It is now more than two years since local media speculation that Aspial would start construction of the Nova City project on Spence St before July 1 2015 to qualify for development incentives. The marketing building was constructed in 2015. Two years hence while there have been operational works on the site and reports of pre-sales there has been no final building approval.
Aspial have finally got around to spinning off their non- Singaporean property developments on the higher risk Singapore Exchange second board. The prospectus contains valuation details for Australian properties. The only building in the body of the document related to valuations (p 94) for Australian projects which does not provide a capital value is Cairns. Note 4 provides further details:
There is no Capital Value attributed to the property. The proposed development plans for Nova City were in the midst of being finalised and the sales launch of the residential units in Tower 1 of Nova City (including residential units located in the podium connecting Tower 1 and Tower 2) had not commenced when the independent valuer, Jones Lang LaSalle Advisory Services Pty Limited, commenced its valuation of the aforementioned property. Accordingly, the valuation for Nova City / 81-83 Spence Street and 112-114 Bunda Street, Cairns, Queensland, Australia is based on the market value of the land on an “As Is” basis, and not based on the proposed development plans of Nova City. The market value of the land as appraised by Jones Lang LaSalle Advisory Services Pty Limited, is A$15.0 million, which was lower than the acquisition price of A$18.9 million paid by
The explanation doesn’t appear to be consistent with the independent valuation report from Jones Lang Lasalle in Appendix B dated April 2017 which does refer to the relevant pre-sales and marketing which had commenced five months before the valuation.
As at date of inspection preliminary site works were in progress, these are associated with the stormwater drainage easement along the southern boundary. We understand marketing of the apartments for Stage 1 officially commenced in November 2016 and we have been advised by the Developer that 28 contracts of sale (or circa 14% of the total number of apartments) had been issued.
However the only valuation provided in Appendix B is the land value which has been reduced from acquisition value as stated. Capital valuations have been provided for development properties in Brisbane where marketing has not yet commenced.
There are some comments in the Appendix B Jones Lang LaSalle valuation report worth noting:
Based on our analysis we do not consider the proposed development is representative of the highest and best use of the site in the current market. The site it-self (sic) in our opinion is not considered an ‘A-Grade’ location in terms of the Cairns CBD with the prime locations especially from a residential amenity point of view being those situated along the Esplanade or Water (sic) front areas.
There is also this suggestion in the independent valuation:
Strengths: A large development site on the southern fringe of the Cairns CBD which has the potential to be subdivided into smaller parcels, for which we consider there would be a wider market appeal.
Source: World Class Global