An award-winning sustainable apartment block has just been sold in its entirety to an investor … who plans to use it for Airbnb holiday lets.
According to a story on the Fifth Estate website, Architect and developer Oliver Steele has sold his Passivhaus apartment development, The Fern in Redfern, to private investor Anthony Maple-Brown.
Mr Maple-Brown plans to run the premises effectively as an Airbnb “hotel” under Hometime property management. According to Fifth Estate, he is understood to have recently sold a technology company.
The 11 recently completed units, certified under highly sustainable airtight design standards, were sold as one packaged for about for $10 million.
At the risk of over-simplification, Passivhaus is a building concept that minimises heating and cooling costs through highly insulated construction, with lower energy usage often enhanced by solar power.
One-bed apartments in the Fern are currently renting from about $250 a night with overall occupancy at around 85 per cent.
The buyer is apparently looking for a return of four percent per year on the investment, with margins improved by the low running costs and solar panels on the roof producing 20 per cent more energy than needed.
“The electricity bills for the first three months was $860 which was mostly for connection fees and services,” Mr Steele said.
He told Fifth Estate that the project probably cost 10-15 per cent more than usual, meaning he made less money out of the venture than he might otherwise have.
“Put that down to being the guinea pig of Passivhaus and reinventing every wheel, panel and cog on the vehicle,” he said.
As for the Airbnb angle, glass-half-empty readers will see the sale as 11 sustainable apartments being taken out of the residential rental market, where ordinary tenants could have benefitted from reduced energy costs.
Glass-half-full Flatchatters will celebrate the possibility that this could mean 11 fewer units in residential apartment blocks that will be given over to holiday lets.
Owners Corporation Network co-chair Jain Hearn asks on the Fitfh Estate website if the City of Sydney gave DA approval for this development to be used as ‘serviced apartments’. So far there have been no responses
And who or what is Hometime? In typical Airbnb fashion, they call themselves “professional co-hosts”. They are in fact a holiday rental property management company whose cleaning, laundering and key collection services can mean that Airbnb “hosts” never have to actually meet the “guests” with whom they are supposedly “sharing”.
They are probably ideally suited to running an Airbnb hotel. At least in this case, the guests aren’t sharing common facilities with permanent residents, whether the owners and tenants want them to or not.
There is more on this story on the Fifth Estate website.