THE PROPERTY DEVELOPMENT REVIEW
How would evaluate the impact of the past eighteen months in your local market? It’s been a whirlwind time with a huge uptick in purchaser demand for DA approved sites. Whilst we didn’t notice a substantial lift in land values in our core markets we did notice that the increased liquidity in the market and willingness to get projects going saw a marked reduction in settlement times for DA approved sites. We are however seeing that this is starting to cool with our more recent deals and offers requesting longer settlement times similar to those being sought by purchasers in 2020. . What are your expectations for the commercial property market over the next twelve months? There are a lot of headwinds which could have a variety of impacts in various asset classes. In NSW it feels like a perfect storm which could significantly slow down development activity as we have an election year, rising cost of debt, increased supply chain costs, much stricter construction regulation with the new building commissioner powers, all of which will likely put a large number of projects on hold.
Two predictions for the next 12-24 months would be: 1. A rise in established apartment values driven by significantly increased rents across all of Sydney 2. An increased percentage of non-core sites or partially built sites to be offered to the market by those developers caught up in the surge of increased costs. Talk us through the most significant deals you have transacted in the last twelve months. We’ve had a few very exciting deals, one being a 7 lot amalgamation in Kogarah for around $25m which resulted in a significant uplift for all of those owners. We had some dissenting parties along the way who made it challenging, however a bit of strategy and courage by the purchaser to take a blocking position on 2 of the properties got the deal over the line. We also had a commercial building in Marrickville which sold for $7.67m which was almost $2m above reserve. Amongst the others, they’re the two that stand out the most and demonstrate the heat that was present throughout 2021.
April / May 2022 – 21
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