Luxe in the ’Loo selling well for FKP, but Victoria and Queensland drag the chain

Diversified property group FKP has reported a 41% drop in sales revenue in its residential development business for the six months to December 2011, with land sales down 20% and apartment sales down 88% compared with the previous corresponding period.

Underlying profit in its residential development division fell 28% to $10.7 million.

FKP’s residential development division includes a number of high-profile projects, notably the Luxe apartment project in Woolloomooloo overlooking the Domain parklands and the residential communities of Saltwater Coast at Point Cook on the outskirts of Melbourne, Rochedale Estates in Brisbane and Peregian Springs on the Sunshine Coast.

The Luxe development, now under construction, is 62% sold with 29 out of the 77 apartment available for sale. One-bedroom apartments in the project are being sold off the plan for $648,000, two-bedroom units for $940,000 and three-bedroom units selling for about $1.3 million. The development launched late last year.

In October the first limited-edition apartment featuring 270 degree views of St Mary’s cathedral, the Sydney CBD skyline and Domain parkland was sold to a local buyer for $3 million having been marketed by Whiterock Capital Partners. 

The developer says results at Saltwater Coast had been impacted by softer market conditions and inclement weather with the lead time between enquiry and settlement increasing over the period.

“In a weak Victorian residential market, sales at Saltwater Coast in Melbourne have slowed from the exceptional levels that were achieved in 2010-11,” says FKP.

There are 1,500 lots remaining for sale at Saltwater, with FKP targeting annual lot sales of between 250 and 300 over the next five years.

“In Queensland, delays in achieving required council approvals directly impacted the number of settlements at The Rochedale Estates,” says FKP.

“However, these approvals have now been attained and increased settlements are expected in the second half of the year.

FKP says sales volumes at Peregian Springs have held up “in a difficult Sunshine Coast market”.

FKP has 4,850 lots across its portfolio currently for sale with an estimated value of  $1.7 billion.

The group plans to build 1,800 apartments over the next six years.

It reported a $43.1 million underlying profit after tax for the half-year, down 21% on the previous period because of a slowdown in residential sales coupled with longer lead times between deposit and settlement of sales for units in the retirement portfolio.