Artists impression of Flagstone. Image – Peet.
  • Peet acquired Spirit Super's 50% shareholding for $46.15M
  • Acquisition will give Peet full ownership of the remaining lots
  • Liquidity of Peet's existing cash and debt facilities set to remain strong over the next 18 months

Listed real estate development company Peet (ASX: PPC) announced late last week it has acquired Spirit Super’s (formerly MTAA Super) 50% share of the Flagstone City project in Queensland.

The decision follows a strategic overview of Spirit Super’s development portfolio.

Peet has acquired the shareholding for $46.15 million, with settlement to occur on the 19 January 2022 and the purchase price to be paid across four instalments over three years/.

Along with this payment, Peet will assume $21 million of debt.

“This acquisition will give Peet 100% ownership of the more than 10,500 remaining lots with a GDV of circa $3.4 billion in Flagstone, in Brisbane’s south east growth corridor,” commented Brendan Gore, Peet Managing Director and CEO.

“Flagstone is a developing asset that is currently generating profits and operating cash. This additional investment is therefore expected to be earnings accretive from settlement.”

When completed, Flagstone City will be a 126-hectare town centre which will be surrounded by industrial land, public space and residential dwellings.

44,000sqm of retail space and 58,000sqm of office is proposed, as is an interstate rail service running through the middle of the centre.

The acquisition will be funded from existing cash and debt facilities, with the Group’s gearing on its interest-bearing debt to be in the vicinity of 30% to 40% over the next year-and-a-half.

The gearing includes Flagstone and University of Canberra land vendor labilities is expected to be around 35% to 45%.

The interest cover ratio for the Group is expected to be four to eight times during this period.

Over the next 18 months, the liquidity of Peet is expected to remain strong with cash and available debt facilities expected to average around $93 million.

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