Following the collapse of a joint venture on a $2.2bn tower project in Dubai, Sunland has conducted a major writedown of their assets in the Emirate – $130m relating to the aforementioned project, another $60m elsewhere in Dubai and $10m relating to Australian assets.

This $200m slashing has seen the company project an annual loss of over $130m.

Despite this, Sunland shares have performed strongly in recent days, bouyed largely by news that the company is engaging in a share buyback of upt to 10% of the company’s stock.

In what could be at the very least bad publicity and at worst a scandal for Sunland, reports are circulating that David Brown – the company’s Chief Operating Officer in the Middle East – has been interrogated a number of times by Dubai authorities regarding a bribery charge, and has had his passport confiscated.

The alleged bribe concerns millions of dollars of consultancy fees that Sunland paid to Dubai’s state-owned developer Nakheel and a third party regarding the purchase of a waterfront property in the Emirate.  Two other men, a current and a former executive at Nakheel have been arrested for their involvement in the alleged crime.

In a media release to the ASX today, Sunland have stated that Mr. Brown is merely a witness to the investigation and has not been interrogated or held as some reports have claimed.  The statement went on to say that:

“Sunland fully supports the Dubai government’s commitment to ensure the region’s property market is transparent. We will continue to provide assistance where required.”

“Maintaining the highest ethical standards in all our dealings has long been a core value of Sunland.”

While it’s not yet clear what impact proceedings will have on Sunland’s Gold Coast business, the news is a blow for the company which had been weathering the current economic difficulties more comfortably than a number of it’s competitors.

In the aftermath of Monday’s 20% drop in share price, Sunland have hinted at a share buy-back in the near future.  This news reversed the negative market sentiment, with Sunland shares up 15% over Tuesday and Wednesday.

Cashed-up, and still on track to reach the forecast record underlying profit of $109m for 2008-09, the share slide was sparked by the announcement that the company would write down over $40m in property assets this year, and cut interim dividends by over half.

While the master plan is still some months away, cashed-up developer Sunland are pressing forward with their vision for Royal Pines.

Since their purchase of the 19 hectare lot in 2008, the decision has been made to create an area aimed more at locals and owner-occupiers rather than foreign investors as has been the case in the past.

With around 200 homesites planned, it is believed that the new products will reflect growing market demand for affordable housing, with both land and house-and-land packages likely to be offered.  There is expected to be a range of new homes, including prestigious pavillion homes which will take advantage of the proxmity to both the Nerang River and the golf course.

Beyond the residential development, there will be a complete revamp of the existing marina, which will include the addition of a commercial, retail and restaurant precinct.

With Sunland selling off the remaning apartments in it’s Circle on Cavill and Avalon buildings, even with the Royal Pines redevelopment underway, it remains one of only a few large local developers actively looking for new sites.

After several days of negotiations with three parties, it is anticipated that City Pacific will announce the sale of some of their assets later today.  The sale is expected to include the 11,000 square metre Surfers Paradise beachfront site that the company amalgamated last year with local developer Craig Perry’s Insight group.

At this stage, the identity of the bidders has not been confirmed, although it is speculated that Sunland and Mirvac – City Pacific’s joint venture partner on the $1bn Gainsborough Greens development are among them.   Details of the deal should become available by the end of the day.