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ALL 147 apartments at the $86 million Trafalgar Lane at Woolloongabba have settled following the tower's completion in July, and all the apartments have been leased within 60 days of settlement.
Amid fears of an apartment glut in Brisbane, the project, developed by Melbourne-based Pellicano, has demonstrated demand remains in the city for the right product.
Some recent projects have recorded defaults as high as five per cent, according to Maddocks, despite historically lingering at three per cent.
Corelogic has also reported that 15.6 per cent of Brisbane CBD unit sales are now loss making, compared to 12 per cent last year.
Despite this, Pellicano Managing Director, Nando Pellicano says the fundamentals of a quality project, including location, design, transport, services, employment and value for money, still apply, and drive demand.
"For us, Brisbane is not a short term investment. We've been in Melbourne for 49 years, and in Brisbane for 19. We foresee substantial more growth and opportunity to come in select areas of Brisbane including Woolloongabba due to its proximity to the CBD and attractive existing lifestyle amenity nearby," he says.
"We undertake careful feasibility studies and research when considering a project, and then spend a considerable amount of time and dedication on the design phase to create functional apartments that will stand the test of time.
"With a good quality product, reasonable prices and a high growth location, settlement risk is dramatically reduced. These rules can be applied consistently across the market and we have recently witnessed the results with the success of Trafalgar Lane."
The twenty-storey development is designed by architecture firm DBI Design. Twenty per cent of the residences were bought by owner-occupiers, with the remaining 80 per cent snapped up by discerning investors.
The majority of tenants are affluent young professionals who work in the immediate area and Brisbane CBD, only two kilometres from the project.
According to research released by think tank Urbis in March, employment in the Woolloongabba catchment area is set to increase by 3.9 per cent per annum over the next twenty years.
"The rental demographic in Woolloongabba is overwhelmingly focused on people in their mid-20s to late-30s, with generally higher than average incomes," says Pellicano.
"The area is going through substantial rejuvenation off the back of the infrastructure currently being built by the State Government. Woolloongabba is one of the main benefactors of the new cross-river rail, and transportation has historically been a driver of growth rates and prices."
Pellicano has also seen success at its joint venture with Perri Projects, the $600 million urban regeneration project South City Square, also in Woolloongabba. The partners recently announced $190 million in sales across its first three towers.
"The state of play in property is more complicated than a simple 'oversupply'. Supply isn't oversupply until it is built, and constricting forces on the market are preventing some of the less feasible projects from even hitting the market in the first place," Pellicano says.
"The product we are building is servicing the market, and the supply is being absorbed both at the sales and at the leasing end."
Other Business News Australia Brisbane property stories:
Luxury apartment buyers pocket $200,000 gain in one year
Developers miss the point as apartment bust 'inevitable'
Concern over building boom comedown
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