Monday, September 24, 2007

Indigo Sued - Kelvin Grove Village Development

Today's Australian Financial Review (p. 60) reports a lawsuit against the developer of the Kelvin Grove Village apartment complex by three retailers. The developer is Indigo.

"According to the court documents, an Indigo employee had told the prospective retail tenants that more apartments had been sold in the complex than was the case."

I have always assumed this to be the case for most developments. I have seen agents say "development 50% sold" when that is not the case, or "construction started" when only demolition has started and the developer has not even obtained finance.

The AFR reports that several stores in the Village have already closed down, it would seem due to lack of people traffic.

The retailers are claiming over $700,000 in damages.

I visited the development last year, and my opinion was (at that time) that it was a dog. It seemed that it would take many years, if ever, for the area to develop into something. Although geographically close to the city, it is too isolated -- one cannot easily walk to the city, and the walk is unpleasant as you have to walk along major roads and cross a highway and a railway. There are no decent shops or facilities in walking distance -- other than the ones that are in the complex, and it appears that some are closing or have closed down. No-one I know living nearby would select the Village as a destination for shopping or relaxing.

The website states:

"Bordered by the Victoria Park Golf Course, Brisbane Grammar Schools, Queensland University of Technology, State Primary and High schools and within easy access to Royal Brisbane Hospital, the RNA Showgrounds, the Aquatic Centre, Suncorp Sports Stadium and the magnificant (sic) Roma Street Parklands - its the ideal location."

Really, the site is bordered four other development sites. Or your could say it is bordered by the six lane Kelvin Grove Road and the six lane Inner City Bypass highway. To get to Brisbane Grammar School, you have to cross the Inner City Bypass highway and a large railway line.

It is also in a gully.

About this time last year, none of the $770,000 townhouses had been sold.

A one bedroom is listed today at $420,000 by the developer being sued. Now, that sounds expensive! For that price, you could buy a 2 bed 1 bath in Skyline in the city, or a 1 bed in Quay West, or a 2 bed in a Devine building in the city.

Or you could snap up a 2 bedroom apartment from $549,000 to $625,000!!! (These are 77 to 90 sqm internal.) That is over $5,500 a sqm (including balcony) - very expensive for a suburb apartment building that has been on the market for some time.

Saturday, September 22, 2007

Brisbane Apartments in the Suburbs

Sometimes, apartments in the suburbs provide better value than city apartments.

If in a good location and near transport, there is a greater pool of possible residents -- students, young city workers, retired couples, single mothers/fathers with one or two children, widows and the like. In other words, people who want convenience, but not the problems with looking after a house; people who want safety and facilities, but not a city apartment.

The areas of Brisbane that I think will have good capital growth over the next five years are:

  • St Lucia -- near the city, Toowong and the University of Queensland. Some apartments have river and city views.
  • Indooroopilly -- many facilities, on a main train line, near excellent schools and the University of Queensland. Some apartments have river and city views.
  • Toowong -- close to the city, with facilities at Toowong Village, and a transport hub.
  • Taringa (between Toowong and Indooroopilly) and on a train line
  • Sherwood -- a nice village atmosphere, only 12 km from the city, and on a train line. Near good parks and schools.

People often say West End will be the next hot spot in Brisbane. My view is that the facilities are not as good as the above. I prefer the Southbank area to West End, as you have city and river views and face north. Most of West End faces West (e.g., see the view here.)

There are big plans for Indooroopilly and Toowong redevelopments. This will drive up prices of existing quality apartments.

But you have to be careful, as there are poor quality apartments or apartments in poor locations (i.e., on major roads) in these areas.

I recommend the following apartments and off-the-plan developments.


  • Fresh Apartments in Toowong -- a resort style complex, with two pools (completion in early 2008)
  • Ciana at Indooroopilly -- includes pool, restaurant and club (completion in late 2008)
  • Parklands at Sherwood (completion in 2009) currently in pre-sales, includes pool

Typically, a two bedroom two bathroom apartment in these complexes is about $500,000, and will be about 85 sqm internal, and (in addition) a large balcony of about 30 sqm and airconditioned.

Example existing complexes

  • Riva at Indooroopilly - river views, pool (which are always fully rented)
  • Ikon at Indooroopilly, on Station Road, which is the subject of about 3 or 4 proposed new developments
  • Encore at Toowong pool, close to excellent park (which are always fully rented)

Pradella's New West End Development

Soon, Flow will be complete. Next door, Pradella will launch a new West End riverside development. I suspect it will be worth considering.

It does not have a name, but it does have a website.

Pradella will have developed three West End riverside complexes:
  • Flow (to be completed in 2007) which looked extremely overpriced, but now just looks expensive; some apartments will be excellent (riverside on high floor) and some are not great
  • New and unnamed
  • LeftBank which is still looking very good
Stockland has Koko, which didn't live up to expectations.

And there is Riverpoint, currently selling off-the-plan, which looks very mixed.

I suspect there will be more to come.

Brisbane Riverfront Apartment Sales

Quay West in Alice Street, Brisbane

A two bedroom apartment at Quay West (Apartment 2006) on Level 20, on the western side of the building, sold yesterday at auction for $830,000.

West End - New Development called Riverpoint

Saturday, September 8, 2007

The Grosvenor

Today, apartment 2601 in the Grosvenor Building (corner of Alice Street and Edward Street) went to auction. It was passed in, without a bid and did not sell today.

This is a Mirvac building. It is in a great location, overlooking the Botantical Gardens and the Brisbane River, and opposite the Stamford Plaza hotel.

Some of the apartments in this building are fantastic. Some have strange floor plans. It is one of the more expensive apartment buildings in Brisbane, and only about one or two apartments get listed for sale each year. Mostly owner-occupiers.

Apartment 2601 is described by the agent, Dixon Johnston, as follows:
"The Grosvenor is a truly magnificent residential complex boasting incredible views across the Botanic Gardens, Brisbane River and city

Apartment 2601 is one of just two, 2-storey penthouses and enjoys generous living spaces, quality finishes and those ideal NE facing views

Situated right in the heart of the CBD, The Grosvenor is just an easy stroll to all the restaurants, cafes and sights the city has to offer"


Skyline apartments in Brisbane are nearing completion. Settlement is planned for late October or November.

Colliers PRD reports that as at the end of June 2007 quarter, 33 of the 192 apartments remain for sale.

I was told that the developer had a number of 3 bedroom apartments available for sale. All 2 bedroom apartments have been sold by the developer.

I was also told that many people purchased off the plan with the intent of reselling around settlement.

I had a tour through the building, and was mostly disappointed. I was glad that I didn't buy any apartments.

Some comments:
  • J type - 78 sqm internal, 98 sqm total. This was sold as a two bedroom, but the second bedroom is fully internal, and has "windows" looking into the kitchen. It is really a one bed plus study. It has river views between Admiralty Quays and Admiralty One. It was sold off the plan in the high $500K. There have been resales at less than $600,000, and there are many of these apartments on the market for resale. Overall, these are small, darkish apartments, and in my opinion are not very nice. My opinion is that these apartments are not worth more than $500,000.
  • I type - 87 sqm internal, 102 sqm total. Two bed, two baths, no walk-in-robe. This apartment is a triangle in shape. You enter into the kitchen, which has a strange shape, and the island bench looks at a blank wall. The kitchen is around a corner, so to speak, and is dark. The dining area is large, and the living room has limited views between Admiralty Quays and Admiralty One. Both bedrooms are at the front, with views. This could have been a good apartment, apart from the overall shape and kitchen -- which does not work. There are a number of these apartments for resale between $650,000 and $680,000. My opinion is that these apartments are not worth more than $600,000.
  • G2 type - 117 sqm internal, 142 sqm in total. Three bed, two baths. This apartment has a large feeling. There is a river view from the balcony and sideways from the living room. The living/dining/kitchen have a really nice vista down Howard Street to the city. The bedrooms are at the back of the building (Arch Lane). For the moment, they have a western vista across the northern end of the downtown. This view will soon disappear with Macrossan Apartments are built right next door, probably turning these nice apartments into dark apartments. The main bedroom has an open bathroom, so from the bed you have a view of two vanity basins. The built in wardrobes are in the bathroom. So what could have been a nice apartment has a strange main bedroom/ensuite design and will soon the bedrooms will be built out by Macrossan Apartments. The developer has a number of these available from $720,000 to $885,000, and is prepare to discount them to clear. There are resales starting at $690,000. On a price per sqm basis, these are good value. But long term, it will not be good. So I would value these at $650,000.
  • K type - 101 sqm internal, 120 sqm in total. This is a small three bedroom at the front on the north-eastern side. When you walk in the door, and from the back of the apartment -- wow! A great river view. But as you move forward, you notice that this apartment is really behind Admiralty Quays. The main bedroom, at the front, basically looks into the back of Admiralty Quays. The living room is set up so that from your couch, when looking at the TV, your view out the window is of Admiralty Quays and not the river. The main ensuite has the same flaws as the G2 type. The second and third bedrooms look at the back of Devine's River Place. This is a small 3 bedroom, that has little privacy and a bad feeling due to Admiralty Quays. The developer has stock left at $835,000 to $855,000. There are resales available for $800,000 and less. My view is that these apartments are worth about $750,000.
  • On the high floors are some magnificent three beds plus media room. They combine, in effect, the I and J types. All three bedrooms are at the front, and they are high enough to look over the Admiralty buildings. These are magnificent apartments. Resales at about level 30 around $1,500,000.
The onsite rental people give this information regarding rentals:

Unfurnished: $360.00
Furnished: $420.00

Unfurnished: $550.00
Furnished: $650.00

Unfurnished: $750.00
Furnished: $950.00

Unfurnished: $950.00
Furnished: $1100.00
Other comments. The pool is very small, and closed in by Admiralty Quays and Skyline. The tennis court looks fine, but has no lights and cannot be used at night -- and so will not be useful for most city workers. The quality of finishes is good, but becoming standard. Nothing that you would not expect from a new city apartment building. There will be two retail stores on the ground floor.

Overall, my opinion is that this is a B grade location. It will be no different to Aurora Towers -- river views, one block back. It is not a prime position, and is surrounded on one side by buildings and soon will be surrounded on the other side. There appear to be many speculators who have bought of the plan. It suspect that they will get burnt. Owner-occupiers will be disappointed with the floor plans, and anyone below level 30 will be disappointed with the views. It is, in my opinion, misleading to call this building riverfront, and to say that it is "the only Brisbane high-rise development to boast river vistas from every single apartment" is clearly misleading, as the H and H1 apartments on the lower floors have only a tiny glimpse of the river between River Place and its car park.

SL8 at West End

When I inquired a few weeks ago, SL8 at West End didn't have many apartments available.

It is still in pre-release, so FKP must be very happy.

Colliers PRD reports that in the June 07 quarter, 60 of the 112 apartments have been sold, at an average price of $566,000.

I was not thrilled with the location of this building. It is a long walk to the main street in West End. It is one street back from the river, but with two 7 story buildings between SL8 and the river. Most floors of SL8 will have no or limited river views, and the ones that do, are western facing. The building overlooks an ugly warehouse and commercial strip, with the Tempo block behind that.

Coronation Residences at Milton

Coronation Residences at Milton is a luxury apartment block, overlooking Coronation Drive and the Brisbane River.

The developer is currently discounting the remaining apartments.

The cheapest is a 3 bedroom on the Western side, level 1, at $995,000. It is 137 sqm internally, with a total of 198 sqm. (There are level 2 and 3 apartments available with the same floor plan, at $1,075,000 and $1,150,000.) The only problem with this apartment is that the wall of glass on the Western side looks into an office building.

There is a two story two bed apartment on Levels 5 and 6, unit 36. It is huge, with 142 sqm internal, and two balconies overlooking the river, to give a total of 169 sqm. Each bedroom and the dining room, lounge and kitchen have river and city views. There are two bathrooms and a powder room.

A magnificent 3 bedroom, floor-through, apartment on level 5, which is 200 sqm and listed at $1,395,000.

These apartments have the some of the best finishes in Brisbane. All have river views.

The only issue is that that they get noise from Coronation Drive. The windows are all double glazed, so there is little noise in the apartment. But it is not quiet on the balcony.

Compared with Riverpoint or Flow, these apartments are a bargain.

Saturday, September 1, 2007

Festival Towers

I recently visited two apartments in Festival Towers, a Devine development in Albert Street in Brisbane.

Recently, the management rights were sold to the Oaks Group.

The complex is very lively. The common rooms and bbq areas at about 5pm were packed. Mostly foreign students.

The apartments on the South East side (e.g., S, T and U types) have now had their views blocked by M on Mary, a building designed mostly for students. A big loss of privacy for this side of Festival Towers.

The apartments on the North West side (e.g., P and O types) now have a river view in a Western direction, towards South Bank and Milton. That view will be lost when the new Westin Hotel building, Empire Square, is constructed on Elizabeth Street.

Two bedroom apartments in Festival Towers are selling in the $400,000s. They range in size from 85 sqm to much smaller, e.g., less than 75 sqm.

Koko at West End

One agent told me recently that Stockland has a significant number of unsold apartments at the Koko development at West End. Another agent told me that the apartment complex has a significant problem getting water for the courtyard gardens, and that it was costing the body corporate more than expected.

I found the gardens over all to be disappointing at Koko. Looking at the original marketing material, and comparing what resulted, there is a big difference. One example: the pool had clear glass-like pool fencing in the brochure; but the pool was built with an ugly metal pool fence.

A number of apartments are being resold, with 2 bedrooms of about 85 sqm being sold for less than $600,000, even $550,000.

A three bedroom on the top floor is listed at $1,450,000.

They just don't seem to be selling that fast.

Vue Apartments on Coronation Drive

FKP's Vue apartment complex is not having much luck. There are two towers, one owned and marketed by FKP, and the other owner by private investors and marketed by Ray White (originally marketed by FKP on their behalf).

The complex did not sell out, and still has a number of apartments for sale.

Possibly, it is because of the location. On the corner of Coronation Drive and the Inner City ByPass. Soon, a new bridge will be built right across the river in front of the complex.

The prices for the unsold apartments have been reduced.

At the end of August 2007, one of the best three bedroom apartments went to auction. It is on the 8th floor with river views. It was originally marketed in the high $700,000s, and it sold for $562,000. Other similar apartments are still for sale at about $660,000.

Details: 2806/92-100 Quay St, sold by RE/MAX Property Centre, sold at auction for $562,000.

FKP is currently selling SL8 in West End, which is one street back from the River and behind Tempo (still with unsold apartments) and LeftBank (completed 2004).

FKP will soon launch a complex to be built over the Milton Railway Station and next to the brewery. It is to be called Union at Milton.