[COM] 114 Waymouth Street | 78m | 26lvl | Wingfold Tower

[Ben]

You're throwing around a lot of figures. Where are you getting your information?

[AdelaideGo]

I have a copy of their valuation report from JLL dated Dec 2015. U2 has been sending it out to a lot of finance broker, hoping to get a deal done.

[floplo]

No banks wants to finance it. It is not going to happen unless Datong will build it with cash.

Why exactly are banks reluctant? Your numbers imply around 20% margin, so if you take a 3 year time frame to complete it that still offers over 6% a year (and that assumes full capital investment upfront). Is that low ? What rate of return are banks looking for ?

[AdelaideGo]

With pre-sales at a level that is enough to cover 100% debt and interest and GST and selling cost, the bank will generally look for 25 to 30% profit margin.

In terms of absolute profit figures, in the scale of a project like U2, the developer need to demonstrate that he can make approx $30 million, after deducting all interest and finance cost.

[floplo]

thanks for this info.

Why are they looking for this kind of margin even after financing costs ? Is that mostly failure risk (i.e. the project not getting completed) or project cost overruns ?

[AdelaideGo]

Property development is a risky business.

10% revenue drop compounded with 10% cost increase, would turn a potentially profitable project into lose.

The failure rate for Adelaide CBD apartment project is more than 70% (7 out of 10 project), even after the developer has received development approval.

[Blimp]

Great insight, AdelaideGo, cheers for enlightening me!

[EBG]

The lights were on but nobody was there- no sales assistants - no customers - no brochures - no opening times - nothing. Even the show room is being vandalized. Nice weeds.

[Blimp]

That empty wine bottle is the closest we will get to a finished U2

[Smithy85]

Datong re-signed as a sponsor of Adelaide United today. In the article announcing the deal, it was mentioned that construction of this project was due to "commence shortly".......

[Ben]

What do you mean commence soon? it started nearly 18 months ago so must nearly be complete

http://www.afr.com/real-estate/datong-b ... 408-1mg0s0

Datong begins work on delayed Adelaide CBD tower
by Simon Evans

It's been a long haul for Chinese developer Datong, but construction on a $70 million, 25-storey apartment complex in the Adelaide CBD, called U2 on Waymouth, has finally begun as it also heads towards completion of a separate 12-storey apartment complex on nearby Gouger Street.

The Datong project at 116 Waymouth Street is smaller than the original $140 million office and residential apartment earmarked for the site, but will still comprise 257 apartments ranging from studios with fold-down beds, to three-bedroom penthouse apartments.

Datong announced an ambitious string of projects a few years ago in Adelaide which also included the proposed 123 Flinders Street apartment complex which would have been Adelaide's tallest building at 39 storeys. But in 2012, Datong put that $120 million project on ice to concentrate on the smaller Aria on Gouger residential apartment project, which will be finished by early May and where 60 per cent of the 93 apartments are sold, and on U2 on Waymouth.

Datong Australia chairman Jin Liang said the U2 on Waymouth complex would be an attractive proposition for parents of international students studying at the two city-based universities, the University of Adelaide and the University of South Australia and reinforce the city's appeal as "an education destination".

It would also be appealing to first-home buyers, investors and business travellers.

The one-bedroom apartments are being offered for sale from $298,000, while the three-bedroom apartments have a price tag starting at $597,000. Mr Liang said there was also the option to acquire two adjoining apartments under one title which the developers are marketing as a "dual-key title". This gave a buyer the choice of renting one out and living in the other.

The U2 on Waymouth building will also have an open-air rooftop cinema on the top floor along with a garden, fitness studio and indoor and outdoor lounges. One of the main target markets is Chinese buyers, with the company also outlining the virtues of being so close to a renowned fresh-produce haven, Adelaide Central Market, and nearby Chinatown. Construction is earmarked to be finished by the end of 2017.

The U2 on Waymouth complex is one of several other residential apartment buildings either about to start construction or part-way through in Adelaide. The Vue development at the southern end of King William Street, close to Adelaide's south parklands, is a 205-apartment complex in the midst of construction. Melbourne-based developers Asian Pacific Group, headed by chief executive Will Deague, and Adelaide-based Starfish Developments are behind the 27-storey Vue development, which will be Adelaide's tallest residential building.

Also on the drawing boards by a separate consortium of developers is an ambitious $100 million-plus project called Eclipse which would be 29 storeys high and located on a 1530 square metre block on the narrow Austin Street, which lies between the stately North Terrace and the CBD's main retail strip, Rundle Mall.

[ghs]

This is no longer advertised on realestate.com.au. I think it's dead.

[adelaidezen]

Looks like it's going to be built by Built Environs. Saw the tenders for U2 on Tenders Online.
http://www.tendersonline.com.au/TenderD ... uid=404585

[Dvious]

That says 2015!

[Pikey]

Not sue if this is a sign of anything, but the block has been cleared and scraped. Could just be on the back of council telling them to control the weed situation too...