This article is from the Australian Property Journal archive
WESTERN Australian apartment developer Finbar posted a $2.78 million full-year profit, down on the prior year as rising interest rates dragged down sales and construction costs remained elevated.
Finbar had posted a $10.98 million profit in FY22.
No dividend will be paid for FY23.
Apartment settlements during FY23 were limited to the Dianella apartment project, which has now sold out, and the recently completed AT238 tower in the Perth CBD.
Construction was ongoing at major projects Civic Heart in South Perth, Aurora in Applecross and The Point in Rivervale. The company has $680 million in project value under construction, expected to be delivered to market later this financial year and the first half of FY2025.
Finbar wrote down the value of its Fairlanes commercial investment by $3 million, while its other investment, the Pelago apartment complex in Karratha, is 98% occupied and generated $6.0 million in rental income.
“The company continues to face challenging trading conditions, with higher than forecast construction costs and sales dampened by the current cycle of rising interest rates,” said Finbar managing director, Darren Pateman.
“However, construction costs have begun to stabilise and there is increasing confidence that interest rates are nearing their peak.
“Although apartment prices have not risen significantly in recent years, we are confident that the chronic shortage of accommodation in Perth, combined with population growth and interest rate stability, means our projects will be well received when they are delivered to the market.”
Finbar’s pre-sale book of $452 million is the highest level of unsettled sales since 2015.
The company ended FY23 with $18.2 million in cash.
