01 May A Near Perfect Score for Settlements at Empire Melbourne
Working with buyers early in the settlement process is how Mammoth Empire achieved a near perfect score on the settlements of its 487 apartments in the 61-storey residential tower in Melbourne’s CBD.
Mammoth purchased the site in 2014 and from construction to completion there were numerous complex changes in regulations for foreign buyers purchasing property in Victoria, especially buyers from China.
Given increasing attention on settlement default risk and oversupply of apartments in Melbourne’s CBD, PDS Group decided to re-evaluate its settlement process to accommodate the changing conditions to ensure all purchasers were given plenty of notice around settlement deadlines.
Media speculation continues to be widespread regarding potential high levels of ‘off the plan’ sales attrition for FIRB purchasers, given the continuing withdrawal of local retail ﬁnanciers from funding offshore purchasers.
“We took the ‘chance’ out of the process,” says PDS Group Development Manager Ben McKie.
“Usually settlements begin four months before move-ins however the process at Empire Melbourne began a year prior to settlement due to the change in the property market, the high rate of cash settlements and ensuring buyers had enough time to seek finance,” added Ben.
As Project Manager for Empire Melbourne, PDS Group factored in the market conditions in its planning and engaged KIN Property, who employ more than 30 settlement consultants across Australia and specialise in large scale settlements.
“KIN Property was the conduit between the purchasers and developers and through forward planning we were able to identify any issues early, enabling us to work through and ensure a successful result. We identified some of the anticipated issues such as for the 50% of FIRB purchasers at Empire Melbourne they would need additional time to facilitate the withdrawal of funds out of China and accessing home loan lenders in Melbourne.
We worked with three lending providers to assist with financing, which ensured we knew where all our buyers were at during the process, enabling us to work through any issues resulting in 97% of the 487 apartments settling on time. Most of the FIRB purchasers settled in cash,” adds Ben.
Kerryn McNamara the founder of KIN Property was complimentary of PDS Group’s early approach.
“We advise developers to start the settlement process early into the construction cycle so we get to know the buyers and keep them informed across all stages of the project, then we can work with them to ensure a successful settlement, especially for off-shore buyers, “ says Kerryn.