Sluggish sales put a shiver into Soul

Sluggish sales put a shiver into Soul

* Anthony Klan
* April 26, 2007

THE developers behind the proposed 77-level Soul apartment tower on the Gold Coast have been forced to renegotiate contracts with buyers as sluggish sales cause construction delays.
Juniper director Graeme Juniper said the group had renegotiated "sunset clauses" with an unspecified number of purchasers in the tower, which is just under half sold.

Juniper was to begin building Soul early last year but is yet to commence on the site.

Another delayed skyscraper, Austcorp's Vision tower - which would be Brisbane's tallest building on completion - is also expected to be forced to renew sales contracts.

Austcorp began marketing the tower in 2004, with an expected completion date of 2008.

But construction has not started and Austcorp executive chairman Trevor Chappell said the tower was now expected to be completed by late 2011.

In late 2005 the group extended Vision's sunset clauses by one year to 5 1/2 years, but the tower's 2011 expected completion date means many clauses may need to be renegotiated.

Mr Juniper said renegotiating the Soul contracts had not been an issue, as purchasers were offered new contracts at the same price as original contracts.

"There are a number of different sunset clauses that have been issued depending on the stage of the development," he said. "But sunset clauses are not an issue. We've had a very good response from everyone, so that's not even on the radar screen."

Mr Juniper said "almost $400 million" of apartments in the ocean-front $850 million skyscraper had been sold and the tower had an expected completion date of "about 2010". Juniper is chasing the top end of the market, offering about 300 apartments with asking prices starting at $1.6 million.

In March it said it had engaged Melbourne contractor Grocon to build the tower. Mr Juniper said Grocon was expected to begin work on the site next week.

Austcorp's Mr Chappell said Grocon had also contracted to build Vision. He said Grocon was expected to appoint a sub-contractor to begin earthworks on the site "imminently".

Mr Chappell said the 72-level Vision development had been delayed by slow sales and financing difficulties.

"Because of the size, complexity and duration of the project it's just taken a lot longer than we all expected," he said.

"The major issue is just negotiating the contract with the builder and satisfying the requirements and conditions with the bank consortium which is assisting us with the funding."

Mr Chappell said about a third of the project's apartments had been sold.

"We've got firm contracts at $180 million and there are currently another $27 million (in progress)," he said.

He said the group was not concerned about sunset clauses.

"From our experience in the past and with other projects, typically people will resign because it's an extension of time (to settlement)," he said.

The end value of the project was $930 million with about $600 million derived from the residential component and $300 million from a proposed commercial component.

Listed property group Investa is in due diligence to buy the 28,000sqm office component of the tower for $200 million.

The tower also includes a retail component.