UEM Sunrise Bhd chief says the company will fully refund the deposits plus interests accrued to the purchasers who bought units in Mayfair, the company’s third property project in Australia, as their sales contracts will be terminated.
Its managing director and chief executive officer Anwar Syahrin Abdul Ajib told NST Property the decision to sell the 412 St Kilda Road site is purely based on a commercial basis and to unlock the maximum value for the company’s shareholders.
“The offer we have received allows us to attain maximum returns to shareholders vis-a-vis the risk returns,” said Anwar.
The market was taken by surprise when the Main Market-listed developer said it was selling Mayfair, its prime St Kilda Road property, which was formerly a police complex.
UEM Sunrise told The Age and Herald that the company made a decision to divest the 412 St Kilda Road site at the UEM Sunrise board meeting held recently, which presumably was held on July 30 this year.
The company said it understands this may be disappointing for purchasers and is committed to ensuring that they receive a full refund of their deposit.
Colliers’ Oliver Hay, Trent Hobart and John Marasco have been appointed as agents for the site.
The Sydney Morning Herald reported that the property is likely to fetch around A$100 million (RM285.25 million) while another media believes it could be between A$70 million and A$80 million.
UEM Sunrise purchased the 22-level B-grade building in 2015 for A$58 million.
The company will walk away with reasonably small profit from its four-year investment if it were to sell the property for A$70 million to A$80 million. The problem is due to the number of units the company had sold off the plan and the interest payable to purchasers upon termination of their contracts.
Mayfair offered 158 residences with layouts of one to five bedrooms, priced from A$1 million to A$11 million and 40 per cent were sold off the plan.
The most expensive in Mayfair are the penthouses, branded as the Zaha Signature Suites.
Anwar said that UEM Sunrise remains committed in the company’s business expansion plans in Australia.
“We still own retail assets in Aurora and Conservatory, and are actively looking for new developments and joint venture opportunities in Australia, with Melbourne and Sydney being our two key target cities,” he said.
UEM Sunrise’s maiden venture in Melbourne, namely Aurora Melbourne Central, consisting of 92-storey high-rise mixed-use development, was launched in 2014.
The second project in Melbourne, Conservatory, comprising 446 apartments in a 42-storey tower, was launched in 2015. Mayfair was launched in 2017.
UEM Sunrise paid a collective sum of A$122 million beginning 2014 to acquire the sites for the three projects.
For Aurora and Conservatory, the units were selling at about A$1,000 and A$1,100 per square foot (psf), respectively. For Mayfair, the price was approaching nearly A$2,000 psf.