Epping Redevelopment Update
When we first decided to redevelop the Epping Conference Office back in November 2015, we had envisaged by now that the old Conference Office would be demolished, the new Office and residential tower would be built, and we would have moved back in and enjoying the new amenities.
But here we are in 2021, still in a hold pattern due to circumstances beyond our control, especially in a COVID-19 era that we find ourselves in. Other factors, such as news of the uncertainty in building quality as seen in the Opal and Mascot apartment towers recently, have also affected sales of high rise residential units.
To this end, the Executive Committee along with advice from the Real Estate Committee and other property advisors, have decided that we will sell the Conference Office to our developers Southern Han, with an option to buy back the commercial space and associated car parking for a price of $6m once the building is complete. The benefits of this decision are:
- We will receive $16m for the property up front. This improves our current situation as we have not received any proceeds from this project. We can invest these funds now, and receive an income flow which will directly help mission.
- We eliminate the long term risk of being the seller of the apartment units, should there be a quality issue with the building. As we will completely be out of the arrangement, the developer will solely bear all associated risk with the building quality.
- We only have to expend the $6m when we need to, when we take possession of the commercial space. Independent valuation of the 1,650 square meters of commercial space with 50 car spaces, value this property at over $11m.
We anticipate the sale of the building will occur in February this year.
While this new arrangement is not quite what we had envisaged at the Special Constituency meeting in November 2015 where we would allow Southern Han development rights on our behalf, it has the same intended outcome in that the current building would be demolished, the new building will be built by Southern Han, and that the Conference Office would solely occupy the commercial space in the building. Therefore the Executive Committee has made this decision based on current circumstances.
If you have any questions, please do not hesitate to send me an email at [email protected].
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