Sunland Taps Market for $50m in Funds

ASX-listed developer Sunland Group looks set to take advantage of improving sentiment in the Australian property market by seeking to raise $50 million through eligible shareholders.

The Brisbane-based developer, which builds apartments and housing lots, has issued another round of unsecured notes to raise $50 million for more projects.

The new unsecured notes will be issued with a denomination of $1,000 subject to a minimum initial subscription parcel of $50,000 with annual interest payable on the five-year note at 6.20 per cent.

Sunland Group managing director Sahba Abedian said the exchange represented Sunland's continuation of the strong and diverse capital management initiatives and provides the Group with continued access to debt capital markets.

“Sunland’s premium development portfolio is the culmination of years of strategic efforts and successful capital management initiatives,” Abedian said in a message to the ASX.

“The new note issue, together with Sunland’s existing financing arrangements, will assist in providing funding for the group’s projects and developments and provide continued working capital for other opportunities Sunland may pursue in the future.”

Sunland, which is now firmly focused on the owner-occupier market, earlier this year fell victim to Australia's residential property downturn posting a 49 per cent decline in net profit to $17.7 million for 2019 and 14 per cent dip in revenue to $283 million.

The group pointed identified softening market confidence and pressures from a decline in investors and foreign buyers as well as tighter lending conditions for the slowing of its business.

Its latest issue of notes to secure $50 million marks a turn in sentiment with the outcome of the federal election — which killed off Labor’s negative gearing and capital gains tax policies — as well as three interest rate cuts, has given would-be real estate investors some renewed confidence.

Sunland has continued to sound out new projects, purchasing two new development sites, Carrum Downs in Victoria for $13 million and in Maraylya in NSW for $6.8 million.

The group currently has 13 active projects along Australia’s east coast and a $3 billion portfolio comprising 4,300 residential homes, urban land lots, multi-storey apartments, and an emerging retail and commercial portfolio.

Sunland has now invited shareholders to subscribe to its 7.55 per cent fixed rate notes due on November 25, 2020.