Victorian government to sell Evo apartments for profit

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Victorian government to sell Evo apartments for profit by Larry Schlesinger

The Victorian government will seek to recoup the estimated $90 million it forked out to buy out an apartment block that would have been entirely surrounded by freeways if Melbourne’s East West Link was built.

The previous Liberal government bought out the buyers of all 175 EVO apartments – priced about $500,000 each – in late 2013. Just months before settlement of apartments, plans for the toll road revealed the Pace Development Group project would be surrounded by concrete, tar and cars rather than the promised “parklands, reserves and tree-lined streets”.

The official axing of the $10.7 billion tunnel and toll road this week, following the $420 million agreement reached by the Victorian government with the Lend Lease-led consortium, could make the apartment project in leafy Parkville, just 3 kilometres from the Melbourne CBD, once again desirable.

“The government’s priority in relation to land and properties that have been acquired as a result of the failed East West Link project is to get the best possible return for Victorian taxpayers. This includes the EVO apartment complex in Parkville,” a spokesman for Victorian Premier Daniel Andrews said.

“While the process is still being worked out and will not be finalised for some months, the government plans to sell the complex.”

Whether the Victorian government can recoup its costs is unclear. Parkville unit prices jumped 19.5 per cent in 2014 according to CoreLogic RP Data, having fallen in 2013. But there is still the potential for the East West Link project to resurface should the state government change in three years’ time, which may reduce the prices buyers are willing to pay. Plus there is the stigma attached to the project.

Investors and owner-occupiers who bought into the project as far back as 2010 were refunded their deposits and fees plus any capital appreciation as determined by the Victorian valuer-general from the date of signing a contract to settling with the Victorian government.

The Victorian government paid legal costs and expenses up to $2500, reimbursed buyers for any lost stamp duty benefit and first home buyers had their state government grant entitlements reinstated.

NO COMPENSATION FOR LOST OPPORTUNITY

There was no compensation for the lost opportunity or any difficulties in finding alternative housing.

EVO investor James Egan, who represented many apartment owners in their campaign to be fairly compensated, said some buyers had received as little as $5000 for the appreciation of their property, while others had come out a bit better.

“Some buyers were elderly who sold their family home and had their hearts set on Parkville,” he said. “I definitely feel we should have first crack at buying back into EVO if there is an opportunity. Other investors certainly feel the same.”

But, he said, original buyers had received no contact from the government since selling their apartments.

“This is the biggest-ever total stuff-up that I have come across in my life,” another EVO investor, Sandy Perumal, said.

​”We bought eight apartments as a group and if we had held these, in the current market we could have sold for a huge profit. What we got paid was nothing for compensation.”

Plans to sell the apartments appeared not yet to have been communicated to government-appointed rental agents Knight Noble, which is offering more than a dozen EVO apartments for rent, starting at $340 a week for a one-bedroom unit.

Travis Sanders, property manager for EVO, said: ​”I am not allowed to speak to the media on behalf of my client.”