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Perhaps more importantly, the question should be what defines a bankable property developer?
The truth is, there are all types of property developers out there, from the opportunistic once off family affairs to the long-term specialist, the small one-man band operator to the listed behemoths, from the successful partnership to the passive investment fund. But the important thing that defines them all is whether or not they achieve their objectives and how the successful ones go about it? 
Most would respond that having the financial wherewithal and the skills to turn a sound profit represent the benchmarks but they are just a single solution one measure of success. But a big balance sheet is not always available and a lot of factors outside of the control of the developer can influence the ultimate profit, which of itself is not always the key measure of success.
What is critical is an ability to control or positively influence the various processes involved in the process and to cope with unforeseen problems positively in order to reach the desired outcome. As a property developer, your primary role is to “manage risk” and that is the true measure of your ability as a developer and ultimately leads to ‘bankability”.
Hopefully you will get a reward for taking that risk and in most instances that is reflected as profit. You invest $1M to buy a site, borrow another $4M to build some concrete boxes and hopefully you sell them for $7M so that after paying the associated GST and selling fees you realise a profit of $1M.
You have risked $5M and 15 months of your life to make $1M in profit. Sounds simple and sometimes it can be but there are many obstacles that can thwart that outcome. What defines you as both a successful and bankable developer is how prepared and able you are to deal with those potentially unforeseen obstacles.
Many developers serve an apprenticeship working for a major corporate developer, an architectural practice or in real estate, where as a single cog in the big machine they learn one or two key roles, get promoted into another specific area of responsibility and progressively develop many of the skills involved in the total process. After a while they build up enough experience and decide its time to go it alone. But more often than not they have not been exposed to all the processes involved and have relied on others with the requisite skills to deal with the issues in those areas.
So, however it is that you find yourself in the role of developer, the key skill required for success is actually the ability to identify and manage all the risks associated with the process, especially those where you are not the expert. Importantly, the ability to identify where you don’t have the requisite skills and to then secure the right resources required to deal with those issues is what really defines a successful and as a result, bankable developer.
There are many ways to solve the problems such as contracting the right consultants or employing the right people to deal with the process but the skill is actually knowing when you will need help and securing it before it becomes an issue and in the best way to protect your investment in the project. You don’t need to be the expert in every facet of the process, but you do need to be able to identify how, where and when to bring one in to efficiently deal with a problem before it becomes one, not after the fact.
When you are able to demonstrate to a banker that you understand all of the risks involved in the development process, have carefully assessed how they may influence your project outcome and how you can deal with them if they arise, you are well down the road towards getting the kind of funding you want and more importantly, on the terms that you want.
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. To discuss your project finance requirement please call (07) 3171 4200 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au" target="_blank">here</a>.
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What defines a successful property developer? HoldenCAPITAL

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Most banks have long memories and it’s those past experiences, which in all probability resulted in the writing off of a bad debt, that tend to have a strong influence on the executives responsible for writing the banks lending policy.
One such area of contention is the issuing of second mortgages and in most cases the approach by banks is consistent, driven by those past bad experiences.
So while there are sound arguments as to why it might actually be in the banks interest to allow a second mortgage, most credit/risk manager default to a position that will not impact on their security position and it takes some very careful negotiations to convince them to do otherwise. So lets look at the reasons why they have those concerns.
The bank does not think the developer has enough money – as the saying goes “If you want it they won’t give it to you and if you don’t want it they throw it at you”. It is true in most regards, that when considering a project a bank wants to be working with a sponsor who has the ability to invest the full equity requirement, also referred to as ‘skin in the game’, and a capacity write a cheque in the event of any unforseen cost overruns.
However, many smart sponsors choose to use Other People’s Money (OPM), usually so that they can get the best return on their funds by investing across multiple opportunities. So it is very important that the financial strength and experience of the sponsor can be demonstrated to the bank even if it is not all to be committed to the project in question.
Utilising second mortgage funding in order to expand the number of projects they can undertake is a smart way for a sponsor to leverage their return on equity provided they can show an ability to meet any unforseen financial pressures along the way. It is critical to give the bank a clear understanding of why the second mortgage funding is being used but also provide statements of position, group cash flows and approved standby arrangements to support the sponsor’s ability to meet their ongoing commitments to the project in question.
The Bank does not want any potential impediments to it realising on its security – In the event that things go wrong during a development, the bank will in most instances look to recover its exposure by disposing of the security via a quick sale rather than undertaking a lengthy workout. Even in the case of a development project, banks do not want to ‘take control’ of a project unless absolutely necessary and will usually appoint a receiver or administrator to undertake the exercise of completing the development and sale as soon as practicable with the minimum of additional expenditure.
Their concern is that where there is a second mortgage in place (and dependant on the terms of any priority agreement in place), the potential exists for that mortgagee to frustrate the actions of the bank by arguing that those actions prejudice their security position. Alternatively, while there may be no default or cause for action on the banks part, the second mortgagee may decide to take action under its securities which forces the banks hand to either take its own action in priority to the second mortgage or pay out the second mortgagee in order to gain full control. Both of these scenarios played out during the GFC and previous market corrections, continuing to make all banks hesitant about transactions involving second mortgages.
One way to address these issues is to have a reputable second mortgage provider who the banks are comfortable with and trust not to take any extreme actions during the life of the project. Additionally, the banks will require the second mortgagee to sign a priority agreement which in effect cedes all of its rights to the first mortgagee while its debt exists, effectively preventing the second mortgagee taking any action that the first mortgagee does not want to occur.
Developers skin in the game – As previously mentioned, all financiers, be they first or second mortgage providers want to see that the developer has an appropriate amount of their own “risk” money in the project – the view being that the developer will be more likely to act in the right way if they have an appropriate amount of their own cash at risk in the project. The current view is that the developer must be providing at least 10% of the required capital stack in a project.
In the eyes of the banks, this is a different risk to having a capacity to meet your obligations as detailed previously. This is about ensuring that the customer is motivated to act quickly to deal with a problem that requires either financial or physical action when it occurs and their concern is that if the equity at risk is sourced via a second mortgage provider then:
There is less motivation for the sponsor to take the required action and they have no power to require the second mortgagee to act or input further equity.
In fact it is often the case that the second mortgagee is a passive syndicate of investors with limited ability to raise additional funds or make quick decisive decisions which leaves the bank having to deal with the problems associated with the projects but also having to be conscious of not acting in a way which is prejudicial to the interest of those investors which is a complication they do not relish.
In summary, banks tend to view all second mortgages as complicating transactions rather than adding value as their interests are not always aligned with those of the borrower and it is therefore a negotiating exercise that requires a complete understanding of the interests of both sides. At HoldenCAPITAL we are often required to obtain a senior banks consent to a second mortgagee position in order to get the best outcome for our client. We do this by clearly demonstrating the positives that the structure brings to the transaction and how the risks will be dealt with.
 
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. To discuss your project finance requirement please call (07) 3171 4200 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au" target="_blank">here</a>.
 
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Why the bank won't let you have a second mortgage

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Following continuing pressure by APRA on banks to ensure that they comply with their obligations under the Basil III accord, the major banks recently reacted by reducing their appetite for construction lending, dramatically reigning in their marketing to developers and in some instances actually reducing the level of staff in their relationship management teams.
This conflict between their requirements to satisfy capital adequacy levels under the accord, coupled with their need to improve their return to shareholders and remain competitive against their peers has created a significant problem for many of their developer clientele.
To achieve their objectives, the banks have raised the bar for developers in terms of their condition precedent requirements, reduced gearing levels and increased their pricing on debt, effectively implementing a flight to quality and leaving many of their traditional but more marginal clients in terms of credit strength, scrambling for alternative funding sources.
This has resulted in a significant shift in the construction lending landscape with developers needing to quickly adjust and re-focus their attention on where they source their debt, and its not just the smaller more marginalised developers who are making this change.
HoldenCAPITAL is currently settling an average of more than 1 transaction per week but recently there has been a noticeable change in the ratio between the traditional bank sourced debt and those alternative funding options now being opted for by developers who don’t want to miss a market opportunity just because their bank has their own problems.
In FY15 we settled 64% of our deals with the major banks but this has quickly changed with 62% of the $300mil of project debt settling between now and Christmas likely to be placed with alternative funding sources.
Through managing the tender process on behalf of its clients, HoldenCAPITAL has been at the forefront of both the bank and non-bank markets and can quickly identify where a client can secure the best outcome for their project needs.  He says that the majors are still a strong force in the sector but there are very real alternatives emerging as strong contenders for new projects.
While there are additional costs associated with these alternative funding sources rising up to the meet the market demand, they do offer their own distinctly different benefits to developers who don’t want to be restricted in their ability to meet identified market opportunities as a result of constraints imposed by their traditional bank which have no direct relevance to their businesses.
By way of example, non-bank money can cost as low as 9-10% per annum, which, when compared to the traditional bank cost on a medium sized projects of say 30 product (if it was available), would add as little as ~$170,000 or a10% variance on normal finance costs (less than 3% of TDC), to a project with a total cost of $6M.
What this alternative product does offer the developer is the potential for significant savings in other areas such as the opportunity to commence the project without the need for pre-sales. It also allows the developer to lock in a construction price and minimise escalation risk as well as the benefit of selling product which has a more certain delivery date, rather than the more speculative "off the plan" route required to satisfy the banks pre-sale requirements. This in turn gives the developer an edge when selling any completed residual stock, which will likely be competing with stock still being constructed by those competitors who chose the pre-sale option.
The changing landscape in the construction finance arena has also given rise to an increase in private investors looking to invest in development opportunities. With the uncertainties surrounding investments in shares, reduced superfund returns and tightening investment yield in investment property, investment in well structured and risk mitigated developments is providing investors with a very attractive alternative. We currently manage over $70mil of private investor funds and the enquiry from new investors is getting more frequent.
So what is the future for construction lending? There is no doubt that many of these changes have been seen before, but the reality facing the banks is that many of the revisions driving how they participate in the construction market are permanent rather than the cyclical changes seen in the past and as such, it would appear that the rise of the alternative lenders is more than just a passing fad and could represent a real paradigm shift in this sector.
 
Dan Holden from HoldenCAPITAL was recently awarded #1 commercial broker in Australia. To find out more about which option best suits your next project, contact Dan Holden at HoldenCAPITAL on 0401 669 502 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au" target="_blank">here.</a>
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Banks tightening of credit to developers heralds the rise of alternative funding options: HoldenCAPITAL

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Banks will fund a deal if it fits their parameters
We often hear people say, “we can just go to our local bank and get this funded, it ticks all the boxes”.  Really!
Recently the big banks tightened up their criteria such as pre-sale requirements, sponsor experience/balance sheet strength and other general criteria required to be satisfied by property investors and developers. They are doing this for a number of reasons but the principal driver is a requirement to reduce their total investor loan growth to below the Australian Prudential Regulation Authorities requirement of 10% p.a.. As a result we are now seeing that they are very selective in which projects they will fund.
Even if a project does “tick all the boxes”, the bank might still not be interested in funding it, with factors such as existing exposure to the sector/local market/client and a preference to improve their risk profile by applying a “best of breed” approach, means that your deal may not measure up even if you are dealing with your long term house bank. 
Knowing what the banks appetite is for various types of project is a key advantage and in some instances we have actually re-packaged a deal and presented it back to the client’s existing bank in a way we KNOW they would like to see it and successfully obtained an approval after it was previously turned down.
In our experience it is all about presenting the deal in the right way, knowing who in the bank is the decision maker and how far to push the boundaries or not as the case may be.
Banks guide valuers in their instructions to engineer an outcome
We see no evidence of this in the market place. In fact we always get the bank to give us a list of their preferred valuers and we then encourage our clients to contact these valuers and engage with them to get a feel for the valuer’s understanding of the specific location and product. 
Yes, some valuers might be better to deal with than others, but overall we see no influence from the banks when they instruct the valuers. They simply want to know if the project works and want to use a valuer who they know will give them an honest no nonsense opinion.
Getting Pre-Sales will be a quick process 
This is probably the single most unpredictable component of any Development Project at the moment, particularly in terms of the time required.  Many of our clients see the market appearing to accept similar product and are confident that they too can quickly achieve the required pre-sale hurdle.  However, in practice we see that the process of securing the sales is only half the battle, with the time and resources required to get those sales to conform to the bank’s pre-sale requirements often grossly underestimated. 
Some of the key bank requirements we are seeing at the moment are:
<ul>
<li>
Sales need to be unconditional in all respects
</li>
<li>NO more than 10% to 15% foreign sales</li>
<li>NO more than 10% sales to related parties</li>
<li>Minimum of 10% deposit strictly applied</li>
<li>A cap on interstate investor sales</li>
<li>A requirement for local sales to prove demand and pricing acceptance rather than a reliance on interstate investors.</li>
</ul>
All banks are the same 
This is a very interesting point of view; all banks are certainly not the same.  Even between the 4 major banks the differences are significant, with some of the more interesting ones being:
<ul>
<li>One major bank has for the present significantly reduced its appetite for Construction Finance and is currently not taking on new to bank projects/developers limiting its lending to its established existing clients.</li>
<li>Official pre-sale requirements are ranging from 110% to as low as 60% debt cover between the remaining major banks</li>
<li>Only one of the major banks will still entertain a Loan to Cost Ratio of up to 80%.  If you want to get the others to do this, then you will need to understand what other criteria they will want to see before they will consider this.</li>
<li>Only two of the majors have any appetite for syndicated deals, where the major sponsor has less that 5% of the equity in the deal. So again, if you are looking at making your equity work efficiently across a number of projects, you will need help to secure the right major bank funding.</li>
</ul>
It will cost me more to use a broker
At first glance this might be appear to be the case, but our experience is that our clients almost always save money by using our services. 
A well-positioned broker who deals with many different lenders on a daily basis will be able to advise you on which lender has the best appetite for your style of project. 
More importantly, by knowing who to speak to within the bank and where to push and where not to push the their lending parameters, a well informed broker will help you get your project out of the ground sooner and will save the relevant opportunity cost that goes hand in hand with ‘getting started and moving on to the next one’ sooner.
Just like the best Developers use the best town planners to negotiate the best possible planning outcome on their behalf, so the best Developers also use the best brokers to structure their construction finance to secure the best possible financial outcome.
This article was written by Dan Holden of HoldenCAPITAL, who are Queensland’s largest project finance firm.
To discuss your project finance requirement please call (07) 3171 4200 or <a href="https://www.holdencapital.com.au/" target="_blank">click here.</a>
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Construction finance myths: HoldenCAPITAL

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The seven different types of property developers
1. The back of the ute developer – This type of developer is typically a former or current tradesman who has a lot of mates who will help out with the build job. Pricing and feasibilities are very flexible and tough to pin down, which makes financiers nervous; bankers much prefer firm construction quotes from a recognised firm. As we all know, the biggest cost risk associated with a development is construction, so it’s important to get this right. 
The market generally allows for a 5% contingency in construction costs, but sometimes banks insist on a higher % if they are concerned about the builder, any specialisation involved, the quote or issues raised by the QS report. Banks are always cautious about the potential for costs overruns, and we often hear the question “how is the Developer going to fund any cost overruns?” The back of the ute developer often has issues in these areas but there are solutions if you know how to package the deal and where to look.
2. The extended family developer – Sometimes we see developers who comprise an extended family with varying levels of experience. Often the kids have inherited their parent’s property(s), which are located in a development hotspot, and the family agree that they will band together and try to develop the project themselves, rather than sell the site to a developer. Potentially this can be a recipe for disaster with emotions and other motivation outweighing pragmatism. 
Whenever the extended family group gets together, the lack of a cohesive goal and the competing motivations make achieving a quick resolution difficult and generally speaking, these types of developments lacking a clear and concise plan, combined with an inability to make quick decisions translate into disasters. The extended family developer is hard going for all the obvious reasons and their project rarely achieves its full potential without a preparedness to compromise and work with the right advisers.   3. The Phoenix developer – We are currently seeing a prolific return of phoenix developers who were very successful developers pre-GFC, entered into somewhat rapid declines during the GFC due to unfortunate dealings with their creditors but are now rising again Phoenix-like. Typically this type of developer is very experienced, but unfortunately misjudged both the state of the market and their level of exposure to it during the GFC. Now they are back out there trying to do deals again, but with limited equity. These guys know what they are doing, and are full of confidence and unlikely to make the same mistakes, for now. They are more conservative with their own limited capital and are looking for equity partners to leverage their position and are moving forward using their experience and contacts to good advantage. They will most likely be successful in the coming years.   4. The $1,000 option fee developer – These guys are always out there pounding the pavement trying to tie up development sites for a very small option fee over an extended period. If they manage to convince the vendor to agree to this strategy, they then have to work out how to develop the site with limited or no equity or take a fee for selling it on to someone who can deliver on it. A challenge indeed! 
We know of a number of high net worth investors who will assist these would be Developers by providing the required equity shortfall, but they need to be prepared to give away a good chunk of the profit, to reflect their real level of risk/reward.     5. The second generation developer – “Dad was a developer, so I’m a developer”. Hopefully dad was a successful developer and taught them well. If so, their chances of success are pretty good. Property development is a pretty tough business and a sound knowledge of the industry is a key advantage, but just because you’re a second-generation developer doesn’t guarantee success. It can make it somewhat easier, especially on the equity side of things! The smart second generation developer learns from their father’s mistakes, and expands on their successes.   6. The “know it all” developer – The know it all cant be told. They are an eternal optimist and believe that all property developments will work, regardless of the market, location or type of development if they are doing it. They also don’t need to do the proper research or employ specialist consultants who could assist with the development, especially in its formative stages. This type of developer don’t need help on any level and believe that property development is easy (for them at least), and a way of providing a top up to their superannuation fund/lifestyle. It’s important to understand that property development is a skill, and just because you have been successful in other areas of business, doesn’t necessarily translate to becoming a successful property developer. This type of Developer can also be likened to “The Debut Developer” or “The Genius” and the “Dreamer Developer”.   7. The cautious developer – The cautious developer is the one who identifies risk up front and finds ways to mitigate these as much as possible. This type of developer believes that the success of each development is based on the success of their risk management plan. They also realise that they don’t know everything, and won’t hesitate to utilise the skills of others, where there is a gap in their knowledge and skills base. In reality, they are the “Smart Developer” and we love working with them because we know they will be doing deals for a long time to come.
In summary, our experience has indicated that the most successful property developments are those who:
<ul>
<li>Have a robust risk management plan;</li>
<li>Have employed the relevant experts to undertake specialist reports where necessary;</li>
<li>Have put a sound marketing plan in place;</li>
<li>Have properly researched the market, price point and location of their product; </li>
<li>Are experienced and knowledgeable in what they are doing;</li>
<li>Have engaged a reputable builder with sound financials and a strong track record.</li>
</ul>
 
This article was written by Dan Holden of HoldenCAPITAL, who are a bespoke construction finance firm, they arrange construction finance and invest in projects through their equity fund, Queen Street INVEST. 
To discuss your project finance requirement please call (07) 3171 4200 or <a href="https://www.holdencapital.com.au" target="_blank">click here</a>.
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The seven types of property developer: HoldenCAPITAL

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SPONSORED POST
Following continuing pressure by APRA on the major banks to ensure that they comply with their obligations under the Basil III accord, the banks recently reacted by reducing their appetite for construction lending, dramatically reigning in their marketing to developers and in some instances actually reducing the level of staff in their relationship management teams. 
This conflict between their requirements to satisfy capital adequacy levels under the accord coupled with their need to improve their return on shareholding to remain competitive with their peers has created a significant problem for many of their developer clientele. 
To achieve their objectives, the banks have raised the bar for developers in terms of their condition precedent requirements, reduced gearing levels and increased their pricing on debt, effectively implementing a flight to quality and leaving many of the their traditional but more marginal clients in terms of credit strength, looking for alternative funding sources.
This has resulted in a significant shift in the construction lending landscape with some developers quickly adjusting to the need to re-focus their attention on where they source their debt and its not just the smaller more marginalised developers who are making changes.  
HoldenCAPITAL is currently settling an average of more than 1 transaction per week but recently there has been a noticeable change in the ratio between the traditional bank sourced debt and those alternative funding options now being opted for by developers who don’t want to miss a market opportunity just because their banks have their own problems. 
In FY15 we settled 64% of our deals with the major banks but this has quickly changed with 62% of the $300mil of project debt settling between now and Christmas likely to be set with alternative funding sources.
Through managing the tender process on behalf of its clients, HoldenCAPITAL has been at the forefront of both the bank and non-bank markets and can quickly identify where a client can secure the best outcome for their project needs.  He says that the majors are still a strong force in the sector but there are very real alternatives emerging as strong contenders for new projects. 
While there are additional costs associated with these alternative funding sources rising up to the meet the market demand, these alternatives do offer their own distinctly different benefits to developers who do not want to be restricted in their ability to meet identified market opportunities due to the constraints placed on their traditional bank which have no direct relevance to their market sector. 
By way of example, non-bank money can cost as low as 9-10% per annum, which, which when compared to the traditional bank cost (if it was available) on a medium sized projects of say 30 product, would add as little as ~$170,000 or 10% variance on normal finance costs to a project with a total cost of $6M. 
What this alternative product does offer the developer is the potential for significant savings in other areas such as the opportunity to commence the project without the need for pre-sales. It also allows the developer to lock in a construction price and minimise escalation risk as well as the benefit of selling product which has a more certain delivery date, rather than the more speculative "off the plan" route required to satisfy the banks pre-sale requirements. This in turn gives the developer the edge when selling any completed residual stock, which will be competing with stock still under construction by those competitors who chose the pre-sale option.
The changing landscape in the construction finance arena has also given rise to an increase in private investors looking to invest in development opportunities. With the uncertainties surrounding the investments in shares, reduced superfund returns and tightening investment yield in investment property, investment in well structured and risk mitigated developments was providing investors with a very attractive alternative. We currently manage over $70mil of private investor funds and the enquiry from new investors is getting more frequent. 
So what is the future for construction lending? There is no doubt that many of these changes have been seen before but the reality facing the banks is that many of the revisions driving how they participate in the construction market are permanent rather than the cyclical as in the past and as such, it would appear that the rise of the alternative lenders is more than a passing fad and could represent a real paradigm shift in this sector.
This article was written by Dan Holden of bespoke construction finance firm HoldenCAPITAL. To discuss your project finance requirement please call (07) 3171 4200 or <a href="https://www.holdencapital.com.au" target="_blank">click here</a>.
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Banks tightening developer credit heralds rise of alternate funding options: HoldenCAPITAL

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SPONSORED POST
How to choose a construction finance specialist
1.     Is your broker actually a specialist?
If they ask you about your business finance needs, refinancing your house or your boat loan then there is a pretty good chance they are an all-rounder. This is great for them, they can ride out the slow times by re-setting your life insurance, but when you need a specialist you want the best because the difference can be expensive – for you! Construction finance is a competitive and complex area and getting it wrong or not getting the best terms can be a costly exercise for a developer when things don’t go according to plan. You wouldn’t hire a handy man to build your new house, so why hire an all-rounder to negotiate your construction finance?… Deal with someone who’s livelihood depends on specifically doing “Construction Finance” and doing it well.
2.     Do they have the respect of the banks? 
Most brokers run through an aggregator, which means their dialogue with the bank is muffled via the conduit process they have to go through. The 3 large aggregator firms in Australia are partially owned by a major bank, and while they vow there is no bias on which offer gets pushed to the borrower, it wouldn’t be like a money making bank to let its brokers push competing banks product. Directly accredited brokers (like HoldenCAPITAL), deal directly with the Bank’s key decision makers and are able to present the deal in the best possible light with an understanding of what those decision makers are looking for. Make sure your broker is not associated with an aggregator.
3.     Do they have access to all the appropriate lenders? 
If you were paying someone to tender the market and get the best terms on your finance deal, wouldn’t you like to know they were impartial on which offer they tell you is best for you? In addition to being accredited with all the major and non-Bank lenders, HoldenCAPITAL looks at who can best service your project needs, creates competitive tension and then gives you the choice. Don’t settle for someone who looks at what’s in it for them in terms of their own relationships…ensure you are getting the best options for your business.
4.     What have they done lately?
Ask them for a catalogue of projects they have funded in the last 12 months. If they boast doing a large volume of deal but only 5 of them are construction loans and relatively small at that, you are dealing with a dabbler, not an expert. Also ask for references from clients who use them regularly. Repeat clients are the best referrals and you should ask to speak to them... Ask for results in both funded projects and happy clients.
5.     Are they a potential competitor to you?
When the market slows down some operators use the knowledge they gain over time to diversify and undertake their own projects. It is worth asking the question as to how many projects they are involved in as the principal developer rather than a consultant or passive equity partner. It would be good to know they aren’t sizing up your project as their own... Don’t get into bed with a competitor.
6.     Do they have the relevant expertise and resources? 
Many brokers are essentially a one-man band or a group of single operators sharing an office and resources. Very few have the technical skills and lending experience which as available to clients of HoldenCAPITAL. With over 100 years of collective experience in finance, joint ventures and project development, we have the experience, expertise and manpower to ensure that you get the right funding package for your project on the best terms available… Deal with experts who understand you project and business objectives and can deliver the results you deserve.
To find out more about which option best suits your next project, contact Dan Holden at HoldenCAPITAL on 0401 669 502 or visit HoldenCAPITAL <a href="https://www.holdencapital.com.au" target="_blank">here.</a><a href="https://mail.privatemedia.com.au/owa/redir.aspx?SURL=malhmdQQ3p2_ubXtc1i7QLswfmaB4KLNauMKRBMOeHDfPmnrYG3SCGgAdAB0AHAAOgAvAC8AdwB3AHcALgBoAG8AbABkAGUAbgBjAGEAcABpAHQAYQBsAC4AYwBvAG0ALgBhAHUALwA.&amp;URL=http%3a%2f%2fwww.holdencapital.com.au%2f" target="_blank"> </a>
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How to choose a construction finance specialist: Holden CAPITAL

One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

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FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

Dan Holden

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