The following in today's GC Bulletin. --------------------------------- Sunland in Dubai sandtrap
by Nick Nichols, business editor
March 28th, 2009
SUNLAND is heading for a $135 million loss this financial year, thanks largely to the dissolution of its Dubai joint venture with golfer Adam Scott this week.
EWM Group, an investment company handling the personal finances of well-heeled clients, including Mr Scott, has defaulted on the joint venture to develop a $2.2 billion super tower, known as The Atrium.
The default, blamed on the downturn in the Dubai property market, has seen Sunland assume full control of the venture and write down $130 million on the project.
The writedown comprises $91 million for the land and $39 million in costs already incurred on the project.
It is part of a massive $200 million in provisions announced by Sunland yesterday, and comes on top of $40.5 million written down in January.
The Q1 developer has made an additional $60 million provision in Dubai and another $10 million on its property assets in Australia.
But the news failed to halt the resurgence in Sunland's shares, which yesterday jumped 10c, or nearly 24 per cent, to 52c.
This is despite Sunland also announcing it will not pay a final dividend.
The shares were buoyed by the announcement of a share buyback, which is still awaiting regulatory approval.
Sunland, which remains cashed up, intends to buy back up to 10 per cent of its 323.5 million shares.
This year's expected loss compares with a forecast 2009 profit of $74 million announced in January.
Sunland said it was not expecting further writedowns, although it was undertaking a formal review of its assets.
In another teaser yesterday, Sunland also said it had been in talks in the past six months with a potential joint-venture partner.
It did not disclose the identity of partner or the nature of the tie-up.
"The discussions are incomplete and there is no certainty that such discussions will result in a binding transaction," said Sunland.
The Atrium is the second project put on hold by the property giant in Dubai, which is only now starting to feel the heat from the global financial crisis.
In January, Sunland wrote down the value of its Waterfront 1 joint venture with the Peacock Group and mothballed the project.
Work is still progressing on D1, the Palazzo Versace and Nur in Dubai, and Sunland managing director Sahba Abedian said the company remained committed to the Middle East.
"We still are very confident in the emerging markets of the Middle East," he said.
"I think it will be a number of years before we see a sense of normality (there)."
In the meantime, Mr Abedian said Sunland would intensify its focus on acquisitions in Australia, where it has achieved 333 home and apartment sales valued at $137 million this financial year.
