Melbourne developer Kokoda Property is backing itself in the difficult Brisbane apartment market, buying a riverfront site in St Lucia for $9.5 million with plans for a $75 million apartment building.
“The Brisbane market has, overall, slowed,” Kokoda Property director Sam Tucker said. “However, we see this as an opportunity as higher-end purchasers are now driving the demand.”
New apartment sales in the Queensland capital have collapsed by more than 70 per cent in a year according to Urbis, while a prime apartment development site in South Brisbane sold last week for a 35 per cent discount.Despite the negative sentiment, Mr Tucker is adamant the 60 high-end, luxuriously sized apartments he is planning at 160 Macquarie Street will sell.
Counter Cyclical Push
“At Kokoda, our strategy is to move at a counter-cyclical direction to the rest of the market.
“Our faith in the Brisbane market may run against convention, but we have no doubt that the quality of our offering will continue to draw strong attention in the market as it matures.
“There are less projects going to market but the ones that are moving forward are of exceptional quality and designed to appeal to this new cohort of buyers.”
Kokoda’s planned 15-storey development, located 6km from the CBD and yet to be named, will feature “a blended neo-classical style with touches of New York’s upper east side”.
Mr Tucker said Brisbane was moving away from investor-driven projects to a smaller, but stronger, owner-occupier market that demanded higher quality.
“Previously the high volume of apartments being pushed through the pipeline were small apartments designed purely as investment stock. We’re now seeing a real change in the Brisbane environment as the stronger owner-occupier market emerges,” Mr Tucker said.
The developer’s foray into Brisbane has shown some success with Chester & Ella in Newstead generating $95 million in sales in its first four weeks.
The project has ranked as a top sales performer consistently since its launch, according to data by Place Advisory.
“The sales success of our previous project is testament to the strong ongoing demand from the higher end of the market,” said Tucker.
The latest St Lucia sale was negotiated by Colliers International’s associate director Brendan Hogan.
“This transaction shows that there is still strong appetite for inner-city boutique developments in Brisbane which provide premium product suited to the owner occupier market,” Mr Hogan said.