SUNLAND OPTIMISTIC AMID ALL THE UNCERTAINTY

SUNLAND OPTIMISTIC AMID ALL THE UNCERTAINTY

SUNLAND Group is in the midst of delivering on some of its biggest projects in a decade, however managing director Sahba Abedian says prevailing headwinds from global forces are impacting investments locally.

"Over the course of the last number of months, particularly from the beginning of this calendar year, we have seen some great volatility come through, particularly in the financial markets in the global stock industry," says Abedian.

"This has created some unsettlement, particularly in the investment markets globally, and with things of this nature there is always going to be some impact that will be felt coming through locally.  Australia is not immune from what is taking shape."

Abedian says this, coupled with the mining sector that is slowing down and the conversations around adjustments to taxation, offers a level of uncertainty in Australia.

And while the property developer says Australia's capital city markets remain at different stages in the property cycle and securing quality development sites is proving challenging, there is still a level of optimism.

"Despite the prevailing headwinds, we continue to see opportunities in specific market segments in Brisbane, the Gold Coast and Sydney's northern beaches and our recent acquisitions in these locations are expected to contribute to earnings growth in the short to medium-term," says Abedian.

"They will be complemented by Sunland's return to the multi-storey sector, which now comprises more than one-third of our national portfolio and is expected to make significant contributions to earnings from 2017 onwards as key projects are delivered and settled."

Sunland, which has a portfolio of around 6000 homes, urban land lots and multi-storey apartments, representing $3.7 billion, today announced a net profit of $3.2 million for the half-year ending December 31, almost level with the $3.3 million it posted a year earlier.

Sunland generated revenue of $79.9 million from 120 settlements during the first half of the latest financial year, down from 195 settlements totaling $97.3 million in the prior corresponding period.

Abedian says improved operational efficiencies, above-average development margins and increasing property values offset the decrease in settlements during the period.

He says the results are in line with expectations, with the bulk of the group's earnings expected in the second half of the financial year.

Major contributors from first half activities include Marina Residences, Concourse Villas, The Glades and Quays Hope Island in Queensland, Dahlia Residences in NSW, and Whyte Residences and Carré Residences in Victoria.

"Contracts in hand now total 855 with a combined value of $663 million, providing solid earnings visibility in the short to medium term," says Abedian.

This includes sold-out projects such as The Gardens in Victoria, which will commence the first stage of settlements in mid-2016, and the Abian residential tower in the Brisbane CBD which is on schedule to settle in mid-2017.

The $240 million Abian tower sold out two years ahead of completion and compromises 140 apartments sitting opposite the Botanical Gardens in Alice Street.

Meanwhile, Sunland's St Lucia site in Brisbane received approvals two weeks ago and the former dwelling, known as the Pink Palace, has been demolished with a launch scheduled in April.

Grace on Coronation in Toowong has received approval from the Brisbane City Council, although it is currently subject to an appeal by an adjoining land owner.

Abedian says Sunland is 'very confident' it will win the court process and the project, which includes 555 units and was designed by award-winning architect Zaha Hadid, will move forward.

Sunland expects to achieve an estimated 380 settlements during the second half of FY16.

The group has confirmed full-year earnings guidance after tax of between $25 million and $29 million.

Sunland has declared an interim dividend of 3c per share fully franked, to be paid March 23.

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