Sunland hammered by Dubai downturn

DEVELOPER Sunland is forecasting modest FY10 profits of $15 million after reporting a net loss this FY of $145.1 million.
Writedowns on projects in the financially-stricken Dubai and Australia total $270.6 million, with the majority of that figure coming from the UAE.

Sunland managing director Sahba Abedian, remains ‘cautiously optimistic’ given the global economic turbulence.

“Despite the global challenges, we have maintained a disciplined approach to capital management and reduction of our corporate expenses,” says Abedian.

“As a result, our balance sheet has remained strong and flexible with $170 million in cash reserves and the group achieved historically low gearing levels of 5 per cent debt to assets and 11 per cent debt to equity.

“We are cautiously optimistic about market conditions improving in FY10 and will be strategically replenishing our Australian development portfolio in our core areas of urban development, residential housing and high-rise developments.”

The group has had to deal with confronting issues over the last six months including trouble in Dubai with group architect David Brown and the scrapping of plans to build the $1.6 billion Atrium tower, which is now subject to legal action and Dubai fraud charges against three Australians.

Last month media and casino mogul James Packer resigned from the Sunland board.

Sunland will continue with its three existing projects in Dubai, the D1 and Nur towers and its second Palazzo Versace hotel. Closer to home, it will develop residential housing in a JV with Sanctuary Cove.

Earlier this year the company made $126 million on sales of Gold Coast assets Circle on Cavill, Avalon and Balencea in Victoria. Its residential project The Parc at Tugun was a success.

“In terms of development, Sunland has aligned its Australian portfolio in response to the change in consumer sentiment and created a robust housing and land pipeline with 3646 products across 27 projects in three states,” said Abedian.

“Our portfolio strategy in 2009-10 is aligned with the changes in market sentiment with over 80 per cent of our products priced between $300,000 and $750,000.”