Dubai Property Boom is over for Sunland
Gold Coast developer Sunland Group posted a first-half profit of $8.4 million down from $67.8 million last December.
The dramatic drop due primarily to the end of Dubai’s property market bull run.
Sunland is still to on course to deliver its promised $15 million profit for the full year maintaining a new more conservative approach to business.
Sunland is still pushing ahead with the Palazzo Versace 60% completed and the 80 level D1 tower in Dubai 40% completed.
Managing director Sahba Abedian said changes to Dubai property law had helped Sunland pursue wayward property buyers who had reneged on instalment payments for both projects.
Mr Abedian would not disclose how many buyers were likely to default on settlements, but he did say the business was ‘working through the issues’ with individual purchasers.
Sunland, which yesterday reiterated its developments in Dubai had no recourse to the listed company in Australia, is likely to reveal how many defaults at the end of this financial year.
Meanwhile, Sunland is edging closer to two new high-rise projects in Australia, one in Brisbane City on a $25 million site bought from Devine Group last year, and another at Labrador on the Gold Coast.
The Brisbane site, part of Devine’s abandoned French Quarter proposal, is earmarked for a 40-level $250 million luxury apartment tower that Sunland promises will be a ‘landmark’ for the city.
The Labrador project, on Marine Parade, is going through the council approval process and will be launched later this year.
Neither high rise is expected to increase Sunland’s bottom-line profit until 2013.
Mr Abedian said the most recent profit result was ’sound’ in the prevailing conditions, showing Sunland had repositioned itself into market segments that were performing.
Sunland has 600 contracts awaiting settlement at existing developments and another six projects to launch, he said.
Mr Abedian said the company was expecting organic profit growth in the next three years from its current housing projects and it was still on the lookout for potential development sites. ”We’re in a strong position to pursue acquisitions but are being extra cautious,” he said.
In the first half, Sunland spent $23.4 million for the remaining undeveloped land at The Glades golf estate at Robina, bought from long-time developer Thakral Holdings.
Sunland’s latest result have been built on revenue of $111.7 million, down from $323.6 million a year earlier. It had a net asset backing of $1.27 a share at the end of December, down from $1.97.
Dubai operations accounted for just 8c of the latest figure, valuing Sunland’s operations there at $24.4 million.