Peet Limited will acquire Spirit Super’s 50 per cent slice of Flagstone City for $46.15m
A leading ASX-listed developer has bought its partner’s 50 per cent stake in one of Australia’s largest masterplanned communities.
ASX-listed Peet Ltd has secured full ownership of its $6.7bn Flagstone City project in South East Queensland.
The West Australian-based company will acquire its joint-venture partner Spirit Super’s 50 per cent shareholding within one of Australia’s largest masterplanned satellite cities for $46.15m.
Peet will also assume an additional $21m of debt, representing Spirit Super’s share of the project’s development loan.
Peet managing director and chief executive Brendan Gore said the move followed a strategic review undertaken by Spirit Super of its development portfolio after it was created from the merging of MTAA Super and Tasplan in early 2021.
He said the acquisition would give Peet 100 per cent ownership of the more than 10,500 remaining lots with a gross development value of about $3.4bn in Flagstone City project, between Brisbane and the Gold Coast.
“Flagstone is a developing asset that is currently generating profits and operating cash,” Mr Gore said.
“This additional investment is therefore expected to be earnings accretive from settlement.”
Peet’s masterplanned community will be home to 12,000 dwellings upon completion and features a 126ha CBD that will service a population of 30,000.
The total $6.7bn Flagstone City project covers 1245ha in total and makes up almost 20 per cent of the Greater Flagstone Region — a Priority Development Area designated by the Queensland Government to fast track the supply of quality, affordable housing in one the state’s fastest growing regions.
Within 40 or 50 years, the population of Greater Flagstone is predicted to top 120,000 bringing with it 50,000 new homes and 30,000 jobs.
Flagstone is the largest community in Peet’s portfolio and Flagstone City was the second such deal for the company in the past month, it having acquired about 15ha of land from the University of Canberra for around $67m with an estimated gross sales value of more than $1bn.
Mr Gore said Peet currently had a land bank of about 45,000 lots across Australia.
“What we’ve changed over the last seven years is a move into the built-form outcome — town homes and low-rise apartments,” he said.
“So when you look at the University of Canberra and certainly with Flagstone and the town centre, it complements our residential land masterplanned community and the built-form outcomes that come with that as well.”
The Flagstone City deal will settle on January 19, 2022, and the purchase price will be paid in four instalments over three years commencing on the settlement date.
The acquisition is being funded from existing cash and debt facilities.
The Group’s gearing on its interest-bearing debt is expected to be in the range of 30 per cent to 40 per cent during the next 18 months.
Peet’s liquidity is expected to remain strong with cash and available debt facilities forecast to
average about $93m over the next 18 months.
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