Big banks hurting Coast

Developers say they’re forced offshore for loans

DEVELOPERS on the Gold Coast say they are being punished by the big banks for an oversupply of units in other Australian cities.

The developer of a $200 million, 210-apartment project at Surfers Paradise has just secured funding, but had to avoid the big four and go offshore for a loan.

While rental vacancies are at three per cent in Brisbane, and around two per cent in Sydney and Melbourne, the rate is less than one per cent on the Gold Coast.

Developers of the 75 per cent-sold Markwell Residences, Brisbane-based Citimark Properties, have appointed Hutchinson Builders to construct the 46-storey tower in the new year.

Citimark joint managing director Angus Johnson said Australia’s constrained development finance market had made projects of this scale difficult to get off the ground, particularly for private developers.

“The shortage of finance has impacted significantly on new supply despite very evident demand and the Gold Coast having one of the highest population growth projections in Australia,” he said.

“Citimark has a long track record with all four major trading banks and for the first time in our history, we did not approach any of them to fund the construction of Markwell Residences.

“We believe the Gold Coast is fundamentally one of the strongest markets in Australia with a significant undersupply, growing population and more than $12 billion in private and public infrastructure investment in the immediate region.”

Citimark is also planning 775-apartment twin towers, one with 67 storeys, in Surfers Paradise and a $110 million, 21storey apartment tower at Chevron Island.

Located on the corner of Markwell Ave and Surfers Paradise Bvd, Markwell will be the largest residential tower to be built in Surfers Paradise in more than eight years.

The project’s funding was arranged by James Walsh, national director of Deloitte Real Estate.

“There is a significantly low supply of new projects actually being constructed in the central Gold Coast region,” Mr Walsh said.

“This is reflected in the record low residential vacancy rate across the Gold Coast which was recently estimated at 0.9 per cent and the lowest of Australia’s largest six cities.”