Finbar had not progressed past early site works at its Civic Heart site, before it pulled the plug on the project earlier this month. Photo: Attila Csaszar

New Civic Heart to be 25% smaller

Friday, 24 February, 2017 - 11:31

Finbar Group’s new plan for its Civic Heart site in South Perth will have 74 fewer apartments and an end value 45 per cent lower than its original proposal, while it will be delivered a year after the first project was scheduled to be complete, the developer has revealed.

The state’s largest apartment developer released the first details of its new Civic Heart plan as part of its half-year results late yesterday, following the announcement earlier this month that planning uncertainty had derailed the sales campaign for its flagship $400 million, 294-apartment development.

Finbar’s latest project update indicated the new development would consist of around 220 apartments and 8,200 square metres of non-residential/commercial space, with an end value of $225 million.

The first Civic Heart plan proposed the development of a 39-storey tower including the 294 apartments and a 3,857sqm shopping centre, which would have been anchored by a 2,756sqm Woolworths supermarket.

No details were provided on the make-up of the commercial space proposed for the new development, nor how many storeys the project would be.

Finbar said it expects to complete the development in the 2020 financial year, pending relevant project approvals and a successful marketing campaign.

Earlier this month, Finbar said it expected to build the new Civic Heart in the original project's timeframe, which would have resulted in a FY2019 completion.

Civic Heart capped off a difficult six months for Finbar, which lodged a net loss of $3.2 million for the first half of FY2017 after taking a $3.5 million hit to the value of the office component of its Fairlanes project in East Perth.

The writedown coincided with Finbar having no project completions in the first six months of the financial year, which resulted in revenue plunging to $19.6 million, down from $32.8 million in the previous corresponding half year.

Managing director Darren Pateman said the impact of the impairment at Fairlanes had been disappointing, but said the developer’s earnings would be heavily weighted to the second half of the financial year.

“Ultimately our result will be determined by the number of Concerto apartmetns sold and settled prior to June 30,” Mr Pateman said in a statement released after the ASX closed yesterday.

“On the basis of current Concerto presales and the project’s anticipated completion this financial year, we expect to exceed our previous full year net profit results.”

Finbar will pay an interim dividend of 3 cents per share, despite the first-half loss.

The developer is currently marketing four projects, in Dianella, West Perth, Belmont and East Perth, while it also has development approval for a further five, in Rivervale, Palmyra, Maylands and Port Hedland.

UPDATE: Finbar today announced that founding managing director John Chan was stepping down from his role as executive chairman, transitioning to non-executive chair.

Mr Chan's son, Ronald, has joined the company's board of directors.