Restructured Folkestone prepares for first Karratha residential settlements

Real estate funds manager, investor and developer Folkestone will shortly secure settlement on the sale of 41 dwellings in the first stage of its key Karratha residential development The Ranges.

Reporting its first interim results since restructuring, Folkestone announced a net profit after tax for the six months ending December 31 of $30,000 compared to a net profit after tax of $700,000 in the corresponding period in 2011 following a number of acquisitions and sales of non-core parts of the business.

Folkestone managing director, Greg Paramor said the company had been very active over the reporting period, and had completed its transformation “from a pure real estate developer to a real estate funds manager, investor and developer providing real estate wealth solutions to private clients and select institutions.”

karrathafeb20one

“Over the past 18 months, we have sold legacy assets, recycled capital and established a funds management platform that now offers listed and unlisted real estate funds to private clients and a number of institutional investors” said Paramor, who was co-founder and CEO of Mirvac from 2004 to 2008.

Stage 1 of the Ranges comprises 2.2 hectares with a “Tourism” zoning and development approval for 108 single level, one bedroom villas with pool and BBQ facilities.

Folkestone has a 25% interest in the project.

The settlements of the first 41 dwellings in Stage 1a  to individual investors is due to commence in March 2013.

The development is designed to provide accommodation to business travellers to Karratha in the Pilbara, WA’s resource heartland and the focus of a number of long?term LNG  and other resource projects.

karrathafeb20two

A further 14 dwellings in Stage 1b have been sold and a marketing campaign for the balance of the 53 dwellings in Stage 1 is underway.

Construction of a further 32 villas is expected to commence mid-2013.

Folkestone also settled on a further 7.1 hectare adjoining rear?lot to the project following negotiations with the WA Government and the local indigenous community regarding Native Title clearance issues.

During the reporting period, Folkestone acquired the Austock property funds management business.

Folkestone also completed its joint-venture (with AMP) Noone Street, Clifton Hill residential development featuring 87 dwellings in the inner suburb of Melbourne, acquired in June 2007. The final apartment was settled on September 20.

The project delivered a cash return of $9 million, of which $300,000 occurred in the reporting period.

Folkestone also launched its first real estate income fund at Sydney Olympic Park, the first in a series of such funds.

The Fund acquired a new 5,920 square metre commercial building at 7 Murray Rose Ave, Sydney Olympic Park for $29.25 million, leased to Thales Australia, as its new Australian headquarters.

Offering a commencing annualised yield of 8.1%, the high number of applications to invest in the unlisted fund meant that it closed oversubscribed.

Paramor says he expects economic and financial markets to remain “challenging but believe there will be a number of attractive investment opportunities in both the residential and non?residential sectors in the next 12 months”.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Comments

Be the first one to comment on this article
What would you like to say about this project?