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The Sydney and Melbourne CBDs have maintained their rankings among the top 10 most expensive markets to rent prime retail spaces as international retailers clamour to get access to Australia’s nation of shopaholics.
International retailers are looking to open around 300 shops in Melbourne, Sydney, Perth and Brisbane over the next few years, according to figures compiled by Colliers International in a new White Paper.
Top Shop, Zara, Gap and Apple are all looking to add to their store presences while the likes of Swedish fashion store H&amp;M and Japan’s Uniqlo are all planning to open a swathe of stores in capital city markets.
Uniqlo, is leading the charge, seeking 40,000 square metres of space across 25 stores followed by Zara, which is seeking 30,000 square metres of space with plans for 20 stores and Top Shop (and its men’s store Topman) seeking 27,000 square metres across 15 stores.
Apple and Canada’s Lululemon Athletica both expect to reach around 30 stores each.
Sydney ranks as the fifth most expensive prime retail market in the world, charging on average $10,700 per square metre with Melbourne ranking eighth with an average prime retail rent cost per square metre at just under $9,000, according to the latest global rents report from CBRE for the fourth quarter of 2012.
Hong Kong is the most expensive prime retail market in the world – an incredible $46,000 per square metre – followed by New York at $31,400 per square metre.
<table cellpadding="0" cellspacing="0" border="1"><tbody>
<tr>
<td valign="top" width="154">
Retailer
</td>
<td valign="top" width="154">
Space sought
</td>
<td valign="top" width="154">
Current number of stores
</td>
<td valign="top" width="154">
Planned future stores
</td>
</tr>
<tr>
<td valign="top" width="154">
Uniqlo
</td>
<td valign="top" width="154">
40,000 sqm
</td>
<td valign="top" width="154">
0
</td>
<td valign="top" width="154">
25
</td>
</tr>
<tr>
<td valign="top" width="154">
Zara
</td>
<td valign="top" width="154">
30,000 sqm
</td>
<td valign="top" width="154">
6
</td>
<td valign="top" width="154">
20
</td>
</tr>
<tr>
<td valign="top" width="154">
Topshop/Topman
</td>
<td valign="top" width="154">
27,000 sqm
</td>
<td valign="top" width="154">
2
</td>
<td valign="top" width="154">
15
</td>
</tr>
<tr>
<td valign="top" width="154">
H&amp;M
</td>
<td valign="top" width="154">
20,000 sqm
</td>
<td valign="top" width="154">
0
</td>
<td valign="top" width="154">
10
</td>
</tr>
<tr>
<td valign="top" width="154">
Williams-Sonoma
</td>
<td valign="top" width="154">
20,000 sqm
</td>
<td valign="top" width="154">
0
</td>
<td valign="top" width="154">
10
</td>
</tr>
<tr>
<td valign="top" width="154">
Apple
</td>
<td valign="top" width="154">
15,000 sqm
</td>
<td valign="top" width="154">
18
</td>
<td valign="top" width="154">
30
</td>
</tr>
<tr>
<td valign="top" width="154">
Gap
</td>
<td valign="top" width="154">
12,000 sqm
</td>
<td valign="top" width="154">
3
</td>
<td valign="top" width="154">
15
</td>
</tr>
<tr>
<td valign="top" width="154">
Abercrombie &amp; Fitch
</td>
<td valign="top" width="154">
10,000 sqm
</td>
<td valign="top" width="154">
0
</td>
<td valign="top" width="154">
10
</td>
</tr>
<tr>
<td valign="top" width="154">
Lululemon athletica
</td>
<td valign="top" width="154">
7,500 sqm
</td>
<td valign="top" width="154">
18
</td>
<td valign="top" width="154">
30
</td>
</tr>
<tr>
<td valign="top" width="154">
Hollister
</td>
<td valign="top" width="154">
7,000 sqm
</td>
<td valign="top" width="154">
0
</td>
<td valign="top" width="154">
10
</td>
</tr>
</tbody></table>
Source: Colliers International
CBRE notes that in Sydney, demand from international retailers (especially from the US) is high with “many new brands set to enter the market in 2013”.
Josh Loudoun, CBRE’s head of retail services in Australia and NZ, says Australia remains “an attractive destination for international retailers.
“New openings are performing well and fuelling demand for additional stores with international groups continuing to express interest in prime CBD locations,” he says.
Loudoun says he is seeing significant interest from international groups looking to capitalise on the proposed changes to George Street, but Melbourne remains the ‘go to’ destination mostly due to the availability of prime locations on Collins Street and Bourke Street Mall.
“Australia continues to rank highly on the world stage for rent levels, which is supported by the shortage of prime locations, and Australian retailers achieving some of the highest profit margins in the world,” he says.
“We forecast this will continue despite the pressure of on-line retailing as new market entrants will continue to fight for prime locations.”
Nora Farren, researcher and author of the Colliers White Paper, notes that of stores already opened in Australia, there appears to be an even split between high Street and shopping centre locations, with Sydney and Melbourne the preferred markets.
The average store size requirement is around 800 square metres, but ranges from just 150 square metres for boutique stores to 2,000 square metres for department stores.
The majority of international retailers entering Australia come from the fast fashion and general apparel sectors with the retailers identifying Australian consumers retailing appetite in the first instance from online sales, based on the value and volume of products being shipped to these stores.
US department stores Nordstrom, Saks Fifth Avenue, Macy’s and Bloomingdale’s all offer shipping to Australia, and openly consider the market as one of their biggest online customers
Farren says she does not expect to see many more large retailers in Australia, with most of the major chains already here, but expects that more specialist retailers will start coming in “certainly higher end fashion retailers, particularly the niche fashion retailers from Europe and US”.
“It remains to be seen if the Australian taste is sophisticated enough to embrace them,” says Farren.
The arrival of overseas brands is not good news for local retailers with less prime retail space available and many without the bargaining power to negotiate lower rents.
“The sophistication and bargaining power of these international retailers often means they pay less or will seek to pay less rent per square meter for the quality of space they occupy, and tend to commit to longer lease terms than local retailers.
“The criticism often levelled at centre owners by other tenants is that the rent of international retailers is being subsidised by other local retailers,” says Farren.
Dolce &amp; Gabbana recently signed a lease for 320?square metres of the Mayfair Building on Collins Street in Melbourne, owned by Charter Hall and Cbus Property while Chanel, Prada and Apple have recently opened their first Perth stores.
UK brand Miss Selfridge will open a pop-up store within the Glue Store at Westfield Bondi Junction, before moving into stand-alone stores.
In its recent results filing Challenger Diversified Property Group said the lease of the former Border’s site in its refurbished Jam Factory on Chappell Street in South Yarra to Top Shop had exceeded expectations. Challenger also signed <a target="_blank" href="https://www.propertyobserver.com.au/retail/challenger-secures-italian-pizza-tenant-konpizza-for-refurbished-jam-factory/2013021859321?utm_source=po&amp;utm_medium=aida&amp;utm_campaign=news">Italian pizza chain Konopizza</a> to lease its first shop in the mall.
The new Myer Emporium being built by in the Melbourne CBD by Grocon for Colonial First State’s Global Asset Management and due to open towards the end of the year is set to include a number of international retailers making their debuts in the Australian market.
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lschlesinger-FZcF9M3vE6

Zara, Topshop and Uniqlo lead retail property push into Australia

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ASIC is considering increasing its powers to include oversight of property investments schemes recommended to self-managed super funds ahead of its report out on property spruikers targeting this sector due out in April.
The corporate watchdog currently has no responsibility for the oversight of direct property investments, a sector that is entirely unregulated.
In November ASIC said it was <a target="_blank" href="/news">undertaking limited surveillance” of financial advisers and accountants </a>over concerns that property spruikers are encouraging investors to set up self-managed super funds purely as vehicles for "dodgy" property investments.
Speaking before a Senate estimates hearing in Canberra last week, ASIC chairman Greg Medcraft, said it was warning investors at the moment “about some of the more aggressive spruikers we are seeing in this area”.
“It would cause us a lot of concern if this became a preferred vehicle for dodgy property spruikers to get back in the market.
“We do have concerns that less reputable property spruikers [are] targeting SMSFs to encourage them to invest, perhaps inappropriately, in direct property,” he added.
The estimates hearing was attended by the Australian Financial Review, which noted that property spruikers targeting self-managed super funds operate with the least amount of oversight and take as much as a 7% commission – around $35,000 – per property sold.
Around 85% of licensed financial advisers operate under the control of bank or a regulated entity like AMP and are not allowed to advice on direct property investments, but a small but significant minority do not operate under any form of bank oversight.
According to Property Investment Professionals of Australia (PIPA) a not-for-profit group lobbying the federal government to bring property investment advice into a regulatory framework, there are more than 80,000 professionals, employed either directly or indirectly within the property investment industry, giving opinions and advice to consumers.
ASIC, in speeches and submissions in the last 12 months, has signalled that it will at the very least look to improve the information available to consumers about setting up a self-managed fund and the risks associated with different investments.
Speaking before a parliamentary committee in September ASIC, Medcraft remarked that ASIC was limited in its oversight of financial advisors and restricts regular checks to the top 20 financial advisory firms to once ever 1.7 years with much wider gaps for smaller firms.
“We are not resourced to be looking at everybody, and that is a very important message. That is why education is really important. Australians are proactive in getting educated and understanding what they should be doing,” he said.
In July last year, ASIC commissioner Peter Kell told the Association of Financial Advisers National Roadshow the key message ASIC wanted to emphasise is that SMSF structures are not suitable for all investors including the need to formulate an appropriate investment strategy and consider alternatives to setting up a self-managed super fund.
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ASIC may expand powers to cover SMSF property investment

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Bendigo and Adelaide Bank has further signalled the likelihood of banks cutting their variable mortgage rates independently of the RBA with its interim results showing a decrease in the cost of raising wholesale mortgage funding.
The bank launched its latest $850 million residential mortgage-backed securities (RMBS) offer, backed by prime residential mortgages, at 95 basis points above the one-month bank rate.
Bendigo and Adelaide Bank managing director Mike Hirst said this was the best-priced securitisation offer since the GFC.
In December, the bank priced RMBS at 110 basis points and in November they were priced at 135 basis points.
Under securitisation, a lender bundles together short-term funded mortgages into tranches and then sells the debt to institutional investors in offshore markets.
<img src="/images/stories/2013/02/bendigoFeb18chart.gif" width="470" height="205" alt="bendigoFeb18chart">
Hirst attributed the cheaper source of funding to ratings upgrades and a general market improvement, which had provided wholesale funding opportunities.
It follows the Commonwealth Bank pricing $400 million worth of AAA-rated RMBS at around 80 basis points over the three-month bank rate and Westpac placing $1.9 billion worth of Class A-1 notes RMBS at an 85-basis-point spread, both deals indicating that wholesale funding costs are easing up.
Alongside the improved funding scenario, Bendigo and Adelaide Bank reported a rise in profits and a “marked improvement” in both its net interest margin and cost to income ratio.
The bank reported an after tax statutory profit of $189.4 million for the 6-months ending December 31 December 2012, up 227% from $57.9% in the corresponding period in 2011.
Underlying cash earnings were $169.7 million, an increase of 4.4% on the prior corresponding period.
The net interest margin grew by 9 basis points to 1.83%, predominantly driven by mortgage repricing benefits.
“Importantly, funding costs have been easing throughout the half, which if maintained will continue to support the bank’s margins,” said Nomura banking analyst Victor German.
German said the interim results “reinforces the recent sector trend with mortgage re-pricing benefits combined with an easing in funding costs to result in improved retail margins”.
“Offsetting this, however, were a couple of specific credit quality issues which concern us, specifically its Queensland exposure (the bank has an arrears rate of 1.2% for mortgages more than 90 days in arrears, significantly higher than Bank of Queensland at 0.7%)  and the Great Southern [collapsed forestry group] portfolio, which resulted in increased bad and doubtful debt charges in the first half of 2013,” says German. In a class action which began in October, more than 20,000 investors are seeking to recover their money and set aside their obligations to repay loans taken from the Bendigo Bank to make their investments in Great Southern investment schemes. 
The bank announced an interim dividend of 30 cents per share, fully franked.
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Bendigo and Adelaide Bank signals cheaper funding for new mortgages

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NSW and Perth offer the best prospects in what remains a soft residential market, says Lend Lease CEO and managing director Steve McCann. 
Speaking as Lend Lease’s interim results briefing today, McCann said there was an expectation of increase residential activity in 2013, but it would be “some time” until there was a recovery in the sector. 
“The residential market remains soft,” said McCann. 
McCann said NSW and the Perth market are the strongest residential markets with Queensland also showing “small signs” of recovery at particular price points. 
But he said other markets remain soft.
McCann added that the Australian economy was still strong “on a relative basis”. 
Lend Lease has a backlog of 57,585 zoned residential land lots and just under 12,000 apartments – of which 11,510 are zoned. 
The number of Lend Lease residential projects decreased from 39 to 37 over the six month period following the sale of the remaining units at Jackson’s Landing on Sydney Harbour, Forde in the ACT and Caroline Springs in Melbourne, but with the addition of the Coolbellup residential community in Perth.
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Residential market remains soft but strength in NSW and Perth: Lend Lease CEO Steve McCann

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Lend Lease has reported a steep drop in demand for apartments in its Victoria Harbour precinct in Melbourne’s <a target="_blank" href="/news">Docklands</a>, with interim results boosted by its largest project, the $6 billion Barangaroo South project.
The property developer and infrastructure developer announced interim after tax profits up 38.3% to $302.3 million to December 31.
Lend Lease explained that the increase in profit was “largely due to the recognition of the profit on the first two commercial towers at its major project, Barangaroo South in Sydney".
However, it noted that its development business had been partially offset by “reduced residential activity in the period”.
The outlook for its residential business is mixed, with Lend Lease noting that consumer sentiment towards the housing market "improved slightly in the period, with mortgage affordability increasing due to lower interest rates, steadier house prices and rising income" but at the same time "low consumer confidence and uncertainty in the labour market has lessened the impact on sales".
Off-the-plan apartments sales fell 29% from 710 sales in the December 2011 half year to 502 for the six months to December 2012.
Lend Lease recorded 10 apartment settlements totalling $10.4 million over the six-month period – representing an average price of $1.04 million, compared with 17 sales totalling $33 million (average price of $1.94 million)  in the previous corresponding period.
Lend Lease says the fall of 47% "reflect[s] the change in the product mix from premium apartments to smaller, more affordable apartments in response to changes in market demand".
The previous period included settlement of a higher number of high value apartments.
Residential lot sales fell 10% from 1,625 to 1,460, with the average price per residential lot decreasing by 17% from $243,850 to $201,500, "reflecting a change in the product mix".
Lend Lease has 37 residential projects at various stages of development with a pipeline of 69,000 units.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/2013/02/lendleasefeb18.gif"><img src="/images/stories/2013/02/lendleasefeb18thumb.gif"></a>
Lend Lease also reported off-the-plan sales of 121 out of 203 apartments released in its Studio Nine development in Richmond (pictured below), which will feature 505 apartments and townhouses when completed on the heritage site that was once the Heinz canning factory, and then a broadcast studio.
<img src="/images/stories/2013/02/studio91.jpg" width="470" height="358" alt="studio91">
Lend Lease had offered very high <a href="https://www.propertyobserver.com.au/developments/studio-9-richmond-offering-buyers-a-10-annual-return-on-deposits-while-awaiting-construction/2012080955948" target="_parent">10% interest rate on deposits paid for apartments in Studio Nine</a>, with apartments priced from  about $455,000 to $1.85 million
Construction commenced on Wertheim Square apartments in Stage 1 of Studio Nine in November.
 
<hr class="system-pagebreak">
 
Victoria Harbour is Lend Lease’s second biggest project by value, with an end value of $4.5 billion.
Victoria Harbour is a 30-hectare precinct connected to the CBD via Collins Street and is primarily a commercial precinct with office buildings completed for ANZ, NAB, Ericsson and Myer.
Completed residential projects in Victoria Harbour include Convesso, the first part of the twin project Convesso Concavo and Serrata, a joint-venture project with Japanese developer Sekisui House.
Construction of Concavo is due to start this year, with a sky bridge connecting it with Convesso at level seven.
In its full year results last year, Lend Lease reported that 15 units remained available for purchase in Convesso, which features 220 one-, two- and three-bedroom units.
Other major Lend Lease projects that feature residential include the $1 billion Waterbank urban regeneration project in Perth and the $2.5 billion RNA Showgrounds project in Brisbane, where off the plan marketing has begun for its first residential apartment development, The Green.
Across all its businesses, revenue rose 8% to $6.25 billion with two the majority of this attributed to its Australian business, where revenue rose 5.2% from $3.8 billion to $4 billion.
Over the six-month period to December Lend Lease launched Lend Lease International Towers Sydney Trust with funding for the first two commercial towers, as well reached agreement with James Packer’s Crown Limited group to build an international hotel and casino on the site.
Lend Lease also secured pre-commitments from Westpac and KPMG to take up 71% of the commercial floor space for the first two towers.
The value of Lend Lease’s investment property portfolio have increased by $219.2 million to $3.63 billion primarily due to the acquisition of two retirement villages, Little Bay, in Sydney’s eastern suburbs and Martha’s Point on the Mornington Peninsula and capital expenditure and revaluations on senior living and other development properties. These increases were offset by the sale of the Glen Woodley retirement village in Adelaide.
In December Lend Lease was selected as preferred bidder by the NSW Government to deliver the $1 billion Sydney International Convention, Exhibition and Entertainment Precinct project, as part of the Destination Sydney consortium consisting of Lend Lease, HOSTPLUS, Capella Capital, AEG Ogden and Spotless.
Lend Lease will pay investors an unfranked dividend of 22 ¢ per share on March 27.
 
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Lend Lease profits up 38% but steep drop in Docklands apartment sales 

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A Melbourne private investor has paid $1.65 million on a passing yield of 5.67% for the ground-floor shop that houses the premises of Fred Perry men’s fashion store on Little Collins Street in the Melbourne CBD. 
<img src="/images/stories/2013/02/fredperry.jpg" width="470" height="353" alt="fredperry">
The 32.5-square-metre strata retail premises at 188 Little Collins Street sets a new record, according to the selling agents Nick Peden and Clinton Baxter from Savills, for the highest rate per square metre – $50,769 per square metre – for a CBD retail property outside of Swanston Street. 
<a target="_blank" href="https://www.realcommercial.com.au/property-retail-vic-melbourne-500597599">Fred Perry has a lease on the store until March 2017, with a five-year option at a net rental of $93,600 per annum</a>. 
<img src="/images/stories/2013/02/fredperry2.jpg" width="470" height="353" alt="fredperry2">
The brand dates back to the late 1940s, when former Austrian footballer Tibby Wegner approached three-time Wimbledon champion Fred Perry with an idea to use his name to sell sportswear. 
They started off modestly with the very first sports sweatband, quickly adopted by tennis players across the courts of Britain. In 1952 the pair launched what was to be Fred Perry's most famous garment: a slim-fit cotton pique shirt with laurel wreath embroidery. 
<img src="/images/stories/2013/02/fredperry3.jpg" width="470" height="353" alt="fredperry3">
The selling agents said the property attracted a great deal of interest from investors keen to take advantage of the secure lease profile and prime CBD location. 
There was competition for the premises from both local and offshore investors, which “demonstrated confidence in the CBD retail market and a desire to secure good-quality CBD property," says Peden. 
"The property offered an excellent opportunity to acquire an extremely well located and affordable retail investment property within the Melbourne CBD. 
"With the low interest rate environment and prospects for strong growth due to the CBD’s rapidly rising population, we were able to sell the property within 14 days of placing it on the market, at the vendor’s price, with minimal marketing expenditure," says Peden. 
This sale represents Savills ninth CBD sale in the past few months.
Space in Little Collins Street comes at a premium. Last week Savills retail director Michael Di Carlo alongside colleague Jeremy Marmur negotiated a new lease for food and beverage retailerMadam Squint, at 353 Little Collins Street property at more than $2,000 per square metre net for a 47-square-metre, ground-floor retail premises on a three-year term. 
Madam Squint is a new concept in Asian salad and sandwich bars specialising in rice burgers.
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Melbourne private investor pays $1.65 million for premises of Fred Perry on sought-after Little Collins Street 

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With demand for office space in the Melbourne CBD set to plateau over the next two years according to consultants Charter Keck Cramer and vacancy rates rising in other capital cities, office landlords will need to be increasingly creative to secure tenants.
One possibility is to consider turning unused office space into a co-working community space, as pioneered by the HUB Melbourne project at the bottom of Bourke Street in the Melbourne CBD.
Co-working communities are an open-plan office spaces which offer membership to mainly entrepreneurs and small businesses and provide not just the necessary business technology, but also a shared community to exchange ideas and innovations and work together where appropriate and mutually beneficial.
The community aspect is the principle difference between a co-working community space and renting a serviced office.
HUB Melbourne has the second highest membership in the world of any co-working community after San Francisco with a second HUB building under development on William Street on the Sydney CBD fringe and set to open in May.
HUB Melbourne was developed in 2011 and opened with 120 members. It now has over 700 members, all of whom are connected to a global community of 5,000 co-working HUB members on six continents.
It can be found on the top floor of Donkey Wheel House at 673 Bourke Street, a striking heritage-listed building dating from 1890.
<img alt="HubMelbourne_DiannaSnape_03" src="/images/stories/2013/02/feb20hub/HubMelbourne_DiannaSnape_03.jpg" width="460" height="307">
The building was once the headquarters for the Melbourne Tramway and Omnibus Company with HUB Melbourne occupying the third-floor space, once a ballroom.
This includes the developing of tables, chairs and partitions placed on wheels to allow flexible configurations of space, lights constructed from recycled bicycle spokes wrapped in cardboard and extension cords bound in crochet. The space also incorporates velvet theatre curtains to section off work zones and absorb sound.
On any given day up to 60 people work at hub, some sitting at desks, others on couches and some in deck chairs as if they were at the beach.
There are no leases, no rental contracts and membership includes super-fast Wi-Fi, printing, tea and coffee, meeting rooms and a mailing address.
Individual monthly membership fees range from $200 per week for one day a week use to $600 for unlimited use.  One day casual passes can be purchases for $50.
Team of up to five can buy memberships ranging from $300 for one day a week membership to $2,000 for unlimited use.
Users of the space include fashion designers, architects and consultants.
<img alt="HubMelbourne_DiannaSnape_01" src="/images/stories/2013/02/feb20hub/HubMelbourne_DiannaSnape_01.jpg" width="460" height="307">
The space was a designed by architects HASSELL in collaboration with HUB founder and CEO Brad Krauskopf.
HUB will also collaborate with Hassell on the fit out of the 500 square metre Sydney co-working space.
According to Steve Coster, principal at architects HASSELL who lead the team that designed the HUB Melbourne space, the concept of a workplace shared by a community of independent users or organisations that leverage social capital to create innovation and business opportunities.
“More than just a shared space or serviced office, co-working communities are focused on creating a network of mutually supportive relationships, connections and entrepreneurial opportunities among members,” he says.
He tells Property Observer, the growth of HUB Melbourne has been spurred on by an increasing prevalence of independent workers following the large-scale redundancies following the GFC.
As a result, there are many contractors or entrepreneurs, whose only other option is to work from home.
“Working at the HUB creates opportunities for referrals and collaboration with others,” he says.
In addition, he says the big corporates are also keen on the concept as a way for smart, innovative people to work in a space which promotes fringe ideas and allows the setting up of start-ups, and growing these businesses.
“For freelancer workers and small start-up organisations, co-working communities provide a community of like-minded individuals and relief from isolation. For large organisations, they provide an opportunity to access more dynamic, short-term, project based skills and capabilities,” says Coster.
According to Coster, the success of the community at HUB Melbourne is achieved through a range of mechanisms.
“Spaces must be authentic, welcoming, comfortable and meaningful for their members because they can only exist if people choose to pay to use them. With remote work on the steady increase, the value of desirable, meaningful places will only become more critical.
“The space has been designed to ensure a deep and genuine sense of ownership by users. It has also been designed to be easily reconfigured, as fast as the speed of business. Technological support is also crucial, provided through a ‘bring-your-own-device’ model, where network access and high-cost elements form a basic framework for rapidly changing technology platforms provided by the users themselves,” he adds.
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Co-working office spaces food for thought for investors as vacancies rise

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Any Commonwealth Bank customer currently paying the Commonwealth Bank’s (or any major bank for that matter) standard variable rate of 6.4% is either an undesirable mortgage customer or a mug.
Such a conclusion can be drawn from comments made by Commonwealth Bank CEO Ian Narev to journalist questions at the bank's recent interim results briefing.
Asked by Channel Nine finance journalist Ross Greenwood why the bank published a standard variable rate when any customer “worth their salt” can get a 100 basis point discount, Narev responded that the standard variable rate was simply a “transparent benchmark” against which every individual home lending rate is set.
“So everybody's rate is relative to the standard variable rate. And I do not think there is any customers, I hope there is no customer who would say we have not been completely transparent to them about their rate.
“We describe it by reference to the benchmark rate, and that is the rate we talk about in the market. So it is very important for us indeed in terms of the legal framework in which we operate, it is very important that customers understand exactly what they are paying and it is something we are very focused on,” said Narev.
January mortgage approval figures compiled by Mortgage Choice, which writes one in 10 home loans in Australia, show that 20% of borrowers took out a standard variable mortgage over the month – one in five.
Logic would dictate that given the dominance of the Commonwealth Bank in mortgage lending (it has 25% of the market), there would be a significant proportion of borrowers paying the bank's standard variable rate as would the other major banks.
ANZ has a standard variable rate of 6.40%, NAB is at 6.38% and Westpac the highest at 6.51%.
Fairfax economic commentator Michael Pascoe told David Koch on Sunrise last week that variable mortgage holders should not be paying an annual interest rate of more than 5.5%.
During the media conference, Narev added that over the past 18 months the Commonwealth Bank had passed on more reductions to the standard variable rate than any other major bank.
Explaining the need for a standard variable rate, Narev said it was the structure under which the banking system operates and that all banks price to it.
“But we are still very keen to get good customers in a way that creates a fair price for them and value to our shareholders and that is something we are very focused on,” he said.
Commonwealth Bank chief financial officer David Craig said the bank was “sort of locked into having a standard variable rate because it is the legal baseline upon which all existing mortgages are priced”.
While Narev would not be drawn on whether the Commonwealth Bank would cut variable rates out of cycle of the RBA, he did hint that it was a possibility.
“I am not allowed to say anything in terms of future prospects on pricing. What I could say is that it is a competitive market and if we reach a different environment in terms of both the volatility and the cost of funding that is conceivable, [then] yes."
For borrowers looking for a little more transparency outside of the major banks, these are the lowest advertised variable and fixed mortgage rates based on listings on mortgage comparison websites <a href="https://www.ratecity.com.au/" target="_blank">ratecity.com.au</a>, <a href="https://mozo.com.au/" target="_blank">Mozo.com.au</a>,  <a href="https://www.infochoice.com.au/" target="_blank">infochoice.com.au</a> and <a href="https://www.homeloanfinder.com.au/">homeloanfinder.com.au</a> as of February 18:
Where the headline rate is the same, the lender with the lowest comparison rate gets preference.
Lowest variable rate offerings:
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Provider
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<td valign="top" width="124">
Loan name
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<td valign="top" width="97">
Rate
</td>
<td valign="top" width="116">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="134">
Easy Street
</td>
<td valign="top" width="124">
Honeymoon Home Loan Special
</td>
<td valign="top" width="97">
4.99%
</td>
<td valign="top" width="116">
5.77%
</td>
</tr>
<tr>
<td valign="top" width="134">
Loans.com.au
</td>
<td valign="top" width="124">
Blackboard Special
</td>
<td valign="top" width="97">
5.09%
</td>
<td valign="top" width="116">
5.12%
</td>
</tr>
<tr>
<td valign="top" width="134">
UBank
</td>
<td valign="top" width="124">
UHomeLoan for refinancing variable loan with a special upfront discount of 0.25%p.a.
</td>
<td valign="top" width="97">
5.12%
</td>
<td valign="top" width="116">
5.12%
</td>
</tr>
</tbody></table>
 Lowest one-year fixed-rate offerings
<table border="1" cellspacing="0" cellpadding="0" width="470"><tbody>
<tr>
<td valign="top" width="137">
Provider
</td>
<td valign="top" width="123">
Loan name
</td>
<td valign="top" width="95">
Rate
</td>
<td valign="top" width="114">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="137">
UBank
</td>
<td valign="top" width="123">
UHomeLoan for refinance fixed rate one year
</td>
<td valign="top" width="95">
4.83%
</td>
<td valign="top" width="114">
5.34%
</td>
</tr>
<tr>
<td valign="top" width="137">
Loans.com.au
</td>
<td valign="top" width="123">
Dream Loan Express - Fixed P&amp;I 1 year
</td>
<td valign="top" width="95">
4.89%
</td>
<td valign="top" width="114">
5.28%
</td>
</tr>
<tr>
<td valign="top" width="137">
Newcastle Permanent
</td>
<td valign="top" width="123">
Fixed rate home loan
</td>
<td valign="top" width="95">
4.94%
</td>
<td valign="top" width="114">
5.97%
</td>
</tr>
</tbody></table>
 
Lowest three-year fixed-rate offerings
<table border="1" cellspacing="0" cellpadding="0" width="470"><tbody>
<tr>
<td valign="top" width="131">
Provider
</td>
<td valign="top" width="131">
Loan name
</td>
<td valign="top" width="96">
Rate
</td>
<td valign="top" width="111">
Comparison rate*
</td>
</tr>
<tr>
<td valign="top" width="131">
homeloanHQ
</td>
<td valign="top" width="131">
Rate Lock Home Loan
</td>
<td valign="top" width="96">
4.99%
</td>
<td valign="top" width="111">
5.53%
</td>
</tr>
<tr>
<td valign="top" width="131">
eMoney
</td>
<td valign="top" width="131">
Pro Pack 75 – 3 Year Fixed Rate Home Loan
</td>
<td valign="top" width="96">
5.00%
</td>
<td valign="top" width="111">
5.67%
</td>
</tr>
<tr>
<td valign="top" width="131">
My mortgage freedom.com.au
</td>
<td valign="top" width="131">
Fixed Rate (LVR&lt;75%)
</td>
<td valign="top" width="96">
5.09%
</td>
<td valign="top" width="111">
5.62%
</td>
</tr>
</tbody></table>
*A comparison rate includes both the interest rate and the fees and charges relating to a loan, combined into a single percentage figure.
For information on refinancing, watch our free webinar <a href="/news">The Do's and Don’ts of Refinancing Your Existing Home Loan ... and How to Avoid Unnecessary Hurdles</a>.
</body></html>

No one pays the 6.4% standard variable rate: Commonwealth Bank boss Ian Narev

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The majority of economists expect the Reserve Bank to leave the cash rate on hold at 3% at its March 5 monetary policy meeting.
Of the 28 economists polled this week by Bloomberg, 20 except the cash rate to remain unchanged.
However, the major banks are divided on this issue with ANZ and Westpac tipping a rate cut to 2.75% and NAB and the Commonwealth Bank expecting the RBA to hold firm.
The other respondents tipping the cash rate to fall in March are all investment banks with a strong foreign flavour.
Joining Australia's Macquarie Bank forecasting a rate cut are French bank BNP Paribas, German bank Deutsche Bank, American banks Merrill Lynch and Goldman Sachs and Malaysian-based CIMB.
The majority of economists don’t expect a rate cut in April either (18 out of 28) while a small majority (17 out of 28) expect a rate cut in May.
Macquarie Bank and Goldman Sachs expect two rate cuts by May taking the cash rate to an all-time low of 2.5%.
</body></html>

No rate cut in March say economists, but major banks divided: Bloomberg

<html><body>
ANZ has reported a 6.2% rise in cash profit to $1.53 billion for the December quarter amid what it calls “cautious behaviour” from consumers and businesses.
Unaudited statutory profit after tax (which includes one off items) was down 20% to $1.36 billion, the result of banking sectore-wide accounting adjustments.
The results were in line with expectations and also matched the 6% rise in interim profits <a target="_blank" href="/news">reported by the Commonwealth Bank</a> earlier in the week.
ANZ’s quarterly performance was marginally better than that of NAB, which reported cash profits for the three month to December up around 4% to $1.45 billion.
However, compared with the Commonwealth Bank’s more or less upbeat assessment of the year ahead and talk of stability and a slow rebuilding of confidence, comments by ANZ CEO Mike Smith were almost gloomy.
Smith said ANZ continued to deliver a “solid business performance” amid “soft economic conditions in Australia and New Zealand and cautious behaviour by consumers and business"
"In Australia and in New Zealand we won share in a number of priority markets including retail deposits and mortgages, " he added, but made no mention of any changes to wholesale funding costs.
ANZ’s group net interest margin – essentially the profit ANZ makes on its financial products including mortgages - was flat relative to the end of September, with a small rise in retail margins for mortgage lending.
ANZ reported a solid performance from Australia Retail (including mortgage lending) offset “by lower returns on retained capital due to the lower interest rate environment along with continued deposit mix impacts and asset pricing pressure elsewhere in the group”.
The bank picked up market share in household mortgages, deposits and traditional and affluent banking segments with “good momentum in commercial lending”.
Credit quality across retail and commercial loans was “sound and within expectations” while average customer deposits increased 12.3%.
Bad loan provisions stand at $311 million, compared with $239 million a year earlier.
Morningstar banking analyst David Ellis described the quarterly result as “solid” with no major surprises, either negative or positive.
“It’s pretty much steady as she goes, keeping the bank on track for solid full-year increase in earnings,’’ said Ellis.
The bank cut 1,000 jobs last year. 
</body></html>

ANZ quarterly profits up 6.2% amid “cautious” environment

<a href="https://www.apartments.com.au/developments/broadbeach-qld-4218">Broadbeach</a> offers plenty of reasons to live vertically, but moving from a substantial family home into an apartment can expose the compromises of high-density living. Privacy, room for guests and usable living space tend to matter more when an apartment is intended as a permanent home rather than an occasional coastal base.

A typical residential floor at <a href="https://www.apartments.com.au/new-apartments/the-eveleigh-broadbeach-7-9-surf-parade-broadbeach-qld-4218">The Eveleigh</a>, on Surf Parade,&nbsp;contains just four apartments. The 94-residence development by <a href="https://www.apartments.com.au/developers/hirsch-faigen">Hirsch &amp; Faigen</a> is predominantly made up of expansive three-bedroom homes, with a limited collection of half-floor penthouses above.

Across the apartment floors, <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> has used the relatively limited number of residences to give each home greater access to natural light and outlook. Living spaces extend towards full-height glazing, while a series of bay windows frame selected views across the Pacific Ocean, city and hinterland rather than treating the building edge as a continuous wall of glass.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360965]

“The apartment floors deliver a collection of homes that embrace controlled outlook via a series of bay windows deliberately framing moments of view,” Rothelowman Director Kim Lowman said.

From outside, those projecting forms contribute to the tower’s faceted profile. Strong horizontal and vertical elements establish its proportions, while the changing position of the sun alters the light, shadow and reflection across the façade throughout the day.

The same attention moves inside the apartments, where the material palette combines warm timber, natural stone, metallic detailing and softer curved forms. Kitchens sit within the main living zone, with stone island benches, integrated joinery and European appliances, before the living areas extend towards the glazing and the outlook.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360981]

Three genuine bedrooms provide room to accommodate family and guests, while two secure car spaces and storage address some of the practical considerations that can become more noticeable when moving from a larger home. Feedback from the display suite has centred on the warmth and restraint of the interiors, with buyers commenting that the residences feel like homes rather than conventional coastal apartments.

A limited collection of half-floor penthouses occupies the upper levels, increasing the scale of the living spaces and adding private balconies and elevated finishes. From this position, the outlook extends between the ocean and hinterland.

Outside the private residences, The Eveleigh separates its shared spaces between the podium and rooftop. The podium is centred on wellness, with subtropical landscaping surrounding a swimming pool and pool terrace, yoga garden, private gymnasium, sauna and hot and cold plunge facilities. Landscaped retreats and pavilions provide additional places to sit away from the main recreation areas.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360966]

Higher in the building, a rooftop pavilion and private dining suite sit alongside resident lounge, barbecue and outdoor dining areas, opening towards panoramic views across the ocean, city and hinterland.

“Buyers are no longer just looking for an apartment, but a lifestyle where they can relax, reset, and enjoy a balanced way of living,” Hirsch &amp; Faigen Director of Sales Matt George said.

Interest to date has come from established owner-occupiers and interstate lifestyle purchasers, including buyers planning a future move to the Gold Coast. Many are coming from larger homes and want to reduce ongoing maintenance without giving up space for family and guests, privacy, two car spaces or the ability to entertain at home.

&nbsp;

[smartcode_project:default project_id=149670 project_image_fid=360969]

Much of that daily life can also take place beyond the building without requiring a drive. Kurrawa Beach and Pratten Park are an easy walk from Surf Parade, while Pacific Fair, Oracle Boulevard, The Oasis, restaurants, cafés, entertainment and public transport are also within walking distance.

The Eveleigh is Hirsch &amp; Faigen's fourth Gold Coast development since entering the market in 2021, following The Hemingway at Palm Beach, The Emerson at Kirra and Yves at Mermaid Beach. Each of the preceding projects sold out before completion.

“Broadbeach had been on our radar throughout our time operating on the Gold Coast,” the developer said. “Following our projects in Palm Beach, Kirra and Mermaid Beach, Broadbeach represented the natural next step for the business.”

The Surf Parade site brought together proximity to the beach, protected coastal outlooks and walkability to dining, shopping and recreation. Hirsch &amp; Faigen also identified the street as an emerging premium residential address, with enough separation from Broadbeach's busier destinations to retain a quieter environment at home.

The Eveleigh is now under construction by Maxcon, with completion forecast for mid-2028. Three-bedroom residences are currently available from $2.87 million.

[smartcode_project_cta:default project_id=149670]

Joel Robinson

The Eveleigh brings house-like apartments to Broadbeach

A long-stalled Campbelltown development site is back in play, with new plans for 139 apartments set to supersede a mixed-use scheme approved almost a decade ago but never built.

The new proposal for 28 Cordeaux Street would deliver 116 market and 23 affordable apartments in a part 14-storey building, bringing a substantial new project into a Campbelltown market where new apartment supply remains limited.

Plans have been filed over the 3,092 sqm corner site at Moore-Oxley Street, around 600 metres from Campbelltown Railway Station and the city-centre retail core.

The site already carries a mixed-use residential approval dating to 2016. Doroch Architects has now been engaged on a larger replacement scheme, which is progressing as a State Significant Development Application following a Housing Delivery Authority determination in August 2025.

The apartment mix comprises 39 one-bedroom, 72 two-bedroom and 28 three-bedroom residences. Two-bedroom apartments make up just over half of the project, while three-bedroom homes account for 20 per cent.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="136dd5b9-3791-4da6-9e31-76f533f5b4de" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da2.png?VersionId=LgOSy9nwf5u.MGswBBwaGGxuX8QpHSl_" />

Of the 139 apartments, 23 will be delivered as affordable housing under the in-fill affordable housing provisions of the Housing SEPP. The affordable component represents 15 per cent of the residential gross floor area and will be managed by a registered Community Housing Provider.

Doroch has sought to break the scale of the building into two distinct elements, with a masonry podium of around four storeys establishing the street edge before the residential tower steps back above.

The corner position has shaped that approach. Cordeaux Street faces toward the commercial and civic centre, while Moore-Oxley Street leads into the lower-scale residential neighbourhood to the south, and the design verification report describes the site as "bridging the commercial core to the north and established residential areas to the south."

The podium will be expressed predominantly in face brick, while the upper levels shift to brushed and grooved concrete cladding with darker metal detailing. Recessed sections, deep balcony edges and landscaping break down the upper form, with an approximately 11.8-metre setback to the northern boundary addressing the adjoining St Peters Anglican School.

<img alt="First look: New 139-apartment plans revive long-stalled Campbelltown city centre site" data-entity-type="file" data-entity-uuid="c8b3d2d3-c561-4bfc-a5d9-a68c0c10dac1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Campbelltown%20da1.png?VersionId=AeAEyJU02Gk2k5noUj2StziCvdQ7fW4B" />

Campbelltown has been starved of new residential developments in the last decade.

The only other notable development set to come to market this year is ALAND's Queen Square, a mixed-use precinct on over two hectares that will comprise apartments above a vibrant ground-level retail and hospitality dining precinct.

First look: New 139-apartment plans revive long-stalled Campbelltown city centre site

First Look: Sherlock Construction pitches apartments for low-rise Deception Bay

Queensland builder-developer MAYD has revealed the first look at its major North Kirra beachfront development, lodging amended plans that reduce the number of apartments and increase the proportion of larger residences.

The project is planned across a substantial 4,742 sqm amalgamated site spanning seven lots at <a href="https://www.apartments.com.au/new-apartments/2-6-pacific-parade-bilinga-qld-4225">2-6 Pacific Parade</a> and 27-33 Golden Four Drive in Bilin​ga, directly opposite Nor​th Kirra Beach.

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD</a> secured the site for $32.5 million in 2025, in what was one of the Gold Coast's largest property transactions of the year.

The development will be delivered across two stages, with the first stage carrying an estimated gross realisation value of around $360 million.

The latest amendments seek to reduce the overall apartment count and shift the project further toward the owner-occupier market, with larger residences designed for buyers wanting considerably more space than traditionally offered in a beachfront apartment.

The residential mix will include townhomes, oversized two-bedroom apartments, substantial three-bedroom residences and four-bedroom homes.

MAYD has appointed Cera Stribley to lead the architecture and interiors, with the Melbourne-based design practice drawing on the beachfront setting through a series of ocean-facing terraces and heavily landscaped balconies.

Strong horizontal forms and curved balconies will define the exterior, with subtropical landscaping integrated throughout the building to soften the built form and increase the connection between the residences and the beachfront.

The project will also include an extensive collection of resident wellness and lifestyle facilities, continuing the broader shift across the Gold Coast's luxury apartment market toward larger homes supported by resort-style amenity.

<img alt="MAYD" data-entity-type="file" data-entity-uuid="d1bcbb05-e659-4b47-8bd4-1e595315e2ad" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%202.05.03%E2%80%AFPM.png?VersionId=jj0XEud1X1DuLt7_KyElhjMdZGOXmLHP" />

MAYD Founder Todd Mould said North Kirra was increasingly appealing to buyers attracted to the more established, lower-density character of the southern Gold Coast.

"North Kirra presents one of the most compelling luxury residential opportunities currently emerging in Australia, combining absolute beachfront with the character and authenticity that buyers are increasingly seeking, and the same sense of tight-knit community that defined Burleigh and Currumbin perhaps 10 or 15 years ago," Mould said.

"With Gold Coast Airport on its doorstep, it also offers a level of accessibility that broadens its appeal across almost every market demographic."

The project comes as the southern Gold Coast continues to attract an increasing share of high-end apartment development and buyer activity.

Kirra in particular has emerged as one of the region's more tightly held beachfront markets, with its relatively low-density character, established surf and hospitality scene and proximity to Gold Coast Airport differentiating it from the higher-density markets further north.

Mould said those characteristics had informed the approach MAYD and Cera Stribley had taken to the project.

"We've worked closely with Cera Stribley to create a vision that is deeply connected to its surroundings," he said.

"Inspired by the coastline itself, the architecture has been shaped around space, privacy and resort-style living, creating a collection of homes that reflects the next generation of luxury on the southern Gold Coast."

MOTIV Managing Director Carly Cottam, who has been appointed to market the project, said buyer attention had continued to move south along the Gold Coast.

"Purchasers who may once have defaulted to Broadbeach, Main Beach or Surfers Paradise are increasingly recognising the value of a genuine beachfront location that offers lower density, strong amenity and a more established sense of community," Cottam said.

"Kirra has a powerful combination of growing demand and genuine scarcity. Beachfront supply is inherently constrained, the area remains relatively low density, and buyers are increasingly placing a premium on locations that feel established, uncrowded and authentic rather than heavily developed."

Cottam said the proximity to Gold Coast Airport was also proving increasingly important for interstate and second-home buyers.

"Being minutes from Gold Coast Airport makes it particularly compelling for interstate buyers, frequent travellers and second-home purchasers who can access an authentic coastal lifestyle almost immediately after stepping off a flight."

The acquisition takes MAYD's active development portfolio to more than $500 million, with the North Kirra project representing one of its largest undertakings to date.

MAYD is targeting an early 2027 launch.

First look at MAYD's North Kirra mixed-use precinct

<main data-perf-region="main">
Castle Hill, the longtime hub of the Hills District, has been one of the major beneficiaries of Sydney's Metro expansion, with improved connectivity helping drive continued population growth, development and buyer demand across the Hills District.

But despite that growth, the suburb has seen relatively few major new apartment projects brought to market over the past 18 months.

Hills District developer Reve Group is looking to fill that gap with <a href="https://www.apartments.com.au/new-apartments/nova-r-ve-castle-hill-2-garthowen-crescent-castle-hill-nsw-2154">Nova Rêve</a>, a major new mixed-use precinct on the corner of Garthowen Crescent and Old Castle Hill Road, a short walk from Castle Hill Metro Station and Castle Towers.

[smartcode_project:default project_id=152737 project_image_fid=377679]

The project will comprise three residential towers alongside a hotel, restaurants, cafes and a skybar, more than 1,600 sqm of ground-floor retail and almost an acre of landscaped gardens.

It represents the largest project undertaken by Reve Group, the development arm of the Kassis family, which has been building across the Hills District for more than 30 years through Kassis Homes.

[smartcode_project:default project_id=152737 project_image_fid=377675]

Nova Rêve also represents a significant step up from the family's first apartment development, Grand Rêve, which was delivered nearby on Garthowen Crescent.

Grand Rêve introduced larger, house-like apartment layouts and premium inclusions including Wolf and Sub-Zero appliances to the Castle Hill market.

Nova Rêve takes that approach to a precinct scale, combining the residential component with hospitality, retail and substantial public and resident landscaping.

[smartcode_project:default project_id=152737 project_image_fid=377685]

Reve Group Managing Director Sam Kassis said the project reflected the family's three decades of building in the Hills, which has evolved from trophy homes on quarter-acre blocks to larger-scale apartment development.

"Grand Rêve was our first apartment project here and it showed us what this pocket of Castle Hill could be. Nova Rêve is the refinement of that idea: not just apartments, but a place the whole suburb can use," Kassis said.

A key part of that approach is the hotel, which has been designed to operate as an amenity for the wider Castle Hill community rather than solely hotel guests.

It will include restaurants, cafes, skybars and all-day dining, alongside conference and event facilities catering to business functions, community groups and private events.

At ground level, more than 1,600 sqm of shops and cafes will open onto the surrounding streets and landscaped areas.

Almost an acre of gardens designed by Land and Form Studios will run through the precinct, incorporating pathways, seating, barbecue areas and children's play spaces.

[smartcode_project:default project_id=152737 project_image_fid=377680]

Reve Group's Romio Georges said creating an active ground plane had been central to the planning of Nova Rêve.

"There are gardens with pathways, barbecues, seating and play areas, shops and cafes opening onto the street, and a hotel with restaurants and a skybar that anyone in Castle Hill can walk into," Georges said.

The project's elevated position on one of Sydney's highest ridgelines will also provide apartments with outlooks toward the Sydney skyline, surrounding parkland and the Blue Mountains.

More than 80 per cent of the apartments will occupy corner positions, with Turner responsible for both the architecture and interiors.

&nbsp;

[smartcode_project_cta:default project_id=152737]

<h3 data-end="3697" data-section-id="q3n5ak" data-start="3672">&nbsp;</h3>
</main>

Larry Schlesinger

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