Rental yield drives investors to Geelong’s Ritz
An expected strong net rental yield is enticing investors to Geelong’s first upscale 4.5-star accommodation to be built at the neglected Ritz site.
Investors from across the nation, including Sydney, Perth, Melbourne and regional Victoria, have already secured 80 per cent of the 110 hotel apartments.
Geelong investors now have their chance to secure an apartment with an expected net rental yield, after all expenses are taken out, of 6-8%.
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CoreLogic data shows the gross rental yield, before expenses are taken out, for a unit in Geelong was 3.5% with a median asking rent of $350 per week.
Integrated Development Solutions director Phillip Petch and agent Dale Whitford launch The Ritz development in Geelong. Picture: Jackie Paige Sanders.
Melbourne developer Integrated Development Solutions will be transforming The Ritz from abandoned and derelict into a $30.8 million nine-level tower on the corner of Bellerine and Corio St.
Director Phillip Petch says a lot of his buyers have seen the renaissance of Newcastle in New South Wales and are seeing the same thing happen in Geelong.
“People outside of Geelong see the upside more than Geelong residents,” Petch says.
“They look at the prices and the apartment and go ‘crikey it just makes sense’.”
The views from the apartments will be incredible.
Petch says one-bedroom apartments start at $455,000 and include a furniture package worth $23,000 and all costs relating to the sale. The total amount will be about $508,000 with an estimated gross rental yield of $53,000.
He says the demand for this type of development is high in Geelong because of the increasing numbers of overnight visitation, with a 15% spike in the year to September, 2017.
“There is huge growth in people staying overnight in Geelong but it hasn’t been met by any supply,” he says.
The Ritz inside at the moment. Picture: supplied.
The Melbourne-based developer has carried out several projects in Geelong, including the renovation of the Gordon Junior Technical School into The Devlin and the modernisation of the adjacent Vue Apartments.
The nine-storey development, designed by local architect Mark Gratwick, will have 110 apartments, a car park for each apartment and a corner cafe and reception area.
Construction is expected to start in June, with completion 18 months after that.
Whitford, Newtown agents are selling the remaining apartments.
This article from the Geelong Advertiser first appeared as “Strong net rental yield attracts investors to The Ritz Geelong”.
