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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.
                
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What CBD office vacancy stats mean for commercial property

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

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

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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.
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What does the car industry closure mean for commercial property?

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

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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.
 
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How baby boomer downgraders may affect commercial property investments 

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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.
 
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The five reasons to choose commercial over residential property

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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.
 
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Breathing life back into your old office: Chris Lang

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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.
 
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Should you ever accept a lower yield? Chris Lang 

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

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.

[smartcode_project:default project_id=112661 project_image_fid=355935]

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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