It is the $17 million penthouse apartment Paul Blackburne believes will transform the Perth property sector, and a big reason he claims the west is defying any talk of a downturn.
Mr Blackburne’s eponymous property group specialises in apartment projects where units sell for an average $1m and more, targeting baby boomers in Western Australia who are downsizing in a market where there has been little supply of luxury units.
It is a strategy that has proven to be a big success, with Mr Blackburne being a prominent member of The List — Australia’s Richest 250 with an estimated $553m fortune thanks to his ownership of the private Blackburne Property Group. His latest project is a case in point to his theory that WA is the “safest market in Australia” for him to be operating in right now
“I would not want to develop anywhere in Australia except for the areas I am doing in WA,” Mr Blackburne told The Weekend Australian.
A year ago, Mr Blackburne paid $25m for the 5451sq m Subiaco Pavilion Markets site in Perth’s inner west and has since gained approval for a $280m project, 60 per cent of which is large high-end apartments priced between $1m and $17m.
Mr Blackburne hadn’t planned to publicly launch the campaign to sell the apartments off the plan until October, with construction set for what is now called ONE Subiaco from next May, and was spending $1m on a display centre while placing a sign up outside the site with a simple image of the building and basic information.
Passing traffic gave it plenty of exposure though and in the past two months Mr Blackburne’s sales teams have had about 700 expressions of interest and last week alone more than $30m sales contracts were exchanged.
So strong has been the demand that Mr Blackburne expects at least 50 per cent of the apartments will be snapped up by October and he could even bring the beginning of construction forward to February with a fully sold-old project. He said while 30 per cent of buyers will be investors after smaller units priced between $500,000 and $900,000, most sales of the $1m-plus apartments will go to downsizing baby boomers.
“WA is the safest market in Australia at the moment as most demand is from local owner occupiers that aren’t borrowing to settle. Almost all our buyers for the $280m of sales in ONE Subiaco will be cash buyers … who have sold their home and want a new place to live.”
The ONE Subiaco project includes a $17m penthouse that Mr Blackburne’s sales staff have spent this week spruiking to potential wealthy buyers, and one he is increasingly confident of selling by the end of the year.
“It is on level 24 in the middle of the western suburbs and a full 1200sq m with 360-degree views to the ocean, city and river so very hard to repeat,” Mr Blackburne said.
Features for the penthouse will include a private rooftop swimming pool, its own wellness centre with gymnasium, sauna, massage and yoga studio, indoor spa and plunge pool and a theatre room and piano room.
Mr Blackburne plans to build ONE Subiaco within three years, and his group, which rolls out a new project every six months, is about to finish its $140m Essence Claremont project next month. He said 87 per cent of buyers at Claremont were locals and only 1-2 per cent have defaulted.
“The fallover rate is much lower than anything in Sydney and Melbourne as we sold them after our market had dropped and prices are the same or higher at completion.”
Mr Blackburne said his group has a strong pipeline of projects, and will launch about $400m worth this year and are in talks on deals that would see a further $460m in new projects released in 2021 and 2022.
The business is also developing almost 200 apartments at the new $1 billion Karrinyup Shopping Centre with AMP Capital.
“There is very little supply of apartments next to such a prime new shopping centre and we expect the 93 apartments of stage one to sell within eight weeks of when we release them in January,” Mr Blackburne said.