A dusty vacant block across from the Kingston hotel was snapped up at auction yesterday for $7.65 million.
Canberra developer and new owner Daniel Bisa said it was a fair price for the 2902sqm site currently used as a car park.
''We are quite happy with it. It was within the upper end of our spectrum, so we are still happy with that though,'' Mr Bisa said.
The director of the Bisa group, Mr Bisa owns and operates 130 serviced apartments in the region.
''We're aiming for serviced apartments to complement our current serviced apartments business. We're still looking at final numbers but it's looking to be between 90 to 110,'' he said.
As part of the sale any development on the block will have to include provisions for a 60-space public car park.
''It will have public car spaces for anyone who wants to park there. One of the stipulations is that it is an underground in-basement car parking,'' Mr Bisa said.
The auction started slowly with the first bid of $3 million knocked back by auctioneer Damien Cooley.
Mr Cooley said the opening bid was well below the reserve but was under instructions not to release the reserve price.
''It sold well above the reserve,'' he said.
Mr Bisa said he was not surprised bidding started slowly.
''They're a pretty cagey bunch here; they knew what they were doing,'' Mr Bisa said.
Raine and Horne Commercial ran the auction. Agent Mark Terracini said there were 20 registered bidders.
''We are very happy with the sale. As far as we were concerned [it's] a very good result and shows the market is still quite active. It's good to see the local developers buying the site,'' MrTerracini said.
Colliers International ACT chief executive Paul Powderly predicted a local developer would snap up the block for $8 million to $9 million. ''We were working on $8 million to $9 million including GST. It's pretty much where we thought. You have to add GST so it's about $8.4 million which is what we expected it to be,'' Mr Powderly said.
He said it was a fair price for the block.
''I think ultimately it's what we expected and in line with a level-headed and good investment sentiment where people are still confident in Canberra without being silly,'' he said.
Mr Powderly said the price reflected the mixed used site zoning.
''This site can be used for residential, which has a higher land value.''
Mr Bisa said the apartments could open as early as 2011. He said despite banks introducing more involved loan procedures since the global financial crisis, obtaining finance was not a problem.
''The tables have turned a little bit into the banks' favour they can be a bit more demanding, but we have good relationships with a number of banks in Canberra so I think we may not have had as big an issue as other developers but it's still a changed landscape.''
Mr Powderly said a LDA auction of property at Kingston foreshore next week would attract more interest.
The second property under the hammer, a 2142sqm site in Belconnen, sold for $1 million.
Canberra Developer Renato Cervo bought the block.
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