Sales test

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Is recession affecting high-end apartment market? Watch this property.

A new sales programme at a Queenstown apartment hotel should determine how recession-proof the top end of the market is.

The exclusive agency for The Rees on Frankton Road has been switched from Queenstown’s Southern Lakes Real Estate to Browns Sotheby’s International Realty, a specialist in high-end property.

Browns intends running a high-profile campaign to sell 28 unsold apartments – out of 89 – and 23 yet-to-be-built lakefront residences.

Co-developer Lindsay Singleton says the listing was shifted from Southern Lakes “because we see [Southern Lakes] as significantly managed-apartment people, whereas our product fits more the second-home market”.

Browns also has ideal international marketing links, he adds.

Singleton’s project has been dogged by resource consent scraps, a degree of local scepticism and the deaths of his brother, co-developer Brett, and project manager Anton Woitasek in a jetboat accident three months ago.

Browns co-owner Julian Brown says his firm doesn’t touch managed apartments but he claims The Rees is different because of the quality of its design, construction, fitout and flexibility of ownership options.

Owners can live permanently in their units or let them out to hotel guests for up to six months for a rental return.

“These are built more as homes than apartments,” Brown says.

“If you want a discounted apartment, this isn’t where you need to come.

“It’s not about getting huge returns – eight and nine per cent returns don’t exist in any Queenstown high-end residential.

“But anything quality-driven or unique has held its value quite well.”

Prices for the 28 apartments range from $525,000 for two-bedroom units to $1.16 million for a three-bedroom penthouse.

The gated residences range from $1.5m to $3.9m for a five-bedroom four-bathroom home.

Brown says a selling point for the apartments – the last of which are four weeks from completion – is that local high-end product is drying up.

“And in the current funding environment, there’ll be little new product on the market in the next five to eight years.
“Besides, 90 per cent of developers have vaporised.”

New Queenstown Lakes District Council planning rules also prohibit similar large-scale developments.

Brown says one of his salesmen will sell The Rees full time on site.

Also assisting will be former Englishman David Matthews, appointed by the developers as a project manager/sales and marketing boss.

Matthews, 42, has 20 years in residential property development – including building $5m houses. The apartments will be sold “as a second home with an income, not an investment with a yield” he says.

He expects ground to be broken on the lakefront residences within five months.

Two have been sold and another two are under offer, Matthews says.