04 Mar 2021
Words Scott Sawyer Sunshine Coast Daily & Hotel Conversation
Low rental vacancy rate on the Sunshine Coast drives demand for permanent accommodation assets
One of the largest permanent management rights complexes on the Sunshine Coast has been sold for what’s believed to be a record multiplier, with demand for accommodation complexes being driven by extremely low vacancy rates.
The management rights to Atrium at Buderim were sold by Habitat Development Group to Prestige Building Management for just under $5 million, which represents a multiplier of 6.1 for the 305-unit complex.
ResortBrokers Director of New Developments and Hotels, Tim Crooks, and Sunshine Coast specialist broker, Chenoa Daniel, handled the off-market deal and said the rapidly increasing demand for quality rentals on the Sunshine Coast drove the bidding for Atrium to record highs. There are 258 units in Atrium’s letting pool.
“Against the backdrop of border closures, lockdowns and restrictions caused by the pandemic, there’s been a remarkable shift of people who want to move to, or return to, the Sunshine Coast and permanent complexes in the area are now in really high demand,” Mr Crooks said.
“Anecdotally, we’re hearing that the Sunshine Coast's increasingly tight rental market has pushed some renters into caravans, garages and other short-term accommodation until they can find a new property,” he said.
“This has also created a trend where developers are now actively looking to sell their portfolios because of the record multipliers being recorded and they’re cashing in on the demand for these assets.
“For many of the developers, their properties have traditionally been tightly held due to their scarcity and their businesses generate strong cash flow. This appeals to the many people in the market who are asset rich but need that continuous cash flow.”
The region’s median rental availability in December 2020 was 0.3 per cent, which is a significant drop from 1.9 per cent in June 2020, according to research from the Real Estate Institute of Queensland (REIQ). Availability of 2.5 to 3.5 per cent is considered “healthy”, and anything below 2.5 is “tight”, according to the REIQ.
Since pandemic restrictions began in March, ResortBrokers reports it has sold and settled on six permanent management rights complexes on the Sunshine Coast, including Atrium, with a combined total of $16 million. A further five are under offer with a combined value of $8 million.
The three staged development of Atrium was completed in 2014 and the residential community has 145 modern townhouses and a series of four mid-rise buildings consisting 160 apartments. The resort-style complex features four inground swimming pools, along with lounge and BBQ areas, set among landscaped gardens.
Buderim is one of Sunshine Coast’s major urban centres and it is located on a 180-metre mountain which overlooks the key commercial hubs of Maroochydore and Mooloolaba. It’s also just a few minutes’ drive from some of Australia’s most popular beaches.
Habitat Development Group is a builder and developer, a rarity in the industry, and it manages all aspects of its projects in-house from site acquisition, planning, construction and ultimately property management for lot owners.
The company specialises in residential apartments and has a solid pipeline of work with further acquisitions planned. It recently announced it had sold 85 percent of the 65 apartments in Tower 1 of Market Lane Residences, which is the first residential project in the new $430 million Maroochydore CBD precinct. Construction of Tower 1 over 12 levels is expected to be completed in January 2022, while construction of the 81 apartments over 14 levels in Tower 2 will be ahead of schedule and is due to begin soon.
“The Sunshine Coast is one of the fastest growing regions in the country and we see an exciting period of growth, in particular the Maroochydore City Centre, over the next five to 10 years,” said Habitat Development Group director Cleighton Clark.
Habitat has also secured a second site in the Maroochydore CBD precinct, which will be known as the Corso Residences, which means it will have more than 300 lots, either approved or under construction.
The company recently completed the sale of the management rights to The Foundry in Woolloongabba, with 88 residential apartments, for $1.4 million through ResortBrokers.