Requests filed to delay the development of a number of approved apartment complexes

Tough market conditions are being blamed for a growing number of developers requesting long extensions for residential projects, despite council approvals already being in place.

A STRUGGLING apartment market has developers queuing up to gain four-year extensions on already approved projects.

At least five have been lodged with the Brisbane City Council over the past month including the partial delay of multiple apartment towers in Ferry St, West End.

Another request for a currency extension was lodged for a 12-storey development at Stones Corner that was approved in January 2016.

The developer wants until January 2024 to build the 99 apartment complex with retail and business premises that will sit on 14 and 20 Stoneham St, 15 Montague St and 57 Old Cleveland Rd, Stones Corner.

An artist's impression of the 12 storey residential-led mixed-use development with 99 units and retail and commercial floor space in Stones Corner. Pic: BCC

All of the requests, bar one, point to a lack of market demand and tough financial climate. The remaining request for a four-year extension in Paton St, Kangaroo Point, offered no reasons.

The most honest and open application for an extension was related to more than two dozen apartments and accompanying retail premises at Greenslopes.

Developers first lodged an application for the project in 2011 and have since made a number of alterations.

The latest request, lodged by Town Planning and Heritage Consultant, asked to extend the development permit for 609-615 Logan Rd, Greenslopes for another four years.

An artist's impression of the complex that has been approved to occupy 609-615 Logan Rd, Greenslopes. Pic: BCC

The premises are currently occupied by businesses including Veeva Hair Design and Yoga Connect Shen.

“The proposal has suffered from the downturn of apartment unit values which has afflicted the industry for the last half decade and has made presale difficult to obtain,” the application for a time extension stated.

“The limited presales has in turn made getting finance all but impossible. Significant additional time is needed.”

A three multi-level complex to provide 106 units and four commercial tenancies near Yeronga Station also wants the pause button pushed.

Besides citing a lack of demand and “the availability of financing opportunities diminished” there were also tenancy issues.

An artist's impression of the complex that has been approved to occupy several house blocks in Shottery and also one in Cowper St, Yeronga. Pic: BCC

Of the five tenanted premises which will be demolished in Shottery and Cowper Streets, Yeronga, two of the leases still have a further three years to run.

Real estate property analyst Leigh Warner said a four-year extension should be enough to allow the developers to deliver on their projects in more prosperous times.

Warner, who is JLL”s head of residential research, said the worst of the market slump is well and truly behind Brisbane which suffered from a major over-supply of investor apartment stock.

A recent JLL report revealed tighter credit conditions and negative sentiment had led to price falls in the Brisbane apartment market in the first half of the year.

“Supply peaked here in 2016, so we’ve been declining for some time … we had an oversupply but we are still a long way through that process and it’s been tough for developers to start new projects,” he said.

“Particularly for large projects, banks and financier are requiring very high levels of pre-sales and the major banks are wanting 100 per cent of their debt exposure covered.”

JLL’s head of residential research Leigh Warner says the worst of Brisbane’s apartment slump is over and projects like Cross River Rail will assist the recovery because there will be an influx on interstate workers looking for places to live. Pic: Supplied

He said the value major projects, such as Cross River Rail and Queen’s Wharf, had on helping rental and housing demand should not be underestimated.

“It’s going to stay a tough environment for large projects for a little while yet, but this whole process is going to accelerate for a few reasons,” he said.

“One is the level of supply is very low and we have an increasing population growth and part of that is the big infrastructure projects like Cross River Rail, Queen’s Wharf will also help with workers.

“A lot of the construction workers will move up from Sydney when their infrastructure pipeline slows and I can see the market improving quite quickly and we will lead the market in Australia.”