PRIVATE developer Pellicano has sold over $33 million of industrial assets in south-east Queensland so that it can plough the proceeds into its strongest construction portfolio to date.
The sale of two properties was secured in the first quarter of this year, giving Pellicano more ammunition to expand on its portfolio of projects worth $179 million.
The company has 360 apartments across three projects under construction, two based in Brisbane and the other in Melbourne, which is the largest in its 47-year history.
Pellicano Group joint managing director Nando Pellicano says the company has a clearly articulated diversification strategy, with a focus on the design and construction of quality residential projects.
"We feel that is it is a good time in the property cycle for us to be selling some of our non-core industrial assets due to the yield compression, and reinvesting this equity into our residential development pipeline in south-east Queensland," he says.
"This year is about consolidating our position as a leader in the residential sector. Last year our residential construction book value exceeded the value of our industrial and commercial activities for the first time in the company's history, and the residential apartment sector is continuing to lead the way.
"We will, however, maintain a strong position in the commercial, industrial and retail industries, with a number of projects under way in our business parks comprising about 45 per cent of our workbook for 2015."
Construction is currently under way on a $28 million Quest Serviced Apartment project located at the centre of Dandenong CBD in Melbourne, which consists of 95 keys over seven levels and about 300sqm of retail on the ground floor.
Just as it has done with Quest Woolloongabba, this asset will be retained and managed by Pellicano as part of the company's growing property portfolio.
The $86 million Trafalgar Lane at Woolloongabba, which comprises 147 luxury apartments across 20 levels, is well under way with construction progressing on schedule, with over 97 per cent of apartments sold off the plan.
Trafalgar Lane, which overlooks the iconic Gabba stadium, also features 1000sqm of retail space with a unique laneway at ground level and 1000sqm of creative hub office space which is available for lease.
Pellicano says preliminary works have now also started on-site at South City Square at Woolloongabba, a $600 million project, paving the way for construction to start on the first stage of the development in the coming weeks.
"The first stage will include a $65 million architecturally designed residential tower with 118 apartments and street level retail," he says.
"South City Square is strategically located on a 2.1ha site within an important urban renewal area and has been designed to become a whole new neighbourhood complete with a supermarket, cinemas, a childcare centre and a boutique hotel.
"The precinct is focused on a 5000sqm central urban square which will be open to the general public and become a place for local residents and workers to relax."
The South City Square masterplan will be rolled out over the next five years and will provide a unique new lifestyle destination for Brisbane complete with apartment living above for about 2500 residents.
Since 2007, Pellicano has completed more than $475 million in residential projects across Australia, consisting of around 990 apartments across 15 projects and has a future development pipeline of more than 1500 apartments.
Pellicano's current property portfolio consists of more than 190 properties and 290 commercial clients. The company holds 149ha of vacant land for future development.
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