Gurner settles apartments worth $200 million in Brisbane in quick time, downplays oversupply concerns
Apartment developer GURNER has repaid its $180 million loan to ANZ following the settlement of apartments worth nearly $200 million at its FV project in Brisbane.
GURNER said in a media release that it had settled 80 percent of the first 520 apartments of stage one of its 981-apartment, three tower ‘FV’ project.
The settlements come at a time when repeated warnings have been sounded from various quarters, including the RBA, about an apartment oversupply in Brisbane.
The precinct, which is managed by Mantra Group under the high-end Peppers brand, has seen more than 80 apartments leased before settlements, and rental yields in the range 5.2 - 7.5%.
The project’s resort-style facilities such as a sunken pool, gym, private dining areas, VIP spa retreats, expansive sun-deck and concierge services are being cited as a big hit by GURNER.
Tim Gurner, founder of GURNER, said both the project’s settlement success and rental demand had proven the fears of oversupply wrong.
"People have been discussing Brisbane’s property market like it’s the end of the world as we know it," said GURNER.
"However, the fundamentals are strong, and with rental yields high and price points low compared to other major Australian cities, I believe Brisbane’s quality apartment market has only just started to hit its straps.
"The constant reports and negative whispers about Brisbane’s market are way too simplistic and alarmist when the reality is, quality apartments are settling well, they are leasing well, generating good rents and achieving solid resale prices."
But The Australian newspaper has reported more than 100 apartments in the high-profile inner-city Brisbane development are yet to settle.
Some 20 per cent of the first tower of property developer GURNER’s 520-unit FV development are yet to settle, it reported.
GURNER said his marketing was not focussed on foreign buyers, unlike other projects of that scale, with only 110 out of 651 settlements by foreign buyers.
“We are seeing more foreign buyers settle in cash rather than through bank finance as they seek to navigate the complex lending requirements, so this is not deterring them from settlement,” GURNER said.
“We have been saying for years that any talk of oversupply has been grossly overstated, due to analysts looking at the number of projects granted permits, rather than the number that actually start construction.”
ANZ’s head of Institutional Property, Eddie Law, said the bank’s outlook for good quality, owner-occupier apartment projects that are backed by experienced developers in Brisbane remained strong.
“We were delighted to be able to support and assist GURNER realise the creation of a premier residential product in Brisbane, despite the anticipated and known market supply metrics.”
The developer partnered with Singaporean listed company, Thakral across the development.
GURNER went on to say that Brisbane could again see an undersupply problem as a tightening of bank lending, construction price rises and foreign investment changes have almost stalled permitted off-the-plan projects.
“The Brisbane off-the-plan market literally came to a grinding halt about 12-15 months ago and by 2019 there will be virtually no new supply coming to the market and we will be talking about an under supply again,” he said.
“This means not only is there less stock on the market than first suggested, the rental market is incredibly tight and good quality apartments that will rent for between $400 - $700 per week are in very high demand.
The project’s third tower, No.1, is due for completion in mid-2019.
