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