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Stockland Upgrades Elara Community with $290m Acquisition

Stockland Upgrades Elara Community with $290m Acquisition
Stockland has entered into an agreement to acquire the property for $290million from Winten Property Group on “capital-efficient terms” over 30 months.
Jun 09, 2016 By Simon Herrmann Tags: SGP, Acquisition, Property

Australian property developer Stockland Group (ASX:SGP) announced the acquisition of a 95 hectare property at Marsden Park in north west Sydney which extends its Elara community.

Stockland has entered into an agreement to acquire the property for $290million from Winten Property Group on “capital-efficient terms” over 30 months.

Managing Director and CEO Mark Steinert believes that the acquisition is a “good investment” for Stockland as it increased the company’s exposure to the Sydney residential property market, which has been “performing strongly”. Furthermore, he added: “The North West Sydney Growth Centre remains under-supplied, given the pent up demand for vacant land and the strong underlying fundamentals that we see for this corridor.”

The acquisition is adjacent to Stockland’s Elara community and presents the company with an opportunity to extend the project for several more years and “maintain strong sales momentum”, according to Mr Steinert.

Strong Demand for Stockland’s Elara Community

Stockland’s CEO Residential, Andrew Whitson, says that new land releases at Elara have typically sold out within the first few days of launch. He believes that the acquisition will enable Stockland to leverage the existing infrastructure investment around Elara.

Since commencement of the Elara project more than 900 residential lots have been sold and the masterplan for the existing community will yield more than 2,300 residential lots. Elara comprises of 198 hectare including a diverse range of housing options with a number of development milestones due for completion in 2016 and 2017. The 95-hectare acquisition will add an additional 1,500 lots.

Investment View: Outlook Remains Strong

Stockland’s investment appeal rests in the current future revenue streams derived from its diversified property portfolio. Stockland offers profitable exposure to the residential as well as commercial property market, as the company develops and manages assets in shopping centres, retirement living, office and industrial. Wise-owl believes that Stockland offers and attractive mix of capital growth and income, as the company pays reliable and attractive semi-annual dividend distributions.

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Simon Herrmann Author: Simon Herrmann Jun 09, 2016

Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.

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