Gamuda Land gearing up for 661 Chapel St sales event

GAMUDA Land’s first Australian project in Melbourne — 661 Chapel St — has recorded a take-up rate of 30% since its launch in Kuala Lumpur in June last year. The property arm of Gamuda Bhd is gearing up for a sales event in Kuala Lumpur for the luxury development on June 18 and 19, before the launch in Australia that is targeted to take place in the second half of this year. The developer is allocating 15 units to be sold during the Kuala Lumpur event next month.

“We feel that the take-up rate we have achieved [from the first launch] is fantastic. It was 5 to 10 times more than we had expected of an overseas property sale in Malaysia, which targets a very niche and specific market — those who are affluent, well-travelled and have ties to the city they are buying a property in,” COO Ngan Chee Meng tells City & Country.

“Most of our buyers were investors — only a handful were planning to migrate. For us, it is important to have a balanced mix of investors and owner-occupiers in our project, hence our decision to launch in Australia later this year, which will target the owner-occupier segment.”

Ngan says the upcoming sales event in Kuala Lumpur is to give Malaysians another chance to purchase a unit ahead of the July 1 deadline, when stamp duty for foreign buyers will increase to 7% from 3%. He says foreign buyers may be concerned about the increase and should consider buying before the stamp duty goes up.

Ngan highlights the incentives that will be given to Malaysian buyers at the sales event.

“We will return 3% [of the purchase price] to the first 10 [buyers] who book a unit to offset the stamp duty," he says. "Also, they do not have to pay the A$5,000 foreign buyer fee and pay the same duties as Australian locals, but with terms and conditions, such as signing the contract before the cut-off date.”

Ngan says interested buyers can find out what the other incentives are at the upcoming event in June.

Although the increase in stamp duty may discourage buyers, Ngan is confident that luxury developments such as 661 Chapel St are less affected by such measures than lower- to mid-end properties.

“From our market research and observation since 661 Chapel St was first launched, and from other smaller events held recently, we have found that there is a demand for luxury products.”

Ngan reveals that two high-net-worth individuals, one from Jakarta and the other from Hong Kong, have each decided to purchase all the units on an entire floor — Level 27 (minus a 1-bedroom unit that was already sold) with a combined internal area of 211 sq m and Level 29 with a combined internal area of 248 sq m — provided the developer can modify the layouts of the units.

At present, the developer is in discussion with the two interested buyers on combining the previously smaller units into larger ones, and will submit the new floor plans for the authority’s approval once the buyers’ specifications are met. The redesigned units on Levels 27 and 29 will now be priced at A$3.73 million and A$4.76 million respectively.

Due to the reconfiguration, 661 Chapel St now has a gross development value of A$154 million (from A$146 million) comprising 142 units of 1- to 4-bedroom units and penthouses, with internal areas ranging from 40 to 271 sq m in size (previously comprising 169 units with one to three bedrooms, ranging in size from 41 to 266 sq m).

The average selling price of the development is A$14,959 psm, unchanged from last year’s launch, while the maintenance fee (also known as owners corporation fee) ranges from A$2,500 to A$11,000 depending on the level and value of the units.

Lifestyle-centric development

Apart from boasting views of the Melbourne central business district (CBD) across the Yarra River, 661 Chapel St is planned to be a lifestyle-centric development with facilities and a 24-hour concierge.

“We have conceptualised it as a residential tower that has a six-star hotel quality in terms of ambience, space and amenities,” says Ngan.

Most of the facilities are on the sixth floor. They include a 25m swimming pool that is boldly cantilevered over the porte-cochere or drop-off area at the Chapel Street entrance, a spa, gym, steam room, sauna, cinema, two private dining rooms, a wine room for viewing and storing wine, barbecue facilities, lounges and open spaces.

On the ground floor is a four-storey grand lobby leading to a walkway that displays selected pieces from the Lalique x Damien Hirst collection titled Eternal, comprising butterfly motif crystal panels.

“We had planned to have beautiful art pieces on the walls of our sculptured walkway since our soft launch in Malaysia, but had not yet confirmed the pieces. Since then, we have decided to collaborate with Lalique, which is world-renowned for its luxury French crystal. To have these limited edition pieces in our development is an honour,” Ngan says.

Also on the ground floor is a music area and dining room as well as a library with a two-storey onyx and glass window that looks out to the gardens of Melbourne High School, which is adjacent to the development.

Chapel Street and its surroundings

Situated at the northern end of Chapel Street in the suburb of South Yarra, close to the river and 4km from Melbourne’s CBD, 661 Chapel St is serviced by trams, trains and buses.

A tram stops directly opposite the development and the South Yarra train station is eight minutes’ walk away. It is two stops from Flinders Street station in the city centre.

Across the road from the development site is Vogue Plaza, which has a Woolworths supermarket, ATMs and Australia Post. Landmarks around the development include the Como Centre, Fawkner Park, the Jam Factory and Prahran Market.

Savills Australia research and consultancy manager Monica Mondkar describes Chapel Street as a prime retail suburban shopping high street and Melbourne’s most popular and vibrant retail and entertainment precinct outside of the CBD. It has an eclectic mix of shopping centres and street frontage shops, offering a wide array of fashion retailers, cinemas, dining and clubs.

According to Mondkar, the popularity of the suburb continues to rise among all age groups, from baby boomers to millennials, and that has driven up property capital values.

“As a result, the rental market is very strong with more residents renting in the market than those who own property, due to affordability issues,” she says, noting that median rents in the suburb are A$2,200 per month for a 2-bedroom unit, offering gross yields of around 4.6%.

Mondkar advises foreign investors to arrange for a professional property management company to manage their rental properties, not only to generate income but also to maintain and enhance their value in the long term.

Meanwhile, Jalin Realty founder and group CEO Ian Chen says South Yarra is a popular destination as it is well-connected to the city, surrounded by affluent suburbs and has commercial and retail offerings along Chapel Street.

"Demand [for property] in South Yarra has remained strong in recent years, as indicated by steady price growth despite significant additions to the stock from new supply.”

Chen says that close to Gamuda Land’s project site, new restaurants are opening at the northern end of Chapel Street that connects to Richmond on Church Street, while the surrounding Forest Hill precinct, west of Chapel Street, has become a highly-populated area where property investors are capitalising on South Yarra’s popularity and its young demographic.

According to Chen, the more permissive zoning in the Forest Hill precinct has encouraged some major projects in the location, with smaller developments peppered around neighbouring Prahran and Windsor.

“More recently, the neighbouring developments have also been attracting older households looking to downsize from the surrounding wealthy suburbs, taking advantage of high house prices in the area,” he says.

The median sale price for units in South Yarra over the year to December last year, according to Chen, has grown by 6.5%, indicating a wave of new supply that has recently settled, with new product commanding a premium over existing stock, thereby raising the median sale price.

He says the suburb’s average annual median price growth over the last decade has been around 3.8%.

Meanwhile, Chen remarks that South Yarra’s vacancy rate is respectably low at 2.3%, with indicative gross rental yields at 3.8%. He says asking rents for apartments have grown by 4.8% to A$420 per week compared with 12 months ago.

Ngan is optimistic about 661 Chapel St because of the fundamentals of the Melbourne market.

“While prices in Sydney rise faster, it can also experience significant falls in each 7- to 10-year cycle. Prices in Melbourne tend to rise rapidly in the first two years [of the cycle] and then move moderately in the remaining years until it has a growth spurt again. And, as Sydney is increasingly unaffordable, Melbourne is expected to be the next centre of growth as it is ranked the No 1 city in Australia for population growth, which is set to reach 2.28 million households by 2035,” Ngan says.

This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on May 30, 2016. Subscribe here for your personal copy.