Cedar Woods Properties has launched its first wholesale land development fund by purchasing a 47 hectare parcel of land at Wellard, in Perth for $36 million.
The land is situated near the Kwinana Freeway and close to two proposed railway stations on the new Perth to Mandurah railway line, 32 kilometres south of Perth.
Cedar Woods bought a 25% interest in the project, which will be managed by Cedar Woods Properties Management. The remaining 75% interest in the project has been acquired by parties associated with major shareholders of Cedar Woods and BOS International, a member of the HBOS Australia group.
The project is expected to commence in late 2007, with approximately 500 residential lots expected to be produced over a seven-year period.
Cedar Woods’ managing director Paul Sadleir said the new funds management business provides greater diversity to the group’s sources of funding, enabling the company to actively participate in more projects of a larger scale, while reducing financial risk and shareholder equity dilution.
“Our new funds management business provided the opportunity and the mechanism for Cedar Woods to participate in this significant development project, without diluting shareholders and preserving part of our balance sheet for other long-term projects.
“One of our key financial objectives has been to develop income from management fees to supplement the income from property development, and this project will receive significant management fee incomes over an expected five-year period,” he concluded.
By Kathryn O’Meara