View Comments
Diploma to offload project
Diploma to offload project

Construction and development company Diploma Group is selling the site of its proposed $50 million iSpire apartment project because of what industry sources claim was a disappointing number of apartment sales and problems getting finance for the Adelaide Terrace development.

Diploma is selling the site with development application for an apartment complex through Realmark Commercial. The status of the off-the-plan apartment contracts, thought to be 60 to 70 per cent of the 78 available units, is unclear.

Diploma did not return calls from _WestBusiness. _

Realmark sales associate James Baker said the firm would be selling the site at 176 Adelaide Terrace but was not authorised to speak about existing contracts.

When it was launched last year, Diploma said the tower would be finished in 2013 but construction has not started.

A spokesman for a real estate firm specialising in CBD apartments said about 20 per cent of the contracts taken up during off-the-plan marketing were understood to have been signed by overseas buyers and not recognised by banks assessing pre-sale numbers.

Another apartment specialist said sales appeared to have been disappointing given the good sales team and an expensive marketing campaign. "They gave it a good shot and spent a lot of money but it was never a good site," the agent said.

Diploma's plans for the iSpire site included a car-stacking system on five levels, a feature that several city real estate agents said was not well received by buyers.

The 902sqm site includes a heritage-listed church, which architects incorporated into the apartment complex as a lobby.

Other property sources said high construction costs and the site's narrow frontage onto Adelaide Terrace created access issues that had an impact on the project's viability.

The project is on a section of Adelaide Terrace already home to a mix of office and apartment towers, with prices for one-bedroom apartments started from about $450,000.

Diploma began marketing the project after receiving development approval for iSpire last year.

Property sources were divided about the possible future of the site.

Some said it was possible a new buyer would continue with an apartment complex but others said the purchaser may pursue an office development.

Realmark has listed the iSpire site for $5 million plus GST, using an offers-to-purchase campaign which closes on Wednesday.

Realmark is also selling a second site owned by Diploma, at 69 Adelaide Terrace in East Perth.

The 872sqm site on the corner of Adelaide Terrace and Plain Street is occupied by the Stanley Centre, a single-storey building that is home to Frasers Property.

Jo-Anne Chin, director of residential at Colliers International, said affordable apartments were selling well in Perth, especially those for less than $550,000. She said buyers wanting good rental returns and owner-occupiers were behind strong sales. A sharp rise in inquiries from self-managed super funds also indicated a possible new wave of buyers.

"More than ever developers are really focusing on what buyers want," Ms Chin said. "They can't afford to bring on a project that will take too long to sell if the product mix is wrong."