Looks as though not all is rosy at The Heritage Country Club. The Age has reported that the the owner of Heritage, Yarra Valley Golf Pty Ltd be appointed a receiver and manager (KPMG). It looks like it all relates to one of the Directors (Mark Letten) of Yarra Valley Golf being involved in property schemes. About 45 companies involved.

http://www.theage.com.au/bu...

KPMG have all the details;
http://www.kpmg.com/AU/en/W...

The Heritage golf course and property development is apparently one of the schemes itself! I’m glad I didn’t cough up $40k for a membership as they were on eBay for $25k and now dare I suggest much less.

A Member there said the course is in poor condition at the moment and that they have been told it is contaminated water that they cant do anything about.

I played a corporate day there couple of weeks ago, wonderful course, one of my favourites in Melbourne…Id certainly join up if they were tossing out bargain basement $500 12mth memberships

Interesting stuff.
After reading those links I now know that the St John’s course is named after a seminary which I presume was on the site.

The joining fee for heritage has dropped to 13,000 I heard the other day.

I played there in a corporate day a couple of weeks back too!

anymore news on this

Ellimb are you around to update us on this issue ??

Your a member right ?

Played St John course a couple of weeks ago was in fantastic condition. Not a lot of people around out there as usual.

I think this will be a taste of things to come among the Real Estate based courses in particular.

The only way they survive is with developer assistance and those developers are find life tough.

Let’s hope they let green fee players on recoup some cash…

firstly there are 2 courses there.
both are in great condition, especially the fairways.
greens have been better in but certainly not “poor”.
as for green-fee players – forget it !

drgolf are you dr john?

dr coldfingers, I presume.

i think all golf course residentials are a failure, they rely on everyone that buys realestate to become a member of the club and it just doesn’t happen..
the glades only has something like 10% of its residents as club members

firstly there are 2 courses there.
both are in great condition, especially the fairways.
greens have been better in but certainly not “poor”.
as for green-fee players – forget it !

Figured as much… oh well, just have to fake interest in membership again next time i want a round there…

This is just a 2c opinion.
Yarra Valley Golf (amongst others) will be under admin and be assessed as a business. The business will continue until sold or liquidated.
This is not because YVG is under receivership due to financial problems but because of breaching the ACT.
Basically the receivers will return money to those particular present investors. So, The Heritage will continue unless YarraValleyGolf cannot pay for the operation. Mind you, the subscription is $3700 per annum. (about the same as RM) about 1200 memberships. 4.5 million per annum, (not counting green fees) is it enough to operate 2 golf courses ? I see eventually some company will just take over YVG. EasternGC perhaps or the Chinese !
Sure the members are worried but there is nothing to do but to ride it out. As I point out, the members is the REAL ASSET as it provides for $4.5 million per annum.

St. Johns is a good course and I would like an independently review by some one who would play a dozen times before making judgement.

ellimb
You assume all members are paying an annual fee which is not the case.
Those that own rooms in the Sebel have playing rights and don’t pay an annual golf fee.

It is to be assessed by the Administrators as to its viability and that will be based on basic fundamentals and the possible ability to restructure.
Given the current business market and the inability of so many clubs to make money out of the business of golf the place may very well be worth land value to a redeveloper who may turn either all or part of it back into residential housing??

Also consider that if the business is sold all those who “own” a playing right may find themselves out in the cold with nothing if the assets are sold to another party as the playing right will be with the current owner Yarra Valley Golf Pty Ltd.
In other words if you want to play after a possible sale, you may very well have to join the “New” club/company.

Will watch with interest.

Yes Sebel have 96 rooms less 102 playing rights. Do you know how many secondary members ? easy 100 @ $2500 pa.
Green fees $95 includes golf cart. how many games pa. ?

Club house food and drinks sale.

Land cannot build more residential lots.

Members have a contractual right with YVG and AGAIN the members are the main asset to the company who ever owns it..
Think.

The contractual rights mean nothing under Administration, join the queue as unsecured creditors.
You assume that members will be trusting enough to hang around to possibly get burned again by a possible new operator.
History shows with these types of operations that many won’t and any new operator will have a harder time than the original.

Have you got a copy of the Annual Report or at the very least the Balance Sheet?
If not you have no idea about how the operation has really traded.
Given your 102 Sebel playing rights @ your $3,700- plus 100 of your original 1200 rights now worth a $100K less than your full rights suddenly means your $4.5 million is now down by about $500K.

I know of two other real estate based course operations that turnover more than the figure you suggest and are losing millions.
Take away the developer support and they are history.
Given this operation was also controlled under a unregistered managed investment scheme could also mean that other aspects of the business are not as they appear.

Why do you suggest they cannot build more residential?
If the operation is not making money out of golf then the business is only worth the possible land value to a developer.

Given that the playing rights for this operation have been sold on market for a hell of a lot less than what they were originally its not hard to guess that its not a bed of roses.

Interested to watch wait and see how this pans out but given the unviable nature of so many real estate courses it would be unlikely that this operation would be doing any better overall than any of the others.

Can’t build more residential out there as I believe most of the course is built on flood plain.

golf 239
Which two other real estate golf course development cannot operate with $4mill pa.? I’m sure you will not tell us ‘cos you just want to support your arguement with no facts.

Cannot build more residential ‘cos has have been knock back by council and state govt.
We talk facts not speculation.
The main asset are the courses and blding and the members.
Gosh ! $500,000 down ? from 102 Sebel memberships ?
plus easy 100 secondary memberships.

Why are you predicting loses for the members? Obviously you are not a member.

All golf membership in Victoria value has devalued.

Balance sheet and P and L statement ? I’ll have a look this Thursday.
Cheers

The flood plain issue may very well limit what can be done in the future and is quite a valid comment.
I seriously doubt that planning issues will ultimately stop redevelopment if a determined, deep pocketed developer really has other ideas.

ellimb its easy to see you are pretty wound up about this situation and I guess you are a member, so its quite understandable that you are concerned about your investment.
I don’t for an instance wish misfortune on the members of any golf club let alone Heritage.
I simply offer a different perspective based on the reality of the golf business and the finances involved today, you can take it or leave it.

ellimb happy to list the two courses to support my comments.
The Sanctuary Lakes and Sandhurst operations turn over substantial amounts of money in there respective operations and both are losing millions.
Without developer support they are gone.
Hell even Sunshine GC whilst not a real estate course turned over $2.233 Million dollars and did a wonderful job of losing $644,096-
Do you think a course that does twice this figure $4.5 Million(using your assumptions) can’t lose money??

My comments about the Sebel playing rights are offered as nothing more than a perspective that the guesses you listed are not as clean as they appear.
Thats why I asked what does the Annual Report say and more so the Balance sheet.

The comment about all golf membership devaluing is I assume directed at again the real estate based courses who sold memberships at massive prices and those who bought them have now watched there value diminish in some cases like St Andrews Beach to nothing?

As I say I watch with interest.

Cheers

Im pretty sure Ellimb is a member as he recommended The Heritage to me when In a previous thread I mosted re: club memberships.

I can certainly understand Ellimb being ‘defensive’ about his club and investment and I hope the figures and admininstrators are able to come to some sort of arrangement to keep the golfing operation going in whatever form , public or private.

I would be very interesting to get a look at an annual report to see how they sit. BUT I guess as Golfer 239 pointed the figures presented may not be as they actually are.

‘As I say I watch with interest’ – Ditto.

Further to my comments above.
I didn’t have the figures for SL & SHC at hand when I replied to fully support my “argument”

Sandhurst pulled total income of $7.094 Million including a Developer Subsidy of $950k and posted a Net Loss of $414,441-.
Extract the developer subsidy the true operating loss was $1.364 Million dollars.

Sanctuary Lakes Pulled $8.795 Million including a Developer Subsidy of $403k and a forgiveness of debt of $576k and posted a profit of $147,690-
Extract the Developer Subsidy of $403k and the forgiveness of debt $576k or $979k in total leaves a loss of $831,310-

Of bigger issue with these businesses is the negative cash burn thats going on and how its being funded, but that another story.

I would be interested in seeing the financial’s of Heritage to get a true perspective of how it really shapes up.

The cost of operating 2 courses would be similar, right. Compare RM and The Heritage the subs are almost the same. (ie. $3700.00 pa.)
The income for the YVG is more and a profit distribution to the investor too.

If you want to know YVG contribution (with is capital cost over the initial years) yes it is heaps. Maybe more than 40 million.

Regarding Sanc L. and Sandhurst.
Are you saying that the operating cost is $7 mill. a year ?
What are the subs ?
If that is the case the developers and hence the clubs will be in serious financial trouble after all the developement of the residential is over.
To cover the operating cost, the subs will be $$7400 pa.

As said earlier, the case is because of breaches of ASIC.
Tips: Mirvac will buy it for 3 songs. lol

They like many other clubs they are in serious financial trouble now.
There operating costs are in excess of there operating income and have always required developer support.

RM has no debt, and no reliance on land sales.
RM also has more than 100 years to learn how to operate its business. To compare Heritage and RM is a bit difficult as they are Two different beasts.

The issue will be with Heritage is how much subsidy the developer is putting in to float the operation and its dependence on land sales.
Given the current circumstances if the the developer was putting in then that will stop, the Administrators will asses the viability of the business and with no support things will change.

You assume Mirvac etc can also raise the money in the current market place, so many developers are struggling to finance new construction let alone buy possible assets that are more mature and not performing.

I wish you luck.

From reading Saturdays Melbourne Age, they might be a some trouble.

Ellimb, can you keep us up to date please

This article?

http://www.theage.com.au/bu...

Sounds a bit ominous??