This article is from the Australian Property Journal archive
Highly successful Melbourne-based apartment developer Central Equity yesterday experienced its last day as a ASX listed company… departing the “public arena” of the sharemarket to become a private company.
In a tightly worded statement, which did not seem reflect the company’s enormous achievements in Melbourne’s apartment market over more than a decade the company said: “It is business as usual. Central Equity has always been a property development company and it remains committed to its core business.”
“The company will stay primarily focused on residential projects and will continue to do its best to deliver affordable housing through medium density projects plus house and land packages.”
It has been tough times for Melbourne’s apartment market, but despite market adversity for many developers Central Equity continued to reward apartment buyers with quality inner city living and its unit holders with consistent returns over a long period of time as a listed entity.
In recent times, Central Equity directors have bought out investors who received on average for their shares $2.15 per share. The buy-out comprised a 56 cents capital component and a $1.59 fully franked divided.
Founding directors Eddie Kutner, Dennis Wilson and John Bourke – who control 55.6% of Central Equity said the buy-out was a “big win for shareholders”.
According to Kutner, Central’s Equity’s market capitalisation jumped by $60 million to $180 million at stages during the buy-out proposal.
“We’ve unlocked $60 million in value, and we’re delighted for shareholders,” he recently told shareholders.
Kutner said he was proud of Central Equity and the returns the company had delivered since its listing on the ASX as a 20-cent company two decades ago.
“An accountant recently estimated that by re-investing dividends, every $1,000 invested in Central Equity then is now worth $60,000,” Kutner told the media gathering.
Kutner, a former accountant, and his two former school teacher directors will continue to develop property under the Central Equity brand after the public company is delisted.
“Central Equity has always been a pure property development company and it remains committed to property development,” recently told Australian Property Journal.
“The company will stay primarily focused on residential projects, but in light of the prevailing market conditions in the new residential sector, Central Equity will be operating on a tighter scale.
“Housing affordability is at a low and the recent interest rate move will have a further dampening effect. Central Equity plans to focus on the fundamentals and will continue to do it s best to deliver affordable housing that suits modern lifestyles.”
One well known Melbourne property personality summed up Central Equity yesterday: “What many people fail to recognise and appreciate is that Central Equity brought inner city living to Melbourne and consistently delivered first class result to shareholders. And for that they get criticised – don’t figure does it?”
For the record, Central Equity closed at $2.22.
By Ted McDonnell
