26 JANUARY 2021 Crown Group is banking on a looming undersupply in the apartment market and a surge in buyers this year to push ahead with its first apartment projects in Melbourne, Brisbane and LA, after reporting a rise in both profit and off-the-plan sales in the 2020 financial year.
Crown Group earlier this month lodged its financial results for the 12 months to June 30, showing pre-tax profit rose 6 per cent to $35.6 million and a solid 111 apartment sales worth $131.5 million across the year.
This was up from 78 apartments worth $92.7 million the previous year – despite enduring four months of the pandemic and a nationwide lockdown in that period. Settlements on the $395 million Waterfall by Crown Group in Waterloo during the peak of lockdown helped.
Already this month, Crown Group has noted an unusual spike in traffic to its display suites and website as buyers have been struck by a sense of urgency caused by media reports that prices will rise sharply later this year, particularly once international students and investors return to the local market. The RBA noted prices could rise 30 per cent over three years if interest rates remain at their record lows.
This followed a buoyant end to 2020, when Crown Group announced world-leader Kengo Kuma and local firm Plus Architecture are to design its first Brisbane project, the $500 million development at West End, and the success of its first-ever international sales launch via Zoom conference for its Artis project in Melbourne.
The sales team cleared nearly $6.5 million in sales for Artis, the new Southbank Melbourne project, in two weeks, when it released a limited release number of luxury apartments to the Indonesian market in December.
Mr Sunito said it was the first time he had launched a project in Indonesia before any other country and the results had been astounding.
“It shows that there is a market among Indonesian buyers, particularly for Melbourne, and that buyers are looking to a future beyond the pandemic,” Mr Sunito said. “They are thinking ahead, for when their children are able to study in Australia again and for when international borders are open.
“What’s most extraordinary is that the sales were made via Zoom during Indonesia’s most severe restriction period. The pandemic has not dampened the enthusiasm of potential investors who showed up, both physically and virtually.”
Artis is Crown Group’s first apartment project in Melbourne. Designed by world-renowned Koichi Takada Architects, the development with 152 luxury apartments and penthouses will enrich the vibrant Southbank arts precinct, with the beauty of its white ribbon façade effect that reflects the notion of “art in motion”.
Mr Sunito said the Melbourne and Brisbane project timings would benefit from a forecast undersupply of new homes in both cities, caused by the current slowdown in residential construction activity. Both were within minutes of the CBD and offered modern living with quality finishes in an appealing and convenient location.
“I expect that in two to three years’ time we will have huge demand for new homes in Australia that will not be met by supply because of the lag in construction that is happening now, particularly in areas of need such as inner-city areas,” he said. “This, coupled with the low cost of borrowing due to record low interest rates, has the potential to drive new apartment prices up.”
Crown Group will focus this year on sales at its big inner-Sydney apartment projects – the $575-million Mastery at Waterloo with 368 apartments and the $1 billion Eastlakes Live project in the inner south, with more than 530 apartments, where three towers have topped out.
It is also working towards launch of its proposed LA project, which is pending entitlement approval in late 2021 by the City of Los Angeles.
The $US500 million ($649 million) mixed-use high-rise condominium and hotel tower in the city’s Downtown district is a joint venture with Singapore-based Magnus Property Pty Ltd and one of Indonesia’s biggest property developers, ASRI. It is expected to be completed in 2024.