Offshore buyers swoop on Melbourne apartments

26 November 2014

www.afr.com, 26 November 2014

By Nick Lenaghan

Malaysian developer UEM Sunrise ­virtually sold out a new high-rise ­residential tower in central Melbourne after two weeks.

Three-quarters of the apartments were bought by foreigners.

With 941 residential apartments and around 210 serviced units, the 92-storey Aurora Melbourne Central is the ­developer’s first local project.

Construction is due to begin next year.

The developer has sold 895 units already, mostly through its strong ­networks in south-east Asia and China. Local buyers account for 25 per cent of the apartments.

Around 60 per cent of buyers are investors. Raymond Cheah, director of UEM Sunrise’s Australian subsidiary, said the sell-out was “breathtaking”, as the project launch had originally been slated for January next year.

“In UEM Sunrise’s 49 years of history in property development, the intensity and excitement of Aurora Melbourne Central is unmatched,” he said.

Mr Cheah said the project’s offshore buyers were attracted both by ­Melbourne’s reputation as the world’s most liveable city and its relatively low prices by international standards.

“As a benchmark in Australasia, Melbourne core CBD prices are on par with KL, 50 per cent cheaper than Sydney, 200 per cent cheaper than ­Singapore, 350 per cent cheaper than Hong Kong, and a staggering 550 per cent cheaper than London,” he said.

“So if you look at the macro context, Aurora Melbourne Central is really an affordable luxury.”

A GOOD TRACK RECORD

The $730 million project will rise in the heart of the Melbourne CBD, on La Trobe Street near the State Library and RMIT University.

It has direct underground connections to the city rail loop and the central retail precinct.

The project includes serviced apartments, along with retail and offices.

Eu Ming Lim, a property lawyer at Thomson Geer Lawyers who acted for UEM Sunrise, said the developer’s ­reputation gave it an edge with buyers.

“Confidence in the developer as to delivery, quality and choice of location is very important to those who may not have the local knowledge and ­experience for making such choices on their own,” he said.

UEM Sunrise managing director Anwar Syahrin Abdul Ajib is wary about the potential impact of a ­parliamentary inquiry into foreign house and apartment buyers. “If there were new taxes on fo­reigners the ­market may suffer a ­knee-jerk reaction and the property market may stall and discourage foreign investments,” he said. “The offshore developers have ­cushioned the supply in the Melbourne market, or else housing prices would definitely have greatly escalated due to the shortage of supply.” Listed on the Malaysian stock exchange, the developer is a subsidiary of the UEM conglomerate, which is owned by Malaysian sovereign fund Khazanah Nasional.

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