Whilst not it's core business, i see significant potential to unlock alot of value for shareholders.
With the recent staff purchases and recent decline in share price, I think the Chairman, Directors and a lot of shareholders have long realised CSR own 500ha of land in Western Sydney and only have this land on their books for $181.4 million. I think this land is soooooo undervalued and this land has been probably been valued by CSR on an existing use basis rather than highest and best use. There are plenty of people and companies that have paid $1-2 million for a couple of hectares in Western and South Western Sydney in the growth corridors and then after the rezoning the land it has gone up in value 5-10 fold depending on rezoning and location.
Make no mistake, 500 Hectares is an enormous parcel of land for any company to hold!!! CSR is in the process of rezoning and developing alot of this land and the company will benefit long into the future according to Chairman's speech relating to previous financial year's results.
For example:
* 10 HA in Horsley Park was sold for $31 million and this is industrial land which attracts a significant discount to residential land... (if you applied this rule of thumb, and everything was like for like, CSR's land portfolio could be worth $1.5 Billion alone).... I know this is not the case as CSR would have to build roads and some of the land maybe bushland and not suitable for rezoning etc.... but it does demonstrate the potential uplift in value CSR are sitting on.
* CSR has also commenced work in Schofields to unlock 1250 residential sites. A quick search on realestate.com.au indicates parcels of land around 500m2 each could be sold for $450,000 each. Whilst there are costs to bring these to market, it will unlock a lot of value for CSR.
The performance of the Property Portfolio division is also extremely high with funds employed of only $181.4 million and providing a return of 30.6% last financial year helping to support the potential added value that could be unlocked.
All the best, do your own research!
