The Block, Channel 9 – 27 Darling Street South Yarra

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With the purported failure of 3 of the 5 auctions for the Block – Glasshouse, I wonder how Channel 9 will set reserves for the next block.

27 Darling Street in South Yarra is the location for the next instalment of The Block and production is well and truly underway. Looking at the planning permit that is listed on Stonington Council’s website, it looks like four units each of 4 levels (parking underneath and then 3 living) will be created from an existing 12 apartments. From these plans it looks like each will have 2 car parks and substantial storage, 3 bedrooms, master with dressing room, 2 bathrooms plus powder room, study or retreat and kitchen, lounge & dining rooms on the ground floor. 3 of the units are approximately 180sqm and the fourth is around 216sqm.

Watercress, the production company of The Block paid $5.7M for the whole site. Considering the mix of 2 bed 2 bath and 1 bed 1 bath existing apartments, I think Watercress did reasonably well on the purchase price, no withstanding I did not know the condition of each and every apartment. Another full block of 12 single bedroom furnished apartments recently sold for $4.5m close by.

With stamp duty taking the purchase price to just over $6m Channel 9 would need to see $1.5m per apartment just to break even on the purchase costs. Let alone the massive renovation cost required BEFORE the contestants spend even more money.

3-4 bedroom apartments in this location should sell better than the last Glasshouse apartments did. Somewhere between $1.8m & $2.2m would be an average price. The extra parking and storage may make a difference and of course the Channel 9 hype but over all I would be surprised to see prices get close to mid $2’s. At best case scenario that would leave about $700k per apartment for the renovation and fit out to break even.

I wonder what the reserves will be this time around!

Stay tune for further updates

Ian James
Director
JPP Buyer Advocates
www.jpp.com.au

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About the author

Ian has been operating his own businesses for more than 25 years. During this time the self taught lessons of building the business, dealing with staff, suppliers, clients and economic woes have been invaluable. Ian is a fully licensed Real estate Agent, a member of the REIV and registered with the Business Licensing Authority.

Buying property is not just sticking up your hand and outbidding your rival. It is an emotional, fiscal and psychological decision that needs to be planned and well executed. Ian is usually involved in over three hundred property negotiations per year; ranging from the $250,000 first unit purchase for a young couple to multiple million dollar residential developments. Ian's business background and endless numbers of negotiations make him one of the industry's leading negotiators.

Ian is married with two adult children, living in Patterson Lakes. He is a keen fisherman when weather and business allows the time.

1 comment on “The Block, Channel 9 – 27 Darling Street South Yarra”

  1. Matthias

    That was a very good and accurate estimate! Making a multi-million dollar loss for the production company as it turns out. Ridiculously low reserve prices. Seems Channel 9 really should stick with TV and not try to play in the real estate market

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