[U/C] 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

All high-rise, low-rise and street developments in the Adelaide and North Adelaide areas.
Message
Author
User avatar
Algernon
Legendary Member!
Posts: 1208
Joined: Sat Jul 09, 2005 9:46 pm
Location: Moravia
Has thanked: 356 times
Been thanked: 175 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#736 Post by Algernon » Wed Sep 16, 2020 7:46 pm

Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.

Patrick_27
Super Size Scraper Poster!
Posts: 2007
Joined: Tue Mar 05, 2013 4:41 pm
Location: Adelaide CBD, SA
Been thanked: 277 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#737 Post by Patrick_27 » Wed Sep 16, 2020 8:12 pm

Algernon wrote:
Wed Sep 16, 2020 7:46 pm
Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.
And even then, the only demand for hotel rooms are those of repatriation flights which is still government money? (Correct me if I'm wrong).

If the real estate market can pick itself up again, then there might be some hope that those projects financed but not yet U/C could be reimagined as apartment complexes, surely?

User avatar
SRW
Donating Member
Donating Member
Posts: 2871
Joined: Fri Jun 08, 2007 9:42 pm
Location: City
Has thanked: 805 times
Been thanked: 397 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#738 Post by SRW » Wed Sep 16, 2020 8:54 pm

Patrick_27 wrote:
Wed Sep 16, 2020 8:12 pm
Algernon wrote:
Wed Sep 16, 2020 7:46 pm
Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.
And even then, the only demand for hotel rooms are those of repatriation flights which is still government money? (Correct me if I'm wrong).

If the real estate market can pick itself up again, then there might be some hope that those projects financed but not yet U/C could be reimagined as apartment complexes, surely?
Repatriated citizens have to contribute $3,000 or more now to their hotel quarantine (which is part of why many remain overseas).

I'm not too optimistic about apartment towers getting off the ground over hotels -- developments of this size have proven frustratingly difficult, even when there were subsidies for stamp duty and council rates in place. Those subsidies have ended, and foreign ownership taxes have been introduced at the same time as China has limited capital flight. Add in the pandemic, the recession and the collapse of O/S migration (the only thing growing SA's population), and it's hard to see much of anything happening. The only reliable niche, aside student apartments and hotels, appears to be the low-rise but higher end apartments marketed to downsizing older (wealthy) buyers (like those on South Terrace). Solution? Imo, in addition to reintroducing stamp duty concessions, the state should bring housing into the infrastructure department, perhaps tasking it to a supercharged Renewal SA with targets for construction activity, affordability and density/TODs. The Commonwealth (if the Coalition could press pause on its disdain for poor people), should use its power of the purse to embark on a social housing and affordability investment (like NRAS from Rudd's GFS stimulus, that saw things like Ergo and Uno apartments built). I don't know about anyone else, but anecdotally from living in the city, homelessness has been the worst I've ever seen in the last few months. Something has to be done.
Keep Adelaide Weird

User avatar
PeFe
Legendary Member!
Posts: 1200
Joined: Mon Dec 07, 2009 9:47 am
Has thanked: 86 times
Been thanked: 234 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#739 Post by PeFe » Wed Sep 16, 2020 8:58 pm

Patrick_27 wrote:
Wed Sep 16, 2020 8:12 pm

And even then, the only demand for hotel rooms are those of repatriation flights which is still government money? (Correct me if I'm wrong).

If the real estate market can pick itself up again, then there might be some hope that those projects financed but not yet U/C could be reimagined as apartment complexes, surely?
The demand for hotel rooms in Adelaide at the moment, yes, is primarily driven by overseas returnees. This will probably continue for at least 3 months and by then it will be summer and an opportunity for South Australia to capitalize on a captive domestic market.

I really hope that the opening titles of the NRL State of Origin 1 (Wednesday November 4) really do justice to the city and the new skyline, because this will be the easiest and quickest method of capturing the attention of millions of New South Welshpeople and Queenslanders....yep the eginning of a sports telecast is probably the best free publicity Adelaide is ever going to get in Sydney and Queensland.

And hopefully the international tourists start dribbling back in mid 2021....

User avatar
phenom
High Rise Poster!
Posts: 459
Joined: Wed May 16, 2007 1:12 pm
Location: Adelaide CBD
Has thanked: 1042 times
Been thanked: 131 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#740 Post by phenom » Wed Sep 16, 2020 10:08 pm

Algernon wrote:
Wed Sep 16, 2020 7:46 pm
Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.
Shouldn't your ire be directed at the Adelaide Oval hotel then given it was much later and also involved significantly more taxpayer money?

arki
High Rise Poster!
Posts: 209
Joined: Mon Dec 15, 2008 2:35 am
Has thanked: 28 times
Been thanked: 104 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#741 Post by arki » Wed Sep 16, 2020 11:36 pm

phenom wrote:
Wed Sep 16, 2020 10:08 pm
Algernon wrote:
Wed Sep 16, 2020 7:46 pm
Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.
Shouldn't your ire be directed at the Adelaide Oval hotel then given it was much later and also involved significantly more taxpayer money?
Unless I am mistaken I don't believe that this project received any government funding (unlike AO), rather a government guarantee that would be in favor of a third party financier. Given how tight credit had become in the past 5 years it's hard to see why anyone would have a problem with incentives that allow projects like this to get off the ground and create local work, without having to directly wear any repayment risk.

Now, AO on the other hand...

User avatar
Algernon
Legendary Member!
Posts: 1208
Joined: Sat Jul 09, 2005 9:46 pm
Location: Moravia
Has thanked: 356 times
Been thanked: 175 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#742 Post by Algernon » Wed Sep 16, 2020 11:39 pm

phenom wrote:
Wed Sep 16, 2020 10:08 pm
Algernon wrote:
Wed Sep 16, 2020 7:46 pm
Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.
Shouldn't your ire be directed at the Adelaide Oval hotel then given it was much later and also involved significantly more taxpayer money?
I found both to be quite ridiculous that the government was funding an already overheated sector. There was never any indication that hotel developers were finding credit hard to come by. The SMA justified their request by saying a bank wouldn't fund a hotel on public land. My response to that is: don't build a hotel.

User avatar
Algernon
Legendary Member!
Posts: 1208
Joined: Sat Jul 09, 2005 9:46 pm
Location: Moravia
Has thanked: 356 times
Been thanked: 175 times

[U/C] Re: 104-106 Currie Street | 117m | 33lvl | Sofitel Hotel

#743 Post by Algernon » Wed Sep 16, 2020 11:42 pm

arki wrote:
Wed Sep 16, 2020 11:36 pm
phenom wrote:
Wed Sep 16, 2020 10:08 pm
Algernon wrote:
Wed Sep 16, 2020 7:46 pm
Worth revisiting the funding issue regarding this tower. The state government for some inexplicable reason, offered favourable loan arrangements to get this over the line. The project is not yet completed and we are in the midst of a global crisis that will have a lasting impact on international travel well into the decade. Result? Money doled out to contribute to an oversupply of the market.

I've been speaking to a couple of people in the game, and they believe that hotel projects that didn't get off the ground yet have firmly missed the boat. Adelaide and Melbourne are fundamentally oversupplied for at least half of the decade, taking into account the huge future stock that is coming online for a growth projection that no longer exists.

Airlines themselves are saying that air travel can not return to normal for another 2-4 years at the earliest after this year flights were cut by up to 90%.
Shouldn't your ire be directed at the Adelaide Oval hotel then given it was much later and also involved significantly more taxpayer money?
Unless I am mistaken I don't believe that this project received any government funding (unlike AO), rather a government guarantee that would be in favor of a third party financier. Given how tight credit had become in the past 5 years it's hard to see why anyone would have a problem with incentives that allow projects like this to get off the ground and create local work, without having to directly wear any repayment risk.

Now, AO on the other hand...
Your recollection of the funding is the same as mine. In this case, the government picked a winner when there were already plenty of winners who could get finance without the government's help. This serves as a clear example of the pitfalls of the government acting in this way.

Post Reply

Who is online

Users browsing this forum: No registered users and 8 guests