02/02/2010 - 15:22

Finbar drawn into school collapse

02/02/2010 - 15:22

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Listed property developer Finbar has been drawn into the collapse of a Japanese-owned language college GEOS, which was a big commercial tenant of the group.

Finbar drawn into school collapse

Listed property developer Finbar has been drawn into the collapse of a Japanese-owned language college GEOS, which was a big commercial tenant of the group.

GEOS-operated St Mark's English language college in Highgate sits on land owned by Finbar Funds Management, a wholly owned subsidiary of the Finbar Group, which bought the property in February 2007 for $11.8 million.

The school was placed in voluntary administration on January 29.

According to its annual report, Finbar had been leasing the property to GEOS for $757,000 per year.

When asked questions about the property this morning, Finbar executive director Darren Pateman responded in an ASX announcement stating GEOS had no arrears in respect to rent.

Mr Pateman also said Finbar held a cash security bond in excess of 12 months rent.

"We do not anticipate there will be a material effect on the company's financial position or profit guidance should Geos default on the lease," Mr Patemen said.

The collapse of the school is likely to impact on Finbar's plans for the property, which it intended to develop into residential apartments when the schools lease expired in 2012.

Mr Patemen said Finbar would be exploring redevelopment options sooner than anticipated.

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