When will Park Get Into Drive?

Mirvac's Park development at the Newstead River Park is currently being sold off the plan, and is due for completion in about June 2012. It is divided into two sections, Park North (which is more expensive) and Park South (which is less expensive.) There are 100 apartments in Park. So far, about 30 apartments have been sold. (See prior Park posts.)

It appears to be a quality but basic development. No pool. No gym. But it is priced too high for investors, and so seems to be aimed at owner occupiers.

In Park South, you can buy a 2 bedroom, 2 bathroom apartment on level 5 for $745,000. This apartment is 81sqm internal with a balcony of 15 sqm. The living room and both bedrooms are at the front.

There is also a 2 bedroom, 2 bathroom apartment on level 4 for $740,000. This is 93sqm internal, with a 15 sqm balcony. The living room is at the front. Both bedrooms are at the back. It is a floor-through apartment.

The kitchens for these apartments are located on the wall of the living/dining room. So taking out the bathrooms and balcony, these are 3 room apartments.

Flood Maps

It is interesting to look at flood maps of Brisbane. You can see, for example, that SL8 is in a flood zone. Newstead River Park is an overland flow zone.

Mirvac's Park

The public release of Mirvac's Park is taking place today -- the same day that 3 apartments at Mirvac's Tennyson Reach are being auctioned due to failure of the buyers to purchase -- and where the off-the-plan contract price is now above market price.

In my opinion, Park is overpriced:

"One, two, three bedroom apartments plus Pavilions are available for purchase now off the plan. Featuring classic toned interior colour schemes with functional spaces, clever storage and useable outdoor areas, each tower has a selection of floor plan styles to choose from.

One bedroom apartments from $495,000

Two bedroom apartments from $675,000

Three bedroom apartments from $975,000

Pavilions from $1.6 million"

See this post for a comparison of these prices with current market pricing. Before buying in Park, I would go to the auction of a 2 bed apartment in Mirvac's Quay West -- which is over 125sqm in size, park and river views, a better location, plus a pool (which Park does not have).

Mirvac's Waterfront - New "Park" release

Mirvac has started its pre-release sales campaign for the Park building at its Waterfront development in Newstead. From the materials I have seen, it will have about 100 apartments. The building is divided into two sections, Park North and Park South. There is a mix of 2 and 3 bed apartments, plus some 1 bedrooms at the back of the buildings. It appears that this building has no gym or pool.

The floorplans are very Mirvac. For example, the smallest 2 bedroom apartment has a floorplan similar to the two bedroom apartments in Mirvac's Arbour on Grey at Southbank. The difference is size. The Park two bedroom is 81 sqm internal with a 14 sqm balcony, for a total of 95sqm. The similar Arbour on Grey apartment is 106 sqm in total.

That being said, there are some larger two bedrooms, and all seem to be well designed. There are floor-thu apartments, with the living at the front and bedrooms at the rear. The two bedroom apartments range in size from 95sqm total, to 108sqm, to 112sqm, to 116 sqm.

In some of the 2 bedroom apartments, the living room is very small, and is only 3.5m wide, which in my view is too tight. Most of the apartments have the laundry in a cupboard, and have a galley kitchen along the dining room wall (and no island bench).

The building is way back from the river, on a park to be constructed -- the site was an old industrial site, and had contamination problems that have been cleaned up.

Mirvac plans about 7 other buildings for this site, so there will always be more apartments to compete with. Also, FKP and others are building on Newstead River Park site.That being said, it is generally a good location. See maps here and here and here.

What concerns me is price. An equivalent Mirvac two bed apartment, overlooking Southbank Parklands or the Brisbane Botanical Gardens would sell in the price range $650K to $800K, with sizes from 106 sqm to 132 sqm, and river views. It appears that these new Park apartments, although smaller and newer, will sell for $100,000s more than the current price for a quality Mirvac apartment in Brisbane.

And remember that Mirvac had over 15 apartments fail to settle at Tennyson, and they were resold about 20% less than the original sales price.

NearMaps

Here are some great recent photos from NearMaps of various Brisbane apartment complexes:

• Fresh Toowong & Encore Toowong
• Parklands Sherwood
• Tennyson Reach
• Admiralty Precinct, including Meriton's new development (and here too)
• Newstead River Park
• Hamilton Portside
• Water's Edge site, Flow and Riverpoint
• South Bank, Arbour on Grey

Charlotte Towers, Festival Towers, Felix, Sebel Brisbane: here

W4

It seems that W4 Apartments by Donovan Hill at Newstead have problems. From a communication from a lawyer in Brisbane: "Our recommendation is that for the time being you do not issue your own proceedings and support the QBSA. It would be unwise to effect full repairs to the building which are likely to be in excess of $1.6M as it will render the QBSA proceedings useless." Temporary repairs were recommended to prevent the situation from getting worse.

This is an example of the risk of buying off the plan.

From Apartment Reviews:

"Poor! Downstairs carpark always floods. Carpark storage broken into. Bird poo everywhere. Poor finish to everything (bathroom tiling loose after 12 mths). Airconditioning problems leading to high electricy bill. Cheap paint on walls. Stupid light (hits your head all the time if you dont put your dining table in that position). Cracked plastering dropping off ceilings. Thats all folks."

"Been in the unit for 4 months now. Very poor finish, everything seems very cheap and tacky.They dont look like new units, more like a renovated unit... The floor is a really cheap vinyl. It comes with some very ordinary light fittings which are supposed to be designed by a famous guy. They look like my five year old made them!"

despite the reported gloom

"After an eventful year’s end, it’s difficult to see where residential property is heading into the new annum. Media reports daily on the poor state of the economy and the likelihood that things will get worse before they get better, yet some signals are conflicting. There are plenty of locations and sectors that still lack stock and it appears that landlords are continuing to get historically high rents despite the reported gloom."

"For those wanting to bag a bargain perhaps the best prospects lie in some of those previously difficult to enter suburbs such as New Farm and Tenneriffe. Buyers over $700,000 have been thin on the ground and tenants are finding rentals a bit pricey, so it seems demand in these golden suburbs is becoming a little tarnished. Keep your ear to the ground and you just might bag a winner, but remember to keep things in perspective. Look for capital growth over a reasonable three to four year horizon. You’re unlikely to make your killing over the next 12 months."

"Of a related nature, good opportunities are also evident in the current market to purchase resale apartments in near new and recently completed buildings on the Gold Coast at prices which are at a significant discount on both the original sale price of the unit and also on the asking prices of similar new units. In some instances, the resale price of apartments appears to be below replacement cost of a similar new apartment."

Source HTW

Waterfront Newstead Update

From a letter from Mirvac dated July 15, 2008:

46 of 99 apartments in Pier North and Pier South were under contract prior to public release on June 21, and 9 more sold since.

Prices achieved ranged from $1.98M to $14.25M.

Available apartments priced from $2.15M to $4.75M and penthouses from $6.4M to $8.9M.

"Park" apartments to be released in mid-2009. Prices expected to start from $800,000.

Newstead Waterfront

Record-breaker rises from toxic wasteland

Fiona Cameron | June 27, 2008

The Australian

AN apartment to be built on formerly contaminated land in inner-city Brisbane has sold off the plan for $14.25 million, smashing the city's residential price record.

The buyer has not been identified but developer Mirvac said it was a Brisbane businessman who planned to make the riverfront luxury penthouse at Newstead his principal place of residence.

The contract, which will be settled when the building is completed in mid-2010, was signed two weeks ago and became unconditional on Tuesday.

Mirvac's proposed Waterfront project is on a site that is part of a larger land parcel that was home to a gasworks until 1968 and still contains the heritage-listed steel skeleton of a giant old gas tank dating from 1860.

The surrounding land became a toxic nightmare for various parties involved and was the subject of long-running litigation over its clean-up until the Environmental Protection Agency finally gave it a tick of approval in April. In the past five years, one million tonnes of soil had been removed from the 17.4ha site, some dug from as far as 9m below ground level, Mirvac said yesterday.

Mirvac said three other apartments in the Waterfront project had been sold for prices ranging between $5.95 million and $8.75million. In total, 60 apartments had been sold for a total $201 million before the project's public release this week.

The penthouse deal has overshot Brisbane's previous residential record by more than $3 million. That record had stood only since April last year when John and Susan George paid $11.2 million for a historic sandstone home on Hamilton hill that was owned by the Anglican Church and home to its archbishops for decades. Mr George is the founder of the Mrs Crocket's salad business.

The Newstead penthouse deal is a graphic indicator of where money is flowing at the market's top end: many of the biggest deals these days are in super-flash apartments rather than old-style mansions.

Developers have zoned in on the trend, and according to agency DTZ's project marketing director, Paul Barratt, another three apartment projects planned in inner Brisbane will have penthouses priced above $14 million.

Waterfront at Newstead

Mirvac has released its top end apartments for its Waterfront Newstead project. Overall, this project will consist of a huge number of apartments. The first release was of the 99 best apartments, with river views. All apartments are large 3 or 4 bedroom apartments. Many have sold. Price range $2,150,000 to $4,500,000 for apartments and $6.4M to $8.9M for penthouses. These are all large apartments, but constructed on a highly contaminated (and hopefully cleaned) site.

Waterfront Newstead

Mirvac's first mailout for their Waterfront project at Newstead has taken place.

Construction of the sales centre on Evelyn Street is underway.

Mirvac plans to release two buildings with the Pier area in the first half of this year.

The website at www.mirvac.com.au/waterfrontnewstead/ states one building will be 5 storeys and the other will be 8 storeys, and will comprise premium 3 and 4 bedroom apartments.

There will be a lake, a 6 hectare park, and a total of 650 apartments across all buildings when complete in 2015 -2017.

Mirvac's Results

Mirvac's results release yesterday included the following information:

• Tennyson Reach QLD - $203m in exchanged contracts
• Queensland residential pipeline forecast for apartments - $1,865m
• Housing market construction activity through FY08
  - Strong: VIC, QLD
  - Moderate: WA, SA
  - Recovering: NSW - but still below long-term trend through 2008
• Inter-state economic outlook
  - Strong: WA, QLD
  - Moderate: VIC
  - Recovering: NSW

http://www.mirvac.com.au/investor/pdf/20080212_WebPres.pdf

TENNYSON DEVELOPMENT: Acquired Aug 05, Project Value $574m, Total Lots - 393; Released Lots - 207; Exchanged Lots -126
Tennyson Breakdown:
Softstone & Lushington Project Value $191m; Total Lots: 115 Released: 115; Exchanged: 115 (Settlement Apr 2009 to July 2009) Price Range: $940,000 – $4.9m
Farringford Project Value $126m; Total Lots 92; Released Lots 92; Exchanged: 11 (Settlement Sep 2009 to Jan 2010) Price Range: $805,000 – $4.9m
Pamphlett Project Value $109m; Total Lots: 82 (Settlement July 2010 to November 2010); Price Range: $695,000 – $3.2m
Parsons Project Value $96m Total Lots 67 (Settlement July 2011 to Nov 2011); Price Range: $885,000 – $3.3m
Somersby Project Value: $53m Total Lots 37 (Settlement July 11 to Nov 2011) Price Range: $885,000 – $3.3m

Newstead River Park: 631 apartments, settlement not until June 2010 to June 2014: Price Range: $800,000 – $6.0m

http://www.mirvac.com.au/investor/pdf/20080212_HYReport.pdf