Giant Malaysian developer UEM Sunrise has all but sold out a $330 million residential skyscraper in the Melbourne CBD, its first project to "top out" in the Australian market so far.
The success at the Conservatory – it is 95 per cent pre-sold – follows on the heels of the sell-out of UEM Sunrise's much bigger Aurora tower, a 92-storey apartment tower in the centre of the city.
However, the smaller Conservatory project, with 446 one, two and three-bed apartments, will be finished first after the physical structure was completed earlier this month.
"It is certainly a big deal for us," managing director Anwar Syahrin Abdul Ajib told The Australian Financial Review. "It tells the industry that we deliver."
Around 70 per cent of the apartments have been sold to offshore buyers. Prices ranged from $485,000 for a one-bed apartment to $875,00 for a two-bed, two-bath unit.
On a per square metre rate, apartments in Conservatory sold at around $11,500.
Settlement is coming up in September. It is a process UEM Sunrise is monitoring closely, in some cases helping connect investors with buyers in a secondary market.
"We're also getting in touch with all foreign banks for the foreign buyers," Mr Anwar said.
"In the case of Malaysia we've been talking to Maybank. Maybank is going to help us provide facilities for the respective Malaysian buyers. We're trying to basically match them together."
Maybank has also stumped up construction finance for Conservatory, while a club of lenders – Westpac, along with Asian banks OCBC and DBS – backed Aurora.
Not yet profitable
The 42-storey Conservatory is at the northern end of the CBD overlooking the Carlton Gardens.
The $770 million Aurora tower is rising opposite Melbourne Central. It has 941 apartments and a component of 252 serviced apartments, which were bought by Singapore's Ascendas Hospitality Trust for $120 million.
A third project will be under way by the end of the year, after the Malaysian developer took over the Victoria Police complex on St Kilda Road and engaged architect Zaha Hadid to design a luxury apartment complex.
Not all offshore players in Melbourne have enjoyed the success UEM Sunrise has to date. Singapore's Fragrance is struggling to find buyers for more than one-quarter of the apartments in the so-called Beyonce tower.
A $154 million South Yarra project by Malaysia's Gamuda Land has sold 70 per cent of its units and is not yet profitable.
Mr Anwar will assess further opportunities to develop on their merits but is clearly bullish on the city's prospects as a population boom gathers pace.
"I like the buzz, the vibe the city has," he said, listing Melbourne's strengths in business culture, leisure activities, and education and healthcare.
"That's why people are very attracted to Melbourne.
"You can see by the number of flights coming in and how busy the airport is. It shows there is still a long way to go in terms of the potential of Melbourne."Source: Financial Review