Sunland flags site sales and redundancies
THE developer of the Gold Coast's tallest building has flagged big changes to its footprint and workforce redundancies in plans to sell off assets and give cash back to shareholders.
Sunland, which developed the Q1 tower in Surfers Paradise, on Tuesday announced a review which looked at the sale of undeveloped sites, completion of projects by June 2023 and delivery of the net proceeds of asset sales back to shareholders in the form of cash dividends.
Sunland hopes this would boost its share price, which for years lagged behind the key measure of net tangible assets that helped determine how much capital companies could raise.
Investors strongly approved of the plan, sending the Sunland stock price up 46 per cent to $1.95. This still trailed net tangible assets which was $2.56 per share.
The plan referred to a three-year time frame involving the completion of projects under development or expected to be complete by June 2023 totalling 70 per cent of the company's inventory and the sale of the remaining future projects.
Sunland said there was a "limited number of further projects" where development would start.
That included the Lanes Retail and Lanes Residences (West Village) developments.
The company's statement to the ASX said "the Board does not intend to reinvest surplus cash in replenishing the development portfolio".
Sunland managing director Sahba Abedian declined to say whether he expected the developer to shrink its presence in the market.
"That is a decision that will then be made after this strategy is executed," he said.
"Naturally you will say it will be a smaller vehicle but that will be determined by the board in due course."
The strategy also referenced redundancies due to the company's shrinking in size as its projects were completed in the next three years.
Mr Abedian said the number of redundancies had not been determined.
"That is really over the course of the next three years as we deliver the portfolio. Naturally some of the positions that are currently are being held unfortunately may not be required given the scale of the business looking ahead," he said.
"It depends on what the board decides on its strategic outlook. At this stage the intention is to repay all of the capital and all of the dividends then naturally Sunland in its current form will come to a close but that is something the board will determine."
Sunland was due to finish work on its 44-storey high rise at 172 Hedges Ave by mid-2022.
Originally published as Sunland flags site sales and redundancies