Developer Stockland to dump key Sunshine Coast projects
STOCKLAND will dump its interest in five major Sunshine Coast development projects as the company shifts its portfolio focus out of residential except for large scale master planned communities.
The move comes nine years after it paid nearly $1 billion to Lensworth for its property portfolio, the jewel in the crown of which was the Crown Development Lease at Kawana.
Stockland paid well above competing offers, attracted by location and the lease conditions that contained no holding costs but saw it pay 10% of the sale price of each lot as titles were registered.
Industry sources said the sell-off represented a very significant shift in the company's direction both on the Sunshine Coast and more broadly.
In all 13 residential developments will be sold nationally.
They include 24 lots in the Kawana Town Centre, the 364 lots at Birtinya (oceanside), 291 lots at Bokarina Beach (oceanside) and a further 126 lots at Doonella (Noosa).
Stockland will also offload its Lake Kawana oceanside superlot that had been earmarked for 250 residential units.
In its February results presentation to investors and the stock market, Stockland's group executive and CEO residential development Mark Hunter said the company had identified the 13 projects as suited for wholesale disposal.
The assets would cost half a billion dollars to develop out and have combined impairments of $234 million.
The company says the sell off would have limited impact on future earnings because most of the projects were impaired or had low margins.
Mr Hunter said yesterday that Stockland had undertaken a detailed review of its residential portfolio.
"Our strategy hasn't changed since 2009, when we announced that we would focus on key growth corridors, developing master planned communities, where possible, to achieve economies of scale and offer a wider variety of products and community amenity,'' he said.
"We continue to develop vibrant, sustainable residential communities around Australia and on the Sunshine Coast."
Sources say big question marks remained over Caloundra South with the controversial satellite city requiring such a massive amount of capital for infrastructure that it could take seven to eight years to become cash flow positive.
However Mr Hunter said the development remained a "key project" for Stockland.
He said Bells Reach, the early release stage of Caloundra South was already proving very popular.
"Together other nearby projects such as Brightwater, we'll be contributing to this precinct and the economic prosperity of the Sunshine Coast for many years to come,'' Mr Hunter said.
Despite the shift away from residential projects the company has been in the Planning and Environment Court all this week appealing council's refusal of its application to develop its flood-prone Twin Waters West land holding north of the Maroochy River Bridge, into a 900-lot subdivision.
Sources said the motivation was a desire to build value into the property before a sale.
Sunshine Coast Council representatives will meet with Stockland and the State Government in Brisbane on Saturday for ongoing talks about the developer's infrastructure obligations for the 50,000 population Caloundra South development.