Indigo Pacific's Towering Ambitions

Sydney, Dec 1, 2006 (ABN Newswire) - We’ve really engaged on a diversification strategy with Indigo Pacific Capital. Not just by region, but also by property sector. So we now have projects in far north Queensland, residential upmarket, we have subdivisions in far north Queensland, we’re about to do some industrial projects on Brisbane’s southside, we’ve got some subdivision residential work in northern New South Wales, and we have a large commitment at Martha Cove on the Mornington Peninsula in Victoria. I think that’s a positive because we tap into different markets that are in different points in the cycle and I think that spreads the risk.

The Kelvin Grove Urban Village opens this month. It’s looking fantastic out there. The retail centre, which is 5,000 square metres of retail, including a 2,000-plus square metre supermarket, is up and trading, various specialty tenants are working, people are moving into the residential towers above. It’s a great project in a great precinct.

Drift is our refurbishment of the previous Ramada Hotel on the Esplanade at Palm Cove.

Drift Apartments contains 130 rooms, one, two and three-bedroom apartments, from a sale price of $300,000 to $3 million. We’ve got 90 of those apartments sold to date, with more coming through the system at the moment. We expect to tidy up those sales and the profits out of that project over the next six months.

Ocean’s Edge is our other project at Palm Cove. That’s a master planned subdivision and housing project at the northern end of the Palm Cove strip. There’s some 400 units in that project. Construction’s commenced on the first stage – that project will take a number of years to complete, but that’s an exciting project with some pre-sales already emerging on the land. That will be finished by March next year in the first stage.

We’ve made two separate commitments at Martha Cove. One was the purchase of two sites to deliver 60 residential units. We have 30-plus of those 60 apartments already sold.

We also made a commitment recently to purchase another site that contains 44 marina-front apartments, a retail centre of some 4,000 square metres and 230-odd marina berths.

The commercial market in Brisbane has been best described as red hot over the past two years. We’ve invested some $4-plus million dollars into Northbank, which is the old Brisbane City Council building.

There’s a refurbishment project undertaken once the council moves out in February next year.

There’s also the opportunity to build another tower on the site, and we’ve lodged a development application for that site, and are currently sourcing tenants for the second tower of some 40,000 square metres.

When the existing retail centre was first constructed, the foundations and lift core were already put into place underneath the existing ground. So we’ve probably got a six-month start and a $5-plus-million construction advantage in relation to the new tower.

Indigo Pacific Capital is about to make an investment in a subdivision at Lennox Head. There’s a 120-lot subdivision just outside the town centre there, it’s a market that’s within two hours of Brisbane. It represents an alternative to the Sunshine Coast market. Also the infrastructure going into the Tugun bypass and other transport nodes and links will cut travel time, and Lennox is regarded in that region as the new Byron.

We’re in the process of hiring a general manager. Even with the GM coming on board, we still have an incredibly low cost structure. And the GM will be the first full-time employed staff member on Indigo Pacific Capital. So you’ll see the cost of staff versus profit or turnover or revenue is very small by market standards.

Our outlook for the next 12 months is really positive. We’ve got a whole series of new projects, we’ve got funds coming back from existing projects, we’ve got profits emerging from existing projects. We’ll want to raise some more capital to deal with the new opportunities as well, so we think the next 12 months will be an exciting time for Indigo Pacific Capital and a good time for the shareholders.