Real estate investment management firm Qualitas announced that all apartments for its Aqua Bondi Junction project have been settled within a three-week period, recording a rare ‘zero percent’ default rate of the pre-sales.
‘The success of Aqua proves that well-designed projects targeting the right mix of buyers, that were fairly sold, are standing up well in the face of a tougher funding environment for purchasers,” Qualitas Managing Director of Principal Investments Mark Fischer said.
The Qualitas-developed high-rise is located at the corner of Oxford Street and Hollywood Avenue, directly opposite Westfield Bondi Junction.
All 129 of the apartments were sold off the plan in 2014 within four hours, with several of the in-demand apartments subsequently changing hands before settlement.
Mr Fischer said Aqua Bondi Junction’s type of development meets the needs of the end occupier and will always exist, regardless of market conditions
Qualitas originally co-funded the project alongside Leighton Properties, but a change in business strategy by its parent CIMIC saw the developer sell its share of the project to Qualitas, who became sole owner.
“At inception of an investment you rarely anticipate needing to buy out your operating partner and delivering the project yourself, however we are always focused on ensuring that we have the in-house technical expertise to do this if required,” Mr Fischer said.
The successful settlement of Aqua is in line with other recently completed projects in the Qualitas portfolio, which includes just under 500 units settled in Sydney, Melbourne and Brisbane, with only 4 pre-sale defaults that were all subsequently re-sold at list price.
“We did experience some requests for extended settlement timeframes which we accommodated, however, the overwhelming majority of purchasers were ready, willing and able to settle,” Mr Fischer said.
He said the firm remains cautiously optimistic about market conditions.
“We are conscious that there will be a significant number of scheduled completions in the latter part of 2017, which the market will need to absorb. But as we head towards the end of 2016 there are no signs of large-scale defaults or serious problems with pre-sales settling.
“We anticipate that there will be specific projects and precincts that encounter more settlement challenges than others. However, the industry seems to have begun rolling up its sleeves to unlock alternative solutions for funding to foreign purchasers.
“Like most things in life, quality will prevail. Well-conceived projects with experienced parties will likely work through any challenges that 2017 presents, whereas borderline projects might see some harder times getting settlements completed,” Mr Fischer said.
Images: Aqua Bondi Junction, courtesy of Qualitas