|Monday, 15 June 2009 12:05|
KORDAMENTHA, the administrator for failed property developer Saville Australia, has recovered $10.6 million from the sale of a Perth development site.
The Altus apartment development site in East Perth, has been purchased by a consortium including listed property developer Finbar and its joint venture partner Wembley Lakes Estate of Indonesia.
The developers plan to scale down the major apartment project that was proposed for the Altus site. Its new plans are for a 10-storey development with 220 apartments, to replace a 32-storey proposal with 250 larger apartments.
The development consortium recently completed a 262 unit apartment project, the Royale complex, in East Perth.
Finbar said it approached Saville Australia to buy the site last year, but was rejected. Finbar chief executive Darren Pateman told the AFR the the company is looking at buying other residential development sites in the area.
We are pleased to advise that a Finbar-led joint venture has successfully secured the purchase of the above mentioned vacant land for $10.6 million.
The property is a prime 4,481 sqm site which is located next to the Company's Infinity project and nestled amongst several completed buildings which have previously been successfully developed by Finbar.
The acquisition will see a 50% Finbar-owned joint venture acquire and develop the site with Finbar earning management fees along with one-half of the development profit.
The current owners of the site had previously secured an approval to develop a 32 storey apartment building on the land. It is our Company's intention to seek a new approval with a more economical scheme which will comprise approximately 220 apartments in a 10 storey structure in order to minimise building costs and shorten the construction timeline. This will enable us to offer an economical product which we believe will be well accepted in the current market.
The purchase is contracted to settle in July, and we are targeting completion of the building to bolster earnings in FY 2011.
We are very pleased to have secured this development opportunity for the Company. It is a strategic acquisition at a time when the Company is experiencing reduced competition in the marketplace and represents good value in an area where we have demonstrated strong development experience and market acceptance for our product. The joint venture arrangement will spread risk whilst allowing us to earn fees by leveraging off our development expertise.
Work will begin immediately on a design and a development application.