Plethora of units as area takes off

A sub­urb just across the river from Bris­bane city is a quiet achiever, writes prop­erty ed­i­tor Michelle Hele

The Courier-Mail - Property - - INFOCUS -

WHILE South Bris­bane is well known for its arts precinct and life­style fa­cil­i­ties such as the Gallery of Mod­ern Art, the Cul­tural Cen­tre and South Bank, it has also qui­etly emerged as an in-de­mand res­i­den­tial hub.

Rental yields in the sub­urb, across the river from the cen­tral busi­ness dis­trict, are strong and de­mand is high, prop­erty an­a­lysts say.

Sev­eral South Bris­bane apart­ment projects have been re­cently com­pleted, are be­ing built or are about to be­gin con­struc­tion.

These in­clude GDL Group’s 10-storey Fish Lane build­ing and Aria Prop­erty Group’s 10-storey Sta­tion 16, which has just been com­pleted.

Aria also has plans for a 56-apart­ment project, Vine, in Rus­sell St, and the 66-apart­ment Ar­ti­san in Merivale St.

Univer­sal Apart­ments, a 69-unit project in Merivale St, has just been com­pleted by Roca Con­struc­tions.

The South Bris­bane Riverside Neigh­bour­hood Plan, which came into ef­fect in April last year, aims to re­tain the vil­lage char­ac­ter of Bound­ary St, in­crease mixed-use de­vel­op­ment in the Kurilpa precinct, im­prove pedes­trian move­ment and con­nec­tions, cre­ate new pub­lic spa­ces and sup­port new and ex­ist­ing pub­lic trans­port.

The plan says the South Bris­bane Riverside should be an eclec­tic, in­nercity riverside community.

It al­lows for a max­i­mum height of 30 storeys of de­vel­op­ment in the Kurilpa precinct of the sub­urb al­though Ur­bis as­so­ciate di­rec­tor of prop­erty eco­nom­ics Jon Rivera says that doesn’t nec­es­sar­ily mean de­vel­op­ers are head­ing that way.

‘‘There has been some great developments from the pre­vi­ous cy­cle that have kept a bit of a lower den­sity,’’ Mr Rivera says.

‘‘De­vel­op­ers know that they can get to that level but the mar­ket has been re­ally re­spond­ing to a lower den­sity and de­vel­op­ers are tak­ing a lower risk.’’

Mr Rivera says look­ing at the plans and de­vel­op­ment ap­provals com­ing through, there are a lot of in­ter­est­ing build­ings com­ing up and few are ‘‘stock stan­dard’’.

He says the lo­cal mar­ket is made up more of in­vestors than owne­roc­cu­piers.

Mr Rivera says South Bris­bane meets what he con­sid­ers are the im­por­tant cri­te­ria for in­vest­ment.

He says the area ful­fils his PIE the­ory by hav­ing pop­u­la­tion, in­fra­struc­ture and em­ploy­ment.

The life­style and cul­tural fa­cil­i­ties in the sub­urb are a big draw­card as well, he says.

‘‘I got asked this ques­tion about a month ago: ‘If you had $500,000 to spend where would you put that money?’ ‘‘And I said South Bris­bane.’’ Mr Rivera says it has been a rel­a­tively for­got­ten area be­cause a lot of fo­cus un­til now has been on com­mer­cial de­vel­op­ment.

But he says rents are high and in­vestors are achiev­ing strong yields.

‘‘The big­gest draw­card is the cul­ture, you can’t put a price on the value that ac­tu­ally has on a sub­urb – it is a com­plete pack­age.’’

RP Data na­tional re­search di­rec­tor Tim Law­less says prices in the sub­urb have in­creased by 22 per cent in the past five years.

In the past year, while Bris­bane’s me­dian unit price was fall­ing 2.6 per cent, South Bris­bane’s in­creased by 3.3 per cent.

The sub­urb has caught the eye of res­i­den­tial de­vel­op­ers as it is ap­peal­ing to res­i­dents be­cause it is close to the city, the Mater Hospi­tal and Queens­land Univer­sity of Tech­nol­ogy.

Mr Law­less says units are still cheaper than neigh­bour­ing West End.

Paul Bar­ratt, of CBRE Res­i­den­tial Projects, says the rental mar­ket is tight in South Bris­bane.

The present va­cancy rate is 1.29 per cent – a healthy rate is con­sid­ered to be 3 per cent and any­thing un­der that tight.

He says just more than half of the pop­u­la­tion in South Bris­bane are ren­ters.

‘‘In 2007, there were 17,000 of­fice work­ers and 900 apart­ments; in 2012 there are 30,000 work­ers and 1100 apart­ments, plus there are now over 100,000 students en­rolled in nearby in­sti­tu­tions,’’ he says.

He puts the yields of 7.08 per cent as among the best in Aus­tralia for a ‘‘blue-chip’’ sub­urb.

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