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Every six months, the Property Council of Australia (PCA) conducts a nationwide survey on the state of the office market around the country.
The accompanying graph will give you a quick snapshot of where things currently stand.
However, even the commercial property market has been subject to the influences of the much talked about "two-speed economy".
Across the country, around 290,000 square metres of space was occupied over the six months to June. That means there has now been an above-average absorption for the last three years.
<img src="/images/stories/2012/08/langaug20.jpg">
Source: <a target="_blank" href="https://www.afr.com/">Australian Financial Review</a>
And that has caused the national vacancy rate to fall slightly to 7.8%.
According to PCA chief Peter Verwer, although demand is 50% above the 20-year average, three-quarters of the CBD absorption took place in Perth and Brisbane.
You only need to look at the graph showing rental movements to see the effect the mining sector is having upon tenant demand.
Traditionally, Sydney has always had the highest prime net rentals of all capital cities.
But this changed in 2007, as a result of the mining boom.
What you should observe the lack of underlying depth and fragile nature of the Perth and Brisbane markets following the effects of the GFC, from 2008 to 2011. And only now is Perth beginning to head back up at a cracking pace.
You'll also notice that Sydney's rentals only fell marginally over the same period, due to the rather large proportion of financial sector tenants it houses.
Rentals in Melbourne and Adelaide continued to increase slowly — despite the impact of the GFC.
The state of play
Over the first half of this year, Sydney has seen an improvement in tenant demand, together with significant office space being withdrawn from the market.
Despite the relatively low vacancy rate in Melbourne, tenants seem a little cautious about business conditions. And some are preferring short-term lease extensions to long-term commitments.
The vacancy rate in Perth actually rose over the past six months, with new space coming onto the market. But that will immediately be absorbed due to strong tenant demand.
Over 80,000 square metres of space has been added to the Brisbane market, which also pushed up its vacancy rate; and a further 50,000 square metres is due for completion next year. Even so, tenant demand remains strong.
An uncertain future for the Olympic Dam project and new space coming on stream will help to keep the Adelaide market somewhat subdued.
Meanwhile, Canberra will continue to suffer from federal government cutbacks and the consequent reduction in its public service space requirements.
Bottom line: You be the judge!
The Perth and Brisbane office markets will provide you with one hell of a ride — so long as you know exactly when to get off.
Whereas, Sydney and Melbourne will simply give you predictable growth — with less excitement, but also far less anxiety.
Right now, commercial property is offering something for every investor.
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Which commercial property market you should invest in right now

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There has been much debate recently about the health of the retail sector.
Needing to constantly have everything "on sale" has certainly shrunk everyone's margins. But overall, sales volumes have languished.
Yet, maybe there is some light at the end of the tunnel. The ABS just reported that retail sales increased by 1% during June, following a 0.8% rise in May.
And department store sales jumped by 3.4% during June — the largest increase in more than a year.
However, as you can see from the graph, the most recent surges in retail activity have also followed directly after generous government handouts.
<img src="/images/stories/2012/08/langaug141.jpg">
Source: <a target="_blank" href="https://www.afr.com/">Australian Financial Review</a>
The golden era
Clearly, retail's golden era is somewhere in the past. In fact, the BIS Shrapnel recently forecast retail sales growth of 2.9% per annum over the next five years. And you only need to compare that with around 5% per annum before the GFC.
Add this to the strong incursion being made by online retailing, and you start to realise the retail sector (as a whole) is looking somewhat fragile.
In fact, Moody's rating agency has recently indicated that the credit standing on major Australian shopping centre owners is a risk.
Moody's considers that low vacancy rates and fixed rental increases above the CPI are simply not sustainable given the sudden growth in online retailing.
Online influence
However, it's not just purchasing over the internet that is causing retailers a problem.
Have you noticed how customers conduct instant in-store price checks using their iPhones or iPads? Retailers are now often being forced to further shave already thin margins on the spot to make a sale.
That simply means retailers need to respond more vigourously to this online threat.
Some recent research by Deloitte confirms retailers must change — and quickly — to deliver a seamless online service for their customers.
Bottom line: Historically, retail landlords have been prepared to accept income yields as low as 4% to 5% because they were accompanied by 8% to 9% per annum capital growth. But this is no longer the case.
Leases with fixed rental increases have been growing faster than the CPI, which only creates illusory growth — because those rentals will simply fall back at the next market review.
Therefore, most commercial property owners are now viewing their retail investments as an "income play". And yields have been firming accordingly.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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With retail capital growth looking fragile, retail yields are firming

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The Labor government is crowing about its latest statistical achievements — low inflation, low unemployment, strong growth and booming investment.
So, why aren't Australians feeling an overwhelming sense of warmth and wellbeing? Probably, as my earlier articles have explained, it all comes down to an overall lack of confidence.
Most people are still expecting the RBA to further reduce interest rates. However, barring a European meltdown, that would seem to be rather unlikely in the foreseeable future.
You only need to study these graphs to understand the RBA's hesitancy — because clearly, the average measures of inflation currently sit at the bottom of the target band adopted by the Reserve Bank.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2012/08/langaug7.gif"><img src="/images/stories/2012/08/langaug7thumb.gif"></a>
Closer scrutiny is required
However, when you look more carefully at the composite parts, you can better understand the make up the overall CPI figure itself.
As a result of the high Australian dollar, the prices for tradable items (mostly imported) contribute -2% per annum to the total figure.
However, the prices for non-tradable items (being domestic goods and services) are currently growing at 3.6% per annum. And the problem is that these represent about 60% of the CPI's final figure.
These domestic items include essential goods and services, which people need and use on a daily basis.
Things like electricity, education, healthcare and rent — where electricity alone has risen by 10.7% over the past year.
Therefore, the low "official" measures of inflation mask the fact that everyday consumers continue to experience living costs, which are rising on a monthly basis.
And this is what is fuelling the present uncertainty within the Australian community.
However, the real irony here is that, if overseas events were to cause the Australian dollar to fall below parity (with the US dollar), this would provide a welcome boost for all our exporters — not merely the mining sector.
And in turn, this would help restore some balance to our present two-speed economy.
Bottom line: These are certainly strange times. And yes, local investors do seem to be confused by all the mixed signals.
However, this doesn't seem to be deterring private overseas buyers, who see Australian commercial property as extremely well-placed for growth over the next five years. And in particular, Melbourne — as Dr Frank Gelber (of BIS Shrapnel) confirmed last week at the REIV's Annual Forecast Luncheon.
All these investors require is a well-located property with a solid tenant on a good lease, and their decision to buy quickly follows.
 Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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Local commercial property investors confused by mixed economic signals

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While everyone seems to agree that the residential market is currently moving sideways, investors often find it difficult to gauge how direct investment into commercial property is really travelling.
Perhaps the best gauge is to take a look at what the sharemarket thinks about A-REITs (Australian Real Estate Investment Trusts).
Generally, these yields tend to operate at about 1.5% to 2% below direct investment into property. Nonetheless, they can be a great indicator of where the present trend is heading.
With debt now under control, the A-REITs have put in a solid performance over the 12 months to June this year.
As you can see from the charts, this trend has been consistently upwards when compared to:
<ul>
<li>10-year bonds</li>
<li>The RBA cash rate</li>
<li>Most other types of equities</li>
</ul>
In fact, since January 2011, A-REITs have returned 11.2% in total, as opposed to equities at -9.3%.
 
Looking forward
With consolidations, the number of A-REITs has dropped from 24 to 19. And investors also have the comfort of knowing they are buying at a discount to current asset backing.
Those A-REITs focusing primarily upon office and industrial property would appear to be performing the best. That is consistent with what we're currently seeing with direct investment into commercial property.
The bottom line
As you're probably aware, the sharemarket tends to price in forward trends, generally giving you a six-month lead-time on what is likely to occur.
As such, you now have yet another source confirming the underlying strength of the commercial property market. This should give you some added comfort to secure a property now, in your own right.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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Why commercial property is trending up

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Gerry Harvey appeared to sum it up fairly well in a recent interview:
"It was unusual to have such a poor sentiment at a time when Australia's economy was relatively strong compared to America and some countries in Europe."
Harvey feels Australia has an economy regarded as strong by outsiders. And yet there is a total lack of confidence, and businesses are therefore suffering.
Overseas investors are actively targeting Australian commercial property — accounting for around half of all sales of over $30 million. However, local investors remain hesitant.
This is purely a confidence thing — something my articles have been attempting to explain, over the past few months.
Experts are purely blaming the overseas turmoil. And it's true, countries affected by the financial crisis have not yet adjusted their economies to the long-term structural shift taking place — mistaking it as simply a fall-off in demand.
Fortunately, Australia is able to sell its mining output to China — creating funds now, to allow for structural adjustment over time.
And so, as tough as this may sound, propping up selected industries through subsidies is simply bad economics.
Instead, the government should be fostering a flexible environment within which businesses and workers can be encouraged to adapt.
Surely China is in trouble?
During the second quarter of this year China's growth was probably slower than at any time in the past three years.
It has been well reported that China's growth rate has cooled. But that doesn't mean a hard landing — because the current expected growth rate (of 8% per annum) is scarcely stagnation.
With inflation seemingly now under control, China has already begun cranking up approvals for roads, airports, steel mills and social housing.
All of these will require what Australia's mining sector produces.
Therefore, Australia's problem will not be a fall-off in global demand. Rather, it will be the impact of greater competition from other countries supplying commodities.
But this is an unlikely to occur until 2016, when the world economy should have fully returned to an expansionary phase.
How should commercial property investors respond?
Because of the general uncertainty, quality commercial properties are starting to look cheap. As an investor, the secret is to have your lease expiry (and therefore a rental review) occur in 2016-17.
That will then provide you with solid income during the current period of confusion. And also allow you the opportunity to reap considerable capital growth, when you review the rental to market.
Bottom line: Confusion generally means inaction.
For commercial property, that translates into there being no meaningful new development in the short term — certainly not of a speculative nature.
However, against this lack of supply, you will still have a growing tenant demand, which will result in increased rentals, and lower capitalisation rates.
In other words, the precise scenario most investors would hope for.
Therefore, recognise it for what it is and position yourself now, before everyone else finally twigs to what was actually going on.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a target="_blank" href="https://bitly.com/IFf40C">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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A lack of supply means increased tenant demand and yields for commercial property investors

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The first half of 2012 has been rather dismal for retailers. Figures coming out of the ABS tend to confirm anecdotal evidence that retailing is doing it tough.
And none more so than department stores, fashion and electronics. Food and entertainment remain the only bright spots.
Major players like Myer, DJs, Harvey Norman and JB Hi-Fi have all recorded a drop in profit.
Even with the two interest rate cuts and recent government handouts, the expected bounce in sales is yet to materialise for traditional retailers.
And they have lowered their expectations going forward — with much concern being voiced about the impact of online retailing.
Online sales
While shoppers seem to be shunning "bricks-and-mortar" stores, many consumers are still spending, to the point where online sales have leapt 20% over the past few years.
<img src="/images/stories/2012/07/langjuly9.jpg">
But you need to keep this figure in perspective: Online retailing is only worth about 5% (or $11 billion) of traditional retail turnover.
Nonetheless, it's a growing trend that clearly has mainstream retailing concerned.
According to the NAB, 75% of this online spending is going to Australian businesses. And yet, tens of thousands of businesses (64% according to MYOB) have no web presence.
So, there is plenty of scope for traditional retailers to restructure, and join the party.
Need for change
Gone are the consumer boom years, where household debt peaked at 150% of disposable income. And clearly, there is now a need for retailers to adjust.
In fact, household savings have been growing since the early 2000s. But the GFC, plus a fall in value of their superannuation and property wealth, have left people feeling poorer.
Hence, their sudden urge to save even more, where households currently have 25.9% of their financial assets in cash — well above the long-term average of 19.5%.
Bottom line: As soon as things stabilise globally and they begin "feeling wealthy" once again, consumers will resume spending and respond with new-found vigour — much like most creatures do after emerging from a long hibernation.
It is during this "catch-up" period that you can expect retail property to regain its position as a sought-after investment once more. And this renaissance should commence towards the end of next year.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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Retail renaissance to begin at the end of 2013

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Can commercial property investors continue to rely on the government? Yes, but probably less than previously — due to both the state and the federal austerity measures currently being implemented.
Some of the recently announced public service layoffs will remove the "automatic" component of government take-up from the CBD office demand equation. But that's not altogether a bad thing.
It simply means that more major development activity going forward will be by pre-commitment, rather than wishful speculation.
This is already being evidenced in Brisbane, where Campbell Newman is planning to relocate his public service requirements to the waterfront. And likewise in Perth, the state government is also looking to decant some of its CBD office needs to the suburbs.
Right around Australia, all levels of government are now seriously reviewing their accommodation requirements and how effectively they use their current office space.
Who occupies what?
Click to enlarge
<a href="/images/stories/2012/07/langjuly3.jpg" rel="shadowbox" title="Click to enlarge"><img src="/images/stories/2012/07/langjuly3thumb.jpg"></a>
According to a recent report by Colliers, government occupies about 25% of all CBD space across Australia. And as you can readily see from the graphic above, Canberra and Brisbane clearly exceed the level.
Melbourne has a fairly balanced "wheel" and also one of the lowest exposures.
Last year, Canberra's overall office vacancy level fell from 13% to 10.8% — which is nothing to really brag about. And the planned staff cut-backs will not help improve that situation.
Slow to change
While governments of all levels may have announced plans to rationalise the CBD office needs, they are renowned for moving slowly, with their implementation. And historically, whole floors have often simply remained vacant following previous staff cuts.
Furthermore, government tendencies have struggled to meet the private-sector workspace ratio of 10 to 12 square metres per person. Instead, most fall within the 15 to 20 square metre range, but some state government tenancies actually exceed that.
Bottom line: While government cut-backs may initially cause some concern for some CBD office landlords, the vacant space should be readily absorbed as the economy expands.
However, the real beneficiary will be suburban office markets — as government tenants seek modern space and a lower rent profile.
Therefore, as an owner of suburban office space you will begin to see a new large player entering the tenancy market. This will help to drive rents up — while still providing government with a lower overall rental bill.
As such, this provides you with a real opportunity underpinned by solid demand.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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What government cutbacks mean for commercial property investors

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Prices may be rather attractive at the moment, but the days of quick and easy financing are over.
Furthermore, the tight credit market is making it tough for some investors to secure loans.
Nonetheless, with a little creativity and preparation, you can often bring otherwise-doubtful funding options within your reach.
And if you want to take advantage of some great opportunities at the moment, here are a few tips to improve your chances of success.
Increase your initial equity
Let's start with something simple. By contributing 30% to 35% upfront for your new purchase, you will secure your loan and probably obtain a better deal on your interest rate.
But if you don't have the immediate cash to do that, you consider a line of credit on your home or no investment property to bridge the gap.
Steer clear of the big four banks
If your initial equity isn't quite as big as it should be, you might consider a neighbourhood bank for financing rather than one of the big banks.
You'll find them to be a little more flexible; plus, they may also know your local market better and prefer investing locally.
Engaging a good mortgage broker is another good option — because they have access to a wide range of loan products. But make sure you deal with someone who knows how to find investor money.
Seek help from the vendor with financing
Right now, some vendors may be prepared to leave some money in the deal for a few years.
But you need a game plan — to "sell" the vendors on financing,
And you need to sell the vendor on you as well.
You need to paint a confident picture so they don't fill in the blanks with their worst fears.
Think outside the box
You may be looking to buy a vacant property, where you know a tenant can be easily found. But a few things need to be done to it first.
Most investors would seek to "screw the best price" out of the vendors, to help offset some of the upgrade costs involved.
That is your first big mistake!
The better outcome would be to have the vendors agree to a six-month settlement but grant you access to renovate after 30 days.
That way, you can complete the upgrade work and have the property fully let before settlement.
But more importantly, you will be borrowing on a higher-valued property — which should cover your upgrade costs. If you settle early, those costs will come out of your own pocket.
Bottom line: In the current market creativity rules.
Never go into a negotiation fixated on price. With just one item to resolve, there is always a winner and a loser.
Instead, it's often far more productive to let the vendors name the price, but you name the terms.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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With a little creativity, you can secure funding for commercial property investment

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According to a recent report by Property Watch, overseas investors appear to be strongly buying office buildings within Docklands and the CBD of Melbourne.
Currently, these office purchases account for around 36% of all very major deals being transacted — and they seem to be driven by Melbourne having the second lowest vacancy rate for this kind of property, after Perth.
Apparently, investors are not being put off by the federal government's recent decision to double withholding taxes for international landlords.
It seems the reason being given for this surge in buyer activity is Australia's economic strength — low inflation, declining interest rates, solid population growth and relatively low unemployment.
And these underlying fundamentals are what obviously appeal to overseas investors, as they consider the foreseeable uncertainties within the US and Europe.
<img src="/images/stories/2012/06/langjune18.gif">
As a result, investors are being drawn to the expected rental growth due to a clear lack of new construction, currently in the pipeline.
This became apparent during 2011, when just over 41,000 square metres of new office space came onto the market, which was well below the annual 135,000 square metres 10-year average.
Bottom line: Sometimes it takes a few "outsiders" to cause local investors to realise that things are not nearly as bad, as what some pundits would have them believe.
But here's the thing — by the time the "overly cautious" have come to realise the truth of where the market currently sits, many of those attractively priced commercial property opportunities will already been snapped up, by savvy offshore buyers.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a href="https://bitly.com/IFf40C" target="_blank">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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Overseas investors showing strong interest in Melbourne office stock, undeterred by double withholding tax

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Not everyone was expecting the RBA to further ease the cash rate when its board met last week.
Some felt the board would simply "keep its power dry", and just wait to see how the outcome of the June 17 election in Greece unfolded.
Some economists like Saul Eslake of Merrill Lynch felt that the $2.5 billion of cash payments by way of government compensation for the carbon tax would serve as "enough stimulus" for now.
But maybe, such thinking took too simplistic a view of things.
Despite the RBA's fears of an underlying growth in wages, monthly inflation figures have sunk to zero. Furthermore, the corporate sector confidence had also slumped.
However, the tipping point was probably the trading losses suffered on Monday this week on the stock exchange — wiping off around $26 billion in value.
Maintaining your perspective
While international conditions may have softened, local share investors nonetheless appear to have overreacted with their interpretation of the likely effect for Australia. And what the RBA is desperately trying to do is interrupt the cycle of negative consumer confidence.
As you will recall, one of my recent articles explored in some detail Australia's underlying growth prospects, low unemployment, healthy financial system and solid investment pipeline.
And this would appear to now be validated by the solid GDP figures released last week, confirming the state of our economy.
Bottom line: The RBA's decision last Tuesday should give commercial property investors even more encouragement.
The shrewd money already seems to be viewing the current turn of events as purely a severe dampening of local confidence.
And once the switch clicks across to "positive", the anticipated surge in consumer activity will reward those who have based their plans on the underlying fundamentals , rather than unwarranted fear.
Therefore, as a commercial property investor, you need to fully satisfy yourself that everything is as you are being led to believe.
If not, you're missing out on genuine opportunities by "running with the herd". And last week's decision by the RBA should serve as a wake-up call for all commercial property investors — because rates will now be on hold for the foreseeable future.
Chris Lang is an advisor to commercial property investors and gives keynote speeches and regular seminars on the best way to invest in commercial property. He maintains a blog, <a target="_blank" href="https://bitly.com/IFf40C">his-best.biz</a>, which he updates regularly about the best way to get the most out of your commercial property investment.
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How the RBA cash rate cut will affect commercial property

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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[smartcode_project_cta:default project_id=112661]

Chris Lang

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