Phillip Usher Constructions to sell a 279-apartment tower on the Gold Coast
An entire 35-storey residential tower with 279 apartments in Southport on the Gold Coast has hit the market for sale in one line, at price estimates of about $180 million.
Residential developer and builder Phillip Usher Constructions is selling the 33,505sq m waterfront project at 120 Marine Parade as part of a strategy to diversify out of tall towers in the area and focus on low-rise development.
Cushman & Wakefield’s Chris Bouwer and Richard McCouaig, who are handling the expressions of interest campaign, said the project was at an early stage of construction enabling buyers to customise new plans for the development.
A buyer would be able to part-sell the apartments and retain the balance as rental apartments or convert the property into a hotel.
Phillip Usher already holds the entire 349-unit twin tower project, H2O Broadwater Apartments, 300 metres away.
It has held the apartments for rental, achieved under the previous National Rental Affordability Scheme.
Other sources have said however personal reasons have motivated the sale and a retail price of about $180 million has been discussed although a gross value of $260 million was also likely.
Strong support
The landmark property on a 4472sq m site is scheduled for completion in the first quarter of 2019. The Queensland government and Gold Coast City Council had shown strong support for the property, which has larger than average one to three-bedroom units.
“Diminishing supply [of apartments] due to lack of funding has restricted many large-scale projects on the Gold Coast. This has resulted in an uplift in ‘off the plan’ sale values,” Mr Bouwer said.
“Purchasing this type of asset is highly unique and rarely offered within Australia,” Mr McCouaig said.
JLL’s Queensland director John Muchall agreed the listing was unusual but said regardless of the motivations, the listing could be strategic because of a shortage of high-rise apartments on the Gold Coast and a booming tourism market looking for more hotel rooms.
“It’s a good time to test the market,” he said.
“The Southport market is very different to Brisbane and the main street [on the Gold Coast]. There’s not many high-rise developments in Southport, Meriton is the only selling. So there’s not much stock in the market.
“There’s no oversupply of apartments, maybe an adjustment on price points.”
Market ‘healthy’
Overall the Gold Coast apartment market, despite its struggles during the global financial crisis 10 years ago and in the 1980s, is healthy, Mr Muchall says.
“The apartment glut from the GFC was taken up years ago, and the take up [of apartments] has been quite good.”
Rental vacancy is low at 1.4 per cent. Rents have increased by more than 3 per cent in the year to June 2017, JLL’s latest research shows.
If a hotel conversion is on the cards, the Gold Coast tourism market has grown 13.9 per cent in the past year, buoyed by Chinese visitors.
This is not the first time apartments are being offered in one-line on the Gold Coast. Market sources previously indicated Dalian Wanda was in talks to sell a chunk of their “Jewel” apartments on Surfers Paradise to an institutional investor.
