Financial Close For Major Building Projects

13:50' 01-05-2017
Privately-owned advisory firm Point Polaris has achieved financial close for five apartment projects and one hotel project, worth a combined end value of $320 million, in the first quarter of 2017.

    AH Working on Project.tif

    Photo: dropbox.com

    The projects include the 142-apartment project “Reflections” in North Melbourne, and the 93-apartment project “The Longhouse” in Hawthorn. Construction of the 380 apartments and 165 hotel rooms in all projects will generate about 500 local jobs.

    According to Point Polaris Managing Director Andrew Hogan, tighter lending restrictions, announced last year, have made it harder to secure traditional finance from the banks, so non-bank lenders and off-shore institutions have stepped in to fill the gap.

    This is not to say funding is not difficult, he says. The Australian Prudential Regulation Authority (ARPA), which regulates banks and most other financial institutions, have made it harder for developers here and overseas, due to funding restrictions. “Point Polaris has been very successful in achieving Australian bank finance for both local and offshore developers.”

    Mr Hogan says Point Polaris clients sell a lot of apartments, townhouses and houses to Chinese purchasers who are “increasingly market-savvy” and seeking out quality dwellings for the right price. He is critical of the state government's new vacancy tax, which he says is specifically targeted at the Chinese and wider offshore community, and is an embarrassment to the sector.

    Mr Hogan said that contrary to reports, there is no market oversupply, and in fact more apartments are needed in order to meet the demands of the local rental market. Vacancy rates for apartments across greater Melbourne are 1.7%, equivalent to housing and apartment stock being vacant for just six days each year.

    Like many in the market, he also believes recent government changes to the first home buyer grants and stamp duty concessions were misguided. In his opinion, these moves are likely to reduce supply to an “already undersupplied” market, push rents up, and increase purchase prices.

    “Victoria will simply become less competitive,” he said.

    With a portfolio of over $1.8 billion across Victoria and New South Wales, Point Polaris expertise offers end-to-end holistic services from site acquisition, town planning, sales & leasing and finance right through to construction and settlement.

    Joe N

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Keywords: major building projectspoint polaristhe longhouse

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