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Sunland sells twin tower site, warns of possible write downs

Business

Sunland Group has sold its Mariners Cove Marina on the Gold Coast for $28 million and warned it may be forced into write downs of its other property holdings.

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The Mariners Cove property was sold to Ridong International and was a $7 million profit for Sunland.

The site was planned to be a controversial twin-tower block of 44 storeys but Sunland withdrew the application in 2016 after strong community opposition.

Sunland managing director Sahba Abedian said the company’s strategy was to crystallise the current market value of non-core assets and inventory which does not form part of its immediate, short-term, portfolio requirements.

“In respect to the current environment and the implications of the COVID pandemic on the property market, the board considers Sunland is unlikely to be immune from market volatility which may eventuate in the short to medium term,” Abedian said.

“In the circumstances, Sunland is reviewing costs previously capitalised on various projects, to assess if such costs may be scrapped, having regard to applicable accounting policies of the group.

“This may apply, for example, where development plans no longer meet the everchanging market demand, and a new development plan that meets market demand is required to be completed and approved by the local authority.”

He said completed inventory may prove more challenging to sell in the short to medium-term because of the current market conditions and Sunland may review the carrying value of certain inventory.

However, he said directors believed the company had generated sufficient cash flow for its ongoing requirements and proceeds have directly resulted in a reduction of the group’s working capital debt position during the corresponding period.

The company was in “a strong financial position to weather the current uncertain and volatile environment” but the board may revisit and review the capital management options available to Sunland with a view to enhancing shareholder value.

The Mariners Cove property is Crown leasehold and that will mean its sale is conditional on the consent of the Queensland Minister for Natural Resources, Mines and Energy, Dr Anthony Lynham.

Sunland will proceed to seek the minister’s consent for the transfer of the term lease of the property to complete the transaction.

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