23 posts tagged “empire square”

"The developer behind the $900 million Vision Tower skyscraper on Mary Street is confident construction will proceed, despite the global credit crisis and economic uncertainty.  Austcorp's ambitious 79-storey building will be the tallest in Brisbane when complete and is tipped to become an icon of the city's burgeoning growth.  However, doubt has been raised over the likelihood of construction, following last week's collapse of the high-profile Empire Square development on Elizabeth Street that was sparked by the worsening world economic climate.

Industry sources told brisbanetimes.com.au a contingency plan had been devised if finance, which had been arranged but not officially confirmed, was to fall through.

Excavation of the building's basement-level car park is underway, but that could be as far as Vision gets if the credit crisis prohibits Austcorp's financial backing.  The developer could sit on the site and operate it as a public car park until things improved, one source said.

However, Austcorp spokesman Terry Lee rejected the suggestion that Vision was in doubt, and said plans remained very much on track.  "We have funding commitments (and) we are still working with the banks to finalise that documentation ... it will take time for us to do that," Mr Lee said.

"This is a normal process that all development projects go through."

Mr Lee acknowledged the turmoil in the global market, but would not be drawn on whether it posed a risk to the development.

"I know there are various rumours circulating in the market, there has always been talk about Vision one way or the other," he said.  "We are progressing as we planned ... I don't want to be drawn on market speculation."

He would not comment on the possibility Vision would be delayed by the on-going credit crisis.

Austcorp had secured more than $12 million in apartment sales in the last quarter, which meant about 70 per cent of residences were now pre-sold with unconditional contracts.  "Total apartment sales amount to $260 million ... Vision will ride out the current market turmoil to become Brisbane's landmark building when delivered in three to four years' time."

See Brisbane Times

A lot of people seem to think that it is the end of the world as far as property investment is concerned.  These are my thoughts.

Facts:

• Interest rates are going down
• There is low unemployment in Queensland
  
• There are few vacant rental properties, and rents are still increasing in Brisbane
  
• According to REIQ and RP Data, medium prices have fallen less than 3% in the past 6 months, and over the past year prices have still increased
  
• Property is still selling.  For example, a three bedroom apartment is Admiralty One sold in less than a week.  At auctions in Mooloolaba this weekend, which has been a tough market, there were 2 two bedroom apartments that had bids of more than $1 million:  Oceans 503 had a highest bid of $1,200,000; and Sirocco 604 had a highest bid of $1M.
• Banks are still lending money, but they have tighter lending requirements
• For most of Brisbane, there are very few delinquencies. 
  
• In outlying areas (such as Forest Lakes and Springfield) and low quality bulk highrise marketed to investors (e.g., Charlotte Towers, and other recent Devine buildings), there are distressed sellers who are selling for less than they paid.
  

Assumptions:

• Matusik, who is a very  bullish property consultant, has the following assumptions in most of his presentations, but I am not sure how many of them will turn out to be correct (and some from his September 2008 presentation are already wrong):
• interest rates to drop by 0.5% in fiscal 2009
• $A remains high – above 85 US cents
• migration to oz remains high US economy has a mild recession, mild recovery in 2009
• demand for our resources continues
• share market settles down unemployment remains below 5% and wages growth remains constrained

• Property in inner Brisbane will take longer to sell than over the past 3 years (e.g., time on market will return to a more normal period of time, from 15 days to 30 or 40 days).
• Prices for poor quality apartments will fall by 25%
• Prices for apartments that have their views destroyed (e.g., Charlotte Towers, 212 Margaret, River City, and some in South Brisbane) will fall by 25%
• Prices for apartments without carparks will fall
• Some new apartments for off-the-plan developments) are priced too high for what they are, and will have difficulties selling in the short term (e.g. Waters Edge, Empire Square, Vision)
• Anything priced over $6,000 per sqm will struggle to sell, unless it is really special
• Off the plan developments will not sell well until completion -- in uncertain times, people do not want to make bets on the future, especially where the product being sold is intangible -- people want to touch and feel in uncertain times.
  
• Really good stuff will sell, and will not reduce in price by more than 5% (if at all)
• In February 2009, the market will pick up, but will not have growth of more than 10% per year for at least two years
• Due to lack of building today, things will get better for investors in good locations in the short term
• This year, my property portfolio looks better than may stock portfolio.
  

There is likely to be a shortage of apartments in Brisbane in the near future.  (This statement assumes that that is not massive unemployment in Brisbane.)  There are few developments under construction, and so very little new stock will come onto the market in the next three years.  What new stock remains unsold is either overpriced or poor quality.

Downtown Apartments

• M on Mary - completed - mostly poor quality 1 bedroom apartments, mostly unsold.  Developer has ceased sales campaign and is running this building as short term accommodation
• Evolution - completed - about 20 apartments unsold - small and overpriced
• Skyline - completed - about 20 apartments unsold - building surrounded by other buildings, and generally overpriced
• Aurora - completed
  
• Empire Square - cancelled
• Trilogy Tower - status uncertain - in presales, with planned completion in 2012 - both hotel rooms and expensive apartments
• Vision - status uncertain - in presales, with completion not before 2012
  
• Soleil Tower - soon to start presales - 403 apartments, with completion about 2011
• French Quarter - early days, no planning approval
  

• Flow (West End) - completed - about 5 remain unsold, will negotiate on price to sell
  
• Koko (West End) - completed - about 5 remain unsold, will negotiate on price to sell
• Tempo (West End) - completed - about 5 remain unsold, will negotiate on price to sell
• IceWorks (Paddington) - almost complete - about 6 apartments remain unsold
  
• SL8 (West End) - under construction, with completion expected in April 2009, poor location
• Waters Edge (West End) - off-the-plan selling, overpriced and selling poorly, completion in 2010
• Ciana (Indooroopilly) - almost complete - about 25 out of 130 apartments remain unsold - good value
  
• Tennyson Reach - 2 buildings nearing completion, 1 building not far behind, 3 more buildings planned
• Newstead Waterfront - 2 buildings selling well off-the-plan
• The Mill at Albion - almost sold out, relatively expensive
• El Dorado Village - to be launched to the marketing in October 2008, completion likely in 2011
• Milton Union - received planning approval

The Empire Square project on Elizabeth Street in Brisbane, which was to include a Westin Hotel, has been scrapped.

"Developer Metacorp is today in the process of advising investors it will not proceed with the development because it has lost financial backing, sources have told brisbanetimes.com.au.  The empty retail stores on the site of the planned development have been readvertised for lease."

It was reported that a large number of the 100 apartments had sold off the plan.  The minimum price was $1.3M for a 2 bed apartment.

See Brisbane Times and SMH.

See this AFR story, which says that Vision does not have finance and no construction contract has been signed.  Trilogy sounds more optimistic. It reports that 74 out of 192 hotel apartments have been sold.  The Westin Empire Square -- hard to tell what is actually happening -- sales are good, but no finance yet.

See SMH

Look out Sydney and Melbourne, the exclusive apartments that are planned along the Brisbane River, the Gold Coast and further north are threatening to steal your limelight.

MONEY IN THE BANK

Roseville resident Rhonda Sear knows how to identify a prime apartment in a quality development. This full-time property investor bought a $1,175,000 penthouse in Queensland's South Bank development in 2004 and sold it 18 months later for $1.6 million. Sear has just listed for sale her three-bedroom, two-bathroom apartment in Norman Reach, a $108-million premium development on the Brisbane River at Norman Park.

Sear bought the apartment for $1,739,000 in 2006 and expects to make a profit despite the softer market. "It's an appealing city and it's a lot more affordable than Sydney," she says. "The key is actually buying the prestige product that has a uniqueness because it should still show strong growth in a soft market because it represents a certain lifestyle."

Sear has also spent $1.51 million on a unit on level 55 of Empire Square, Brisbane.

Google has an interesting service, that allows you to see what people are searching for on Google.

It is called Google Insights.  It is helpful when making investment decisions.

For example, when looking at searches conducted in Australia over the past 12 months, the following are relative rankings of various searches:

There was an interesting story in The Australian last week, but states that the Empire Square development in Brisbane has not yet obtained construction finance. Also, no construction contract has been signed. The developer says:

"The worst possible scenario for Empire Square would be that if it didn't start by the end of the year, for whatever reason, we would be left with half an acre in the CBD that could be rented out for the next two or three years," Mr Chopard said.

"Located from level 47 up, the 98 two-and three-bedroom apartments are priced from $1.3 million and marketed as having full access to the services of the building's Westin Hotel.

The residential component also includes six penthouses priced from $4.5 million.

Metacap Developments insists there has been no shortage of interest in the $500 million development, which also includes 306 hotel suites and 23,000 square metres of commercial space.

Expressions of interest were placed on 80 per cent of private apartments, before sales officially opened yesterday.

"We have already been inundated with enquiries... (this) is a great result, particularly given current market conditions," company director Jerome Chopard said.

Empire Square will also feature 306 hotel suites and a range of five-star facilities, including a gym, pool and restaurant.

Permanent residents will have access to the full services of the hotel, including the concierge, maid, doorman and personal assistant."

From Brisbane Times, 30 July

The tentative new proposed Northbank design for Brisbane includes a 30 floor building at the Elizabeth Street off-ramp.  This will impact the views from Casino Tower and probably the Empire Square development.

Watch Video