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Developer Sunland's (ASX: SDG) rationalisation of its Queensland property portfolio continues following a deal to sell the retail development precinct The Lanes in the Gold Coast suburb of Mermaid Waters for $45.8 million.
The announced agreement with NSW-based Panthera Group comes hot on the heels of several property sales in the vicinity in recent months, including three lots from Sunland's adjacent residential development of the same name for $48.75 million, of which more than $9 million was tabled as profit.
However, profit expected from the sale announced today is set to be much larger at $26.3 million, with the land purchased also including the development's central lake.
Under the terms of the contract Panthera is required to develop the land in accordance with the approved development plans for the retail precinct, although Sunland will continue development until settlement is completed including subdividing the overall area to create the lots being purchased.
"The buyer will be assigned the benefit of any existing leasing arrangements completed to date by the Seller and any further leasing arrangements completed by the Seller and the buyer up until settlement," Sunland said in a release to the ASX.
"Settlement is to be 90 days after the later of the seller providing title to the land and 20 March 2022, although the buyer has the ability to bring forward settlement."
The sale is part of a broader strategy for Sunland to offload some inventory that is not under development in order to pay off debt and return money to shareholders.
When the Brisbane-headquartered group announced these plans in October last year it set a goal to return shareholders the net asset value at the time of $2.56 per share. At the time of writing today SDG shares had reached $2.70, up 4.65 per cent on yesterday's closing price.
"All of Sunland’s undeveloped sites are now under contract, although some carry conditions such as development approval, titling requirements and access arrangements. Management continues to work with respective buyers to fulfil the respective contractual conditions," the group said.
"Consistent with its current strategy, funds realised by Sunland Group pursuant to the sale may be used by Sunland Group for working capital, to repay liabilities, and returning net asset value to shareholders or a combination of these."
The sale was negotiated off market following an introduction of the Buyer by Kollosche Commercial, Broadbeach.
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