Sunland Group wind-down sails by building crisis

Sunland Group founder and chairman Soheil Abedian (left) and managing director Sahba Abedian (right). Picture: Richard Gosling

Construction issues have not impacted Queensland developer Sunland Group’s plans to wrap up operations next year as the father and son team at the helm work on their own projects.

The prolific developer behind the Gold Coast’s Palazzo Versace and Q1 first flagged plans to wind up the company in midst of the pandemic in 2020 before filing an intention to delist from the ASX to the Australian Securities and Investments Commission last year.

It has been relatively smooth sailing in the two years since despite challenging building conditions, said managing director, Sahba Abedian, who joined his father at the company in the late 1990s.

“It’s inevitable, all projects have been impacted by the Covid period,” Mr Abedian said. “Whether the Covid virus or the weather, there have been some challenges, but realistically you innovate and overcome.”

Sunland Group’s The Lanes Residences is one of three projects still under construction.

The strategy to privatise the company is on track to be completed by the fourth quarter of 2023.

“The group will continue returning net assets to shareholders, in the most expeditious and appropriate manner, subject to legal, financial and regulatory requirements and market conditions,” the company told the ASX.

Three projects are still underway under the Sunland banner, including the masterplanned community The Lanes Residences West Village and the final two stages of townhouse development Montaine Residences at Mt Annan in southwest Sydney.

The contracts for the last six apartments within residential tower 272 Hedges Ave at Mermaid Beach are set to be finalised by the end of the month.

Fixed-price contracts signed with Hutchinson Builders prior to the pandemic meant the developer did not face price escalation pressure. All construction is expected to conclude sometime between April 2023 and the end of June next year.

Several unused lots are also being sold off, including 918 at The Lakes in Mermaid Waters and just last week Sunland sold its Benowa retail precinct for nearly $17m to an experienced Gold Coast investor. Lot 916 at The Lakes has already been settled “in accordance with expectations”.

Artist impression of Peerless, a $255m, 36-storey tower proposed for Mermaid Beach. Picture: Supplied.

Sunland initially aimed to deliver shareholders a return of approximately $2.56 per share and to date has distributed $1.17 in fully franked dividends. Once projects are completed, the business estimates a further dividend and capital distributions of $2.21 per share.

Sunland’s current expectation is this future distribution will comprise a series of dividends estimated at $1.31 per share (in total) and a series of capital distributions of $0.90 per share (in total). Dividends will continue to be fully franked where franking credits are available.

The company’s AGM will be held on November 15. But company founder, Soheil Abedian, is getting on with his own projects.

He was recently given the green light for a $255m Mermaid Beach tower called Peerless. The 36-storey luxury high-rise has already appointed Hutchinson Builders to undertake the build, which is expected to start in February.