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Listed property developer Devine Limited (ASX: DVN) has entered into a contract to sell its exclusive Hideaway @ Currumbin site on the Gold Coast for $75 million.
The 153.12 hectare land parcel, located at the gateway to the Currumbin Valley, has been acquired by FKP Limited. The contract is conditional on Devine securing operational works approval for the development from the Gold Coast City Council and provides for settlement to occur via installments paid over a four-year period. The first installment of $25 million is due on receipt of operational works approval which is expected to occur in the March 08 quarter.
Devine acquired the site for $27 million in September 2003. The proposed prestige lifestyle development will feature a total of 527 up market homes and villas. Central to the estate’s design is the creation of an expansive 16-hectare lake, overlooked by a village centre.
Devine’s founder and Managing Director, David Devine, said shareholders would benefit from the early profit delivered by the sale, enabling the company to fasttrack its expansion plans along Australia’s east coast.
“Since Devine acquired the Currumbin site four years ago, we have invested a significant amount of time, money and resources in planning this environmentally sensitive development and securing Development Approval,” Mr Devine said.
“During the Council development approval phase we prepared 68 detailed reports and studies, which included 164 design drawings and plans.
“We also worked closely with the Gold Coast City Council and seven State Government departments.
“Final Development Approval was granted in November 2006. Since then, the shortage of land on the Gold Coast, combined with the region’s continued population growth, has driven up land values.
“The Gold Coast is one of the fastest growing areas in Australia. Over the past decade the region has experienced growth of approximately 70%, increasing the population from 356,000 in 1996 to 507,000 in 2006 (source: Gold Coast City
Council).
“Legislation constraints to future developments of this type in the area have also added to the site’s value.”
Mr Devine said the company made the decision to put the prime site on the market following a number of off-market approaches from major developers.
“By doing so, we were able to secure the best outcome for shareholders and generate an attractive return on our overall investment in the site,” Mr Devine said.
“Devine is an experienced property developer and buys and sells when the opportunity arises. We have recently secured a number of acquisitions as part of our disciplined diversification and expansion strategy, frequently buying properties off-market in structured transactions.
“This is part of our focus on building a pipeline of profitable future projects that will deliver increased earnings commensurate with the increase in shareholders’ funds and shares on issue.
“The sale of Hideaway @ Currumbin will enable us to concentrate our efforts on other planned developments such as Hamilton Harbour on Brisbane’s inner northern fringe, as well as various commercial, residential and hotel projects in the Brisbane CBD.”
Mr Devine said the company would continue to investigate future development opportunities on the Gold Coast.
The sale was coordinated by sole agent Andrew King, Joint Managing Director of DTZ in Brisbane, via expressions of interest which closed on 13 September 2007.
Mr King said the Hideaway @ Currumbin sale was one of the largest in the Gold Coast’s history.
“South-east Queensland’s chronic undersupply of residential land, combined with the site’s rare natural location, created strong demand for this project,” Mr King said.
On 8 November Devine announced a one-for five renounceable rights issue to raise $62.5 million to capitalise on future residential land and property development opportunities.
Mr Devine said the funds from the rights issue would enable the company to progress its portfolio of projects, creating a pipeline of future work that, when fully developed and sold, will have an end value of more than $3 billion.
On 29 August Devine announced an after tax profit of $21.367 million for the 2006-07 year, 13.2 per cent up on the previous year’s result.
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