Queensland-based developer Sunland has announced plans it could wind down its business operations over the next three or more years, as it sells off assets to pay off debts and improve value to its shareholders.
In an announcement to the ASX, the developer behind Gold Coast projects such as Palazzo Versace and Q1, said it would sell off 30 per cent of its inventory value, and flagged redundancies as it reduces its operations.
Sunland’s Board has sought external advice on alternatives to return “fair value to the group’s shareholders” as part of the review.
In the announcement, the Sunland Board said it considers the share price performance over the past 10 year period as “disappointing” given the inherent value of the business, and assets had not been recognised by the market in the underlying share price, describing the share price performance as “lacklustre”.
Sunland’s share price reached a low of $0.55 in July 2011 and a high of $2 in March 2015, but its board said the share price is now at a level materially below the net tangible asset value per share for the group.
The aim is to return to its shareholders current net asset value, where possible, of around $2.56 per share.
The group's share price was $1.93 on Wednesday afternoon.
Approximately 70 per cent of Sunland’s inventory is currently under development and programmed to be completed over the course of financial years ending in 2021, 2022 and 2023.
Sunland’s total assets were valued at $574 million according to its full-year 2020 results.
Sunland will sell down around 30 per cent of its undeveloped inventory that is either currently not under development, awaiting final concept designs or pending development approval for intended schemes.
The group says the assets will be placed on the market through regular channels and sold at market price.
Sunland, led by Sahba Abedian, was founded by his father Soheil Abedian and Foad Fath in 1983.
Last financial year, Sunland sold properties such as Ingleside in New South Wales, The Heights in Queensland, and The Lakes Retail in Queensland for a total of $65 million.
Most recently Sunland sold the Mariners Cove development site located at The Spit, for $28 million at a premium of $7.7 million after-tax to book value.
Sunland’s board notes that it does not intend to reinvest surplus cash in replenishing its development portfolio.
As a result, the announcement said that various roles within the business would become redundant with staff to receive appropriate entitlements, and some staff would stay on to deliver the new strategy.
Sunland said developments still progressing include Lanes Retail and Lanes Residences, known as West Village located at Mermaid Waters, and the site at 154 Marine Parade in Coolangatta at the southern end of the Gold Coast.