Ariadne Australia Forms Partnership with Precinct Properties for Major Developments
ARA (ARA) Share Update August 2024 Tuesday 27th
Ariadne Australia Announces Strategic Partnership with Precinct Properties
Ariadne Australia Limited (ASX: ARA) has announced a significant partnership with Precinct Properties Holdings Limited, a subsidiary of Precinct Properties New Zealand Limited, to develop key marine and residential sites in New Zealand.
Instant Summary:
- Ariadne holds a 61% indirect equity interest in Orams Group Limited and Orams Residential Limited.
- Precinct Properties acquires a 24.9% interest in Orams Marine Village and a 50% interest in the adjoining residential site.
- OGL retains 100% ownership of Orams Marine Services.
- Two limited partnerships will be formed for the marine village and residential site.
- Precinct Properties will act as Development Manager.
- The agreement is conditional upon finalizing documentation, financing agreements, and Auckland Council approval.
Partnership Details
Ariadne Australia Limited has entered into a conditional agreement with Precinct Properties Holdings Limited to develop Orams Marine Village and an adjoining residential site in New Zealand. Ariadne holds a 61% indirect equity interest in both Orams Group Limited (OGL) and Orams Residential Limited (ORL).
Under the agreement, Precinct Properties will acquire a 24.9% interest in the ground lease and buildings of Orams Marine Village, as well as a 50% interest in the adjoining residential site. OGL will retain full ownership of Orams Marine Services, the largest marine maintenance and refit services business in New Zealand, which will continue to operate from Orams Marine Village.
Formation of Limited Partnerships
Two limited partnerships will be formed to manage the properties. OGL will hold a 75.1% interest in the partnership that will acquire Orams Marine Village, which includes a 125-year waterfront ground lease and associated water leases. ORL will hold a 50% interest in the partnership that will acquire the residential site.
Precinct Properties will be appointed as the Development Manager for both projects. The partnership is expected to reflect the book values of the respective property assets as of June 30, 2024. The agreement is subject to the finalization of transition documentation, financing agreements, and approval from Auckland Council.
Future Developments
The partnership aims to facilitate the construction of approved commercial buildings within the Marine Village and progress the development of the residential site. This strategic collaboration is anticipated to enhance the value and utility of both properties, benefiting all involved stakeholders.
The partnership with Precinct Properties is likely to positively impact Ariadne Australia's stock by enhancing its asset portfolio and development capabilities. The involvement of Precinct Properties as Development Manager adds credibility and expertise to the projects, which could attract further investor interest. However, the conditional nature of the agreement means that investors should remain cautious until all approvals are secured.
Investor Reaction:
Analysts are likely to view this partnership as a strategic move that strengthens Ariadne's position in the New Zealand property market. The retention of full ownership of Orams Marine Services by OGL is seen as a positive, ensuring continued revenue from marine maintenance and refit services. Investor sentiment is expected to be cautiously optimistic, pending final approvals.
Conclusion:
Investors should keep an eye on the finalization of the agreement and the subsequent developments in the Marine Village and residential site. This partnership has the potential to significantly enhance Ariadne Australia's asset portfolio and market position. Stay informed on the progress of these projects and consider the long-term benefits to your investment strategy.