Seymour goes cold on Brisbane apartment development
Veteran Queensland developer and rich-lister Kevin Seymour will mothball a $200 million apartment project in Brisbane until the next property cycle, saying demand in the city is no longer deep enough to warrant the development.
Mr Seymour told The Australian his Seymour Group will refurbish the existing building on the site — the Arena nightclub — as retail, but hold the 312-apartment project until the market rebounded.
“I don’t think the demand is there without taking abnormal risk,” Seymour says. “The heat has come out of the market.”
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The move is an early signal that the smart money is on song with the RBA’s warning of an overheated apartment market.
The market us in a “slight downturn”, with Seymour saying his approach is to develop in a rising market.
We are looking for investment opportunities, some for the younger generation
“It’s a fantastic site and we will leave it to the next cycle when we can get a premium for the apartments that we cannot get in the present cycle,” he says.
The NAB commercial property survey released yesterday found fewer property developers were looking to enter the market in the short term — around 50% plan to start new works in the next six months, down from 58% a year ago.
“Significantly, for developers intending to start new projects, a survey low 38% indicated they were targeting residential developments, down from 54% in Q4, presumably reflecting the over-build in apartment markets,” NAB chief economist Alan Oster says.
The survey also found more developers say their debt and equity funding situation has worsened over the quarter, while the average precommitment requirement to get projects up and running rose for the fourth straight quarter to 54%.
It’s a fantastic site and we will leave it to the next cycle when we can get a premium for the apartments that we cannot get in the present cycle
Last week Chinese developer Chiwayland put its 2830sqm site in Parramatta, in Sydney’s west, on the market, saying it would buy other sites, but was looking through to the next cycle.
Brisbane has seen a wave of apartment projects with Lend Lease developing its $2.9 billion residential, commercial and retail precinct on the inner-city RNA showgrounds, rich-lister Tim Gurner, and David Devine’s Metro Property Development undertaking projects in and around Fortitude Valley while Asian developers have snapped up sites in the CBD.
Seymour Group is continuing with its prestige 30-apartment project at inner-city New Farm and is preparing to lodge a development application with the council.
“We are looking for investment opportunities, some for the younger generation,” Seymour says.
The Seymour family has also been offloading some assets with Seymour selling his trophy Brisbane office building HSBC Tower at 300 Queen St for $188 million to Singapore-listed ARA Asset Management through JLL and Knight Frank. Earlier this month, Seymour’s daughter Leigh sold the 429-space Festival Car Park in Brisbane to The Star Entertainment-led consortium that is developing nearby Queens Wharf casino precinct, for $45 million.
This article originally appeared on www.theaustralian.com.au/property.
