Property Investment
A PORTFOLIO of quality investments generating shareholder returns Schaffer Corporation’s investment property portfolio of eight properties.
- IBM Building , Hay Street, West Perth , Western Australia (22.1% interest)
- Oce House, St Kilda Road , Melbourne , Victoria (20% interest)
- 89 St George's Terrace, Perth , Western Australia (20% interest)
- Hometown, Albany Highway , Cannington , Western Australia (25% interest)
- 115 Vulcan Rd, Canning Vale, WA (20% interest)
- Parks Centre, Bunbury , Western Australia (16.7% interest)
- Joondalup House, Joondalup , Western Australia (11% interest)
The debt associated with the properties varies with each property’s risk profile however the vast majority of this debt is secured against the individual properties and is non-recourse to Schaffer Corporation. All properties are positively geared and generate strong earnings and cash flow.
Schaffer Corporation adopts a conservative property valuation policy with all investment properties reflected in the group financial statements at depreciated cost, not market valuation. Consequently, Schaffer Corpotation has substantial unrealised capital gains on its investment property portfolio. These capital gains will be realised over time, and when the board considers the best interests of shareholders are served by a sale of an investment property interest.
Property Development Projects
Schaffer Corporation holds a 15% interest in the Mindarie Keys Marina residential land subdivision located north of Perth, Western Australia.
This highly successful development project is nearing completion with approximately 95% of the 250+ residential development lots now sold. To date, the project has generated more than $40 million of revenue for Schaffer, and the project has generated an annual rate of return in excess of 15% p.a. (pre-tax).
Schaffer Corporation is part of a syndicate that has identified ongoing demand for industrial land in Western Australia. To that end, early in calendar 2006, Schaffer Corporation acquired a 20% interest in a 26-hectare property at Neerabup, north of Perth. The investment is a land banking exercise and, commencing in the next three to five years, this property is likely to be developed as an industrial subdivision.