Misleading Advertisement for Pulse

Here is text of an advertisement for the Pulse off-the-plan apartment complex:

"Best Value Apartment in Brisbane CBD. This 2 bedroom 2 bathroom inner city apartment located in the heart of Brisbane CBD is an unbelievable $499,000."

Advertisement by Martin Graham from Property Focus.

I am not sure how an apartment building that is almost in Milton could be said to be in the "heart of the Brisbane CBD"! Have a look at the photo from the advertisement -- you can't even see the CBD. This complex is close to Milton Road, Coronation Drive and with views of the Inner City By Pass.

And on what basis is this the best value 2 bedroom apartment in Brisbane??

Take care, because FKP's complex next door to Pulse (Vue) has had capital decline, not capital growth.

FKP Slow to Start Construction

"FOUR years after Transit Oriented Developments were touted as key to housing thousands of people around transport hubs, building is yet to start on any.

Instead projects designed to create a self-contained living, working and leisure environment in Brisbane have been blocked by red tape, rising headworks charges, financing issues and business woes.

It's not that the concept has no appeal. FKP's The Mill project in the inner northern Brisbane suburb of Albion has had strong pre-sales. But in light of changing market conditions, FKP is still awaiting approval after reconfiguring some plans.

The company has also spent years developing plans for another TOD over the railway station at Milton, in the city's inner west, and has revised plans awaiting approval from the Brisbane City Council.

But without approvals in place yet there is no certainty as to when construction will start."

Courier Mail

Union at Milton

Union at Milton has updated its website -- FKP has cleared the site, and is waiting development approval.

SL8 in West End

SL8 in West End is nearing completion. The building has an industrial look, and the apartments have good views of industrial sheds.

2 bedroom listed for re-sale at $570,000 (Apt 203)
2 bedroom listed for resale at $560,000 (Apt 213)
2 bedroom listed at $690,000 (Apt 241)
2 bedroom listed at $550,000 (Apt 142)
2 bedroom listed at $617,000 (Apt 214)

For most of these apartments, the second bedroom looks over the back (open) hallway.

"With more than 90% of the 1, 2 & 3 bedroom apartments sold, limited opportunities remain to invest in SL8’s West End apartments. The two bedroom apartment final release is now selling from $565,000-$975,000."

See SL8 Real Estate (FKP)

Update: See readers comments here.

SL8 Opinion part two

I drove past SL8 today in West End. I was not impressed. Although still under construction, to me it looks like a cheap motel from the 1950s. All the railings for the balconies are metal pipe rails. So from the front, it looks very uniform with railings going the complete width from left to right on every floor, without a break. From the back, it looks even worse. You may not realise, but the apartments don't have closed hallways. The door opens onto a hall that is outside -- and with the same rails going along the whole length. So you will be exposed to the the rain, heat and wind as soon as you open your door. The building looks to me like a larger version of the motel where Martin Luther King was assassinated when leaving his room.

Brisbane Apartment Hotspots

"National Property Research managing director Matthew Gross said the area surrounding Sherwood in Brisbane's west will also be a future hot spot.

The combination of continued population growth and an undersupply of residential stock will lead to increased prices in the long-term, Mr Gross said.

Pradella's large-scale Parklands at Sherwood development is also likely to underpin growth, with stage one of the $150 million project nearing completion.

"As new, quality stock hits the market, it is anticipated the median rental figures for apartments in Sherwood will also grow significantly, providing investors with exciting purchasing opportunities," Mr Gross said.

See Brisbane Times

SL8 Update

"With more than 90% of the 1, 2 & 3 bedroom apartments sold, limited opportunities remain to invest in SL8’s West End apartments. The two bedroom apartment final release is now selling from $565,000-$975,000."

Source: SL8 website

The Mill at Albion

The AFR reported that sales at FKP's The Mill project at Albion were strong, with 120 out of 132 apartments sold, at an average of $6500 a sqm.  For smallish apartments, where most of the two bedroom apartments don't have an external view from the second bedroom, and there is only a galley kitchen, and the overall aspect and views are poor, it seems that FKP has done well here.  I wonder how happy purchasers will be when this project is complete?

Stockland and FKP

"FKP intends to continue  discussions with Stockland, to ascertain whether a transaction in the best interests of FKP securityholders can be consummated."

See FKP Media Release from December 2008

Predictions for 2009

At the beginning of 2008, I made a number of predictions in this post.

The predictions were mostly wrong!

The Brisbane apartment market did not grow significantly in 2008, and took a minor step backwards. At present, there are fewer buyers and more sellers. For some off-the-plan developments, no sales have been made for months. Second tier buildings and buildings with more than 200 apartments have not done well.

So I will be careful with my predictions for 2009:

I still believe that quality inner city apartments in Brisbane will do well in 2009. Provided there is no significant unemployment and provided that foreign students continue to come to Brisbane, vacancy rates will remain low.

In 2008, only four new inner city apartment buildings completed and settled. These were Evolution (over priced), M on Mary (which has mostly 1 bedroom apartments, and the developer is now in liquidation), Flow at West End and Iceworks at Paddington. In 2009, no new large inner city apartments will settle. Groundwork has started on Mertion's Soleil and the Trilogy Tower project, but these will no complete until 2012. Mirvac's Tennyson Reach project will settle two buildings in 2009, and FKP's SL8 at West End will also probably complete in 2009. So not much new stock.

So here are some predictions for 2009:

• The price of a good quality 2 bedroom 2 bathroom apartment in Brisbane, with views, will range from $780,000 to $850,000.
• The price of an average quality 2 bedroom 2 bathroom apartment in Brisbane will struggle to pass $550,000.
• Average rent for an unfurnished 2 bedroom apartment will rise to $600 per week.
• Investors will return to the market, as interest rates are falling and rents are rising.
• There will be more action in the inner suburbs than in the city. Prices for quality apartments in areas such as Indooroopilly and Toowong (where there is a train station and regional shopping, close to education facilities) will boom. By the end on 2008, it will be hard to find a good quality 2 bedroom apartment in these areas for less than $600,000.

• The Gold Coast apartment market will tank even more. The Sunshine Coast apartment market will remain steady.

Milton Union Station Development

"A 30-storey highrise with 210 units, hotel, and a 10 storey office tower over Milton railway station will be built within the next three years after receiving the greenlight from Brisbane City Council."
See Courier Mail
I wonder if the fumes and smoke output from the brewery will impact those living in the apartments?

The article also mentions the Mill at Albion:
"FKP is also building another transit oriented development at Albion, which was approved by the council in April. Mr Miller said so far 120 of the 140 units averaging about $650,000 each had been sold."

SL8 Opinion

FKP is selling various apartments at SL8 at West End. These include:

• Six Skyhomes: 2 storey, 2 bedrooms, 2 bathrooms, priced at $1.165M to $1.195M
  
• Two storey ground floor terrace houses, 2 bedrooms, 2 bathrooms, 115sqm internal, priced at $895,000 to $915,000
  
• A penthouse with claimed river views, 3 bedrooms, at $975,000.

I am skeptical about this development. Despite having Donovan Hill as the architect, and some larger apartments with large and interesting terraces, in my view, this is a B grade location. It is in an industrial area, and any view will be of industrial sheds and poor quality offices. (Have a look at StreetView in Google Maps.) It is not located on the river. It is a long walk to any shops or restaurants. It is over 2kms to the downtown, so a long walk. No ferry or train nearby. The better view is to the west or south-west, which is not great. Some of the "cheaper" two bedroom apartments, which are less than 90sqm internal, have an internal bedroom -- that is, the windows for that bedroom appear to go to the common hallway and not the outside.

According to the FKP website:

"With more than 90% of 1,2 & 3 bedroom apartments sold limited opportunities remain to invest in SL8 with two bedroom apartment final release now selling from $565,000-$975,000."

When FKP is taken over, I wonder what the new owner will do in relation to SL8.

The Mill at Albion Goes on Public Sale

The Mill development by FKP at Albion went on sale today in public release. There had been about 4 weeks of pre-release sales to people who had pre-registered or who were on the FKP database. It was reported that more than 70% of the 143 apartments had sold in pre-release.

The development consists of 4 new buildings -- 2 which are residential, and 2 are commercial. There is also an old flour mill on the site, which will be renovated. One residential building is 10 floors high, and apartments in this building look south to the city or east over Albion. This building has a lap pool on a podium deck. The second building has apartments that mostly look east, but some weird shaped apartments look north. (One line of apartments looks directly into two old silos, which will remain on site.) People living in the second building have access to the pool in the first building, but will have to cross a road to get to that building.

Most of the apartments have 2 bedrooms and 2 bathrooms. All the one bedroom apartments are reported to be sold. There are also some three bedroom apartments.

Most of the 2 bedroom apartments range in size from 85 sqm to about 92 sqm internal, plus a balcony. The pricing for 2 bedroom range from $660,000 to mid $700,000s.

The site is located on or adjacent to the Albion railway station.

I would be concerned that the views from the apartments could be built out. The current aspect is not attractive -- the views are of or over warehouses, a pub car park and an adult shop. The area is mostly light industrial.

The most common two bedroom design is called a 2F. It is 92 sqm internal, with a 15 sqm balcony. It is a good size overall, and the rooms all are a good size too. The front door of the apartment opens into an open "mud room". There are glass sliding doors from the "mud room" to the dining room. There is no separate kitchen -- a wall kitchen is located on the side of the dining room. The second bedroom is an "internal" room -- it has a high window onto the hallway and a window into a "mud room". The apartment has showers but no bath. I was offered one of these apartments, on a low floor looking east, for $685,000 (or about $6400 a sqm).

The Mill

News About Union, Albion and Northbank

Ten News Video

Union Development - Milton Railway Station

From the FKP website:

http://www.unionmilton.com.au/

"Union is proposed to incorporate:

• 30-storey residential building comprising 213 – one, two and three bedroom apartments
• 127 room, 4.5 star hotel
• 10-storey office building comprising 13,500 sqm of net lettable floor space
• Prime podium and street frontage retail
• Multi-million dollar Milton Railway Station upgrade."

"Views to the river. Views to the city. View to the hills. Bring your worlds into Union.

Unrivalled 360 degree views of Brisbane and beyond will be the focal point of Union’s proposed 30-storey residential building. As a stunning and sleek landmark in Milton, Union will offer a location free from the clutter of neighbouring buildings.

Residential opportunities at Union are proposed to commence from Level 8 and will comprise an array of architecturally sophisticated options, including:

• proposed terrace apartments overlooking Railway Terrace
• proposed one bedroom apartments up to Level 22, and a variety of two and three bedroom apartments with a bird eye views of Brisbane up to Level 30.

For those seeking the pinnacle in residential apartment living – a limited number of two storey, three bedroom apartments are also proposed."

FKP's Albion Development

FKP has an interesting project planned for Albion, called the Albion Mill. See http://www.themillalbion.com.au/ and
http://skyscraperlife.com/showthread.php?t=7627

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.

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.