Redevelopment Will Add Value To Cane Fields
The Age
Wednesday March 26, 2008
QUEENSLAND company Maryborough Sugar Factory has been swamped with offers from potential joint-venture partners after lodging plans for a $500 million marina and residential project with the council.
The publicly listed company, which is backed by legendary corporate raider Sir Ron Brierley and owns up to $30 million worth of land, is keen to unlock the value of its large portfolio of cane fields to take advantage of booming demand for riverfront and marina property.An application to have the zoning of the land changed from farming to residential and commercial use is now with the council, which has also received the master site plan for the banks of the Mary River at Maryborough.Several construction and property development companies have already made the trek to Maryborough Sugar's offices on Queensland's Fraser Coast to lobby for the project.Publicly listed Canberra Investment Corporation, controlled by Sir Ron's Guinness Peat Group, is expected to bid strongly for the development, which will include a resort, hotel, marina and residential precincts. Also in the running could be Ariadne, which has developed marina assets in Southport, Batemans Bay, Port Macquarie and Auckland. Ariadne's biggest shareholder is businessman and company director Gary Weiss, who is also on the board of Guinness Peat and is Sir Ron's long-serving lieutenant.Maryborough Sugar chief executive Mike Barry said Guinness Peat was very supportive of its plans to develop the 174-hectare waterfront site. Sir Ron, who initially viewed the ASX's only pure sugar company as a good play on the soft commodity, has built up his investment company's stake in Maryborough Sugar to just under 27%. But now Mr Barry and his board are crystallising the hidden value of some of their land holdings as they shift sugar production to other parcels of land. "We want to maximise the value of these assets for our shareholders," Mr Barry told BusinessDay. "We are first and foremost a sugar company and will always remain that, but it's also productive of us to unlock the value in our property portfolio."Mr Barry said a large part of the local population that worked in Maryborough commuted from Hervey Bay, 25 minutes to the north, causing congestion on the roads. A first-class development in Maryborough would be a viable alternative for those people, he said. Property prices in Hervey Bay had risen sharply.The residential component of the site will include 1300 homes. It will also feature residential, retail and commercial buildings, as well as a luxury hotel and marina with up to 300 berths.ABN Amro Morgans analyst Belinda Moore said she believed that, on approval, the value of Maryborough Sugar's property would increase greatly. "We believe this development provides the platform for the Maryborough community to capitalise on the high growth projected in the region, by further developing the assets and lifestyle that have made the region so attractive," Ms Moore said.She said the company had stated that the approval process for the $500 million development might take up to two years, and total development up to 15 years."If successful, the effects of the development will likely have flow-on effects on Maryborough Sugar's remaining landholdings, one of the largest in the region," she said.Ms Moore rates Maryborough Sugar a "buy" and values the company at $3.14 a share. The stock ended 15? lower at $2.30.
© 2008 The Age
