2 Cole Street BRIGHTON

Comments on 2 Cole Street BRIGHTON

Hard to find any faults with this package - it's Brighton golden mile, it's absolute beach front and the floor plan looks very workable for an update. A great investment or home to live in! What is the value?  Well if didn't hit  at least $6000 per  sq metre that would be out of kilter with other sales,  so the start price of $5.5m is a fair and not a misleading one. Where the vendor's reserve is  and   where buyers value lies in this strengthening market will be the big question.  We've seen a number of sales in the area in recent times so range is clear - lone bidder circle $5m - good competition circle $6m and one or two that must have it towards $7m - the final result is not obvious to me. The house itself maybe something you work with as the plan is OK or because of size and lack of current yard space you may decide to bulldoze (STCA) and start from the basement and go upwards. Even Donald Trump would find it hard to overcapitalise on this if the new build is good. A world class block of land and strong agents in Carole Laird and Julian Augustini driving the end result.

James Control Price: Land + Building. Building first - in most cases when looking at good buying for sites of this character we place little  value on buildings. Why? Because at this level (Toorak and Brighton Golden Miles) most buyers place minimal value in the home unless it is either brand new or an exquisite period home. Some may bulldoze No 2 Cole (STCA) or change so dramatically that the building itself is almost a handicap (eg no basement car parking - so valuable outdoor entertaining land or indoor space is taken up with garaging). But No 2 Cole may stay up because it does have some class and it may have some setback and light and other council issues if it is demolished.  No 2 Cole also the potential for development of units and that may affect the final price although the land size is such that we're struggling to see the premium being paid over what a single home buyer would pay. So for us we put value in the building at $500,000 based on our assessment that new as is, it's a $1.5m build - this is dated and we assess it at 30% of new value due to its age . What is the land worth? We looked at a Shandford Avenue sale which after saying the home was worth $1.5m gave a sqm price in excess of $7900 back towards the Bayside peak of March 2007. It was absolute waterfront and similar size. We think this is one starting point. A sale in Martin Street assuming minimal house value says absolute beachfront land was $7500 sqm around the same time. We think another interesting sale and another starting point was a sale in Seacombe Grove in late 2006, with a great view of the dog beach and yacht club that shows us land was going for even as high as $10,000 per sq metre if you think the building value was between  $3 and $4m. A Dawson street  sale in December 2007 says land was around $7000 plus per sq metre for absolute beachfront but it maybe the weaker view which hampered it a bit; being set back on all the above mentioned blocks. So the big question in working out good buying in this instance is. 1) These blocks are already incredibly rare so how much do you want this and it maybe 2 years before another comes up again 2) How strong is your opposition (other buyers) at present (market mood and year in year out golden mile buyers). Bidderman has said that Golden Mile properties have been extremely well supported at market value this current season with an average of around 4 bidders. But that has been for Golden Mile where land values have been around half of what we are talking about here at 2 Cole St (Golden Mile beachfront) so Bidderman maybe very different on this sale. Then there was the big sale reported in Glyndon which if it sold at around the reported price pointed towards $10,000 per sq metre for land and building - and around  $8000's per sq metre for land (if house build estimate is correct) - granted the block was double the size and made it even rarer. Our feeling is, if ever there was a range quote property then this is it -the market seem positive in its outlook and this is crème de la crème beachfront so our thoughts behind our control price are there is no real obvious price, but this is our best effort at good buying. We think it goes without saying you need deep pockets, clarity of intention and multiple, flexible bidding strategies. Finally this is gold - one of those properties that will continue to outstrip many others because it has a very high land content to value ratio, is extremely rare and unless people stop liking being near the water or there is some serious truth to global warming then this will forever and a day be a great buy. Our James Control Price reflects that and even exceeding it with a long term view in mind is not unwise.