asset and improve the income stream as market conditions improve.
The company’s Saltwater Estate at Helensvale was completed at the end of 2011, with 13 residential lots sold and $1.84 million used to pay down debt to Commonwealth Bank.
It is holding 11 commercial lots ranging in size from 2000sqm to 7100sqm at the Siganto Drive property. In November 2011, MacLeod says he paid more than $1 million in infrastructure charges to Gold Coast City Council.
“The shocker is that we own this property and half way through developing it and prior to the PIP (Priority Infrastructure Plan) charges, we were hit with the fees. That resulted in a three-year delay at Council,” he says.
“We will end up paying around $1.4 million on a little development. Too many people have been ‘smashed over the head’. The mum and dad developers who would once be building a small townhouse project are long gone. The problem with the Gold Coast City Council is there’s an ‘us’ and ‘them’ mentality and it shouldn’t be like that. We should be working together.”
MacLeod says while a reprieve on charges has come as a result of a review in July 2011, there is still too many delays.
“We had a buyer keen on one of our commercial lots at Siganto Drive who was told by the council that it would be one month before they could even look at her application,” he says.
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