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Will lower oil prices mean improved economic growth?
The answer is both yes and no, depending upon which country you live in.
Recently, the Australian Financial Review reported an analysis by Oxford Economics, which predicted the likely effect upon GDP during 2015-16 of oil being at US$40 v US$84 per barrel.
A quick summary of that is included below.
<img src="https://commercialpropertymadeeasy.com/assets/2015/01/Oil-GDP.jpg" style="display: block; margin-left: auto; margin-right: auto;">
As far as Australia is concerned, ANZ's chief economist Warren Hogan says:"The $1 a litre petrol currently being pumped in Sydney bowsers is akin to half a 0.25 percentage interest cut."
Clearly, those oil-producing countries around the world will suffer. However, one country's loss is another country's gain.
The World Bank feels windfall savings (through price reductions) will lead to improved global economic demand — particularly, in those countries which rely upon foreign oil. And in return, this will help address the present imbalance in economic growth.
Furthermore, the World Bank predicts China's current account surplus could add between 0.4-0.7% to its GDP, during 2015 alone.
For Australia
Therefore, not only will our economy and consumers benefit from lower oil (ie: petrol) prices, but our major trading partners — China, US, India and Japan — will also enjoy advantages from lower oil prices as well.
As such, this should translate into a fourfold benefit for Australia
<ul>
<li>A decline in the present inflation rate; 
</li>
<li>Improved consumer confidence at home; 
</li>
<li>A sustained lower dollar to help exporters; and 
</li>
<li>Improved demand for what our exporters produce over the next 12 to 18 months.
</li>
</ul>
Bottom line: According to CBRE research, 2014 saw a record $26.8 billion in commercial property deals.
Office sales represented over half that total; and 23% of purchases were made by foreign investors.
With most industry experts expecting 2015 to be another strong year, improved confidence among local buyers could provide some welcome competition to those overseas purchasers.
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chrislang-EQKojcgJPV

How lower oil prices could affect Australian commercial property: Chris Lang

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Office vacancy rates have lept towards 15% in Brisbane, Darwin, Canberra, Adelaide and Perth. This takes the national average to 12.4%, as an overall vacancy level.
However, businesses are now leasing space once again in both Sydney and Melbourne — where their vacancy rates are currently hovering around 10%, according to JLL.
Tenant demand for space under 800 square metres has been strong — with technology firms, investment banks and business services expanding. Compared with other capital cities, Melbourne enjoys demand from a far wider profile of tenants.
By 2016, the Property Council of Australia is predicting a vacancy rate of under 9% for Sydney and Melbourne. Whereas, the other capital cities are expected to still be up around 16% (CBD Office markets are considered "in balance", with a vacancy rate of between 6% to 8%).
<h3>Offshore Buyer Demand</h3>
Overseas investors have been responsible for boosting sales of commercial property to nearly $11 billion during the September quarter. Their contribution was about $4.4 billion and accounted for half the number of actual sales.
Interestingly, Singaporean investors (at $2.8 billion) have clearly outperformed Chinese investors (at $518 million).
While many of the purchases were made within the various CBDs, there will be an obvious flow-on effect to the inner-city suburbs around most Australian capital cities.
Furthermore, there were a significant number of purchases made of lower-grade office buildings — which are planned for either development (or conversion) into apartments.
<h3>Two-fold Effect</h3>
These projects will obviously help in reducing the overall vacancy rate around the country, by effectively withdrawing whole buildings from the market.
However they will also create added concern for those fearing an unhealthy oversupply of inner-city residential accommodation, within our capital cities.
Bottom line: Overseas investors are clearly seeing numerous opportunities here in Australia. And their increased activity over the past year has certainly taken many local investors by surprise.
Provided you base your purchases upon underlying fundamentals, the next four to five years is looking rather rosy for commercial investors.
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Commercial property: State of the nation

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The RBA's Dilemma
The general consensus is that our dollar should ideally be trading at around US85 cents and that would provide a balance between encouraging non-resource export businesses, while not adding unwanted inflationary pressure.
The RBA could achieve this simply by lowering the official interest rate. However, that would then fuel even more local borrowing — especially within the residential property market.
Ideally, the RBA would like to raise interest rates. Yet, that will only encourage more overseas funds into the country chasing attractive higher returns. Without a lower dollar exchange rate, that would put even more pressure on our export industries.
However, with the Aussie dollar falling to around US90 cents recently (and slipping slightly below that since), maybe the RBA will have its wish fulfilled.
The Impact of a Permanently Lower Dollar
Immediately, this would discourage overseas funds chasing higher returns and temper the demand by investors for both residential and commercial property.
Furthermore, the banks would begin losing their source of cheap funds and therefore, have less money available to lend.
Both these events would help cool the present frenetic market— where funds are often merely "seeking a home", with scant regard to value fundamentals — be it for residential or commercial property.
Bottom line: Make sure you stick to the basics, when assessing commercial property.
Always set out to look for:
<ul>
<li>Well-designed, well-located properties;</li>
<li>Solid tenants on a good leases; and</li>
<li>The ability to "add value", where possible.</li>
</ul>
Make sure you remain an investor in quality, not merely an accumulator of commercial property.
If you cannot find exactly what you want on realistic terms, perhaps you need to wait for the dust to settle and simply let these over-eager "amateurs" discover the importance of basing decisions upon underlying value.
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How does the Aussie dollar affect commercial property?

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No longer are Australia's main capital cities' office markets in sync.
During the last century, the CBD markets seemed to operate within a fairly regular 18-year cycle — in other words, from "peak to peak".
However, all at ceased when the global financial crisis hit in 2008.
In the lead up to that, developers in Sydney and Melbourne had predominantly undertaken projects with significant tenant pre-commitments.
Brisbane and Perth had seen a huge amount of speculative development occur — driven by the hype of the mining boom.
<img src="https://his-best.biz/assets/2014/08/CBD-Offices.jpg" alt="CBD-Offices">
Source: Property Council of Australia, via Fairfax.
The Wash Up?
As the table above confirms, there is now a massive disparity between the various capital city office markets.  
<blockquote>
Sydney and Melbourne were the only cities to improve their vacancy.
</blockquote>
As you can see, the latest PCA survey shows Sydney and Melbourne were the only cities to improve their vacancy for office space, over the past six months.
For Brisbane and Perth, vacancy rates have clearly blown out, while demand is actually falling.
Over the period, you saw the vacancy rate for Sydney decline from 9% to 8.4%. Similarly, the rate for Melbourne dropped from 8.7% to 8.5% and sits at around just 4%, for Docklands.
The Mining States
By contrast, the vacancy rate in Brisbane rose from 14.2% to 14.7%. It will most likely hover around this level for the next few years.
The Perth market is not far behind — with its vacancy rate rising from 9% to 11.8%, over the past 6 months. As with Brisbane, demand for space has declined; and Perth's vacancy rate may creep even higher, over the next few years.
Looking Forward
Since late last year, the Sydney and Melbourne markets have certainly improved. And you are already seeing major investment from overseas buyers — keen to capitalise on the upturn, and rising prices.
Unfortunately, Brisbane and Perth are probably lagging between three to four years behind — because of the huge amount of vacant space needing to be absorbed.
Bottom line: You can expect the Sydney and Melbourne office markets to grow solidly over the next four or five years — and are likely to peak around 2019/20.
That may well be the time for you to switch your investing to Brisbane and Perth — as they will then be enjoying their recovery phase.
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There are now massive disparities between capital city office markets

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Whenever you consider commercial property, it's important to fully understand what the overall yield is likely to be.
And the simple formula to arrive at an estimated overall figure is: yield = income + capital growth.
And investors often ask me how do average yields vary from one sector of the commercial property market to the other?
The short answer is: "They tend not to vary at all."
Now on the face of it, that might seem a strange response. But remember, you are now talking about the overall Yield from the property — not merely the net return, as far as Income is concerned.
Long-term Expectations
From my experience, investors are anticipating an overall yield from their commercial property (i.e. income and growth) of around 12% per annum.
<img class="aligncenter size-full wp-image-14360 colorbox-14357" src="https://his-best.biz/assets/2014/07/Yields2.jpg" alt="Overall Property Yields" width="556" height="306">
<img class="aligncenter size-large wp-image-14358 colorbox-14357" src="https://his-best.biz/assets/2014/07/Yields.tiff" alt="Anticipated Overall Yields" width="1" height="1">As this table explains, the composition of that yield will vary between the sectors.
And yet when taken together, the total for those components is expected to remain the same, across all three sectors.
In other words, if a retail a property is purchased returning 5% per annum, then that investor is anticipating a 7% capital growth each year.
Alternatively, there may be the odd occasion where you can negotiate a "terrific deal" on an industrial property, at around 11% per annum.
However, you need to realise that your capital growth will then most likely be down around 1% per annum.
And the reason you were able to achieve such a high income return was to provide you compensation for the anticipated meagre growth going forward.
Will there be Anomalies?
Of course, there will always be occasions where a vendor is caught in a tight spot; and that will enable you to sneer a great deal. However, that will generally be the exception.
Also, you may have noticed some of the recent retail sales in strip shopping centres occurring at extraordinary returns, as low as 3% net.
On the face of it, those investors are anticipating capital growth of 9% per annum. Unfortunately, that may turn out to be a fond hope — because of the present fragile nature of retailing.
Bottom line: The table above is intended to provide you with a handy guide for calculating your anticipated overall yield from commercial property.
Furthermore, it also enables you to select your preferred risk profile.
In other words, choosing between a higher income return, or higher growth. Or maybe, you decide upon the office sector, to provide a more balanced portfolio.
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Understanding overall commercial property yields

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One question often asked by inexperienced investors is whether or not you can manage your own commercial property.
And clearly, the short answer is: Yes, if you know what you doing.
However, owning a commercial property means that you do have certain legal responsibilities and among them are your property's compliance with the various essential services requirements under current building regulations.
Obviously, the rules and regulations will vary from state to state. But nonetheless, it's something you need to be fully informed about.
For example: The objectives of the Victoria Act (from July 1994) include:
<div>
<ul>
<li>To establish, maintain and improve standards for the construction and maintenance of buildings;</li>
<li>To facilitate the adoption and efficient application of national uniform building standards and the accreditation of building products;</li>
<li>To enhance the amenity of buildings and protect the safety and health of people who use buildings;</li>
<li>To facilitate and promote the cost-effective construction of buildings; and</li>
<li>To provide an efficient and effective system for issuing building and occupancy permits.</li>
</ul>
</div>
You will find the Act sets out the legal framework for regulating construction of buildings, building standards and maintenance of certain building safety features.
<h3>Your Obligations</h3>
As a landlord, the regulations require you:
<ol>
<li>Identify and inspect all essential services to specific standards and frequencies.</li>
<li>Keep hard-copy records of inspections on site.</li>
<li>Complete and display the annual essential services report and the occupancy permit in the building.</li>
</ol>
Buildings constructed before July 1994 are not required to have an annual essential services report. Nonetheless, all the safety systems must be properly operating and maintained.
This would include things like exit signs and paths of exit; and therefore, it would be prudent for you to keep records of all your maintenance checks.
However, if you were to undertake significant upgrade works to an older building you would then be required to fully comply with current day regulations.
Bottom line: While compliance may seem somewhat confusing and onerous, this is something your managing agent will be able to co-ordinate on your behalf to ensure you meet all your legal obligations.
And therefore, the long answer is that it would be in your best interests to appoint a competent managing agent — rather than try to muddle through on your own.
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The commercial property regulations and obligations investors need to know

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An article in the weekend Financial Review opened with:"Macquarrie Group, a bellwether for the strength of the office leasing market, is expanding."
And this clearly accords with a recent report released by BIS Shrapnel, which confirmed the office recovery would be stronger in "service and trade exposed markets like Sydney and Melbourne, but weaker in the mining-based markets such as Perth and Brisbane".
<img src="/images/2014/05/06/lang%20may%207%20one.png" alt="">
Source: Knight Frank/Australian Financial Review.
For Melbourne, you are now seeing strong demand in and around the city fringe — mainly within Southbank and the Docklands precinct.
Developers in these areas enjoying obvious cost advantages, which are then reflected in a lower rent profile for their prospective tenants.
And this is what led the likes of ANZ and NAB to relocate to Docklands, over a decade ago.
A growing number of major corporate tenants are progressively realising they no longer need be located within the heart of Australia's CBDs.
Instead, they can pre-commit to prime-grade Offices at very competitive rentals — and have that accommodation designed and fitted out, to meet their specific needs.
And this demand appears to be flowing through to established suburban markets as well.
With most of these new developments having significant pre-commitment from major tenants … this should curb the tendency for speculative development, over the next 3 to 5 years.
And this will help safeguard against an oversupply of space, within the Sydney and Melbourne office markets.
 
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Demand for office space on the improve

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The RBA recently confirmed a neutral bias, when it announced its latest decision to keep the official interest rate on hold.
Inflation appears to be relatively steady — and still well within the RBA's stated band for comfort.
Furthermore, the feedback from the residential market is that house prices in Sydney and Melbourne now appear to be levelling out.
The RBA was keen to see the residential market slow somewhat. However, if that doesn't remain the case, it may need to look to increase in interest rates.
In any event, the RBA has now signalled the next direction will be upwards from here. And the first sector to be affected will be residential property, as mortgage payments increase.
What does that mean for commercial property? 
As the interest rate rises, consumers now have less to spend. And this quickly impacts upon retail sales — which in turn, can adversely affect the appeal of retail property as an investment.
Generally, this decline in sales tends to occur with a three to six months time-lag, from when interest rates start to rise.  
Right now, retailers are already reeling from poor trading profits— through a combination of the impact of growing online sales, plus the recent influx of competition from some major overseas traders.
Therefore, any increase in interest rates from here will only serve to further affect the profitability of an already struggling retail sector.
<blockquote>
Any increase in interest rates from here will only serve to further affect the profitability of an already struggling retail sector.
</blockquote>
As you will appreciate, the industrial sector is principally logistics and distribution. Therefore, as retail activity slows, you generally see a flow-on effect for industrial storage space. And previously, this has occurred with a further lag of about a six to nine months.
However, with greater diversity of users now seen within the Industrial sector, any impact is likely to be far less severe than before.
How will the office sector be affected?
As interest rates begin to rise, they will have little (if any) effect upon the office markets around Australia.
This was apparently confirmed by an 80-year study conducted by the BIS Shrapnel … which confirmed there was actually no correlation between interest rates and the well-being of the office sector.
Rather, any fluctuations are driven purely through demand and supply of space — which is primarily related to the health (or otherwise) of the Australian economy.
Bottom line: Despite the intrinsic appeal of retail investment property, you need to be mindful of the underlying strength of your tenant (and the lease covenant) going forward.
Industrial property will prove to be a solid investment. However, your real growth will be seen within the office sector — both in the CBD and suburban office markets, which are currently heating up.
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Commercial property and interest rates

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Where are we right now and what actually determines the cycles for the residential and commercial sector?
As it happens, most people believe every sector is quickly affected by interest rate movements, that's not strictly true.
And where interest rates do have an effect, the actual timing of that also varies.
How it seems to work in practice
The most sensitive sector is clearly residential property.
As interest rates rise, this immediately starts to curb home buyer borrowing — which, in turn, thins out the number of people bidding at auction and that quickly affects selling prices.
Generally, about three to six months later, you'll notice retail sales being affected. As a result, investors will tend to temper their demand for that sector.
Because most industrial property is largely used for product distribution … any fall in retail sales tends to decrease the need for storing additional stock.
As such, the industrial market can then start to become affected — with about a 12-month time lag.
Residential property right now
Despite all the publicity about having an over-heated housing sector, the stats suggest any collapse in the residential market is still a fair way off.
During last year, home buyers were more or less playing catch-up — as a result of effectively doing nothing since the GFC.
And so, you are likely to see prices stabilise throughout the remainder of 2014.
The office sector
The office sector is basically unaffected by interest rates.
Instead, it closely tracks economic activity and this is what then determines the supply and demand for office space.
Bottom line: As a result of where things sit in the current cycle, you should be enjoying good growth for office property over the next three to five years — certainly in the Sydney and Melbourne markets.
With a those markets expected to peak somewhere around 2018/19.
Unfortunately, the other capital city office markets appear to be running several years behind this time frame, so make your investment decisions with this in mind.
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Do low interest rates affect the commercial property cycle?

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Have you noticed how people are generally now acting in a far more positive manner and that's simply because they are starting to feel "wealthy" again.
But you need to look deeper
With share and property prices rising, consumer confidence has finally returned — which was confirmed by the improved retail sales during December and January.
Plus, you saw GDP exceed expectations — by rising 2.8% for the December quarter.
This increased spending is also being supported by high household savings.
A clear indication of renewed confidence
And this has shown now up in spending for entertainment and eating out — which historically, has been recognised as a clear indication of renewed confidence.
New housing approvals have improved by 35% over the past 12 months. And once complete, these homes will also need to be fully furnished — which is great news for all the homemaker centres.
Furthermore, Coles will be investing more than $1 billion to construct 70 new supermarkets, over the next three years.
<blockquote>
All of those workers who contribute to this surge in exports will all need to be housed somewhere.
</blockquote>
In its May Budget, the government intends to curb wasteful recurrent expenditure inherited from Labor. While it also plans to embark upon significant infrastructure projects — to start boosting employment around the country.
A surge in exports
For the first time in most people's memory, Australia will be enjoying a positive balance of trade.
In other words, for the next decade or so, you should be seeing our exports exceeding imports. And this will further help in reducing Australia's overall debt.
Even though the boom in mining expenditure may have come to an end, the resultant export of raw materials will now continue for years to come.
Furthermore, our exports in education, tourism and business services will all grow dramatically — as the global economy improves.
All of those workers who contribute to this surge in exports will all need to be housed somewhere. And that will open up opportunities for new suburban office and warehouse facilities around Australia over the next three to five years.
Further evidence of an underlying strength in the commercial property market is now provided by the latest IPD/Property Council index.
During 2013, you saw investors (both local and overseas) stride out from the shadows of the global financial crisis. And as this graph confirms, every sector has displayed a healthy improvement in selling yields.
Both the US and UK commercial property sectors have responded slightly ahead of Australia, because their labour markets (and therefore demand for space) have been improving at a faster rate.
Savvy investors are already in the market
Investors have already sought out solid opportunities.
Nevertheless, there has been significant (and consistent) Asian money pouring into Australia over the past 12 to 18 months — as investors have already sought out solid opportunities in the $100 million plus bracket.
This has effectively forced local buyers to bid up prices for lower-valued properties — or simply miss out on securing a position, before the expected upsurge gets fully underway.
The effect of this strong activity won't take very long to filter down through to the lower price brackets and then, out into the wider suburban markets around Australia.
Bottom line: They say that no one rings a bell at the bottom of the market. However, what's occurring is probably the closest you'll likely get.
Therefore, observe the signs and make sure you act accordingly if you've been at all hesitant about stepping into the market.
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Commercial property benefiting from economic upturn

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

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Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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Chris Lang

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