Docklands land value takes off

By Bethany Williams

Land values in Docklands have skyrocketed, if MAB’s recent sale of a Waterfront City parcel is anything to go by.

On paper, it appears MAB Corporation has almost doubled its investment in the site, without turning a sod.

The value of the Pearl River Road car park jumped from $2590 per sqm when MAB purchased it from ING for $9.84 million in 2011 to $7589 per sqm when it on-sold the site with a permit in August to Singaporean developer Hiap Hoe for $28.8 million.

A MAB spokesperson said the profits suggested by Docklands News were grossly overstated but was prevented by contractual obligations and confidentiality requirements from correcting the suggested figures.

The major jump in value can be attributed to the almost tripling of the allowable development height on part of the site, approved by Planning Minister Matthew Guy in January this year.

ING’s former masterplan allowed 50 metres of height at the front of the site, but Mr Guy approved a building of 142 metres.

After gaining the permit, MAB quickly moved to sell the site, putting it on the market by June and selling it to Hiap Hoe in August.

MAB purchased the site from ING as part of three Waterfront City parcels in 2011.

Property records indicate that ING Real Estate Development sold the 3475 sqm site to PiazzaNova West Pty Ltd for $9 million in November 2011.

ASIC documents reveal MAB owners Michael and Andrew Buxton are the sole directors of PiazzaNova West, linking MAB to the sale.

Before selling the parcel, MAB added 320 sqm to the site, creating the 3795 sqm site it sold to Hiap Hoe in August.

Docklands News has calculated the buying and selling price per square metre and applied it to the final 3795 sqm size of the site.

In 2011 the site was purchased by MAB for $9 million, equating to a square metre value of $2590. We applied this figureto the extra 320 sqm when calculating the 2011 value of the 3795sqm parcel.

In 2013 the 3795 sqm site was sold for $28.8 million equating to a square metre value of $7589.

It’s understood MAB would have spent around $3 million in holding costs and successfully obtaining a permit for the taller tower in its development agreement.

Accordingly, it’s estimated MAB made around a $16 million profit from the sale of the Waterfront City parcel.

According to a press release issued by Hiap Hoe, the Pearl River Road development will be the company’s first venture into the international market.

The company plans to review the approved development plans (for construction of the buildings pictured above) and introduce a serviced apartment or hotel compartment.

Commercial real estate firm CBRE managed the sale of the site and director Mark Wizel said Hiap Hoe believed the sites proximity to the CBD, Southern Cross Station and the water views were terrific attributes.

He said construction was due to start before June 2014.