Showing posts with label The Chelsea. Show all posts
Showing posts with label The Chelsea. Show all posts

Sunday, May 4, 2014

Two Tier Property Market in Brisbane?

Is there are two tier market in Brisbane for apartments?  Are Brisbane owners, investors and renters looking for one kind of apartment, but developers are building another kind of apartment for foreign investors?  Some commentators have said that there will be an oversupply of apartments in Brisbane. For a certain kind of apartment, that may be correct.  But for what Brisbanites want, there may be an undersupply.

Take Bowen Hills for example.  It is close to the city, but has very few local amenities.  It was a light industrial area, and with highways cutting through it.  It is not inner city, and too far to walk to downtown or the Valley.  There are no parks or restaurants or river views.  There are number of large apartment buildings being constructed in that area, with small one and two bed apartments.  A lot of the sales and marketing is targeted at foreign investors, particularly the Chinese.  But do locals want to live in these apartments?  They are very small, and the buildings are very dense.  There are very few owner occupiers in these buildings.

Some examples are Madison Heights (286 apartments) and Chelsea (195 apartments).  It appears that it is taking a long time to rent out or re-rent the apartments in these buildings.  Rents are being reduced, for example, to $485 for a two bedroom apartment.  I suspect that the rental market is saying that, for the location and facilities, you can do much better elsewhere, so the apartments are renting only if rents are very competitive.



On the other hand, river front apartments in Brisbane city, apartments in New Farm, and "normal" residential locations such as Indooroopilly (where very few new apartments have been added to the market in the past five years), appear to be selling well and renting quickly.  These apartments are often much larger (130 sqm compared to 75 sqm for a 2 bedroom apartment, for example), have a better location, have more owner occupiers, and there is not an oversupply.

I also wonder what rents and returns the investors in the new apartment buildings have been promised, and what they are actually receiving, and for how long the apartment sits empty not generating rent?

Will the rents hold up when it comes renewal time in six months or a year?  Will tenants stay on or move out?  The Chelsea is an example of a building that appears to have a number of apartments for rent; it completed in 2012, and received bad press at the time.  (An advertisement below from last year for Urban Edge at Kelvin Grove, settled last year, where apartments will be coming up for renewal about now.  Kelvin Grove is a much better location than Bowen Hills in my view.)


Wednesday, December 5, 2012

The Chelsea - an analysis

Matusik has done a very interesting analysis of The Chelsea development in Bowen Hills, that recently completed.  It is worth studying this analysis.  See The Chelsea.

Some points from the Matusik study:

  • More than half the sales were "rebated sales", making it hard to determine the actual sales price.  Most rebates were given early in the sales process.
  • It took about 2 years to sell the 177 apartments in the complex.
  • Only six apartments have been purchased by owner occupiers.  This is a very low percentage.  (My rule is to purchase only in buildings where there is a high percentage of owner residents in the building.)
  • 70% of the buyers appear to be Chinese, either from the Sunnybank area, Southern States, Singapore or elsewhere.
  • A number of apartments are now listed for resale, at about 10% below the recorded purchase price (before any rebates are taken into account).
"Too often the last dwellings in a new project are discounted [by the developer].  This undermines the project’s overall value; is very unfair to those who bought early in the piece (regardless of what incentives were offered) and also reduces the developer’s profit (assuming there is any!)"

Saturday, September 22, 2012

Advertised Rents

In today's Courier Mail and on REA, the following new developments had apartments that were advertised for rent:
  • Mirvac's Park apartments at Newstead - 2 beds at $700 a week; 3 beds at $1000 a week; 1 bed furnished at $650 a week
  • Pradella's Urban Edge at Kelvin Grove - 1 bed from $345 a week; 2 beds from $485 a week
  • Metro Property's The Chelsea at Bowen Hills - 1 bed for $405 a week; or $324 via NRAS; 2 bedrooms from $510 a week

Saturday, April 7, 2012

Midwood Report - Brisbane OK

"The outlook for the new Brisbane apartments market remains healthy with supply and demand evenly matched, but the Gold Coast market continues to struggle with sales of new apartments still at post-GFC lows, according to the latest Midwood Report.

Unconditional sales of new Brisbane units increased from 74 in the November quarter 2011 to 186 in the February 2012 quarter. Stock levels have declined to 1,446 from a peak of 1,683 in May last year, which equates to two-and-a-half years’ worth of supply at current sales rates.

Investors have been spurred on by rising rental returns, with one-bedroom inner-Brisbane flats registering rental growth over the past 12 months of 9% to a median of $300 per week, with a smaller 4% increase in two-bedroom flats ($380).

The strongest-selling project was David Devine’s Metro Property Madison Heights development in Bowen Hills, which clocked up 57 sales with prices ranging from $350,000 for a one-bedroom apartment to $434,000 to $556,000 for a two-bedroom apartment. Madison Heights features 296 apartments, with 200 sold since launch of the project in March 2011. There were also 15 sales at Metro Property’s The Chelsea development also in Bowen Hills, with 190 out of 195 apartments now sold in the project. Prices range from $355,000 for a one-bedroom apartment to $546,000 for a two-bedroom apartment, and there were 20 sales recorded for Brooklyn on Brookes in Fortitude Valley, Metro’s joint development with Indian-based developer Pearls. The other strong performer was Meriton’s 81-storey Infinity Tower, currently under construction, with 34 sales recorded and prices ranging from $470,000 for a one-bedroom apartment to $650,000 for a two-bedroom unit. To date 123 out of the 287 apartments in the tower have been sold."

Full article here at Property Observer.

Saturday, August 6, 2011

Reapfield Sells Maidson Heights




If you are thinking of buying a property in Brisbane, why not ask a property consultant in Singapore. For example, Metro Property Group is marketing its Bowen Hills developments in Singapore through Reapfield. They are even advertising in newspapers. One example, above, is the "iconic" Madison Heights development. I wonder if buyers in Singapore know the track record of David Devine and the actual location in Bowen Hills of the property? As reported in the Courier Mail recently, Bowen Hill has 12 traffic bridges. It is not a place that I would want to spend the night.

The image immediately below, from the Reapfield website, shows the proposed Madison Heights location (yellow line) and Chelsea Apartments proposed location (thin red line). Below that is another view of Bowen Hills - Madison and Chelsea are located approximately behind the red circle titled Inner City Bypass.



Sunday, July 17, 2011

Bowen Hills Developments

See article in BusinessDay.

Towers of up to 30 storeys high will soon start being built in Bowen Hills as developers snap up land in Brisbane's booming inner-north. But ailing confidence in the property market has one company struggling to secure pre-commitment commercial sales vital to the commencement of construction. ...
Metro Property Group, headed by property baron David Devine, has also turned its attention to Bowen Hills announcing last month it had sold all 195 units in The Chelsea, on Hamilton and Tufton streets, since the project's launch last November.
Metro Property Group has been given the green light for another two apartment towers of 24 and 30 storeys in the suburb.The developer's 24-storey tower on Mayne Road, which will protrude over the Edgar Street laneway, includes 242 apartments in total. Although the taller tower, The Madison on Campbell Street, exceeds the ULDA's 24-storey general height limit in the precinct, the body's design panel said the additional storeys made the tower appear more "slender".

Sunday, February 13, 2011

New Apartment Projects In Brisbane


This is my list of actual and pending apartment projects in inner city Brisbane.

1. Macrossan Apartments, located behind Skyline and the Admiralty buildings. Not river front. 37 levels. Full floor apartments on higher levels -- 3 bedrooms plus study, about 250 sqm internal, with small balcony. High level of finishes. Expensive. See typical floor plan. The main bedroom looks right into Skyline -- not much privacy here. The apartment on level 26 will be auctioned (by the developer it seems) on 3 March 2011. The building is complete, but it seems that less than half the apartments have sold.


2A. Soleil, by Meriton. Next door to Macrossan, and also behind Skyline, is Soleil. Currently under construction. Over 400 apartments; 74 floors. Currently at about level 55. The developer will keep the management rights; and will keep ownership of a large number of apartments on higher floors. This, in my opinion, creates many issues for owners, so take care. Will be settled in stages, with lower floors settling first. This is a B grade development in my view.

Photos of Soleil under construction: Photo of Soleil, Macrossan and Skyline; photo of the 3 Admiralty buildings, River Place, Skyline, with Macrossan to the side and Soliel growing from behind above Skyline.

2B. Infinity, by Meriton. Located in the Roma Street area, behind but to tower over Evolution. 77 floors of apartments, so this will be a massive height for Brisbane, but the actual floor plate is not that large. Currently in off the plan sales - see brochure. The hole for the carpark has been dug, but the building itself is not yet under construction. With 2 bedroom apartments starting at $590,000, this looks to be expensive. Again, the developer will keep the management rights and a number of apartments in the building, so take care.

3. Sunland's "Carrington" development on corner of Alice Street and Albert Street. This development recently received Council approval. 47 floors of high end apartments. Will cast shadow over Botanical Gardens, which is not good for the public. If you read all the controversy about Q1 on the Gold Coast, I hope that Sunland does a better job on its first Brisbane apartment building. The AFR reports that construction will start when 50% of the 257 apartments have been pre-sold.

4. Devine's proposed development, on the corner of Margaret Street and Albert Street, at 30 Albert Street. This is right behind the Sunland development mentioned above. A development application was lodged on Christmas Eve, 2010, so this will be some way off. 37 floors, 420 apartments, 1 and 2 bed apartments only. Looks like another Charlotte Towers.

5. The Midtown, on Charlotte Street, opposite Charlotte Towers. Currently in pre-sales; demolition has started onsite. One and two bedroom apartments. 29 floors of apartments.

6. The Chelsea and Madison on Mayne, by Metro Property Developments. These apartment buildings are both in Bowen Hills, and contain 286 and 242 apartments. Metro is associated with David Devine and Ken Woodley, both ex-Devine. Their most recent development was Charlotte Towers, where (as reported elsewhere in this blog) capital growth has been on average about 1% and many purchasers off the plan have lost money. So if they follow the same approach, the developers will profit, but not the initial purchasers. It is interesting to read this. These apartments do not have development approval. (Metro is also planning on Brooklyn on Brookes, in the Valley. (Also, Richmond at Bowen Hills by another developer.)

7. Mosaic in the Valley, still waiting for development approval. 20 floors, about 250 apartments. Currently being sold off-the-plan.

8. McLachlan & Ann in the Valley. 234 apartments, currently being sold off the plan.

9. Kevlin Grove Urban Village: A bunch of apartment buildings under construction, including 3 buildings by Pradella (branded as Urban Edge); and Edenview; and Binary Apartments.

10. SouthPoint at SouthBank. 20 floors.

11. Newstead River Park - about 15 apartment buildings planned, with Mirvac completing "Pier" shortly, and "Park" in presales. FKP plans to build The Gasworks.

12. Northshore Hamilton (many developers, with a large number of apartments planned), Hamilton Reach (in presales) and Hamilton Harbour (three apartment buildings by Devine, currently under construction) and Portside by Multiplex (one building under construction, at least one more planned); and Rivana (by Citimark).

13. Rive at Albion/Breakfast Creek (under construction, but flooded). Two towers of apartments.

14. Waters Edge at West End. Developed by Pradella. (stage one complete; stage two under construction). Basement and pool area flooded.

15. FKP's The Milton at Milton. Was in off the plan sales. Display flooded.

16. The Capitol Apartments, South Brisbane. Currently in off-the-plan sales.

17. Yungaba Apartments, Kangaroo Point. Currently in construction, but delayed due to floods.

18. Montague West End - site flooded, and website not active.

19. The Apple, in the CBD. Small building on 1 bedroom apartments.

20. Belise, St Paul's Terrace, in the Valley. In presales, off the plan.

Saturday, October 2, 2010

Bowen Hills

There will be a large number of new apartment projects in Bowen Hills. This area is close to the city and the Royal Brisbane Hospital, but does not have much else going for it.

Some example developments selling off the plan include