Investment Updates: February 2025

The borrower continues to work towards the refinance of the facility.

With the building structure complete, the project’s focus has shifted to the internal wall installation, wall cladding, and service rough-ins. Over 80% of the contract works have been completed to date and progress remains on schedule.

Tatura:
– Initial settlements are expected to commence in mid-late March 2025 following the issuance of the Statement of Compliance (SOC) this month.
– The borrower has reported 50 presales out of 60 remaining lots across.
– Stages 1 and 2, reflecting strong demand.
– 53 settlements of 55 lots have been completed to date from Stage 1.

Morwell:
– Bulk earthworks for Stages 1, 2, and 3 are ongoing.
– 58 presales have been achieved across Stages 1-3 of the project.
– The Australian Government’s Housing Support Program has allocated $35.8 million to five projects aimed at fast-tracking housing in regional and metropolitan growth areas in Victoria. Funding is a strong likelihood to have a direct benefit on the Morwell development.

As the facility is unlikely to be repaid by the maturity date in March, ARK has provided the borrower with indicative terms for an extension until the end of October 2025.

The Victorian Planning Authority (VPA) recently confirmed that the Ballarat North PSP will focus exclusively on the Core Area of the precinct, excluding the Expanded Area where the property is located. In response, ARK has instructed a re-valuation of the property to assess the impact of this exclusion on its land value. Once the report is received, anticipated in March 2025, ARK will evaluate whether any adjustments to the facility are necessary.

The borrower plans to hold the two remaining security properties as a land bank while due diligence on the Oakbank PSP continues. ARK has commenced assessing a refinance of the facility, which includes evaluating the Oakbank PSP.

The property is under contract, with settlement scheduled to occur in September 2026. This allows for a seamless refinance into a new facility with ARK or an alternative lender at maturity which aligns with the settlement timeline.

The borrower intends to strategically hold the property in the short to medium term whilst continuing to monitor the market. The planning overlay remains supportive of a major mixed use development on the site.

Following a review of proposals from multiple agents, Savills have been appointed as the new sales agent. The sales campaign is now live and scheduled to run for six weeks. ARK will continue to underwrite investor interest.

The borrower has received planning approval which has activated the site for development. The facility is expected to be refinanced into a construction facility with ARK before the maturity date, which is currently under assessment.

The acoustic barrier works have now been completed. Plan sealing has been lodged and is currently awaiting approval from the Department of Transport. Once approved, title registration is expected to follow, with settlements commencing 14 days thereafter. ARK anticipates the facility will be repaid in full by the end of March 2025.

The operational works application has been approved, enabling Shadforth to finalise the civil contract. Once the contract is executed, expected in early March, Shadforth will mobilise on-site approximately two weeks later.

The borrower submitted the planning application for the proposed 213-lot subdivision in early January and is still awaiting preliminary council feedback.

Strip footings have now been completed whilst precast panel installation and roofing have continued this month. The warehouse slabs are scheduled to be poured in early March 2025.

The borrower has made substantial progress in securing development approval for the Salisbury Plain property and anticipates receiving formal approval in early March.

Demolition of the site has been successfully completed. A remediation contract is currently under review, with execution expected to occur in March 20225 and works scheduled to commence shortly thereafter.

Indicative remediation costs remain in line with expectations.

The borrower continues to progress an amendment to the Local Structure Plan (LSP). The Stage 1 subdivision application will be lodged in March 2025, with approvals for both the LSP amendment and subdivision still on track to be received in Q2 2025.

The borrower continues to hold discussions with major banks to secure a refinance offer for the property.

The borrower has been working closely with the project team to address all outstanding requirements necessary for full construction commencement. This process involves securing various approvals and sign-offs from authorities, which has taken longer than anticipated. The civil contractor is set to mobilise on-site in early March in preparation for the commencement of works.