The Finbar Group Limited (ASX: FRI) share price had the wobbles today after the company announced completion of its Riverena apartments.
The news initially dropped the property developer's share price down to 72.5 cents before lifting higher to 75.5 cents, up 3.4% in mid afternoon trade. However, the Finbar share price later again retreated, sliding back down to close at 72 cents, down 1.37%.
Let's take a closer look.
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What does Finbar do
Located in Western Australia, Finbar is engaged in property development. The company focuses on developing medium-to-high density residential buildings and commercial offices. Finbar operates in apartments, commercial, retail, and leasing.
Riverena apartment completion
Finbar advised today that its Riverena development in Rivervale, Western Australia, had reached practical completion. The end value across all residential lots is estimated to be $52 million.
Despite the impact of COVID-19, the project has secured $22.2 million in pre-sales with 56 apartments under contract. Owner occupiers make up the majority of buyers, accounting for 70% of sales to day. About 20% of the apartments under contract were attributed to first homebuyers.
Settlement on the pre-sold units at Riverena is expected to start in November, with revenue to contribute to FY21's earnings.
What did management say?
Commenting on the achievement, Finbar managing director Darren Pateman said:
The Riverena project is part of a significant investment in the growing Rivervale precinct which will benefit local residents and businesses in the area, and will lead on to the continuation of our developments in the precinct on other land in which we have an interest.
The sales secured at the project to date indicate a growing confidence in the market which can be attributed in part to recent government stimulus measures and the strength of the WA economy in relation to other states and countries.
This improvement in sentiment has resulted in October 2020 on track to be the largest sales month in two years, which again points to a gradual recovery in the Perth residential market.
Mr Pateman called on the Western Australia government to remove the foreign buyers' surcharge, saying he believed the added cost had stopped overseas investor activity and could prevent sustained growth in the housing market. He added:
Confidence in the WA market is improving and it is important to keep that momentum moving in the right direction by encouraging investors back into the market, and we believe removing the foreign buyers' surcharge will contribute significantly to that whilst further boosting employment for the construction sector generally.
About the Finbar share price
The Finbar share price has skyrocketed over the past week, jumping more than 17%. At a current market capitalisation of $197 million, the Finbar share price looks to be recovering some lost ground. Shares in the property developer fell to 52 cents in March after achieving a 52-week high of $1.01 in February.
