38 posts tagged “devine”

"Strong pre-sales of residential units in Hamilton Harbour stage 1 with 89% of 257 units now sold. (This project is also a JV with Leighton Properties) ... Hamilton Harbour and King George Central forecast to commence later this calendar year subject to finance being secured."

Devine Annoucement

"SALES LEVELS ACHIEVED ON STAGE 1 OF THE HAMILTON HARBOUR MIXED-USE RESIDENTIAL, COMMERCIAL AND RETAIL DEVELOPMENT HAVE EXCEEDED OUR EARLIER EXPECTATIONS. ... TOGETHER WITH LEIGHTON PROPERTIES WE HAVE NOW COMMENCED THE PROCESS OF SECURING FUNDING FOR THE CONSTRUCTION PHASE AND, GIVEN THE HIGH LEVEL OF PRESALES ACHIEVED, ARE CONFIDENT OF ACHIEVING THIS TO ALLOW CONSTRUCTION TO COMMENCE SHORTLY."

AGM Speach

There are very few new apartment developments in inner city Brisbane under construction and nearing completion.  This is good news for owners of existing apartments, as the number of apartments available for sale will not increase dramatically in the next few years.  This is my list:

It is interesting to review the information Devine has published regarding its French Quarter development, that it is in the process of selling. It gives a good idea as to developer profit margins and costs of new apartment developments, such as French Quarter. (The information was not password protected at first, now it is, so you will have to trust me on this.)

For the "Carrington" Building (268 apartments, with 302 car parks).

Revenue for residential apartments - $11,400 per sqm, totalling $411M
Revenue from selling management rights - $2.45M

Total Development costs, including land value at $49M and construction costs at $177M = $310M

Profit - $85M

Interestingly, marketing & commission costs are $22M.
("Marketing Costs allowance 2.0% of Gross Sales Revenue. Commissions of 3.0% of Gross Sales Revenue with 50% paid on unconditional contracts & 10% deposit held.")

So, for a 2 bed, 2 bath apartment (110sqm in size), the average price would have been $1.2M. Of this, about $350,000 is profit, and $60,000 approx is marketing costs and commission for the sales agent.

"HOUSING prices around the country rose nearly 2 per cent in August, the biggest monthly increase since researcher RP Data-Rismark began its tracking in 2005.

The August increase takes housing value growth to 7.9 per cent for the first eight months of the year, with Melbourne turning in the best performance -- an 11.6 per cent jump. ...

In a note yesterday, Mr Walters said an expected 25 basis-point interest rate rise next week, tighter lending standards, the Commonwealth Bank's move this week to lift its fixed mortgage rate, and the winding down of the first-home owner grant would all affect new development.

David Devine, managing director of Queensland-based residential developer Devine, said it was nearly impossible to secure funding from the banks for apartment and unit projects, irrespective of pre-sales.

Mr Devine said figures from researcher BIS Shrapnel showed there was demand for 175,000 new homes nationally each year."

The Australian

"Unit values marginally outperformed house values in August, with units rising 2.1 per cent while houses gained 1.8 per cent."   Source

See also, RP Data blog

As mentioned in a prior post, Devine is selling the French Quarter site.

Here are the sale details:  http://www.frenchquarterbrisbane.com.au/

"The French Quarter vision has been shaped by Devine Limited after extensive research, planning and design. The French Quarter includes an agreement with IHG for an InterContinental* Hotel which will complement the development. The marketing and sales success of the apartments at French Quarter is predicated on five key success drivers:

• Brisbane’s best CBD residential address.
• A “cutting edge” architectural design.
• A broad mix of 4 and 5 star apartment types.
• The Parisian style retail environment presenting to Albert Street.
• The presence of the world renowned InterContinental Hotel.

Alice Street is Brisbane’s equivalent of Macquarie Street in Sydney and Clarendon Street in Melbourne. Alice Street has long been recognised as Brisbane’s best apartment address with the presence of The Parliament of Queensland, The Queensland Club, Quay West and The Grosvenor. Buildings on Alice Street overlook the city’s Botanical Gardens and the Brisbane River with high level views as far as the Border Ranges, Moreton Bay and the Glasshouse Mountains.

Albert Street is the principal pedestrian link between the gardens and the Queen Street Mall. This active pedestrian friendly street is well patronised for its many cafés and retail shops."

Devine is not proceeding with its French Quarter hotel and apartment project in Alice Street.  The site was listed for sale in today's AFR.  Story in the Courier Mail:

Twin tower plans for Brisbane axed by Devine
Michelle Hele | September 17, 2009 12:00am | CM

ANOTHER residential tower project has fallen over in the Brisbane CBD, with Devine pulling out of its $1 billion French Quarter development.   An international competition was held to pick its designer and it was to house the most expensive apartments in Brisbane – up to $15 million.

Devine spent years buying up individual apartments in buildings which are currently on the land so it could control the site on the corner of Albert, Alice and Margaret streets.   Stage one was to feature a tower with a luxury six-star hotel, with apartments on top, retail and commercial space on the lower levels and Parisian-style cafes and walkways.

But with Devine appointing agents to sell the property it seems unlikely it will ever be delivered.

Meanwhile, Austcorp's Vision Tower is still in limbo with no work carried out for months and some of the group's companies in the hands of voluntary administrators.

Work is also delayed on Trilogy Tower, an $800 million project on the site of the former Red Cross Blood Bank, and Metacap scrapped plans for its $500 million Empire Square tower on Elizabeth St.

Geoff McIntyre of Jones Lang LaSalle and Rick Bird of Ray White Transact have been appointed to sell the French Quarter site and will market the property internationally.  Mr McIntyre said it was a one-in-a-million site.  Mr Bird spent months negotiating the individual purchase of units in the apartment blocks. The agents said the plan was to sell the property to another party which would go ahead with the project.

Devine managing director David Devine said he was disappointed but after a review of operations the company realised house and land packages were providing a better short-term return at lower risk.  The group was also reviewing its land holdings in Queensland and would sell some soon.

Mr Devine said the focus now would be on buying more land in Victoria so the group could turn it into profits quickly.

"You can't do everything that you want to do," he said.   "It is disappointing but the fact is that our business is exceptionally good on the house and land front where demand is high and supply is low.  We have too much land in some areas in Queensland and we are looking at selling that."

Mr Devine said good sites such as the French Quarter site would sell in any market. Offers to purchase French Quarter close on November 12. Mr McIntyre said in a good market the site could make up to $90 million.  Mr Bird said with all the work that had gone into planning, a developer would have a significant head start on the project.

• What will happen to the inner city Brisbane apartment market if foreign students stop coming to Brisbane?
• When interest rates rise, will Brisbane apartment prices fall?
• Will Meriton build a building in Brisbane that is lesser quality than Devine?  Is that possible?
• When will Felix have its river views blocked by development?
• Will returns to owners in Oaks buildings decrease this year?
• Will apartment prices in Brisbane continue to fall into 2010?
• When first home owners stop buying, will sellers who have not sold become desperate?
• Are the only investors buying at present the vultures and bottom-feeders?
  

French Quarter in Alice Street Brisbane

"Continuing to progress the submission of an application for a development approval for this exciting future redevelopment opportunity."

Hamilton Harbour

"Excellent market response to the first stage of the “Hamilton Harbour” residential development"

"Development approval now received and marketing of first stage of residential commenced March 2009. First stage 86% sold."

"Strong pre-sales of residential units in Hamilton Harbour stage 1 with 86% of 257 units now sold. (This project is also a JV with Leighton Properties)"

Commencement Dec Qtr 2009
Est. Completion Staged development over approximately 5 years

Source

"After launching the first residential offering in early March, Hamilton Harbour joint-venture partners Leighton Properties and Devine have achieved their first major milestone – achieving 200 sales.

Selling out more than $100 million worth of apartments in just over four months is a triumph for the developers, which have attributed strong sales to the developments’ Hamilton location.

Devine National Marketing Director Ken Woodley says more than 80 percent of buyers are from Brisbane."

Construction has not yet commenced.

http://www.qbr.com.au/news/articleid/57924.aspx

Ken Woodley, the Marketing Director for Devine, left the Harbour One sales office in Hamilton this afternoon with a big smile on his face.  As he drove back to his large apartment in the Mirvac Quay West building in Brisbane, he was no doubt thinking about the 85 apartments that his team "sold" by way of expression of interest over the past two weeks in the Hamilton Harbour development.

The glossy brochure for Hamilton Harbour given out at the sales office is very impressive.  You can feel the quality in the brochure.  It is a shame that the brochure is misleading.  There are nice PhotoShopped photos (i.e., fake photos) that show happy people on balconys with impressive river views.  However, no apartment in Harbour One will have a balcony with the designs shown in the brochure, and the views will not be anywhere near as impressive (because there are buildings between Harbour One and the river.)    And is it correct to say "Waterside Living" for a building on Kingsford Smith Drive that is two blocks back from the river with no direct river views?

The apartments with the best views face West, which is not great in a Brisbane summer.

The apartments are small and expensive.  There are only three elevators for 238 apartments!  There is no gym included -- you can join a commercial gym being built on the site.  The living areas for most apartments have popcorn ceilings with oyster lights -- not the highest quality.  Many one bed apartments do not have a car park.  And a number of the one bed apartments do not even have a laundry -- not even a cupboard with a washing machine or dryer.

Type A One bedroom
41 sqm internal, 50 sqm total
No river views.
No car park.
No laundry.
Kitchen is a strip of cupboards in living room.
No room for dining table inside -- plan shows dining table on balcony.
Sliding doors to bedroom.
Price range - $295,000 to $385,000.
Price per square metre for most expensive of this design - $7,700
But if you add $50,000 for lack of carpark, then price per square metre is $8,300.

Type C One bedroom plus "extended living space"
54 sqm internal, 64 sqm total
Potential river views.
Kitchen is a strip of cupboards in entry way.
No room for dining table inside -- plan shows dining table on balcony.
No bath - shower only.
Price range - $405,000 to $495,000.
Example:  Level 7 apartment is $430,000
Price per square metre for most expensive of this design - $7,734

Type E Two bedroom
73 sqm internal, 84 sqm total
Potential river views.
Second bedroom not near second bathroom
Both bedrooms at front
Price range - $555,000 to $695,000.
Example:  Level 10 - $640,000
Price per square metre for most expensive of this design - $8,273

Type F Two bedroom
84 sqm internal, 98 sqm total
Largest two bed apartment
End apartment.
Potential river views.
Excellent glass-fronted wall to ceiling living space -- should give this apartment a wow factor!
Bedrooms at side or back -- second bedroom looks into blank wall.
Price range - $605,000 to $805,000.
Examples:  Level 10 - $690,000; Level 12 - $745,000
Price per square metre for most expensive of this design - $8,214

It would be interesting to track re-sales in the recent Devine Charlotte Towers, to see if the apartments were priced too high when sold off-the-plan.

According to REIQ, the medium Hamilton apartment price for December Qtr 2008 was $415,000, which is down 11.6% on the previous quarter.  Buying an existing apartment may be better value, or even Portside.  For example, a two bedroom apartment in Admiralty Two, with direct river views and absolute river front, can be purchased for less than $650,000 (106 sqm) and is less than $6,000 per sqm.  A one bedroom in Quay West, where Ken Woodley lives, is about 74 sqm, includes a car park, and is about $440,000 (less than $6,000 per sqm).