Melbourne developer Kokoda buys St Lucia, Brisbane riverfront site
Melbourne developer Kokoda Property is buying a riverfront site in Brisbane’s St Lucia with plans for a $75 million apartment building in spite of a slowing market and the recent collapse of a major builder.
It is paying $9.5 million for the site.
"The Brisbane market has, overall, slowed," Kokoda Property director Sam Tucker was quoted by The Australian Financial Review as saying.
"However, we see this as an opportunity as higher-end purchasers are now driving the demand."
New apartment sales in Brisbane have collapsed by more than 70% in a year, according to Urbis.
It also said the Brisbane apartment market has been self-correcting and unlikely to suffer any great supply-demand imbalance.
SQM Research recently said that Greater Brisbane faces an oversupply of 8,000 new dwellings this year as scheduled completions outstrip population-driven growth in demand.
However, Urbis figures showed that only 1,812 units are under construction in the CBD across four projects.
Just last week, Metro Property Development was reported to have sold a prime apartment development site in Brisbane for a huge 35% discount after buying it for $20 million just two years back.
Despite the negative sentiment, Kokoda’s Tucker expects the 60 high-end, luxuriously sized apartments he is planning at 160 Macquarie Street to sell.
"At Kokoda, our strategy is to move at a counter-cyclical direction to the rest of the market,” he said.
"Our faith in the Brisbane market may run against convention, but we have no doubt that the quality of our offering will continue to draw strong attention in the market as it matures.”
The site sold for $6.75 million in 2014, according to RP Data.
The site was previously marketed as well with an offering of apartments. The site area is 1242 square metres.
Called St Lucia Residences, it was conceived by Hayes Anderson Lynch Architects and interior designers SJB Interiors.
Kokoda's planned 15-storey development, located 6 kilometres from the CBD, will have "a blended neo-classical style with touches of New York's upper east side".
Tucker said Brisbane was moving away from investor-driven projects to a smaller, but stronger, owner-occupier market that demanded higher quality.
Kokoda’s project Chester & Ella in Newstead generated $95 million in sales in its first four weeks and was ranked as a top sales performer consistently since its launch, according to data by Place Advisory, the AFR said.
"The sales success of our previous project is testament to the strong ongoing demand from the higher end of the market," said Tucker.
The St Lucia sale was negotiated by Colliers International's Brendan Hogan.