Property Investments

The Property division consists of a portfolio of syndicate investment properties, property development projects, and wholly owned/operated properties.

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Investment Property

Schaffer Corporation’s portfolio of quality investment properties, which generates strong and stable earnings, consists of the following (current at FY16 Full Yearly Report);

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.

Property Development Projects

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 will likely be developed as an industrial subdivision in the future.

Other Properties

Schaffer Corporation owns several other properties in Perth which are primarily occupied by various functions of the Building Materials division. The directors believe several of these properties have significant redevelopment potential in the future, and the long term strategy is to eventually redevelop these properties and maximise returns to shareholders.

Valuation Policy

Schaffer Corporation adopts a conservative property valuation policy with all property reflected in the group financial statements at depreciated cost, not market valuation. Consequently, Schaffer Corporation 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.