Sunland secures 25 percent returns on its residential development

Sunland secures 25 percent returns on its residential development
Sunland secures 25 percent returns on its residential development

East coast residential developer Sunland reported a dip in net profit to $3.2 million but has reconfirmed full-year earnings of up to $29 million, given anticipated second-half property settlements.

Sunland managing director Sahba Abedian said he had also noticed a cyclical pull-back in bank lending for new properties.

"I do feel there is some adjustment taking place where banks are becoming more stringent on their lending, and that is in respect to lending to developers as well," Mr Abedian said. 

"I think it is partly regulation, but I also feel they have a view to the cycle," the Australian Financial Review reported.

"Despite the prevailing headwinds, we continue to see opportunities in specific market segments in Brisbane, the Gold Coast and Sydney's northern beaches, and our recent acquisitions in these locations are expected to contribute to earnings growth in the short to medium term."

Sunland has a total of 855 contracts on hand with a combined value of $663 million, with an estimated 380 settlements during the second half of the year.

He said a sustained focus on operational efficiencies enabled the group to achieve an average return on development of 25 per cent, above a target of 20 per cent.

 

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

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Company Profit Bank Lending

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