This article is from the Australian Property Journal archive
PERTH-based apartment developer Finbar Group has signed a 10-year exclusivity agreement with builder Hanssen Pty Ltd, giving it access to a $2.15 billion project pipeline.
This agreement has exclusively bound Hanssen to provide building and construction services to Finbar and its nominated joint venture entities for 10 years and allows Finbar to appoint other building contractors to ensure continued competitive pricing from Hanssen.
As part of the agreement, Finbar has agreed to place 5,000,000 ordinary shares to Hanssen issued at a price calculated by the volume weighted average price of Finbar shares in the past 20 business days.
Hanssen will fund the share purchase by loan to be repaid within five years. The calculated total value of the private placement will be classed as a loan to Hanssen.
Finbar’s managing director Darren Patemen said the agreement will align the interest of both companies for the long term and ensure profitability.
“This agreement is a very important negotiation to secure the effective and economic development of our current pipeline. This unique building contractor relationship Finbar has enjoyed for many years has given our company a competitive advantage that would be difficult and expensive to replicate.
“Whilst we have enjoyed an exclusive arrangement from the outset of our relationship with Hanssen some 15 years ago, we cannot assume that it will always be this way.
“This agreement guarantees Hanssen’s services for a further 10 years and ensures that we continue to protect and retain two of our most important competitive advantages as a developer in WA, namely our low cost construction base and development agility,” Patemen said.
Property Review
