Aland Equity Group Locks in Property Management Agreement for Elm Grove Heights Land Release

Aland Equity Group (ASX: AEG) subsidiary Aland Equity Land Management Rights has locked in a management rights agreement (MRA) for 56 residential lots comprising Stages 2B-1 and 2B-2 of the Elm Grove Heights land release in the New South Wales regional town of Bungendore.

Signed with Elmslea Land Developments as trustee for Elmslea Land Development Unit Trust No 2, the 24-month agreement formalises a capital-light investment model for the development.

It gives Aland an exclusive right to manage development of the estate including arranging satisfaction of the outstanding conditions of a development approval, overseeing subdivision of the land, and co-ordinating the sales and marketing process and will be responsible for financing the cost of these services.

Elmslea will pay Aland a fee of $140,000 for each lot sold and will grant limited recourse mortgages over the relevant land to the financier.

Melbourne-based Marq Trustees has been engaged as independent trustee of the fund and Aland will act as investment manager.

Marketing and Sale Agreement

The MRA replaces a binding heads of agreement (HoA) signed in July to manage the marketing and sale of the Elm Grove Heights land release.

The land will remain owned by Elmslea Land Developments until each residential lot settles, at which time the fund will receive a net sales income generated above the agreed acquisition price and transaction costs.

The structure assumes an acquisition price of $400,000 per lot, with council contributions estimated at $1.38 million and $1.11 million under two statutory categories and marketing expenses budgeted at $250,000.

The MRA was scheduled to be finalised during the three-month HoA term, and is subject to completion of debt financing and any required regulatory or shareholder approvals.

Significant 2027 Profitability

Aland managing director David Nolan said the wholly owned Elm Grove Heights fund was expected to generate $75,000 income per lot after costs, delivering first revenues and significant profitability during 2027.

“We are excited to commence the sales campaign in late September, with the Cowra and Chinnerys [residential estates] expected to launch shortly after, building a pipeline of fund income and funds management revenue,” he said.

A sales and marketing campaign is scheduled to commence in late September targeting buyers in Canberra and surrounding regional markets, with Aland entitled to 100% of investment returns and management fees as fund owner.

Mr Nolan confirmed the fund would not acquire the Elm Grove land upfront and will have no responsibility for development or construction of the lots.