Colliers International has seen strong interest in the ‘Masterplan Approved’, 2.9 hectare, Nine Network’s Willoughby site on Artarmon Road in Sydney’s lower north shore, indicating positive signs for Australia’s residential real estate market in general, they say.
The current low value of the Australian Dollar, likely further interest rate cuts, greater availability of credit, combined with early signs of the market turning have attracted expressions of interest from an array of parties, both foreign and local.
“We’ve been surprised by some of the unusual combinations of foreign equity and boutique local developers. We see this as a positive for Sydney’s future residential market,” Colliers International National Director, Development Sites, Residential, Guillaume Volz said.
“Australia is benefiting as a consequence of global economic uncertainty,” he said.
“Foreign capital, largely Asian including Singaporean, Hong Kong-based/PRC and Japan, is looking for a safe haven in quality trophy projects with some parts of the world currently perceived as less stable and with Australia offering strong relations, a weakening dollar and the outlook on interest rates dropping,” Mr Volz said.
A critical shortage of supply
Market Research compiled by Charter Keck Cramer cites a critical shortage of supply in approved apartment development sites in Sydney, which Mr Volz says is also likely driving interest from those looking to add to their development pipelines in two to three years.
The report showed the Greater Sydney apartment market fell by over 50 per cent from 33,000 new released apartments in 2017 to just 16,000 in 2018; the lowest number of new releases since 2012. 2019 is expected to be lower again.
A record 29,200 apartment completions were recorded in 2018 with a further 27,300 forecast to occur in 2019. The report forecasts a drop to 23,300 completions in 2020 and a dramatic 9,200 completions in 2021.
In the Lower North Shore, since 2009 there have been approximately 9,000 contemporary apartments completed. Since 2009, the suburb of Willoughby has seen limited apartment completions with only 226 new apartments constructed across the suburb. In the short term, there is likely to be limited increases in apartment supply across Willoughby with only one project containing 20 apartments under construction and no projects presently being marketed.
A Trophy Masterplan Approved site located only 5kms from the CBD
Designed by internationally acclaimed award-winning architects CHROFI, the masterplan approved site where Channel Nine remains the tenant until late 2020, currently includes approval for 460 apartments across ten buildings ranging in height from four to nine storeys.
The masterplan also includes a series of public piazzas and extensive publicly accessible open green space creating a contemporary village-style community unlike anything seen on the lower north shore of Sydney before.
Key features of the site includes:
· Approved Masterplan
· Cash flow positive site: income generated on site until late 2020
· Mid-rise, masterplanned urban village including parkland and own road network
· Proximity to Gore Hill Expressway – only two traffic lights to CBD
· Designed by top tier internationally recognised and awarded architect, CHROFI
· Ability to stage or develop in one line
· GRV: $1billion+
· Blue chip Lower North Shore suburb grossly underdeveloped with apartments.
Mr Volz added the site has numerous compelling factors on its own merit however the critical shortage in supply that is forecast for Sydney’s lower north shore in particular, makes it especially highly desirable.
“Current global market conditions could lend to an increased asset value with a low Australian dollar, further interest rate cuts likely as well as lack of supply,” Mr Volz said.