Abacus Convert Debt to Equity

20 January 2022

Abacus Property Group will exit its remaining residential development and mortgage legacy loan positions by converting two loans to equity and in the refinance of a third.

Abacus has exchanged conditional contracts to acquire a 100% freehold interest in the remaining land at 56 Prescot Parade, Milperra NSW (“Riverlands”) and 181 James Ruse Drive, Camellia NSW (“Camellia”), converting Abacus’ interest from lender to owner. Abacus will also be repaid the final remaining loan at Doonside NSW as part of a re-finance of the site.

Managing Director, Steven Sewell commented “These transactions bring to a close this non-core business activity for the Group.”

Abacus partnered with, Demian Developments in both the Miplerra and Camellia sites. The 82ha Riverlands Golf Course at Milperra was planned to be redeveloped for housing and with much of the land subject to flooding only 15ha was capable of being developed. In 2019, the Group sold off the 18ha of the rezoned land to Mirvac for $37m, leaving the balance of the land with little value.

The Camellia site is a prime 6.8ha parcel of land adjoining the Parramatta River and James Ruse Drive. The site is heavily contaminated but is ultimately well suited to a large scale residential development. Demian Developments prepared a master plan for the site incorporating 2,400 apartments and 14,000sqm of retail space, however in early 2021, the Department of Planning deferred a decision on the planning for the site until a new Strategy for Rosehill and Camellia could be developed. The site was put up for sale in May 2021, however interest in the site was mostly conditional upon a rezoning.

Abacus will now pay $100 million, excluding transaction costs, for both sites which equates to the carrying value of the outstanding loans previously held against the parcels of land. Settlement of the transactions is expected to occur by the end of March 2022.

Abacus have not disclosed the valuation of the two sites however if a rezoning of Camellia is successful, it is likely to be worth in excess of $100m.

The two properties at Riverlands and Camellia will now be managed internally by Abacus with a focus on realising the medium term development potential.

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