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Reecognising Turning Points
The Australian | Fiona Cameron | 5 March 2009
MANY developers recognise the wisdom of acting countercyclically - but few have the nerve to act on it and fewer still can access the necessary funding.
Sydney-based developer-Kyko Group developed its biggest project during the crash of the 1990s - a $250 million apartment complex at Wollstonecraft Bay in Sydney and now, with the economy again in dire straits, the family owned firm will soon start building Mon Komo, a $150 million, two tower residential and serviced apartment project at Redcliffe, just north of Brisbane.
Managing director Mary Wong Jenkings says Kyko has forged ahead with the scheme. It is funded and not
dependent on pre-sales.
She says any downturn creates a stock shortage, and then when the market starts turning up, most developers have nothing to offer.
"It's also for the buyers, because when the upturn starts, they are already in position so they will have the capital gain," Mrs Wong Jenkings said.
"That's how we look at the situation."
With settlements on the Redcliffe project due in the last quarter of 2010, the timing is good, she says, with the market likely to be improving by then.
"We planned for this (downturn) at the beginning," Mrs Wong Jenkings said.
"We want to be in position when the upturn comes."
Since the Shanghai-born Mrs Wong Jenkings and her Sydney-born husband, Terry Jenkings, founded Kyko in Sydney in 1978, the company has become not only a developer but also a substantial property investor.
Kyko began working on Wondakiah in the early 1990s.
On completion in 2000, the project included 11 buildings, 41 marina berths and four tennis courts.
The company has developed two residential projects at Darling Point in Sydney's east - the $50 million Serene Cove in 1998 and $30 million Bellezza in 2005.
In 2006, it undertook a restoration and strata subdivision of the heritage art deco-style City Mutual building
in Sydney's CBD.
As an investor, Kyko holds a significant swag of commercial property, including the Henry Waymouth Centre in Adelaide, and in Sydney, Citadel Towers at Chatswood, and CBD property including the State Street Centre, AGC House, 130 Elizabeth Street, City Mutual building, DFS Galleria and 99 Elizabeth Street.
The company also owns 193 North Quay in the Brisbane CBD and 114 William Street in Melbourne.
"The family-affair Kyko Group negotiates financial downturns and upturns with the skill of a mariner"
Kyko's development director, the Jenkings' son Bill, is overseeing the Redcliffe project.
He said Kyko bought the 6414sq m former Seabrae hotel site in 2007, and its "Mon Komo" development would be a Caribbean-themed project with two 12-storey towers.
One would be of apartment residences ranging in price from $300,000 to $800,000 (with penthouses up to $1.5 million) and another housing serviced apartments and a function and convention centre.
The pretty seafront at Redcliffe was already a big drawcard for weddings, Mr Jenkings said, but the Mon Komo development would allow sizeable functions to be catered for in style, and provide accommodation for guests.
Brisbane international airport, 20 minutes drive away, was a huge plus for Redcliffe, as it would allow easy access for functions and convention delegates.
A $315 million Houghton Highway redevelopment is under way and due for completion in 2011, and includes a duplication of the bridge to Redcliffe. This is expected to significantly ease access on the peninsula and cut driving time to the Gateway Motorway, Brisbane Airport and CBD.
Mr Jenkings said the Mon Komo site was widely recognised as the best in Redcliffe - 28km north of the
Brisbane CBD - and was adjacent to beachfront parkland, with a north-east aspect.
"It is the most easterly development site in Redcliffe and offers magnificent views across Moreton Bay, and to
Brisbane and the Glasshouse Mountains," he said.
Building tenders currently were being assessed for the Mon Komo site, adjacent to beachfront parkland.
Construction was expected to start in May. The design, by Altus architects, would be "moden and upmarket". Bill Jenkings said.
More than 160 expressions of interest from buyers had been lodged through the website, although sales had not started.
"It seems to indicate the market is really interested in what is going on." Bill Jenkings said.
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