Aland Equity Group targets $32m annual income via new property model

Aland Equity Group (ASX: AEG) is expanding its capital-light property funds model to the Chinnerys precinct in Bungendore and the Yarrabilly development in Cowra. This strategy, previously utilized at Elm Grove Heights, allows the company to manage large-scale residential developments without the need to acquire underlying land upfront.

By retaining land ownership with entities such as Share Star Holdings and Southern Rural Holdings until final lot settlement, Aland avoids upfront stamp duty and associated costs. The company intends to use project debt facilities to fund the completion and sale of development stages, which is expected to improve capital efficiency and maintain a 30% gross profit margin while reducing the need for dilutive equity raisings.

Managing director David Nolan stated that the Chinnerys project, which includes approximately 3,200 lots, is estimated to generate roughly $160,000 in income per lot after costs. At a rate of 200 lot sales per year, this represents an estimated $32 million in annual fund income.