Brisbane’s "cash flow positive" Belise 80% sold after slow start

Brisbane’s "cash flow positive" Belise 80% sold after slow start

With 80% of the apartments already sold, Bowen Hills-located 228-apartment development Belise will soon see a tower crane on the site.

The $120 million Belise project has completion expectations for March 2016, and remaining in the development are one-bedroom plus study apartments, and two-bedroom apartments. Prices start from $477,000. Initially, there were one, two and three bedroom apartments, with prices from $405,000.

They have been advertised as "cash flow positive investments" from "year one". This would be for the after-tax outcome for a one-bedroom plus study with a 90% lend for assumed household income buyer of $80,000 to $180,000, at a $471,000 purchase price.

Breaking this down for a one-bedroom plus study shows that to get a substantial after tax cash flow, you would be renting it out furnished ($15,000 packages are available from the developer) or the positive cash flow is $1.63 per week after tax in year one. Adding the furniture package alters the numbers by slightly increasing the rent and providing more depreciation deductions. Interestingly, repairs and maintenance are kept equal for both equations. They make 5% annual capital growth rate assumptions. Body corporate is expected at $3,650 for year one and property management is estimated at 8% plus GST. You can see the full break down here. A furnished apartment is projected as bringing in an after-tax positive cash flow of $84.20, according to their equations.

It was a slow start for the project, having launched in October 2010, but in November 2013 was seeing traction.

RCQ Construction has been appointed to build the development, which is the creation of Reed Property Group and Group Kildey.

Reed Property Group managing director Ken Reed said that the area is high-yielding and experiencing a “boom in development unlike anything this precinct has seen before”.

“There is an undersupply of high grade property in Brisbane’s inner city suburbs and an oversupply of buyers demanding quality, which makes Belise the high-growth property investment that it is,” said Reed.

Belise meets key investment criteria for both owner occupiers and investors offering close proximity to the CBD, the soon-to-be-opened Legacy Way Tunnel eastern connection, public transport, retail and entertainment options, parks, walkways and bike paths, and educational facilities,” he said.

The median unit price in Bowen Hills is currently $407,000, according to RP Data, with a $420 median advertised weekly rental price.

Group Kildey director Graham Kildey said that they wanted a five-star hotel feel and facilities.

It comes with a café, bar, recreation deck with heated pool, spa and sauna, a fully equipped gym and a sunset lounge on level 21.

“The layout of the apartments is open plan to create airflow and to award river or city views wherever possible,” said Kildey.  

Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

New Developments Brisbane

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