Aland Equity Group (ASX: AEG) has executed a series of cornerstone property funding agreements designed to expand its funds management platform into the property sector.
The agreements provide long-term rights to finance the acquisition and staged development of residential, seniors living, mixed-use, and commercial projects owned by entities associated with company chair Alex Brinkmeyer.
The advanced projects are located in high-growth corridors and include the Yarrabilly residential development at Cowra in New South Wales, and the Chinnerys and Bungendore industrial training facility and technology hub project near Canberra.
A potential future pipeline comprising more than 4,200 mixed residential lots and a 100,000 square metre business park has also been identified.
Funding Agreement Terms
Under the terms of the property funding agreements, development of new projects will be completed by experienced project delivery entities associated with Mr Brinkmeyer outside of the Aland group.
Aland will act as investment manager and will generate revenue primarily through investment management fees.
The company’s role will be limited to a funds management capacity and it will not be permitted to act as property developer.
Pricing methodology for the acquisition of the property will incorporate a 30% development margin at the fund level for residential developments, underpinning investor returns.
Scalable Property Business
Aland managing director David Nolan believes the company will be able to build a scalable property funds management business to support significant shareholder returns.
“These agreements establish the foundation for the expansion of our funds management platform into the property sector and provide us with a long-term pipeline of property funding opportunities,” he said.
“Importantly, the platform provides us with exclusive rights to establish funds to finance the acquisition and development of projects with approvals already in place, rather than relying on sourcing projects from external parties.”
“We believe incorporating these projects into AEG’s property funds management platform will deliver long-term value for our shareholders,” Mr Brinkmeyer added.
Long Development Career
Aland’s property funds management platform is supported by the development expertise and operational capability of entities associated with Mr Brinkmeyer.
His development career—which spans more than 50 years across Australia, England, and the US—includes the delivery of more than 10,000 residential lots across NSW and the Australian Capital Territory.
Mr Brinkmeyer has been involved in the development of the award-winning Jerrabomberra Estate satellite township, as well as major Canberra suburbs including Gordon and Condor, pioneering development in Canberra’s Gungahlin satellite city, and the Southern Tablelands’ largest rural residential subdivision at Royalla Station.
The Elmslea Estate was completed in 2013 and comprised over 510 large residential lots together with substantial open recreational spaces, while the Bungendore Seniors project comprising 40 free-standing villa within an exclusive gated community was completed in 2020.
