<html><body>
The Property Council of Australia recently released its latest survey — for the six months to January 2013.
It reports that the national vacancy rate for CBD offices has increased slightly to 10.4%. However, that hardly tells the whole story.
An uneven spread
<a rel="ibox" href="https://his-best.biz/assets/2014/02/Office-vacancies.png"><img height="370" width="300" src="https://his-best.biz/assets/2014/02/Office-vacancies-243x300.png" alt="Office-vacancies" title="CLICK to enlarge" style="display: block; margin-left: auto; margin-right: auto;"></a>As the accompanying table reveals, the vacancy levels show a marked variation around Australia.
Demand for space in Brisbane and Perth has declined in line with the mining sector.
Yet despite this, new supply is scheduled to come onto the market — with the current total office stock due to increase by more than 10%, over the next four years.
Likewise, Adelaide will also experience an oversupply through to at least 2016.
Not all bad news
Both Sydney and Melbourne have seen a number of older office buildings converted into upmarket residential apartments. However, the Barangaroo Project will soon push Sydney's prime CBD vacancies above 10%.
Overall, demand for Melbourne has remained strong — causing its vacancy rate to fall to around 8.7%.
Bottom line: The CBD office markets are not interest-rate sensitive. Instead, they respond purely to their local supply and demand for space.
At this stage, Melbourne would appear to be best positioned of all the CBD markets to grow in value over the next threee to five years — which is now being evidenced by the strong interest from overseas purchasers.
And you would expect that to flow through to the suburban office market as well.
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. 
You can visit his website <a href="https://property-edge.com.au/" rel="nofollow" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
                
</body></html>

chrislang-EQKojcgJPV

What CBD office vacancy stats mean for commercial property

<html><body>
Commercial property stands to benefit from the recent improved business trading figures — which have soared to a two-year high. These now fall into line with the NAB Survey's confidence levels.
As such, many forecasters believe these latest figures (together with the growth in house prices over the past 12 months) now reflect the underlying strength of Australia's post-mining economy.
Therefore, further interest rate reductions expected by the RBA are unlikely to occur any time soon — if at all.
The China factor
As you would be aware, China has just confirmed its annual growth figure at 7.5% for the December quarter.
While this may be down from the heady 10% plus during our mining boom, it clearly reflects a far more realistic and sustainable level of annual growth.
All this means is that the mining sector will now be operating in a more traditional supply phase — instead of the previous boom-time development phase.
You'll recall <a href="https://www.propertyobserver.com.au/commercial/don-t-be-put-off-by-negative-press-when-considering-commercial-property-prospects-chris-lang/2013043060890" target="_blank">an article last year</a> outlining China's potential demand for our iron ore over at least the next 20 years or so — where the underlying facts and logic remain rather persuasive.
If China continues along this path, it can only help in re-balancing the Australian economy.
Overseas demand for commercial property
Over the past five years, overseas buyers (mainly Asian) have accounted for more than half of the direct purchases in commercial property.
And yet over the past 12 months, savvy local investors have also re-entered the market in competition — and now account for 70% of direct commercial property purchases.
However, with our dollar falling below parity with the US the level of interest from overseas buyers will only escalate.
Even though many of these purchases may be at the higher end of the market, this effectively forces investors to seek out suitable property in a lower price bracket.
Bottom line
As the competition increases these higher prices will begin filtering down through the entire market, causing yields to firm. And that will inevitably result in solid growth for investors, over the next three to five years.
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. 
You can visit his website <a rel="nofollow" href="https://property-edge.com.au/" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
 
</body></html>

Increasing overseas interest and surge in confidence are good signs for local investors

<html><body>
In an article last year, I flagged <a target="_blank" href="https://www.propertyobserver.com.au/office/activity-based-wokplace-formats-translates-to-bottom-line-savings-but-require-the-space-to-implement-chris-lang/2013081364152">the growing trend of "hot desking"</a> among mid- to larger-business services firms employing our knowledge workers, around Australia.
This trend (since the early 1990s) has been driven by the inevitable cost savings — resulting from a reduction in their office space requirements.
And if this trend were to continue it would clearly have the potential to adversely affect the overall demand for office space going forward.
However, a recent article challenged the underlying wisdom of this penny-pinching fad.
First, the logic
The current rationale contends that by replacing individual offices with workstations (even removing the dividers), this significantly reduces the space requirement per employee. At the same time, the aim is to improve staff collaboration.
And now many of these firms are simply issuing their staff with a mobile phone, a laptop and a locker, adopting a "virtual office" and "clean-desk" policy — where you (as an employee) have no fixed location within the office from one day to the next.
What does the latest research reveal?
Diane Hoskins (of big US office design firm, Gensler) has researched 90,000 people, from 155 companies, across 10 industries.
As a result, her team found that Knowledge Work comprised four separate functions:
<ul>
<li>
Focus (individual work involving concentration and attention to a particular task);
</li>
<li>
Collaboration (working with others to achieve a goal);
</li>
<li>
Learning (acquiring knowledge or skill through education or experience); and
</li>
<li>
Socialising (interactions to create trust, bonds and values, collective identity and productive relationships).
</li>
</ul>
What they discovered was that collaboration was not the most significant factor in workplace effectiveness. Rather, it was individual work focus!
Furthermore, they found that these new-style office layouts actually make focus virtually impossible.
Instead, workers experienced constant "interruptions, auditory and visual distractions (which) all combine to make focus the modern office's most compromised work mode."
Bottom line: This is great news for commercial property investors.
While current office design seeks to improve collaboration, it actually sacrifices individual focus. Thereby, reducing worker efficiency — resulting in far lower productivity overall.
Apparently, the Gensler research also found that workers who can focus effectively are able to do the following things more effectively in the workplace:
<ul>
<li>
57% more able to collaborate;
</li>
<li>
88% more able to learn; and
</li>
<li>
42% more able to socialise.
</li>
</ul>
As the penny starts to drop, more and more firms will begin reverting back to a more conventional (larger) office layout.
And therefore, you will see demand for office space accelerate over the next three to four years — with a resultant increase in both rentals and capital values.

<hr>
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a href="https://property-edge.com.au/" rel="nofollow" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
This article originally appeared on <a href="https://his-best.biz/" target="_blank" rel="nofollow">Commercial Property Made Easy</a>.
 
</body></html>

The penny has dropped: Failing hot desking fad will benefit commercial investors

<html><body>
There has been a whole lot of negative talk recently about the detrimental impact of the car industry leaving Australia.
And clearly, our hearts go out to all the affected workers and their families in car manufacturing and those related component suppliers.
Most of us cannot even begin to imagine the shock and surprise they are now feeling — particularly right on Christmas.
And yet, if you just focus upon the likely impact on the Australian economy, much of the commentary can be seen as misguided.
Certainly, Holden's departure will have a short-term impact. But let's look at the facts: It appears to be emotionally charged, and politically motivated — with the talk of a recession quite wrong, and bordering on mischievous.
<ol>
<li>
As Saul Eslake (chief economist at Bank of America Merrill Lynch) points out, car and components manufacturing represents about 0.4% of total employment. An adds only a similar amount to Australia's gross domestic product (GDP). As you would probably realise, this is no more than what we already experience now as quarterly GDP fluctuations.
</li>
<li>
A study by Flinders University found most workers, who were made redundant by Mitsubishi's 2007 closure of its Lonsdale and Tonsley Park factories (in Adelaide), found alternative work within 18 months..
</li>
<li>
Unlike Mitsubishi, the actual closures for Ford and Holden are not happening immediately. Rather, they have been foreshadowed well in advance and will occur progressively through to 2017.
</li>
<li>
State and the federal governments (plus the companies involved) will be providing millions of dollars of support and retraining help, for every displaced worker.
</li>
<li>
Apart from those close to retirement, this means everyone who is serious about finding ongoing employment has a once-in-are-lifetime opportunity for a "financed transfer" across to a new employer — whose future is not dependent on government subsidy for survival.
</li>
</ol>
You only need to cast your mind back to the bushfire devastation Victoria went through in early 2009. As a result, the recovery process (funded by the state and federal governments and, in that case, the insurance companies) left the Victorian economy in a far stronger position.
Now it enjoys positive net migration, when compared with other states. And more importantly, that process has also resulted in Victoria's present solid budget position; as well as an escalating commercial property market.
Bottom line: You need to look past the knee-jerk, emotional reactions, plus the inevitable short-term adjustment. And instead, focus upon the long-term sustainable benefits, which these current events will deliver — both to the economy and the commercial property market.

<hr>
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a href="https://property-edge.com.au/" rel="nofollow" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
</body></html>

What does the car industry closure mean for commercial property?

<html><body>
A recent article in the Australian Financial Review reassured investors that the anticipated short-term surge in sublease space (within Australia's CBD Office markets) has simply not eventuated:
"Sublease space spikes at times when the economy is weak and business confidence is low because companies are restructuring and downsizing."
<img alt="CBRE_sublease_space_by_industry" height="315" width="470" src="/images/stories/2013/11/12/CBRE_sublease_space_by_industry.png">
Source: CBRE
Furthermore, the article suggested that the overall amount of sublease space is expected to fall sharply over the next few months — following the post-election improvement in business confidence.
And of all the capital cities, the CBRE research shows Melbourne has provided the greatest improvement over the past year.
What else does the chart reveal? For a number of years now, this blog is pointed to Melbourne having far greater stability — when you compare it to other capital cities. And my reasoning has been that Melbourne enjoys a far more diverse tenancy mix.
However, there has never really been any definitive analysis, to clearly confirm this particular assertion.
That is until now!
As you can see from the chart above, every CBD (other than Melbourne) has a major exposure to one specific market sector:
<ul>
<li>
Sydney: Finance &amp; insurance;
</li>
<li>
Brisbane: Mining, manufacturing &amp; construction;
</li>
<li>
Perth: Mining, manufacturing &amp; construction; and
</li>
<li>
Canberra: Information technology.
</li>
</ul>
As you would appreciate, when any of these business sectors begin to surge those capital city office markets respond rapidly — with escalating rentals and prices.
However, during an economic downturn (like the GFC ) those same markets tend to suffer the most.
Bottom line is with a more-balanced spread within its tenancy mix, Melbourne's office market is better placed to withstand such economic gyrations.
While it may not reach the same heady peaks, nor does Melbourne plumb the depths experienced by the other capital cities.
Perhaps it lacks some of the excitement. Yet instead, Melbourne has historically been able to offer investors solid and predictable returns.

<hr>
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a target="_blank" rel="nofollow" href="https://property-edge.com.au/">Property Edge Australia</a> to help you get the most out of your commercial property investing.
 
</body></html>

Balance is best: Why Melbourne's office market is well placed to withstand economic gyrations

<html><body>
You may recall several <a href="https://his-best.biz/?s=baby+boomers" target="_blank">blogs in the past about baby boomers</a>, explaining the effect they will have upon the property market — both residential and commercial.
In 2005, I warned investors that: If you hadn't sold your traditional inner-city family home by 2010-11, you had better be prepared to hold it until 2025.
My reasoning for this was not that there would be any fewer buyers. Rather, they would be five times as many of these homes on the market — as baby boomers sought to downsize en masse.
Based on the recent buying frenzy (and the regular 70%+ clearance rates) for houses each weekend this year you may feel I had been somewhat mistaken.
However, you need to keep in mind that the GFC had effectively put everything (and everyone) "on hold" for about five years. And the residential market is merely playing catch-up, on both price and activity.
Anyway, an article appeared on page five in the weekend Australian Financial Review entitled: "Baby boomers set to flood the market with family homes", which caught my eye.
So, what will this mean?
For those boomers seeking to downsize, it will mean a growing number of similar competing listings on the market. But with no additional buyers, for these out-moded homes.
Many of them will be in need of major upgrade work. And some will have reached the point, where they only represent land value.
Therefore, you will soon face the likelihood of downward pressure on pricing, in order for you to achieve a sale.
And this new reality will certainly have some unexpected consequences:
<ol>
<li>
What you once looked upon as your de facto superannuation will be eroded;
</li>
<li>
You will have less to spend on your new "smaller" home or apartment; and
</li>
<li>
The inheritance available to your children could effectively be trimmed.
</li>
</ol>
Will this affect commercial property?
On the face of it, you would probably expect not too much impact at all.
However, during the early 2000s, many investors use the untapped equity in their homes, to set up lines of credit.
And then, used them to purchase one or more solid commercial investment properties.
The commercial properties themselves may be performing well. But it is the LVR for the line of credit, which will concern your bank over the next 10 years — as the market falls away, for your traditional family home.
As such, you may find yourself having to sell the commercial property to keep your family home. Or be forced to sell the family home, in what will soon become a soft market.
Bottom line is fortunately, most of my clients will have already taken the necessary steps to avoid this dilemma.
However, with the residential market running hot at the moment, you still have a small window in which to resolve any exposure you may currently have.
 
<hr>
 Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property.
You can visit his website <a target="_blank" rel="nofollow" href="https://property-edge.com.au/">Property Edge Australia</a> to help you get the most out of your commercial property investing.
 
</body></html>

How baby boomer downgraders may affect commercial property investments 

<html><body>
This is a question often asked by traditional residential investors when they're considering the transition across to commercial property.
And you'll quickly discover the reasons are rather compelling.
Reason #1: Longer leases
Quite often, you'll find residential tenancies will be on a month-by-month basis, maybe six months, perhaps for a year.
Whereas, commercial properties will tend to lease for between three and five years, and often for longer. That means you have fewer tenancy changes, and a far more predictable income stream.
Reason #2: Greater security
When residential tenants want to exit half-way through a lease, they simply need to find a suitable substitute tenant. And then, transfer the lease across to that person.
From there on, this new tenant becomes responsible for the rental, over the remainder of the lease term.
Commercial tenants are running a business from your property. And whenever they sell their business, they also require your approval to 'assign' the lease.
However, here's the difference: If the new commercial tenant defaults in paying the rental, you also have recourse to the previous tenant as well — because commercial leases are business contracts, enforceable by law.
Reason #3: Commercial tenants pay outgoings
Typically, residential properties will provide you with a 5% gross rental return.
From this, you need to pay the rates and taxes, insurance, maintenance and so on — leaving you with about a 3.5% net return, at the end of the year.
Depending upon what (and where) they are, commercial properties will generate a 5% to 9% rental return.
However, commercial tenants are also required to pay the various building outgoings on top of their rental — making this a net rental return to you.
Reason #4: Commercial tenants operate a business
As you know, if the toilet stops working in an apartment … the tenant asks you to send around a plumber. Whereas, commercial tenants quickly attend to (and pay to fix) the problem themselves — so as not to disrupt their business.
Furthermore, the overall appearance of the property becomes a reflection on them. As such, your property is kept in good condition, at their expense.
Therefore, whether the lease requires it or not, most commercial tenants will regularly repair and repaint the property, in order to maintain a good corporate image.
Reason #5: Payment certainty
Most residential properties are rented by individuals. Therefore, the rent is generally paid in cash or by personal cheque. And this can often vary in its timing.
Because they are running a business, commercial tenants consider rent as simply another regular expense each month. And generally, this gets set up as an automatic bank transfer — and can be specified as such, in the lease.
Bottom Line: As a residential investor, you find yourself having to deal with the vagaries of individual people.
However, as a commercial investor, you tend to enjoy a more predictable long-term relationship with your tenants — based upon a proper business footing.
Doesn't that sound like a far better arrangement?
 
<hr>
 Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a rel="nofollow" target="_blank" href="https://property-edge.com.au/">Property Edge Australia</a> to help you get the most out of your commercial property investing.
 
</body></html>

The five reasons to choose commercial over residential property

<html><body>
Last Thursday, an article by Mercedes Rueh highlighted the emerging trend of hubs and co-working spaces in Melbourne and other Australian capital cities.
What you need to take away from the article is that the nature of work is changing. And therefore, creating new opportunities for you and other commercial property investors, who are flexible and forward thinking.
What are co-working hubs?
Co-working spaces are shared offices with most of the facilities that you would find in a normal office — such as wi-fi access, audio visual equipment, coffee machines.
They can be large open working spaces with tables, or split into larger and smaller rooms. It just depends on the style and preference of the users for the space.
Individual and groups workers are able to rent space for hourly, daily, weekly or monthly fees or set monthly fees.
You are starting to find these hub facilities popping up in most Australian capital cities.
Who actually uses shared work-spaces?
Co-working spaces are the first choice for many 'bootstrapping' start-ups because they offer the features of a normal offices space with lower costs. But it is not just small start-ups using this hub format.
Deloitte, AMP Capital, the NSW government, the GPT Group and CBRE are just a few of the companies experimenting with dynamic work spaces.
These spaces are becoming more popular because they foster creativity, collaboration and community which benefit employees and managers.
The demand for co-working spaces is only increasing — as office workers, specifically Gen Y, demand work that is more flexible and engaging.
What does this mean for landlords?
The uses of commercial property are changing in many ways. And the emerging co-working trend offers you the opportunity to add value to your properties.
At the end of an existing lease, or when a tenant vacates — you could clear out an older office building floor. Then refurbish the office with as a modern co-working space.
The secret then lies in securing one of the emerging, more-progressive corporates. Or a single "entrepreneurial" head tenant, who will then assume responsibility for arranging and coordinating all the smaller users.
Bottom line is if you simply allow yourself think outside the box and recognise emerging trends in the commercial property market you'll always be able to find opportunities to significantly add value to your older portfolio.
 
<hr>
 Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. 
 
You can visit his website <a target="_blank" rel="nofollow" href="https://property-edge.com.au/">Property Edge Australia</a> to help you get the most out of your commercial property investing.
 
</body></html>

Breathing life back into your old office: Chris Lang

<html><body>
On the face of it there's no apparent logic as to why accepting a smaller yield would make sense.
Unless of course, you intend to occupy the property when the lease expires; or it may adjoin the one you already own. In which case, the initial low rental is really of north of paramount importance.
However, not every such sale will have a special value to the purchaser. More often, the reason for accepting an initial low yield will be that:
<ul>
<li>
There is a pending review, to bring the rental in line with market level;
</li>
<li>
You have a strong tenant and a long lease, and place some added value on having a secure cash flow; or
</li>
<li>
The property has redevelopment potential, and a short-term lease.
</li>
</ul>
When are you able to snare a higher yield?
Sometimes the remaining lease on a property may be short, with no certainty the tenant will continue on.
You're being compensated for the lack of security in cash flow.
Therefore, despite the rental being appropriate your passing yield may well end up higher than usual. And, in effect, you're being compensated for the lack of security in cash flow.
However, there are several other reasons why you may obtain a higher passing yield:
<ul>
<li>
The rental is above market, and likely to fall when the lease expires;
</li>
<li>
The property is purpose-built, and only suitable to a narrow range of alternate uses;
</li>
<li>
The building itself is obsolete, and would soon in need of upgrading or replacement;
</li>
<li>
The tenant could be considered financially weak; or perhaps …
</li>
<li>
The property is currently occupied under a non-conforming-use permit.
</li>
</ul>
And so, it's important to users seek advice from your consulting team — to properly interpret the evidence you have available.
The bottom line is you must not simply accept every passing yield as "reflecting the market", whenever you're looking for comparable sales.
Instead, make sure you look behind each and every sale. And you need to discover whether the rental was at market level; the tenant and lease period were secure; or if there may have been any hidden potential for further development.
 
<hr>
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a target="_blank" rel="nofollow" href="https://property-edge.com.au/">Property Edge Australia</a> to help you get the most out of your commercial property investing.
 
</body></html>

Should you ever accept a lower yield? Chris Lang 

<html><body>
Recently, there was an article focusing upon how much the government could save in rent through more efficient use of the office space it occupies.
But let's perhaps look a little wider than that, because over the past decade many major companies have been adopting an activity-based workplace format.
By using this campus-style approach, staff are being provided with a laptop and a locker,  but are not allocated any specific desk.
In Melbourne, the trend has mainly been unfolding within the Docklands with companies like NAB, Telstra, ANZ, Suncorp and Fairfax having all relocated their main offices there. In fact, NAB is currently in the process of filling its second Docklands building — this time in Bourke Street.
So, why is the trend occurring?
<img src="/images/stories/2013/08/lang_aug_14_graph.jpg" width="470" height="266" alt="lang_aug_14_graph">
Source: Jones Land LaSalle, Deloitte Access Economics, The Age.
As you can see from the above graph, workspace ratios (ie: space occupied per employee) has been progressively falling over the past 20 years. But more recently, the trend has been driven by this activity-based approach to tenancy layouts.
Clearly, these larger companies will not need to occupy as much space, if they:
<ol>
<li>
No longer allow for individually-petitioned offices; and
</li>
<li>
Only provide seven desks for every 10 staff members.
</li>
</ol>
What does this mean for landlords? 
Effectively, you are now witnessing the concept of an open plan layout on steroids and obviously, that will translate into bottom-line savings in the annual rent bill.
When the GST was first introduced, there was an initial one-off surge in inflation and similarly, there will need to be a one-off adjustment in the space requirement in these recent new lettings for these larger companies.
As you can appreciate, there are significant upfront costs involved before tenants can achieve these resultant savings in rent. Therefore, according to Jones Lang LaSalle, the targeted "efficiencies" are realistically available only to tenancies of at least 3000 square metres.
As such, there are some existing CBD landlords who will need to cope with the initial impact of this workplace trend and in the process, creatively retro-fit the space being vacated — if their tenants do decide to relocate.
The bottom line is you need to keep in mind that just under half of all CBD tenancies are too small to derive any benefit from an activity-based layout.
Plus, there are a number of pundits who still doubt whether this new trend will deliver anywhere near the expected gains in staff productivity.
Chris Lang is an advisor to commercial property investors, sell-out author and regular speaker on how to invest in commercial property. You can visit his website <a href="https://property-edge.com.au/" rel="nofollow" target="_blank">Property Edge Australia</a> to help you get the most out of your commercial property investing.
This article originally appeared on <a href="https://his-best.biz/" target="_blank">Commercial Property Made Easy</a>.
</body></html>

Activity-based workplace formats translates to bottom-line savings, but requires the space to implement

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Joel Robinson

First look: Harridan plans Burke Street transformation beside Boggo Road transport hub

IN BRIEF

<ul>
	<li>
	Just three double-storey Sky Homes sit at the top of The Waterline, each with its own private marina berth and rooftop terrace.
	</li>
	<li>
	Construction on The Waterline is complete, with the first residents expected to move in from mid-October.
	</li>
	<li>
	Sky Homes range from 282 sqm to 367 sqm and are priced from $3.65 million.
	</li>
</ul>

<hr />
Lewis Land has opened the first completed sky home for inspection at Harbour Shores, giving buyers their first opportunity to step inside one of just three double-storey residences crowning The Waterline.

Each sky home comes with its own private marina berth, rooftop terrace and Broadwater views, combining the scale of a larger home with direct access to the boating lifestyle that underpins the wider <a href="https://www.apartments.com.au/new-apartments/harbour-shores-biggera-waters-564-oxley-drive-biggera-waters-qld-4216">Harbour Shores</a> masterplan.

[smartcode_project:default project_id=113271 project_image_fid=366708]

Lewis Land Head of Development Michael Long said the inclusion of a berth with every Sky Home had become increasingly valuable as marina access across the Gold Coast tightened.

“Marina berths are becoming increasingly difficult to secure across the Gold Coast, so including one with every Sky Home makes this a genuinely rare offering,” Long said.

“The private 70-berth marina will accommodate boats up to 12 metres in length and is positioned just 2.5 kilometres from the Broadwater, placing the open ocean only 15 minutes away.

“Being able to step out of your home onto your boat is a rare luxury, and it’s something residents here can look forward to when it opens later this year.”

[smartcode_project:default project_id=113271 project_image_fid=366709]

The display opening comes as construction completes on The Waterline, with the first residents expected to move in from mid-October.

The three Sky Homes range from 282 sqm to 367 sqm and each feature three bedrooms, three bathrooms, multiple living zones, expansive kitchens with butler's pantries and large balconies taking in the Broadwater outlook.

Each residence also has three secure basement car spaces and additional storage.

“This is the first opportunity the Gold Coast has had to step into Harbour Shores and see, touch and feel what we’re bringing to life here,” Long said.

“There are only three Sky Homes within The Waterline, ranging in size from 282sqm to 367sqm, with each residence featuring three large bedrooms, three bathrooms, multiple living zones, expansive custom-built kitchens with butler’s pantry, and large balconies capturing Broadwater views.”

<img alt="Harbour Shores" data-entity-type="file" data-entity-uuid="bab65e10-4fab-45e1-92d8-fc56e2ab98ff" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-25%20at%202.00.16%E2%80%AFPM.png?VersionId=XT8q76LsPkw3cYTsvN3JfFDaPLud90PN" />

Residents of The Waterline will have access to a private pool, along with Harbour Shores' wider collection of amenity including a lagoon pool, social clubhouse, tennis court, gym, yoga facilities and sauna.

Lewis Land partnered with Studio Collective to furnish the completed display, with the interiors designed to demonstrate how the residences could function as permanent homes rather than simply as show apartments.

Studio Collective Director Melissa Park said the surrounding waterways informed the interiors, but in a more restrained way than a traditional coastal scheme.

“We drew inspiration from the canals and coastal surrounds, but our approach was to interpret that subtly through layered materials and a grounded palette of earthy tones, rather than literal coastal references,” Park said.

“We introduced hero moments of green and teal to reference the surrounding waterways, while mirrored elements help reflect natural light.

“The result is a residence that feels elevated yet comfortable, somewhere buyers can genuinely imagine themselves living, entertaining and unwinding.”

Sky Homes are priced from $3.65 million.

Lewis Land is also offering private marina berths with The Residences, its limited collection of three and four-bedroom villas positioned directly along the Harbour Shores waterfront boardwalk.

Three-bedroom villas are priced from $2.99 million, while four-bedroom residences start from $3.19 million.

Harbour Shores is being marketed by Colliers International.

[smartcode_project_cta:default project_id=113271]

Lewis Land opens sky home display as The Waterline completes at Harbour Shores

St Vincent de Paul Society Housing Australia has filed plans for a major mixed-use housing precinct on the southern edge of the North Sydney CBD, adding another significant proposal to a pocket around North Sydn​ey Station that is quickly becoming one of the LGA's busiest development zones.

The State Significant Development Application covers a 5,990 sqm site at <a href="https://www.apartments.com.au/new-apartments/1-19-mackenzie-street-lavender-bay-nsw-2060">1-19 MacKenzie Street and 211 Blues Point Road in Lavender Bay</a>, immediately south of Nor​th Sydney Station and between the commercial core and the lower-rise Lavender Bay Heritage Conservation Area.

Designed by Wardle, the proposal would deliver a new residential tower comprising 88 build-to-sell apartments and 19 affordable apartments, alongside a separate co-living building with 57 rooms and a building manager's studio.

It would also see the significant restoration and upgrade of St Francis Xavier Catholic Church, the adaptive reuse of the former school building, new parish facilities, retail, a new public square and around 1,000 sqm of publicly accessible open space.

<img alt="Vinnies North Sydney" data-entity-type="file" data-entity-uuid="d5dd7f87-a617-463e-b577-17541e01f0e9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.13%E2%80%AFAM.png?VersionId=4R8TsFN3P_LrrXO2HswTOIrx2blil8lh" />

The project is seeking a concurrent rezoning of the site to R4 High Density Residential and an increase in the maximum building height to allow a tower reaching RL120, or up to 20 storeys. The proposal was progressed through the NSW Government's Housing Delivery Authority pathway.

The build-to-sell component will be weighted toward larger apartments, with just six one-bedroom apartments compared with 31 two-beds, 43 three-beds and eight four-bedroom residences.

The 19 affordable apartments will comprise two studios, 15 one-bedroom apartments and two two-bedroom apartments, taking the total apartment component to 107 residences before the 58 co-living rooms are included.

<img alt="Vnnies" data-entity-type="file" data-entity-uuid="7d568ca5-cb90-4e18-96c6-d9795dba0c56" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.10.05%E2%80%AFAM.png?VersionId=GY2R5M9VtQh0EKy1vajaea19PSLOPuRD" />

Wardle's design for the Vinnies site has sought to negotiate that emerging high-rise context while retaining the lower-scale character of MacKenzie Street and the adjoining heritage conservation area.

The main building adopts a three-storey podium and tower arrangement, with the podium aligned to the ridgeline and front setback of St Francis Xavier Church.&nbsp;Wardle has designed the podium with colonnades, seating, recessed entries and active ground-floor frontages, with sandstone-toned precast concrete and face brick referencing the materiality of the existing church.

The tower then steps back eight metres to the south and six metres to the north before rising in a sculpted form comprising four interlocking quadrants. Wardle has also introduced rounded forms and chamfered corners to reduce the tower's perceived bulk and improve view sharing with neighbouring development sites.

Resident facilities and outdoor areas are planned at the separation between the podium and tower at Level 3, oriented toward Sydney Harbour and the CBD skyline.

The tower itself will feature a glass reinforced concrete facade, with recessed balconies and deep reveals used both to provide shading and privacy and frame views toward the harbour and city. The lower levels take a different architectural approach, using brick and sandstone-toned finishes intended to establish a stronger relationship with St Francis Xavier Church. The Church itself will be conserved and upgraded for its continued use, while the former school building will be adaptively reused as part of the co-living component.

<img alt="Lavendar Bay" data-entity-type="file" data-entity-uuid="2d4418ad-90aa-4d49-af93-c80b140aea80" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%209.09.47%E2%80%AFAM.png?VersionId=Kv4gzbsACaGvZSRuaqcfGC54jEJRXIDJ" />

&nbsp;

The proposal adds to an increasingly concentrated pipeline of residential development around Blue Street, MacKenzie Street and Lavender Bay.

Just west of the site, Central Element lodged plans earlier this year for one of the most significant residential developments proposed in Lavender Bay in recent years.

Central Element's SJB-designed scheme at 64-66 Lavender Street and 3-7 Middlemiss Street would deliver 163 apartments across two towers rising 23 and 32 storeys, replacing five existing apartment buildings containing 32 homes. The project also forms part of the Housing Delivery Authority pathway.

<a href="https://www.apartments.com.au/news/nsw/first-look-central-element-reveals-lavender-bay-apartment-plans?utm_source=chatgpt.com" rel="noopener" target="_blank">First look: Central Element reveals Lavender Bay apartment plans</a>

Immediately around North Sy​dney Station, another two significant proposals have emerged at 5 and 15 Blue Street.

Zurich Australian Insurance Properties is seeking to adaptively reuse its longstanding commercial building at 5 Blue Street, directly above North Sydney Station, rather than demolishing the structure.

Its SSDA proposes converting the building into a 14-storey mixed-use development with 62 apartments and 86 co-living rooms, together with ground-floor retail and a major refurbishment of Blue Street Plaza. The application is currently at the Response to Submissions stage.

<a href="https://www.apartments.com.au/news/nsw/first-look-zurich-targets-north-sydney-office-conversion-with-148-unit-proposal-above-metro-station">First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station</a>

&nbsp;

First look: Vinnies files for 20-storey Lavender Bay apartment tower as North Sydney housing pocket heats up

When the opportunity arose for South Australian developer Palumbo to return to Kent Town, where it had previously delivered East Park Apartments and the East 
Rundle Apartments, it wasn't one the longstanding developer-builder was going to pass up.

The decision was quickly vindicated, with more than 30 apartments sold within the first month of launching <a href="https://www.apartments.com.au/new-apartments/royal-apartments-kent-town-2-8-north-terrace-kent-town-sa-5067">Royal Apartments</a> to the market.

The 206-apartment development, which will bring significant new supply to Adelaide's tightly held eastern city fringe, also gives <a href="https://www.apartments.com.au/developers/palumbo">Palumbo</a> the opportunity to bring new life to one of Kent Town's most recognisable watering holes.

[smartcode_project:default project_id=6109 project_image_fid=376073]

Royal Apartments incorporates the historic Royal Hotel, a venue Palumbo Managing Director Daniel Palumbo said has a longstanding connection with the local community.

"Everyone in the area has history with the Royal Hotel," Palumbo told Apartments.com.au.

"It was quite an active pub and social gathering place for locals. We want to bring it back to its former glory."

[smartcode_project:default project_id=6109 project_image_fid=376072]

The wider development will comprise two residential towers alongside the restored hotel, sitting on North Terrace opposite the Adelaide Park Lands.

For Palumbo, the project also marks a return to familiar territory.

The developer completed East Park Apartments next door more than a decade ago and jumped at the opportunity to develop in Kent Town again when the Royal Hotel site became available.

"The opportunity emerged, and we moved to secure the site," Palumbo said.

"We were approached by the previous landowner, who said they had extensive commitments in Sydney and weren't in a position to deliver the project.

"We took over the site and within six months recut the design scheme to be more in keeping with the type of development we want to bring to Adelaide.

"Now we're on the market and those changes have really resonated with local buyers."

That has translated into a strong start to sales, with 33 apartments transacting in the project's first 35 days.

Palumbo said the early purchaser profile had been consistent with the group's traditional focus on owner-occupiers rather than investor-led apartment stock.

"Local owner-occupiers have always been our market," he said.

"There are always some investors, but we've never developed what would be called traditional development stock. Owner-occupiers are very much our market."

[smartcode_project:default project_id=6109 project_image_fid=376068]

The buyer mix has been diverse so far, with downsizers and younger professionals both accounting for a significant portion of early sales.

South Australia's current stamp duty settings, which allow&nbsp;eligible homeowners in South Australia aged 60 savings of up to $103,830 on stamp duty when they downsize to a new property valued at up to $2 million,&nbsp;have helped encourage downsizer activity, while younger buyers in their late 20s and early 30s have been attracted to the opportunity to live immediately outside the CBD while still being able to walk into the city.



Location has been a major part of the proposition for both buyer cohorts.

[smartcode_project:default project_id=6109 project_image_fid=376075]

Royal Apartments sits on North Terrace directly opposite the Adelaide Park Lands, with residents able to walk through the parklands toward the East End, Rundle Street and Rundle Mall.

Apartments have been positioned to capture views across the parklands, Adelaide skyline, Botanic Gardens and Adelaide Hills.

Palumbo believes the scarcity of developable land along this section of the Park Lands makes the site particularly difficult to replicate.

"There's very few allotments on that side that can be developed," he said.

"If this location was in New York and you were sitting on Central Park, you'd be talking about a $60 million apartments."

Royal Apartments will offer a broad mix of residences, ranging from one-bedroom apartments through to four-bedroom sub-penthouses and penthouses.

Current listings include one-bedroom apartments from $680,000, while larger three and four-bedroom residences are priced around $2.5 million.

Residents will have access to a swimming pool, gym, barbecue and recreation areas, residents' lounge and dining space, and a communal deck.

[smartcode_project:default project_id=6109 project_image_fid=376067]

The apartments will feature generous balconies, while secure parking, bicycle storage and storage cages will also be provided.

A porte-cochère-style arrival and drop-off area has also resonated with buyers, particularly those attracted to being able to walk into the CBD during the day while retaining secure vehicle access at home.

Palumbo is acting as developer, architect and builder on Royal Apartments, continuing the vertically integrated model it has used across its South Australian portfolio.

The group was also behind the $150 million Sofitel Adelaide, the 251-room five-star hotel and residential tower which opened in 2021.

Palumbo said Royal's launch had come at an interesting time for the broader Adelaide apartment market.

Buyer confidence had initially been impacted by uncertainty surrounding the Federal Budget and broader economic conditions, but Palumbo believes sentiment is beginning to improve against a backdrop of significant investment flowing into South Australia.

He pointed to increased activity across defence and resources, including Olympic Dam, as potential long-term drivers of the state's economy and housing market.

"Money is starting to flow into Adeliade, significant amounts as Adelaide bucks the trend of the rest of the country.," Palumbo said.

"There's a lot of activity in the economy over the next decade. I think more investment will come into this market."

Early works on Royal Apartments are expected to commence this year, with major construction activity and cranes anticipated on site from early next year.

[smartcode_project_cta:default project_id=6109]

Palumbo's return to Kent Town strikes early chord with buyers

Go-to builder-developer <a href="https://www.apartments.com.au/developers/graya">GRAYA</a> is continuing to bulk out its already impressive and diverse apartment portfolio across South East Queensland. Their latest milestone is securing development approval for Silk, its boutique riverfront apartment development in St Lucia.

The approval clears&nbsp;the way for the team to begin construction planning for the 22-residence project.

<a href="https://www.apartments.com.au/new-apartments/silk-st-lucia-16-18-sandford-street-st-lucia-qld-4067">Silk</a> will rise 15 levels from an 810 sqm site at 16-18 Sandford Street, occupying a prominent bend of the Brisbane River with a prized northern aspect across Orleigh Park toward the Brisbane CBD.

The approved scheme will comprise 16 split-floor and six full-floor residences, continuing GRAYA's move into larger-format apartment developments targeting Brisbane's prestige owner-occupier market.

The project has been designed around the site's broad river frontage and dual-direction views, with GRAYA prioritising larger residences, privacy and outlook over apartment yield.

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="aa5c2349-f96c-4914-a812-1f2cd6827af8" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.44%E2%80%AFAM.png?VersionId=WY0vEU_7vYjeRJKQHiCwFdMxu8PvFh52" />

GRAYA Co-founder and Chief Executive Officer Rob Gray said the project had been shaped around local homeowners wanting to remain in St Lucia without maintaining a traditional family home.

"St Lucia is one of those suburbs people do not want to leave," Gray said.

"They know the river, the trees, UQ, the golf course, Toowong and Indooroopilly, and that familiarity is hard to replace.

"True riverfront opportunities here are exceptionally scarce. What we have designed at Silk is a way to stay in the suburb people love, with the scale and privacy of a private home and far less to maintain.

"This is not typical apartment product. It is a proper home on the river, and that is exactly what this market has been missing."

The approval comes as new apartment development continues to increase across the St Lucia and neighbouring Toowong corridor, although direct riverfront sites remain considerably more tightly held.

GRAYA Co-founder and Managing Director Andrew Gray said securing the approval had removed a significant element of development risk from Silk.

"Genuine riverfront sites of this quality in St Lucia are not something that comes up regularly," Gray said.

"The approval removes a substantial layer of execution risk, and the location underwrites demand in a way very few inner-city sites can.

"The fundamentals here are as strong as anything we have assessed in Brisbane."

<img alt="Silk St Lucia" data-entity-type="file" data-entity-uuid="d0f3d734-65e1-48e8-8ed3-2e0715ffcdd9" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-26%20at%208.25.56%E2%80%AFAM.png?VersionId=sOLSs_jdHkXLWbBKzRyayf5BfTb2vPsD" />

Silk will see GRAYA return to a stretch of the Brisbane River where it already has recent construction experience. The vertically integrated group recently completed ARC in neighbouring Toowong as builder for developer Spyre, delivering the riverfront project on a constrained site.

GRAYA will take a different role at Silk, controlling the project from design and development through construction and aftercare under its vertically integrated model.

The development will include a gym and resident leisure areas at ground level, integrated with the river's edge.

Silk joins a growing pipeline for GRAYA across Brisbane and the Gold Coast, which includes Enclave, The Gallery, Coral and Ripple.

The developer-builder has also recently lodged plans for its largest project to date, <a href="https://www.apartments.com.au/new-apartments/the-silo-19-chester-street-newstead-qld-4006">The Silo</a>, a proposed <a href="https://www.apartments.com.au/news/qld/graya-buys-frasers-newstead-site-plans-the-silo-between-james-street-and-gasworks-precincts">$700 million mixed-use development</a> in Brisbane's James Street precinct.

Silk is expected to predominantly target local owner-occupiers and prestige buyers seeking a permanent riverfront home in Brisbane's inner west.

Registrations of interest are now open, with further details on the project and construction program to be released as it progresses.

<hr />
<h2>SILK PROJECT FACTS</h2>

Developer-builder: GRAYA

Project: Silk

Location: 16-18 Sandford Street, St Lucia

Apartments: 22

Built form: 15 levels

Site: 810 sqm riverfront holding

Mix: 16 split-floor and six full-floor residences

Status: Development approved

Next step: Construction planning underway

[smartcode_project_cta:default project_id=152168]

Chris Lang

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News