SUNLAND PROFIT TAKES THE ELEVATOR
Written on the 4 July 2014 by Nick Nichols
SUNLAND’S move back into the high rise market is putting an elevator under its profits, with the Gold Coast property developer announcing a boost to its forecast earnings for the 2014 financial year.
The company is expecting the profit to land between $13 million and $14 million, up from a previous forecast high of $12 million – or upwards of 16 per cent higher than previously forecast.
Sunland is crediting the surge to strong sales of its Marina Residences on The Concourse at Royal Pines.
The trend is expected to continue as the company ramps up its high rise activities, kicking off with Abian, a luxury residential tower in Brisbane comprising 142 apartments with an end value of $239 million.
Sunland this week began construction of Abian (pictured), a 40-storey tower that has proved popular with buyers despite an average apartment price of $1.6 million.
The company, known for its landmark developments Q1 and Circle on Cavill on the Gold Coast, has already secured 80 per cent pre-sales of Abian’s stock, totalling more than $160 million.
Sunland’s managing director Sahba Abedian says these sales won’t be reflected in Sunland’s profit results until the 2018 financial year with the project set for completion in 2017.
“That will be a very significant year for Sunland,” says Abedian.
“Our return to multi-storey developments will continue to make a greater contribution to the portfolio as new projects are launched and settled.”
Sunland has a range of projects for which it is close to lodging development applications, including Mariners Cove, which is expected in three months, and a high rise at Labrador which has been redesigned after Sunland acquired the adjacent KFC site earlier this year.
Another project at Varsity Lakes, near Bond University, is earmarked for four towers of nine storeys. A development application is expected to be lodged for this in four to six months.
One of its biggest projects in years is the planned redevelopment of the former ABC studios in Brisbane which will comprise three towers with an end value of $500 million.
A development application for that project is expected to be lodged in about two months.
Other projects poised for launch include The Heights, at Pimpama, which will yield about 804 residential lots worth a total of $197 million.
The project, formerly known as Maddison Estate, is expected to be a high yielding asset for Sunland which secured the site last year from the banker to failed Gold Coast funds manager LM Investments.
A development application for The Heights is expected to be lodged in about three months.
These emerging projects come on top of four separate project releases in Melbourne and Sydney this year.
Abedian says Sunland’s profit is benefiting from strong contributions across its markets in south-east Queensland, NSW and Victoria.
“The timely release and delivery of our design-driven residential communities, together with improving economic conditions and consumer sentiment, have resulted in increased sales and settlements across our national portfolio in FY14,” he says.
The full-year profit also has been aided by Sunland’s capital management initiatives, including the share purchase plan which wound up last financial year, and the company’s conservative balance sheet which sees gearing sitting around 21 per cent of assets.
Abedian says the current year will benefit from further settlements of the Marina Residences which comprise 84 apartments across two five-storey towers.
He says settlements are “progressing nicely” and with 70 per cent of the project currently sold.
Sunland will continue to seek opportunities in its key markets which Abedian says are benefitting from rising demand.
The company currently has a development pipeline of 5328 apartments, homes and residential lots worth a combined $2.5 billion across its portfolio.
About a quarter of that portfolio is on the Gold Coast, although the company is poised to move its head office to Brisbane in a matter of weeks due to its new focus on the booming Brisbane market.
Author: Nick Nichols