THE PROPERTY DEVELOPMENT REVIEW
building contracts who are most affected. Developers are now having to refund deposits and reprice projects accordingly to offset these cost increases, and with quick sharp price hikes naturally off the plan sales have cooled a little from the record levels they were at last year. In comparison to other states, we still remain very affordable, and we believe that these inflationary pressures will ease in the coming months and the market will return to a more normal environment where projects will become more feasible again. Talk us through the most significant deals you have transacted thus far in 2022. • Burleigh Home and Life Centre for $72.5 million by Gordon Corp. (Retail investment) • Yamanto Village Shopping Centre for $21.1 million. (Retail investment) • Kao Farm Pimpama for $20.46 million sold by Bob El. (Development site) • 5-8 Stadium Drive Robina - Price Confidential (1.44ha Development site) • 1-4 Stadium Drive Robina for $12.35 million. (Development site) • 9-15 Tallebudgera Creek Rd (Retail investment) for $8.75 million. • 519 Olsen Avenue, Southport (Retail investment) for $8.75 million. • 1162 Pimpama-Jacob’s Well Rd, $3.1m. (Retail investment)
changing market conditions, most owners have enjoyed very strong capital growth in recent years and stand to gain significant profits even sold less then what they could have achieved say 3 months ago. From our own internal analysis, we’ve seen a significant shift in listing enquiries from traditional developers & investors who typically pursue residential projects toward industrial & commercial type assets - how have you seen that trend over the past few years or so? We are certainly seeing development groups diversifying their portfolios to other asset classes such as industrial and commercial. A lot of these residential developers have undertaken industrial and commercial projects in the past, and they see these as lower risk opportunities at this time and are buoyed by the current strength of these sectors and the lower construction costs associated as opposed to doing a residential development at this time. What impact have rising construction costs had on developers based on your conversations with them recently. Rising construction costs are having a major impact on the industry here right now, predominately it’s residential developers who have sold out entire projects based on prior feasibilities without having had the ability to lock in
site values, what’s your take on how these have shifted and are there still pockets of value available for those groups looking to source suitable opportunities. Interstate development groups and traditional Southeast Queensland groups are the primary inquirers for sites, and we don’t see that changing any time soon because of the strong fundamentals. International interest in this sector has been limited more recently. Boutique Beachfront/ Beachside sites aimed at end users continue to be the most in demand however we have seen a trend in developer interest for areas such as Robina were multiple sales have occurred more recently, attributed to the low cost of land and the ability to complete faster more affordable end products. Circa 80 -120 apartment developments at land acquisition price points of between $10- $20 million have been the most in demand. From a vendor perspective, what’s driving their decision-making process in disposing of assets -is it the strength of the market or are you sensing there could be a level of uncertainty around rising interest rates setting in? Vendors witnessed unprecedented prices being achieved and sought to capitalise on the strong buyer appetites, this was the most dominate factor in their decision- making process over the past 12 months. Even with current market uncertainty and
August / September 2022 – 69
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