In all, 97 per cent of the apartments have already sold off the plan, with about 70 per cent of those selling to offshore buyers. Prices ranged from $485,000 for a one-bed apartment to $875,00 for a two-bed, two-bath unit.
On a per square metre rate, apartments in Conservatory sold at about $11,500.
To improve the settlement process, some Conservatory buyers are being given more time, while UEM Sunrise has reached out to various lenders and shared information with its buyers. In some cases, secondary buyers have been found to take over an apartment.
But the Malaysian developer is being careful to preserve value and avoid discounting remaining apartments.
“We’d rather protect the value of the property and do other things instead, for example, fully furnish apartments. Things like that. We don’t want to depress the price,” Mr Anwar said.
Conservatory is one of three projects being developed in Melbourne by UEM Sunrise, after the Malaysian swooped on two sites in the CBD and one in St Kilda Road in quick succession.
Publicly listed in Malaysia, the company is the development arm of the UEM Group, which is wholly-owned by Khazanah, a Malaysian government investment fund.
Settlement is also under way in the initial stages for the much larger Aurora project, a $770 million skyscraper opposite Melbourne Central. It has 941 apartments and a component of 252 serviced apartments, which were bought by Singapore’s Ascendas Hospitality Trust for $120 million.
Mr Anwar is hopeful of achieving a 99 per cent settlement rate overall at Aurora, which is due to top out in the first quarter next year. The average selling price for apartments in the project is $10,500 per square metre.
For its third project UEM Sunrise took over the Victoria Police complex on St Kilda Road and engaged architect Zaha Hadid to design a luxury apartment complex.
Mayfair comprises 158 residences of one- to five-bedrooms, ranging in size from 70 square metres to 556 square metres. Prices start at $823,000. The penthouses are listed for up to $13.1 million.
With around 50 per cent sold so far, the developer hopes to begin construction by the third quarter next year.
“We’d like to get to 60 per cent,” Mr Anwar said.
Aurora is funded by a club of lenders, including Westpac along with Asian banks OCBC and DBS. Conservatory and Mayfair are funded from Malaysia by Maybank.
Mr Anwar is taking a more cautious view on the local housing market, with many buyers caught out in tightening credit conditions. Foreign buyers have also been hit by increased stamp duty in Victoria and other states.
“The environment is certainly not as before,” he said. “In the long-term we remain positive on the Australian market, Melbourne and Sydney. It’s just that in the current environment we may need to perhaps weather it for the time being.
“The property boom has been somewhat driven by overseas investors coming in, so that helped in terms moving a lot of our product. Seventy per cent of our [sales] came from overseas investors.”
There may be an upside though, especially for large government-backed developers such as UEM Sunrise as the credit squeeze creates potentially a buyer’s market, according to Mr Anwar.
”We don’t mind buying parcels for future development if the price is right. We can afford to hold them. We’re going to get proceeds and profits coming from settlement in these two projects. So there will be some funds available that we can potentially use for land-banking purposes.
“It’s not going to be to the scale of what we’ve done before. But we’ll certainly use some of our profits from this to invest in Melbourne if the price is attractive.”