Marshall White Projects Newsletter Edition 2

Retail or Referral partners?

PROJECT PROFILES Past and Present

Edition 02 | 2013

Amending a plan of subdivision

Welcome To Marshall White Project Marketing’s Second Newsletter For 2013.

Since the success of the first edition and the positive feedback from developers and builders alike, we are pleased to continue to provide essential information for those looking to construct high density apartments and townhouses.

The difference in the second half of the 2012-2013 financial year has been dramatic, with a significant increase in buyer demand and the beneficial flow-on effect to the ‘sell through’ rate for the majority of our current projects.

Our referral partners, or ‘channels’ still play an active role in moving investor grade product, both here and overseas, often generating sufficient pre-sales to cover debt costs prior to a public launch.

(See article on 307 Barkers Road, Kew) I invite you to discuss with me your next project.

Leonard Teplin Director | Marshall White Project Marketing 0402 431 657 | 03 8862 4938 leonard.teplin@marshallwhite.com.au

Breaking News The number of project sales and the subsequent sell-through rate of our boutique developments throughout the catchment areas of our offices is almost double year on year and a number of developments are ‘flying under the radar’ as far as the residential owner-occupier is concerned.

of which have either a city view or northerly orientation - all with easy city access. ‘The Union’ 174 Union Road, Surrey Hills will also appeal to a similar sector of the buyers, namely single professionals, couples and local investors when launched early November.

307 Barkers Road, Kew was launched without an internet presence or hoarding board, yet twenty-six of the twenty-nine apartments were placed by our investor groups within a fortnight of introduction.

Our top-end activity is also indicative of the renewed confidence shown by the empty-nester, with the magnificent 372 sqm penthouse apartment at 41 Carson St, Kew selling off the plan for $3.6 million, well before a forecast construction completion date of late 2014.

Overseas investor groups are currently touting the ‘Solstice’ apartments at 138 Camberwell Road, Hawthorn East throughout Kuala Lumpur, Shanghai and Beijing during October with already over thirty apartments pre-committed prior to a scheduled public launch early in 2014.

Recent launches on the open market include the launch of ‘One Seven’ at 17 Riversdale Road Hawthorn offering thirty-four apartments, a number

If you are looking to market apartments or purchase off the plan then please contact Leonard Teplin on 0402 431 657

Working With A Developer To Set Up An Owners Corporation If you are a developer of a strata development it is compulsory to create an Owners Corporation when a Plan of Subdivision creates common property and you must be aware of your obligations and responsibilities before you are permitted to list your properties for sale. Importantly, when the Owners Corporation is established it becomes a separate legal identity and can sue and be sued. It is important to ensure you understand the process. One way to do this is to consider appointing an external professional manager to assist with the process.

As a developer, you have a multitude of responsibilities under the Owners Corporations Act 2006, including arranging Owners Corporation Building & Public Liability insurance, registering the Plan of Subdivision with the Titles Office, and providing the following: • • • • • • • • • • • • • •

Plan of Subdivision Common Seal Occupancy Certificates Insurance Policy Special Rules Budget Accounts Folder Cashbook Minutes Folder Keys & Remotes Financial Reports Folder Owners Corporation Register List of Warrantees from Tradesmen Maintenance Contracts

You must also provide purchasers with Owners Corporation Certificates as part of the section 32. This certificate sets out the details of the Owners Corporation funds, fees, insurance, rules, leases or licenses and any proposed works. You should also give purchasers the details of building defects (Builders Warranty) insurance, and ensure that a meeting of the Owners Corporation is arranged within six months to decide on management, insurance, budgets and a host of other requirements.

Pitfalls of not attending to any of these issues can be many and onerous.

A purchaser may withdraw from a sale if an Owners Corporation Certificate is not provided or the requisite Owners Corporation Insurance is not in place when the lot is sold.

Every minute you spend on paperwork is time you could be devoting to your project. There is a solution – consider appointing a manager very early in the development process. This manager can assist you by taking the pain out of setting up your Owners Corporation or strata title development and can be delegated the developers responsibilities.

The Melbourne Body Corporate Management Group has 46 offices throughout Greater Melbourne and Regional Victoria who are all specialists in assisting developers set up Owners Corporations, and take care of all the above requirements. They also have a consulting arm who can liaise between yourself and their local office to co-ordinate any of your projects, no matter where they are located.

Contact Bill Connors at Melbourne Body Corporate Management Consulting on 03 9544 2889 / 0414 827 913 or www.mbcmconsulting.com.au

No Longer Just a Man’s World In a field dominated by men, Rochelle Bugno actually believes that property development is the ideal career for a woman. The developer of ‘The Union’, an enclave of twenty-six one and two bedroom apartments in a leafy residential area of Surrey Hills, Rochelle brings a welcome female perspective to the industry.

A mother of three school age children, Rochelle has discovered that property development gives her the freedom and flexibility to be as involved in her children’s lives as she would like to be while at the same time significantly contributing to her family’s financial security. Although some weeks are more demanding than others I have always been able to spend the school holidays with my children, she says.

To the risk averse, embarking on a development of the scale of ‘The Union’ would be a very daunting proposition. The secret to Rochelle’s confidence is her methodical approach to due diligence.

So before she even commenced the development she had undertaken a thorough risk assessment. She does advise would be developers not to expect everything to go to plan. There will always be problems or

obstacles in the way. It’s the attitude that you take to those problems that is the key. You need to look at every problem as a challenge to be overcome rather than as a reason not to proceed, she says. One of the hurdles that Rochelle faced was that the council decided to impose a heritage listing on the façade of the building. Rather than becoming adversarial as most developers would, she embraced the decision. As a resident of the area herself she understood the desire to maintain the character of the streetscape. Her approach is to work with the locals not against them.

A priority for Rochelle is the liveability of the apartments, something that is often overlooked by other developers. She tries to envisage just how the new owners will use the spaces. Outdoor spaces and storage are often after thoughts but Rochelle believes they are integral to the owner’s lifestyle enjoyment.

While construction is a field that you may expect to find a high level of chauvinism, Rochelle has found architects, town planners and even tradespeople very supportive. As soon as they understand that you are serious about the industry and know what you are talking about they will respect you, says Rochelle.

Rochelle advises women interested in entering the field to start small, maybe with an apartment renovation. The idea is to sell each project once it is completed and then use the proceeds to launch larger and larger developments. That is how Rochelle herself gained the expertise and confidence to build ‘The Union’. Her other piece of advice is to find a mentor, something she has found invaluable.

‘The Union’ will be soft launched to the retail market late this year, then Rochelle is looking forward to adding a woman’s touch to an even bigger development.

meet our directors Mark Dayman AREI Mark began his property career in 1985 after relocating to Melbourne from South Australia where he trained as a mining engineer before working underground for three years in Kambalda WA. With twenty-five years in Real Estate he brings a wealth of knowledge to Marshall White Projects.

Mark’s enduring passion has been for project work and now with Marshall White Project Marketing, he leads a dedicated project team for ‘off plan’ townhouse and apartment selling. ‘The opportunity to be involved in literally every aspect of a marketing campaign means that I can take full ownership of achieving the best yield, not just the best price. In the end it’s all about giving our developer clients an edge in the selling process.’

Currently involved in over $200,000,000 in new ‘off plan’ product, Mark’s dedicated projects team assists more developers and builders reshape the skyline than any other agency. Mark would welcome the opportunity to assist from the concept stage right the way through to completion.

0409 342 462 | mark.dayman@marshallwhite.com.au

Leonard Teplin Having grown up in South Africa and then spent several years in Portugal Leonard has developed an instinctive appreciation for the diversity of inner Melbourne communities and housing styles.

Known for his ability to create sales at the highest level, Leonard specialises in project sales and marketing in Melbourne, with consistent sales results of over $125 million dollars in sales each year, Leonard operates at the highest end of the real estate market.

Connected to the best developers and builders in Melbourne, Leonard enjoys managing his clients projects from inception to completion.

Leonard enjoys many interests including sport, history and travel. Leonard also enjoys fundraising activities with both Marshall White and his fiancĂŠ Leisa.

0402 431 657 | leonard.teplin@marshallwhite.com.au

CURRENT PROJECTS

Willow Garden Apartments 28-34 Boisdale Street, Surrey Hills

Range - $410,000 - $1,040,000 Percentage Sold - 85%

Hidden within the natural beauty of Surrey Hills are the Willow garden apartments. Boutique, luxury parkside living. Taking advantage of its enviable parkside location, Willow uses natural material and tones to blur the divide between building and park, creating private, leafy residences. With only two apartments per level and the convenience of

The Consort 39-41 Carson Street, Kew

Range - $2,285,000 - $3,595,000 Percentage Sold - 60%

private car parking, Willow offers an outstanding level of luxury. Inside each residence, spacious open-plan living areas give each home a unique, relaxed flow. Large floor-to-ceiling windows ensure an abundance of natural light, as well as providing magnificent park views.

The Charman 323 Charman Road, Cheltenham

Range - $350,000 - $695,000 Percentage Sold - 90%

The Seymour 40 Seymour Avenue, Armadale Range - $415,000 - $609,000 Percentage Sold - 20%

XI Camberwell 594 Riversdale Road, Camberwell

Norfolk 7 Somers Avenue, Malvern

Range - $650,000 - $2,000,000 Percentage Sold - 90%

Kulin Townhouses 10 Emily Street, Carnegie Range - $599,850 - $649,950 Percentage Sold - 35%

Range - $465,000 - $1,425,000 Percentage Sold - 90%

One Seven 17 Riversdale Road, Hawthorn

Range - $389,000 - $1,290,000 Launching October

FEATURE DEVELOPMENT Solstice 138 Camberwell Road, Hawthorn East Range - $454,000 - $676,000 Percentage Sold - 30% Solstice is a vibrant, active and visually stunning addition to the Camberwell Junction landscape. It has been created to project presence and breathe life into this coveted location. Inspired by its near neighbours, hints of the beautiful art deco Rivoli Cinema can be seen in Solstice’s striking, organically curved bronze façade. Lustrous and bold, the play of light and shade off its facade will change as the sun moves through the sky, creating an active, intriguing statement.

At the centre of Solstice sits a private landscaped garden and entertainment area – the perfect place for residents to relax, entertain and gather. The ground-level retail will give the Solstice community its daily heartbeat. Solstice apartments, located at 138 Camberwell Road Hawthorn East, is close to a multitude of attractive amenities.

SOLD OUT

Stonnington Terrace 1-21 Somers Avenue, Malvern

SOLD OUT

Argyle 93 93 Argyle Street, St Kilda

So Good The Architect Will Live There Too A block of seven luxury apartments in Kew designed by architect Nicholas Day, who will live in the building when it is complete, is clearly aimed at the local empty nester market. The Consort, at 41 Carson Street, will have six apartments and a penthouse and is a sister block to 39 Carson Street, which sold to empty nesters from some of Melbourne’s most prestigious suburbs.

All of The Consort’s apartments have three bedrooms with en suites, and a study and

separate powder room. Six are 279.6sqm with a terrace of 69sqm, and the penthouse is 367.6sqm with terrace totalling 168sqm.

All apartments have three basement car parks and storage. Prices for off the plan sales begin at $2.43 million and interiors will include double-glazed windows, high 3.0 and 3.3m ceilings, Calcutta marble in bathrooms and kitchens, European oak parquet floors, tall Emporite doors and reverse-cycle heating and air conditioning.

The exterior has an imposing, slightly Gothic air, with angled rooms as a corner feature.

Construction has begun and completion is anticipated late 2014. For enquiries, please call Mark Dayman on 0409 342 462

Past Project Profile 307 Barkers Road, Kew Retail or Referral Partners?

There are a few problems with developing that are good to have. One, that your sell-through rate is so rapid that the development is un-named and working drawings are still on the architects to do list. In spite of the fact that it’s only been two weeks from a release to the referral partners, you’ve already placed your twenty nine apartments.

Your sell-through rate usually correllates to the importance of schools, parklands etc to your target market. Now, increasingly, the question needs to be asked: ‘Who is going to buy them? The retail market (young professionals etc) or the referral partners (investor groups).

Number of apartments

29

Pricing Range

$435,000 to $803,250

GR

$16,607,700

Market status

Released August 2013

Completion date

Anticipated Late 2014

Architect

Clarke Hopkins Clarke

Builder

Statewide Services

Website

Not needed

Target market

Investors only

Results to date

Sold Out

If you are going to work with referral partners (more importantly - if you have the resources to fund a sell through), then you need to brief your town planner and architect accordingly.

Product

No.

Average sqm

Average Price

1 Bedroom

9

52.3

$461,000

Let’s look at the numbers for 307 Barkers Road, Kew.

2 Bedroom, 2 Bath

20

69.6

$590,500

‘Modelling’ up a group of apartments for the referral partners involves: 1. Location - associated infrastructure/appeal 2. Preferred Size

1B/R - 43-50sqm

2B/R - 55-65sqm 3. Preferred Price Range

1B/R - $365,000—$455,000

2B/R - $500,000—$595,000

With the two opposite ends of the off-the-plan market moving well, namely the investors in the $365,000 - $595,000 range as well as the owner occupiers in the $1 million plus market, it’s important you speak to Marshall White Project Marketing before submitting your planning application and establish which end of the market you should be catering for with your next project.

Please contact us with your enquiries Mark Dayman 0409 342 462 Leonard Teplin 0402 431 657

Off The Plan Sales When Does An Amendment To A Plan Of Subdivision Materially Affect A Lot? In Lockwood v PSP Investments Pty Ltd [2013] VSC 10 the Victorian Supreme Court recently confirmed the Victorian and Civil Administrative Tribunal’s (VCAT) ruling in Besser v Alma Homes Pty Ltd [2012] VSC 460 that an amendment does not need to be ‘adverse’ or ‘affect rights deleteriously’ to be material.

of sale had been validly rescinded. The Vendor’s offer to grant ninety-nine year leases over the car parks was seen as an admission that the eight contracts of sale were ‘linked’ and went against the Vendor’s argument that each contract of sale should be looked at separately.

The main things to take from this case are:

In Lockwood the Purchaser bought four apartments and four car parks at a development in Windsor (eight separate contracts of sale). Following the day of sale, amendments were made to the plan of subdivision which effected the following: 1. Making the car parks common property (the four car park contracts of sale therefore failed) 2. Removing lot 800 on the roof (proposed penthouse) and making this area common property 3. Increasing the lot liabilities and entitlements as a result of the car parks and roof being common property.

The Vendor did not notify the Purchaser of the amendments in writing (as required under section 9AC(1) of the Sale of Land Act 1962 (Act)) and the Purchaser only discovered the amendments after the Plan Of Subdivision was registered. The Vendor subsequently notified the Purchaser of the amendments in writing and offered ninety-nine year leases of the four car parks.

The Purchaser sought to rescind the four apartment contracts of sale (the four car park contracts of sale had already failed) on the basis that there had been a material change to the Plan Of Subdivision.

The Vendor argued that the 8 contracts of sale were stand alone and an amendment had to be detrimental before it could be material.

The Victorian Supreme Court held that an amendment does not need to be adverse or affect rights deleteriously to be material and that the contracts

1. Under section 9AC(1) of the Act the Vendor must notify the Purchaser in writing within fourteen days of the ‘proposed amendment’ following the request for amendment and before registration of the plan of subdivision.

2. Registration of the plan of subdivision will not prevent a Purchaser from rescinding a contract of sale under section 9AC(2) of the Act within 14 days of notification of a material amendment to the plan of subdivision.

3. An amendment to a plan of subdivision does not need to be adverse or affect rights deleteriously to be material. In Besser the material amendment to the plan of subdivision was a reduction in the Purchaser’s lot liability and entitlement which the Vendor argued was an advantage, but VCAT held was material and allowed the Purchaser to rescind the contract of sale.

It seems that the Courts will support rescission where there have been amendments to the plan of subdivision.

Amendments to plans, whilst at times unavoidable, should therefore be kept to a minimum, especially in relation to changing lot entitlements and common property, and should be communicated to Purchasers in writing as soon as possible following a proposed amendment and prior to registration of the plan of subdivision.

For more information contact Mills Oakley Lawyers Phone: (03) 9670 9111 | Email: info@millsoakley.com.au

our unique points of difference

Your Own Marketing or Marshall White Project Marketing We appreciate there is a lot of information to consider before appointing your agent and it is often difficult to quantify the benefits that a particular agency may make prior to a marketing process taking place. Marshall White has focused on implementing a number of proven strategies that project marketers and developers either do not employ or, at best, do so on a very limited basis.

The Basics Developers and agents are doing the following to generate sales • • •

Work out of a dedicated display suite.

Liaise with referral partners, both locally and overseas – Marshall White works with 184 referral partners to assist in finding the right ones for your project.

Marketing designed to attract buyers to your project

Twelve months ago these procedures were enough to generate sufficient pre-sales to cover debt financing, however, we are now in a new market.

Now new strategies with the benefits of strong relationships and market presence must be leveraged to achieve a successful outcome Marshall White is the leading agent in Stonnington, Boroondara and the Bayside areas.

Selling Apartments Today Marshall White Project Marketing - Our unique points of difference •

RAND – the security of a leading, instantly recognised and most importantly trusted brand helps the resurgence of ‘empty nesters’ transition B from their family home within Bayside/Boroondara/Stonnington into their new residence. With Marshall White’s market dominance within these high wealth area’s, our ‘front of mind’ recognition will create an easy buying path for this crucial section of your target market.

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T HE ART OF CROSS REFERRAL - attached is some of the recent developments Marshall White Projects have been actively been promoting, from which a significant database of over 3,000 “off the plan” qualified buyers have been gathered.

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ORE REFERRALS - Marshall White have created Marshall White One specialising in residential property from $300,000 - $1,000,000, M specifically with in Stonnington and Boroondara – these dozen salespeople actively refer qualified buyers to the project team.

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UYER EMAIL – upon receiving your instructions to market your development it will be featured in our weekly eBulletin update which is sent B to over 20,000 registered buyers as our feature project. Our qualified buyers rely on this bulletin and we consistently receive a number of sales from this strategy alone. Our data base is a central pool of potential project buyers and our seventy sales agents work together to introduce buyers to “off the plan” apartments. Importantly as commission based agents and project salespeople they have a strong financial incentive to do so and this means our clients have the entire sales team behind them, all working to sell your project!

The climate today dictates your need to obtain sales from a dozen different sources – each sale crucial in a market of ample choice and determined by the quality of your salespersons follow up.

Every effort is made to provide accurate and complete information in Marshall White’s (trading as Marshall White Projects) technical and regulatory newsletters. However, Marshall White cannot guarantee that there will be no errors. Marshall White and its contributors to the newsletter make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of the newsletters and expressly disclaims liability for errors and omissions in the contents of this newsletters. Neither does Marshall White and its contributors to the newsletter assume any legal liability for any direct, indirect or any other loss or damage of any kind for the accuracy, completeness, or usefulness of any information, product, or process disclosed herein, and do not represent that use of such information, product, or process would not infringe on privately owned rights.

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