Half of NSW and Queensland development site listings distressed

There has been a marked increase in the number of distressed development sites put up for sale, particurlarly in NSW and Queensland, according to research carried out by property valuation group LandMark White.

Almost a third of major investment properties advertised in the Australian Financial Review in August were forced sales, the firm has found, with this figure rising to about 50% for sales in NSW and Queensland.

At the other end of the spectrum, just 5% of properties up for sale in Victoria are distressed sales, with the state building a reputation as a safe haven for developers.

However, according to Vanessa Rader, head of research at LandMark White, the increase in the number of distressed sales put up for sale will not automatically push up yields.

She says yields have stabilised since the GFC, with vendors selling now to cut their losses.

Distressed assets up for sale include Midwaters, a 1,232-square-metres property at 3496 Main Beach Parade on the Gold Coast that was to be the site of a $48 million 17-storey tower by veteran development group Raptis. The site is being marketed by Stephen Kidd and James Taylor from Colliers under instruction from the mortgagee Wellington Capital with offers due by October 12.

Another distressed asset up for sale is another section of the Martha Cove residential and marina project on the Mornington Peninsula, which is being marketed by CBRE agent Scott Gray-Spencer on behalf of receivers McGrathNichol.

Gray-Spencer says a lot of pressure has been placed on vacant, unapproved land, assets the banks wish to get off their books.

According to receivers KordaMentha, non-incoming producing assets such as development sites are pushing up the number of forced sales.

Berrick Wilson, partner at KordaMentha, says there are a lot of development sites no longer feasible in the current environment.