Mortgagee Brisbane development site on the market
A development site in inner Brisbane on which an apartment tower was planned, is being sold by the mortgagee.
It comes as the city’s oversupply concerns loom large.
The RBA has in recent months voiced its concerns over the apartment oversupply in Brisbane. Thousands of completed apartments are set to hit the market this quarter.
The marketing for the 1,012 sqm holding on Carl Street in inner-city Woolloongabba is being handed to Cushman & Wakefield by the lender.
The site is two blocks of three that won development approval from the Brisbane City Council for a 91-apartment tower to be called Dietrich on Carl in 2015, according to The Australian.
Situated in the heart of Woolloongabba, the 91 units were to be spread across 12 levels, with a roof top pool and recreation areas.
Close to transport and shops and with a rich heritage, the property was marketed as offering lifestyle and location benefits that would appeal to both owner/occupier and investor alike.
Unit supply in greater Brisbane is scheduled to grow by 20 per cent over the next two years, with 39,420 apartments and townhouses hitting the market, according to property analytics firm CoreLogic.
With more than 2,200 new apartments remaining for sale, developers are under pressure to settle their stock despite tightened lending conditions for foreigners and investors.
Cushman & Wakefield agent Joe Kennedy said there was reasonable interest in the two sites, which is within Brisbane’s eastern corridor zoned for high-density residential.
“The development site market in Brisbane is not what it was two years ago, with all the doom and gloom, but it is starting to pick up again,” Kennedy said.
“This is certainly the first (mortgagee-in-possession) site we’ve had. It’s not something I’ve seen a lot of.”
The entire three block site was bought in two purchases for a $5 million total in 2014 by Sandton Pty Ltd, a Canberra company trading as Precision Living. The company could not be reached for comment, according to The Australian.
Developers have deferred around 43 per cent of apartments in major projects across inner Brisbane due to a decline in sales, higher construction prices and tighter lending conditions, a report by Place Advisory’s June Quarter said.
Smaller development sites were still scoring deals, Kennedy said, citing site sales for 12 to 20 units within their office totalling $12 million in the popular western suburb of Indooroopilly.
The oversupply story is true for established Brisbane developers. Metro Property Development last year sold a site on Brunswick Street in Fortitude Valley and Montpelier Road in Bowen Hills for a combined loss of $11.2m.
The company later sold their Manning Street site for $13 million, making a loss of $7 million, to Aria Property Development.
Metro has also put the final two stages of its Central Village apartment complex in Fortitude Valley up for sale through JLL.