Sunland to sell site of rejected Brisbane project Grace on Coronation

Sunland to sell site of rejected Brisbane project Grace on Coronation

A proposal for the controversial Grace on Coronation project led to a legal challenge in 2015, prompting a Supreme Court ruling in 2018 that overturned council approvals. 

Property developer Sunland Group (ASX: SDG) has announced the conditional sale of the Brisbane site where it had hoped to build a $430 million residential tower project designed by Dame Zaha Hadid.

Development of the champagne flute-shaped towers was approved by the Brisbane City Council (BCC) in 2015, but local opposition over their expected blockage of river views and diminished aesthetic values looking across from West End led the Queensland Supreme Court to overturn the decision.

The 15,000sqm site on 600 Coronation Drive, Toowong is also the former site of the ABC studios, and will now change hands again after Sunland struck a deal to sell the property to Brisbane-based developer Consolidated Properties Group (CPG) and other parties. 

The $43.5 million deal is worth more than double the $20 million Sunland paid for the site in 2013.

CPG will acquire most of the land with a $35.5 million settlement scheduled for January next year, while the balance of the land comprising 2,346sqm is being acquired for $8 million by interests other than CPG for personal use.

The sale of both contracts, once settled, will contribute approximately $4.3 million net profit after tax in the 2022 financial year with the material contribution resulting from the contract of sale with CPG.

Funds received from these transactions will be applied to reduce working capital debt facilities.

Sunland's net profit after tax surged by 85 per cent in the December half to hit $17.4 million, while investors responded positively to plans in September to prioritise the payment of debt and give back its estimate of net asset value if possible at around $2.56 per share to shareholders.

Since then the share price has almost doubled to just shy of that mark, trading currently at $2.34. These are levels that haven't been seen since the sub-prime mortgage crisis led to plummeting value for the company. 

CPG made its mark on the Brisbane skyline in recent years with Spire Residences in the CBD completed in 2017, and the company is currently building the $850 million mixed-use Yeerongpilly Green.

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