CSR Limited (CSR)announced today that it is upgrading the forecast for its Property division forthe year ending 31 March 2006 after reaching agreements on propertytransactions including further sale and lease of industrial land at its 100hectare Erskine Park site in Western Sydney.
The first sale of17 hectares of land at Erskine Park to BlueScope Steel Limited was announced inJuly 2004.CSR is in the final stages ofsite preparation and road construction with the proceeds of this transactionexpected to be realised by March 2006.
In addition, twoother parties have agreed to acquire a total of 3.7 hectares of land for $9.6million.These sales are conditional onobtaining registration for subdivision of the land and development approvalswhich are expected by March 2006.
Consistent withCSR’s strategy to also pursue lease opportunities at Erskine Park, CSR andanother party have entered a long-term lease for 2.9 hectares.CSR will develop the industrial property forthis tenant while receiving ongoing lease revenue.The asset is forecast to have an end value of$15.8 million producing an initial yield of 7.75%.
CSR ManagingDirector Alec Brennan commented, “CSR has accelerated the development of theErskine Park site to meet the rapidly growing demand for industrial land inWestern Sydney.We can deliver fullyserviced lots on flexible terms which are attractive to a variety of partiesseeking to buy or lease land in the area.”
CSR will continueto work with local and state development authorities to generate further valuefor the remaining 76 hectares of land at Erskine Park capable of development,subject to regulatory approvals.
CSR’s full yearoperating result for Property is now expected to be at least $50 million.This includes proceeds arising from theAugust 2005 sale of the garden products joint venture, EnvirogreenPty Limited (50% CSR) and final proceeds arising from an adjustment to the July1996 agreement regarding sale of CSR’s former Pyrmont site in Sydney.