Investment Updates: May 2025

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

Titles were issued in early May, with the initial batch of units settling shortly thereafter. Additional settlements are scheduled for June, ahead of the facility’s full repayment anticipated by the end of next month.

Tatura:

• Stage 2 has received all approvals except from Transport Victoria in order to obtain Statement of Compliance. The expectation is that this will be received in early June, with settlements to commence shortly afterwards.
• The borrower has reported 50 presales out of 60 remaining lots across Stages 1 and 2.
• 53 settlements of 55 lots have been completed to date from Stage 1, with the remaining 2 withheld.

Morwell:

• Bulk earthworks are underway across Stages 1–3.
• A total of 49 presales have been achieved across Stages 1-3 of the project, with an additional 9 in Stage 4.
• The Australian Government’s Housing Support Program has allocated $7.9 million for sewer infrastructure benefiting the property.

The facility is currently in default, with ARK reserving its rights from 7 March 2025 to charge default interest, while a new facility is arranged.

In December 2024, it was confirmed that the Ballarat North PSP will not include the Expanded Area where the property is situated. This has negatively impacted the property’s current value.

An updated valuation reflecting this outcome has now been finalised, and ARK has reviewed the revised figures.

To support decision-making on the appropriate course of action, ARK has also commissioned a second valuation for comparison. This will inform the strategy

ARK has issued a term sheet to the borrower to refinance the existing facility into a new 12-month facility that will reach financial close in June 2025.

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.

Demolition works at The Buckingham are now complete, and minor renovations have commenced to repurpose the existing hotel building as the site office for the upcoming development.

Approximately 60% of the full construction drawings have been completed and the final build cost is anticipated by August 2025.

Sales advice has been received for one lot, with contract execution and deposit anticipated in early June. The contract has been issued to the purchaser following successful negotiations, reflecting a positive shift in buyer interest.

Recent sales activity in Newport indicates improving market sentiment which coincides with Domain Projects reporting interest in three lots.

The civil contractor is targeting completion of all works by mid-June 2025, subject to weather and site conditions, which have been challenging throughout May 25. The project has experienced delays due to the late issuance of the Construction Certificate, council-related matters, and more than 74 days of inclement weather.

Tendering for marina construction is currently underway.

‘Within Stage 4 there have been 54 lots settled and 4 remaining. A small number of contracts were terminated (with ARK’s approval) due to a significant uplift in resale value.

Strong sales momentum continues across the estate, with 125 of 153 lots pre-sold in Stages 5 to 7. Stages 8 and 9 (outside of the facility) have achieved 100% presales.

Bulk earthworks are underway, with civil works for Stages 5 to 7 scheduled to commence shortly.

The borrower is well advanced in negotiations with their preferred civil contractor, one of Australia’s largest.

Execution of the civil works contract is anticipated by next month.

One lot settled in Stage 1 during the month and settlement of a further lot is expected to occur in June.

Works within Stage 2 are in the final stages and practical completion is expected to be achieved early next month.

Stage 3 works are underway, with bulk earthworks and sewer installations now complete.

The facility has been extended until 31 July 2025 to allow the borrower additional time to evaluate the offers received.

Due to inclement weather there has been a delay in construction commencement. Shadforth are now expecting to mobilise on site in early June.

The borrower submitted the planning application for the proposed 213-lot subdivision in early January with preliminary council feedback expected in the coming months.

Civil works continue to progress strongly, with over 75% of contracted works now complete. Precast walls have been installed for 22 of the 24 warehouses, roof sheeting is complete on 15, and storm water works are ongoing.

Sales performance remains strong, with 7 sales executed, and several others in advanced negotiations.

Remediation works remain on schedule for completion by June. Slab removal has been completed across 50% of the site, and soil remediation is progressing as expected, with no unexpected contamination detected.

Civil contractor tenders will be conducted throughout June, following the submission of council engineering approval in mid-May. Civil works are scheduled to commence in July 2025.

Each lot release in the development has been well received by the market and fully sold. The sponsor will continue with staged releases to optimise value while ensuring ongoing presales compliance.

The borrower is preparing the final submission for the amendment to the Local Structure Plan which will include the approved modifications. Final approvals are expected in late June.

The borrower is continuing discussions with major banks to secure a refinance, which is expected to accelerate as the facility term approaches maturity

Council has approved the Functional Layout Plan, marking a key milestone that materially reduces delivery risk. While there were minor delays, all required approvals to commence works have now been secured. Bulk earthworks commenced towards the end of the month and will continue into June.

Construction is progressing steadily and the following works are currently underway:

– Bulk earthworks are ongoing
– Sewer installation is well advanced
– Stormwater infrastructure is in progress
– Retaining wall construction is underway
– NBN installation is progressing

Additionally, DA3 has now been approved for the residual land included in the facility, which is expected to unlock significant value within the broader project.

The facility reached financial close during the month.

The facility reached financial close during the month.