Sunland reports $4.3 billion development pipeline
The Sunland Group today announced an after tax profit of $31.5 million for the full year ended 30 June 2016, an increase of 5 percent on the previous corresponding period’s $30.1 million profit.
It reported a strong balance sheet with $19.9m in cash and $97.4m in undrawn working capital lines.
The level of gearing was advised as 33 percent debt to assets and 56 percent debt to equity.
The group advised $41.2m in new site acquisitions, with a further $32m in site acquisitions in Brisbane and the Gold Coast due to settle during the first half of the 2017 financial year.
Sunland's managing director, Sahba Abedian, said the improved financial performance was a result of increased development margins, prudent capital management initiatives and the emergence of earnings from retail assets.
“The strategic portfolio replenishment and capital management efforts of recent years have continued to deliver favourable results for the Group, enabling the portfolio to benefit from the value uplift resulting from buyer demand along the eastern seaboard,” Mr Abedian said.
“These projects contributed to a total development return of 35 percent across the portfolio, significantly higher than our targeted return on cost of 20 percent.”
During the financial year it launched 10 new projects including Shea Residences in Brisbane, Magnoli Residences in Palm Beach and the heights (pictured above) master planned community in Pimpama, further positioning the portfolio to capitalise on the improving south-east Queensland residential markets.
Sunland completed four new site acquisitions totalling $41.2m during the period in Brisbane (St Lucia and Toowong) and Sydney’s Northern Beaches (Ingleside and Warriewood).
The new acquisitions are at Everton Hills (Brisbane) and Coolangatta (Gold Coast).
The Group’s portfolio comprises 6,300 land, housing and multi-storey products with a total end value of $4.3 billion, with 16 active projects along the east coast of Australia.
During the 2016 financial year Sunland generated $235.6m in revenue from 443 property settlements compared with 2015 with $279.7m from 387 settlements.
Sales volume was down in FY16 as projects in New South Wales and Victoria were sold out during the previous year and no additional projects were released in these states.
The group pipeline of presales has 779 contracts totalling $605m as at 30 June 2016 for new projects released across the portfolio.
In late July 2016 Sunland launched the $82m mixed-use Marina Concourse development adjoining the Royal Pines Marina on the Gold Coast.
The Grace on Coronation project in Toowong has been approved by Brisbane City Council, however Sunland continues to deal with an appeal through the Land and Environment Court and a judgement is not expected until early 2017.
Construction of Sunland’s $240m luxury Abian residential tower development in the Brisbane CBD has now progressed through to level 34 and settlements are expected to contribute to the 2017 and 2018 financial years.
“While record low interest rates and improved consumer sentiment continue to drive buyer demand, we are cognisant of the cyclical nature of our industry and maintain a disciplined and conservative approach to the replenishment and delivery of our portfolio,” Mr Abedian said.
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