BRISBANE’S apartment market has received a boost, after Hamilton Harbour was named best mixed-use development in the country by The Property Council.
The $500 million joint venture between Devine Limited (ASX: DVN) and Leighton Properties (ASX: LEI) beat Watpac’s (ASX: WTP) Waterloo Junction Stage 1 and the Kingston Foreshore in the ACT.
The companies joined forces in 2008 to transform the 2.1 hectare industrial site into a residential, retail and commercial precinct – with 660 apartments across three towers and tenants including Woolworths (ASX: WOW) and Domino’s Pizza Enterprises (ASX: DMP).
Devine general manager of apartments and development Cameron Mana says it was important for the project’s success to combine amenity with affordability.
“Affordability was a critical factor. We worked very closely with Economic Development Queensland and the UDIA (Urban Development Institute of Australia) to deliver apartments that were highly affordable.
“The objective from the UDIA was to get approximately 5 per cent of the property as affordable apartments to rent from $300 a week.
“We managed to deliver over 20 per cent, in addition to some high quality penthouses that sold for up to $2.2 million,” he says.
The awards win follows the sale of the commercial KSD1 and Central Retail Buildings on the site to 360 Capital for $62 million in a deal that was finalised in April.
The residential developer recently announced that 98 per cent of Hamilton Harbour stock has been sold, with six apartments remaining – displaying growing demand for apartment living from Brisbane buyers.
“Devine has delivered over 3000 residential apartments in Brisbane and this has demonstrated the underlying strength of the market,” Mana says.
“We definitely intend to expand our operations in the apartment sector.
“The housing and land sector are still a very important part of our business operations, but we will look at expanding in the inner-urban and mixed-use apartment area.”
Mana says growth in the city has been “slower in the last 12 to 18 months” than warranted, but employment growth in some suburbs is providing advantages.
“I look at areas such as Newstead and Teneriffe and demand there is very strong at the moment, especially when you look at the number of jobs that are moving into that area.”
He says it follows the relocation of Energex and planned sites for Bank of Queensland (ASX: BOQ) and Tatts Group (ASX: TTS), bringing thousands of employees to Newstead.
“On top of all that, we’ve got confidence and the local buyers are definitely returning to the market.
“We’ve seen spectacular growth in Sydney, which means yields are starting to come under a bit more pressure in that market and we’re seeing investors looking at Brisbane and seeing the capital growth opportunity.”
Mana says he is excited about the improvement in demand, with the company gearing up to complete its next two projects.Devine’s DoubleOne3 apartment project in Teneriffe is almost 90 per cent sold, with settlements commencing next month, while Mode in Newstead has sold close to half its apartments without a formal public sales campaign.
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