Brisbane 14 Unit Development

Hello, I'm new to the forum and have a question regarding our only property.

It's 820sqm just North of Brisbane on high ground, before Newmarket St. We have approval and a nearly completed DA for 14 units at a GFA of 1.5 .

My question is this, do I develop myself (my family will live with my mum during construction - and I can take time off work), do I sit on it or sell to a developer.

We are in a position to develop, it will involve a lot of work - but we can get access to the cash. And personally I work in project management so I can overview some processes to save on some costs. Total build cost including taxes, levies, permits etc is about $3 mill. From what I understand I selling each unit will yield about $6.5 - $7 mill. If sold promptly.

However - I'm not sure of the stability of the brisbane market. One professional insists the market is dropping, another it's rising. ie will people actually buy the units?

Selling to a developer, this is an option, but I'm not sure of the processes and/or where to find and approach them?

Any thoughts and I ideas welcome.
 
Hi,

Sounds like a promising site - from someone who used to sell development sites for a living in QLD here are a few thoughts if you want to go down this route, take as you will and this is not to be interpreted as advice:

Do you have any sort of OPW or BA?

Guessing at a 1.5 plot ratio each unit would be about 90sqm and you're looking at a price of 470 - 500k/piece for the finished product? How many levels and would it have a lift or is it a walk up?

If you want to reach the right target market (developers) and get the best price for it as a site, maybe consider going to the market formally with an agent who specialises in selling development sites. Expect to possibly spend about $11k-$13k on marketing to do it properly and from appointment to conclusion of the campaign (Auction/Tender close) you'd usually be looking at around 8-ish weeks.

Remember at the end of the process if you don't get to a level where you'd consider selling you don't have to sell it, but at least you'll know what the market might be willing to pay - which could be enough to walk away now or maybe show you that you're better off doing it yourself to unlock the value.

From previous experience and generally speaking, smaller sites which require less capital to get up typically generate more interest from the market (more enquiry, buyers, higher potential price etc) when taken to the market properly.

Disclaimer - this is only general feedback on what selling as a site could entail and not advice. If you need some suggestions on people who sell sites like this in Brisbane please send me a pm.
 
I would generally advise people to start with a much smaller development, unless they have both significant experience and access to lots of cash, but it appears that you may have both in order.

The profit margins sound great. What do you think the site is worth?

I have friends who develop in Brisbane on that scale (do anything from 6 to 40 units) if you are interested in selling it, PM your email address and I can pass it onto them.

One potential issue is going to be the presales that most banks would require. Would you be targeting owner occupiers or investors? Investors will work off yield, so calculate this at purchase price, understand the demand for rentals and vacancy rate. You may want to get a project marketer onboard to sell to investors, but this is only likely to appeal if there is a strong yield.

Selling to owner-occupiers is a different scenario. It can be hard to get presales as they tend to want to see a finished product. There are lenders who can offer finance without presales, but you would need to demonstrate your level of experience to handle the project, or get an experienced project manager onboard. Not having presales also increases your risk and you have very high holding costs on completion if they don't sell at the end.

Cheers,
Matt
 
Good questions above from the development perspective.

On the topic of keeping the units and renting if you can't sell them, my understanding is that your GST situation could possibly change if you claim it during the construction phase and then decide to hang onto the stock at the end and lease it out? Maybe someone can clarify this

What is the value of the land under your RLV analysis? If you could achieve this in selling the site, would this be enough of a return to cash out and move on without incurring the additional layers of risk? Sometimes a bird in the hand...
 
I’ll try answer all Q’s as they roll in.
HD ACE – We’ll require to sell at least 50% with 12 months of obtaining funds. From what I can see online, a similar build rents for between $490 and $550 pw.

SB25 – BA and OPW are on the drawing board. We’re working with an Architect and Town Planner to finalise the documentation. I’m currently debating in my head whether or not to push the button and complete it 100% for own use or sell with DA, I’m really at the tipping point of where to commit now.
Build wise, looking at elevator, ground floor parking for 16-18 cars, then 4 stories – 3x 4 units at 2brm then top floor with 2 units x 3bdrm – city views to South and Hills to North, possible bay views to east.
Formal campaign, yes will consider it – will check sales commission also. Thanks for all points to consider.
Renting/Sell 50:50 RLV – I’ll have to check the RLV, I’m not sure how our’s has been calculated. And yes GST will change, there are some accounting hoops to jump through – but nothing to major.

Mattnz – Really not sure what the site is worth. My thinking is that it’s only worth what a developer will pay, as they’re the market. Therefore it comes down to what margins they’re after.
Owners V Investors – the proximity to RBH and QUT would make it attractive as an investment, but it’s very close to the city. I would think about a 50:50 split. I will check the ‘yield’ I’m not sure of this, what is a strong yield value? Anything above 6% - I really don’t know. I’ll search more about it, on this forum.
 
Brisbane cbd boutique development

this is an old thread but I have another couple of sites in similar location as Windsor,

one is in Lutwyche of 32 units, other is Kedron 9 units.

Im looking for more similar sites and happy to look at working together with any land owner,

have fun
Derek
 
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