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GURNER™ proves market naysayers wrong, settling $200,000,000 worth of apartments in Fortitude Valley

16-Oct-2017


Luxury apartment developer GURNER™ has proven the naysayers wrong, repaying its $180m loan to ANZ and settling approximately $200,000,000 worth of apartments, just days after calling for settlement of the first 520 apartments of stage one of the developer’s 981-apartment, three tower ‘FV’ project.

The precinct, which is managed by Mantra Group under the high-end Peppers brand, has seen incredible rental enquiry with over 80 apartments leased before settlements even commenced, and strong rental yields of approximately 5.2 - 7.5 percent achieved. 

Tenants have been citing the project’s resort-style facilities including a sunken pool, state-of-the-art gym, private dining areas, VIP spa retreats, expansive sun-deck and concierge services as some of the key amenity aspects attracting their appeal.

Head of Institutional Property at ANZ, Eddie Law, said the bank’s outlook for good quality, owner-occupier apartment projects that are backed by experienced developers in Brisbane remained strong.

“ We were delighted to be able to support and assist GURNER™  realise the creation of a premier residential product in Brisbane, despite the anticipated and known market supply metrics.

“ The efficiency of all residential development projects is governed by the speed of trust between stakeholders and this is the primary reason why this project was delivered on time and budget and settled in record time by the end buyers of the apartments.

“ ANZ looks forward to working with GURNER™  on other development projects going forward,” he said.

The developer partnered with Singaporean listed company, Thakral across the development, with Thakral’s managing director, Kevin Barry, saying:

“ We were excited to partner with GURNER™  on this iconic development.  GURNER™’s ability to deliver a quality product has been fundamental to the success of FV.  The settlement success is testament to the differentiated product delivered and the underlying demand and strength of the quality apartment market in Brisbane,” he said.

The project’s settlement success comes after a period of prolonged concerns and discussions regarding settlement rates following the changes to the major banks’ foreign lending policies in 2016, and a perceived Brisbane oversupply.

However GURNER™ founder and director, Tim Gurner, said both the project’s settlement success and rental demand had proven otherwise. 

“ People have been discussing Brisbane’s property market like it’s the end of the world as we know it.  However, the fundamentals are strong, and with rental yields high and price points low compared to other major Australian cities, I believe Brisbane’s quality apartment market has only just started to hit its straps.

“ The constant reports and negative whispers about Brisbane’s market are way too simplistic and alarmist when the reality is, quality apartments are settling well, they are leasing well, generating good rents and achieving solid resale prices.

“ Most projects of this scale in Australia would have seen 50-90% of the apartments sold to foreign purchasers, however we had incredible local support for the product and never focused on foreign purchasers. 

“ This resulted in FIRB sales of just 110 out of 651 and settlements from these buyers have been incredibly strong with no rescissions, even with the incredibly strict lending criteria now in Australia.

“ We are seeing more foreign buyers settle in cash rather than through bank finance as they seek to navigate the complex lending requirements, so this is not deterring them from settlement.

“ We have been saying for years that any talk of oversupply has been grossly overstated, due to analysts looking at the number of projects granted permits, rather than the number that actually start construction.

“ The reality is, due to the tightening of bank lending, construction price rises and foreign investment changes, almost none of those permitted buildings have been built. 

“ The Brisbane off-the-plan market literally came to a grinding halt about 12-15 months ago and by 2019 there will be virtually no new supply coming to the market and we will be talking about an under supply again.

“ This means not only is there less stock on the market than first suggested, the rental market is incredibly tight and good quality apartments that will rent for between $400 - $700 per week are in very high demand.

“ Like any market, quality product focused towards owner occupiers, with high quality apartments, amenity and services are doing really well and will always generate more demand than those that don’t have a point of difference. .

“As always we spent a considerable amount of money, upwards of $8million to upgrade the lobbies, amenity areas and apartments to ensure that we didn’t just meet our buyers’ expectations, we exceeded them.

“I have met and spoken to many buyers who have inspected and they have been absolutely blown away by the attention to detail, quality and level of sophistication through the project and in particular the FV Private Club, which is incredibly humbling after years of hard work.

“ We set a very ambitious goal when we began this project and it has been many challenging years of incredibly hard work but I can honestly say that it has even exceeded my expectations.

“ The leasing process has been a big logistical operation so far to bring so many prospective tenants through but we are working our way through the hundreds of enquiries we could not be happier with the process so far.

“ It just makes us even more determined to push the envelope of design and quality across the project’s third tower, No.1, which is currently under construction and due for completion in mid-2019,” he said.

The building’s remaining 130 apartments in stage one have now been called for settlement and will begin settling this week.

To learn more about GURNER™ please call (03) 9654 6222 or visit www.gurner.com.au


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