Fri, 21 Sep 2018, Gold Coast Bulletin
Chinese buyers are spending millions of dollars buying into one of the biggest industries on the Gold Coast – management rights for apartment buildings.
One of the major groups selling the rights says a third of all inquiries for ‘prime’ opportunities are coming from Chinese buyers.
Resort Brokers agent Alex Cook said their preference was buildings with permanent residents, rather than those with holiday letting.
“Top of their shopping lists are buildings where the body corporate pays a substantial salary for caretaking.
“Most of the sales to Chinese buyers are of established management rights but we can see these buyers, as they gain more experience, targeting the rights to new projects.”
Resort Brokers’ Paul Mueller said four of the group’s biggest Gold Coast residential rights sales this year have been to Chinese buyers.
These included Park Breeze, the twin Nexus towers, and the new Allegra apartments building in Southport, and Deepwater Point overlooking the Broadwater at Labrador.
“Together these sales are worth more than $10 million and were struck at strong multipliers of between 5.5 and six times.
“The buyers share a Chinese background, but they are not the migration market.
“Among them are Australian, New Zealand, and Hong Kong Chinese who had already settled on the Gold Coast and were seeking to buy their own business to generate a secure income while offering good prospects for capital gain.”
Mr Mueller said the prices for the four properties ranged from more than $1.5 million to well in excess of $3.5 million. All included a manager’s unit.
He said that where management rights buyers had typically sought buildings with a high number of units in the letting pool to generate income, these Chinese buyers were paying greater value on the size of the guaranteed salary. “We have the rights to the upmarket Aqua building on the Broadwater at Labrador listed for close to $3 million, including an upscale apartment,” he said.
“It is a predominantly owner-occupier building with only 15 of the total 104 apartments in the pool, so not a lot of income will come from letting fees.
“But, with an annual body corporate salary of $288,000 on offer, we are getting a great deal of interest from Chinese buyers.”
Mr Mueller said funding was not a problem for the Chinese buyers.
“Our Chinese buyers contribute the 40 per cent deposit from their own resource.”
Mr Mueller said interest from Chinese buyers in off-the-plan management rights to new projects were expected to build.
“We sold the Allegra rights off the plan at a very healthy six-times multiplier and we expect there will be a good deal more interest from Chinese buyers in a couple major new projects.”