Metrics, Odus pair to develop $290m Gold Coast tower

The firm, which deploys 60 per cent of its capital in residential development – the majority of it in metropolitan Sydney – was chasing the unmet demand for housing in Brisbane and Gold Coast.

“We’re a little bit more active in that part of the market given the positive inflows from net interstate migration, the tailwinds that come with increased demand as they head towards the construction aspects for the Olympics,” Lockhart said on Tuesday.

“Those sorts of things are positive in terms of creating opportunities.”

The expansion by Metrics – which Lockhart said had deployed more than $40 billion-worth of capital over the past 12 years into 1200 projects – comes as lower interest rates and a more predictable outlook for costs reduce the risk for new residential projects.

Fewer than “half a dozen” of Metrics’ 1200-plus investments were projects over which it had taken control because its client borrower had run out of money, Lockhart said. In January, Metrics took over development of a Box Hill site in Melbourne after developer APH collapsed.

Many developers still can’t sell apartments at prices that make planned projects viable.

“I guess those presales that he’d negotiated on that site were under market compared to increased prices and demand,” Lockhart said of Stamoulis. “Those original presales were not struck at a profitable rate.”

Metrics and Odus acquired the 1355-square-metre site and plans for the $290 million project for $55.68 million.

Melbourne-based Stamoulis Property Group acquired the site, which previously held a 14-storey apartment building called Hibiscus, for about $31.5 million in 2022, said Kollosche Prestige agent Harry Kakavas, who amalgamated the site with colleague Michael Kollosche.

Stamoulis rescinded the sales before selling the site, Lockhart said.

Odus Property Group managing director Byron Sakha said Odus was an integrated company and could deliver the project more efficiently than a developer using a third-party builder. Completion was due in late 2027 or the first quarter of 2028, he said.

“When it’s all in the one group, there are just more efficiencies. Plus, we’re across the road, so there are efficiencies with the construction team we already have on site,” Sakha said.

“Potentially, the project for the Stamoulis Group had been on foot for the last few years, whereas we’re coming into it fresh. We had the capacity. We had the enthusiasm for the project.”

In Gold Coast’s thin contractor market – where other developers are already setting the size of their projects at a level they know local contractors will be able to deliver competitively – concerns about building costs and the viability of contractors also influenced Stamoulis’s decision, a source said.

“It wasn’t just that he undersold them initially,” the person said. “It was a combination of reasons. He was not convinced that one, the quoted construction price wouldn’t hold at what he was quoted; and two, would the builder survive?”

ARI will be the second joint venture between Odus and Metrics. The two are already developing a separate residential project across the road from the ARI site, a $190 million, 29-level tower called La Mer. They would save money by offering continuing work to subcontractors and trades once their current job ended, Sakha said.

The new partners are selling apartments at a higher price than they sold under Stamoulis. Sakha said the lowest-priced, 292-square-metre apartments taking up a half floor in the building, would start from $7.3 million. Kakavas said they averaged $6 million three years ago.

The Financial Review contacted Stamoulis for comment on Tuesday.

Lockhart, who last month warned that efforts by corporate regulator ASIC to boost transparency of private market lenders could put them at a disadvantage to banks, repeated comments that good governance made more regulation unnecessary.

“What they are concerned about is more about investment mandate compliance and good governance,” he said.