Some investors find dual-key apartments twice as nice
Dual-key apartments, which offer the option of separate lives or extra income, are a rarity in Australia. The two-in-one apartments have been available for the past decade, with Frasers leading the field.
According to Frasers group sales manager Adam Sparkes, dual-key apartments offer investors higher rental yield by splitting the apartment for separate occupants.
Typical dual-key apartments come with a shared foyer and then a main residence and a second smaller dwelling of one bedroom, a bathroom and kitchenette.
Each has a separate lockable door accessed without having to enter the other residence.
To date Frasers has sold 161 dual-key apartments in One Central Park (pictured), the first stage of its $2 billion Central Park urban village on Broadway in Chippendale, Sydney. Dual-key sales represent 33% of the 432 apartments sold to date, with an average sales price of just over a $1 million.
Its two bedroom dual-keys measure 102 square metres. The development also offers a one bedroom plus studio dual-key alternative that measures 82 square metres.
Frasers may be at the forefront of dual-key apartments currently, but the configuration is by no means a new phenomenon in Australia. Meriton’s 2002 Trafalgar, Sydney, development included 12 dual-key apartments, all of which contain a two-bedroom apartment and a studio accessed by a common door, but separated once inside. But none of Meriton’s current offerings are marketed with any dual-key apartments.
Among those to buy an off the plan dual-key apartment from Frasers was Zoran Milososki, a contractor hired to pour concrete at Central Park.
Milososki bought an 82-square-metre dual-key apartment for $945,000.
“The particular apartment configuration I chose consists of two one-bedroom suites with a common hallway and laundry, then two separate, secure doorways. It’s a smart investment, as I will rent out both properties to help pay off the mortgage,” he says.
Those buying purely for investment purposes will enjoy rental yield likely to be around 6% gross, with potential rents around $500 to $600 per week for each suite.
Another dual-key investor, Fiona Lyda, owner of Surry Hills boutique Spence & Lyda, purchased a three-bedroom dual-key apartment at another Frasers’ development, Trio.
Trio features 16 dual-key apartments. The 10 that consist of one bedroom plus studio are priced from $935,000, and the six apartments that offer a one-bedroom/two-bedroom configuration start from $1.575 million.
Lyda will reside in one portion of the property while her 14-year-old daughter will live in the adjoining apartment in the years to come.
“We found this to be the perfect solution – buying a dual-key apartment in anticipation of the time when my daughter will appreciate living in her own space,” she says.
According to Sparkes the larger three-bedroom version sold well, with an average price of $1.45 million.
“The majority of these have been sold to owners that reside within the larger two-bedroom portion, with some having rented out the smaller studio space [for about $500 per week]. Those that chose to rent both portions are achieving around $800 to $850 per week for the two-bedroom and around $500 per week for the studio. Collectively that equates up to $1,350 per week, which is around a 4.8% gross rental yield.
Among Frasers' first development to feature dual-key apartments was Lumiere on Bathurst Street, which Sparkes says completely sold out before completion.
Beyond Sydney, Frasers is offering dual-key apartments for the first time in East Perth at its Queens Riverside development close to the Swan River foreshore on Adelaide Terrace.
The first apartments to market are in the 26-storey QIII (Q-three) building, which will include 58 dual key apartments among the 265 apartments being built.
The Perth prices for dual-key apartments will start from $600,000.
The QIII apartments are designed by Perth architect Bruce Robinson, who was also responsible for the design of Perth's Raffles hotel development.
Trio's apartment plans, click to enlarge:
