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Brisbane apartment developers look at the high-end market as competition between projects increases

COMPETITION for the hearts and wallets of would-be Brisbane apartment owners has sparked a “flight to quality” among developers.

And the managing director of Brisbane-based property company Tessa Group, Brendan Tutt, said local developers are leading the quality charge.

“Competition now means that developers now have to lift the bar and deliver more,” he said.

“What people are delivering has to be so far above what the market was accepting three years to five years ago to make themselves stand out … there is a massive flight to quality.

Tessa Group, which started 14 months ago is riding high on the apartment wave.

Since Mr Tutt, who was with Metro Property Development, his colleague Andrew Coulter and ex ANZ operative Kurt Swenson formed Tessa (asset spelt backward) they have formed five divisions employing 61 staff.

The Group has more than $250 million n assets under management and has five inner city sites under its control to develop 200 apartments.

Its first development is the 28 apartment G35 project in Windsor which sold out in the first day.

Another division Tessa Advisory has been appointed to sell more than $500 million of property for some of Queensland’s top developers with expectations of selling 1000 apartments this year.

Mr Tutt said the apartment market three to five years ago was characterised by a lack of competition and a “homogenous” offering

“For that reason the level of quality did not need to be as high,” he said

“But now, due to the fact of there are a lot more developers and liquidity in the finance markets, there are more projects up and running . and more competition.”

Mr Tutt said currently there aware three apartment sectors — high end owner occupier; high density general development and boutique, while townhouses were a rapidly emerging segment.

He said the lower risk boutique end of the market was is becoming more active.

“The apartment market will continue to be strong for the next three to five years,” he said.

“Local Brisbane developers are really delivering a first class product, with designs that are second to none.

“The southerners are coming in but it’s the local guys who are creating something special. They are the people delivering suburb changing developments.”

This article has been re-produced from The Courier Mail. Authored by Chris Herde.

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