Overseas investor – $3.35m Sydney off the plan apartment – “the purchase of a $3 million plus property unseen is not something lightly undertaken”

July 20th, 2015

Our London based import/export client retained us as his buyers’ agent to find and buy a luxury apartment in a crescent of suburbs extending from The Rocks to Darling Point including the Sydney CBD.Having ascertained that our client was restricted to purchasing in a new Foreign Investment Review Board approved development from a developer, we assembled and coordinated a local team of experts comprising a chartered accountant, migration agents and solicitor to devise the most effective way of structuring the purchase. We also introduced our client to a specialist local financier.

To ascertain all opportunities falling into the category of property our client was eligible to purchase, we devised a two pronged methodology.

First, identification of opportunities based upon our long standing knowledge of the crescent of interest and numerous relevant contacts in our data base.

Second and to ensure as far as possible that we did not miss any opportunities, we tested the results produced by the first approach against the record of Development Applications maintained by the two local councils with jurisdiction in that crescent.

The latter check led to our reviewing over 6,000 Development Applications made in the four years prior to our retainer.

We also provided detailed comparative analyses of two Foreign Investment Review Board approved developments in North Sydney and Pyrmont and a leasehold development in the Sydney CBD.

This methodology succeeded in identifying one strongly preferred building then under construction which satisfied all of our client’s buying criteria.

Once selected as the target, we undertook rigorous due diligence into that project over several weeks which included retrieval and inspection of Council records, analysis of comparable sales in existing buildings, obtaining independent rental appraisals, inspection of display suites and common areas, investigation into a proposed ground floor commercial tenancy, analysis of likely strata levies, arranging depreciation advice, numerous site visits in a hard hat as well as visits to adjoining buildings to test the accuracy of the developer’s indicative view shots.

The major risk identified by this due diligence was the risk of view loss from the apartment of interest upon completion of a diagonally opposite building that was also under construction. To assess that risk, we obtained and provided to a specialist New Zealand based associate all pertinent Relative Levels measured from Australian Height Datum and other information which that associate used to prepare a 3D model, accurate in all planes to 50 cm, showing what the views and any obstructions from the apartment of interest would be once both buildings were completed.

The results of this due diligence informed the strategy by which, during negotiations lasting over a month, we succeeded in reducing the developer’s asking price by $300,000 or 8.2% – a percentage understood to be more than twice the discount allowed to other purchasers of similar apartments in the development. With off the plan purchases, the need to maximise such a discount is essential to mitigate the risk of paying a price higher than speculators achieve on re-sale once the building is completed.

This retainer was completed entirely by detailed emailed reports, photographs, numerous telephone conferences and without having met our client. Having now seen the apartment for himself, our client and his partner were delighted with the purchase.

We were looking to buy a property in Sydney for investment purposes and, at a later stage, for personal use. We are based in UK and therefore particularly in need of the services of a good buyer’s agent. After talking to a number of such agents sourced from the internet, we chose Curtis Associates.

It was a good choice. Chris Curtis listened to our requirements carefully and produced a short-list of potential properties after exhaustive research carried out by his firm. He talked through the advantages and disadvantages of each one. Through our many conversations we soon realised he understood what we were looking for. We were very much on the same wave-length. Where our interest was leaning towards a property he thought unsuitable, he produced additional evidence to convince us that we were on the wrong track.

The purchase of a $3 million plus property unseen is not something lightly undertaken. With Chris’s expertise and attention to detail, we felt confident to proceed. He was skilful at the negotiating stage and partly by relying on the results of some novel due diligence, secured a meaningful discount. He also provided useful guidance in selecting a local solicitor, immigration lawyer and agent, accountant and sources for mortgage finance.

Chris is a highly qualified, likeable and very capable buyer’s agent. With his support we felt confident proceeding with a multi-million dollar purchase unseen from ten-thousand miles away. We doubt there are many others with his unique combination of skills and abilities. We recommend Curtis Associates whole-heartedly.

Applying the hindsight test ™*.

A three bedroom apartment on the same floor but with an inferior floor plan and aspect sold six months later for $19,090 per square metre in contrast to the $18,001 per square metre paid by our client. This equated to a capital gain of 6.6% in six months for an inferior apartment to the subject.