03/10/2012 - 01:16

Developer Peet sells Yanchep land for $28m

03/10/2012 - 01:16

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ASSET SWING: The 50ha site, originally promoted as golf estate, was bought by the Department of Housing. Photo: Sun City Country Club

LISTED property developer Peet has sold a $28 million parcel of land next to its recently promoted Yanchep Golf Estate development to the Department of Housing, in what appears to be part of an announced asset sell down.

The 50-hectare site is believed to sit across Yanchep Beach Road from Peet's golf estate, which it started promoting earlier this year. Peet has been retained by the department to be project manager.

Peet had previously announced plans to develop nearly 1,500 lots on what had been a 15 Ilia parcel of land it bought in 2011 from one of its associated syndicates for $62 million.

The planned estate follows the contours of the eastern perimeter of Sim City Country Club, the member-owned club which entrepreneur Alan Bond developed in the early 1970s. The western side of the course has already been developed for housing.

Golf estates proved popular in Perth for a few decades stalling in the 1970s but have become less fashionable as costs for developers have risen.

The development is at the northern end of a major coastal corridor, which is being actively developed by a number of major private, public and state groups, starting at Alkitnos and stretching up to Yanchep.

Department of Housing general manager, commercial and business Paul Whyte confirmed the sale but could not provide detailed plans for the site, other than that it would reflect other joint venture developments with private players in the past decade or so.

“The land will be developed in alignment with the department’s other estates such as Ellenbrook, Banksia Grove and Butler and will deliver a range of land and housing products,” Mr Whyte said “Detailed plans have not yet been developed for the site.”

Ellenbrook is the best known of the department’s joint ventures, with a 50 per cent stake in the development, which has been overseen by LWP

Butler involved Satterley Property Group while Banksia Grove was with PRM Property Group.

Peet declined to comment on the land sale but had previously stated the first land stage at Yanchep Golf Estate had sold 90 per cent of its lots and sales of the second and third land releases had been strong.

Property developers in the listed sector have had a tough time of it, and Peet has been no exception.

The company recently announced a 76 per cent drop in net profit to $5.4 million for the 2011-12 financial year.

Last month Peet said in a statement it would reduce its gearing from 52.5 per cent to 40 percent by January 2014 and that it would also reduce its debt limit, excluding unsecured convertible notes, to $200 million by June 2014.

As part of a strategy to reduce debt obligations, which had stood at $293 million, Peet planned to sell $100 million of its non-core assets.

As at June 30, $40 million of non-core assets were contracted to settle in the second half of this year and the remaining $60 million is targeted for 2013.

Peet also said it had begun internal reviews on improving operating and overhead costs efficiencies.

In August, the Department of Housing announced that its implementation of the State Affordable Housing Strategy 2012 - 2020 had resulted in more than 6,000 new affordable housing options.

The strategy aims to bring 20,000 new affordable homes to market by 2020.

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