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The privately owned Perron Group has agreed to pay a post-GFC record of $690.4 million to acquire a 50% share in a portfolio of three Centro flagship regional shopping centres.
The Perth-based property investment business owned and controlled by founder and chairman Stan Perron has entered into unconditional contracts to become joint owners of the Colonnades in South Australia, The Glen in Victoria and the Galleria in Western Australia in a deal brokered by Simon Rooney, Australian head of retail investments at Jones Lang Lasalle.
<img src="/images/stories/galleria4.jpg" width="470">
The Galleria (pictured above and below) is the biggest asset in the portfolio with 73,000 square metres of net lettable area and 201 speciality stores.
<img src="/images/stories/galleria5.jpg" width="470">
The Glen (pictured below) measures 59,000 square metres.
<img src="/images/stories/glen.jpg" width="470">
The Colonnades (pictured below) measures nearly 66,000 square metres.
<img src="/images/stories/colonnade.jpg" width="470">
JLL says this transaction is a post-GFC record for an agency-negotiated real estate transaction.
The previous record was the $738 million paid by LaSalle Investment Management in August 2007 to acquire a 50% stake in the Westfield Doncaster in Melbourne.
The Centro portfolio sale price on reflects a 3.7% premium to book value (pre-transaction costs) reflecting an increased level of demand for exposure to this sector.
The recent transactions of Westfield Doncaster (25% interest), Northland (50% interest) and Myer Centre Brisbane (50% interest) in late 2010 through to early 2012 were sold in line with book values, while in late 2009 and early 2010, Westfield Whitford City (50% interest) and Joondalup were sold at 5% and 2.9% discounts to book values, respectively.
Click to enlarge
<a title="Click to enlarge" rel="shadowbox" href="/images/stories/perron.gif"><img src="/images/stories/perronthumb.gif"></a>
 
 
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Perron Group to acquire half stake in three Centro centres for $690 million, setting post-GFC commercial retail record 

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Work has stopped on 26 building projects worth $300 million across Australia following the <a target="_blank" href="https://www.propertyobserver.com.au/industry-news/st-hilliers-construction-arm-placed-in-voluntary-administration/2012051554713">collapse of the construction arm of St Hilliers.</a>
Administrators to St Hilliers Construction Pty Ltd, Trent Hancock and Michael Hird of Moore Stephens Sydney Corporate Recovery Group, advised that four construction sites operated by St Hilliers Construction Pty Ltd have reopened today including 153 Clarence Street, Sydney, NSW – a commercial office refurbishmen, Chullora Marketplace, Greenacre, Sydney, NSW – extension and refurbishment of a retail complex, Mt Arthur Coal Mine, Muswellbrook, NSW – infrastructure works for a mine site and Glenden Mine, Bowen Basin, Queensland – housing construction for a mine site
The Administrator and St Hilliers executive chairman Tim Casey and his team are working together and in active discussions with all clients, with the objective of reopening as many construction sites as soon as possible.
Closed projects range from state government social housing projects only recently awarded to St Hilliers to defence projects, a new school, mining accommodation projects, office redevelopments and luxury apartment blocks.
Some St Hilliers sites have already been blocked off, with one local business operator in The Rocks in Sydney tweeting that a St Hilliers apartment project on Cumberland Street had been blocked off, with a guard standing outside.
“Just went to Cumberland street and St Hilliers have a big security guard stationed in the foyer. They never did before,” tweeted ‘Stuart C’.
The collapse of the business has placed around 1,000 contracting jobs at risk, with many contractors yet to be paid for projects they have worked on.
Creditors will have to wait more than a week to find out what administrators are proposing for the failed business.
A spokesperson for administrators Trent Hancock and Michael Hird of Moore Stephens Sydney Corporate Recovery Group told Property Observer a creditors' meeting is expected in the next 10 days.
In NSW, current building projects in limbo include 13 social housing projects being developed on behalf of the state government as well as the construction of mining infrastructure for BHP Billiton in its Mt Arthur Coal Mine in Muswellbrook.
<img src="/images/stories/redcross.jpg">
Other prominent NSW projects include the heritage-listed Red Cross Building in 153 Clarence Street in the Sydney CBD (pictured above), which St Hilliers bought last year and is currently converting into strata offices.
<img src="/images/stories/gateway.jpg">
In Victoria, St Hilliers has been contracted to build the Ashwood Chadstone Gateway Project (picutred above and artist's impression below) for the Port Philip Housing Association, with the aim of delivering a mix of 210 affordable rental homes and 72 private homes.
<img src="/images/stories/gateway2.jpg">
 
<hr class="system-pagebreak">
 
Projects in Queensland include two training facilities for the Department of Defence as part of a $1.4 billion infrastructure project at Gallipoli Barracks in the Brisbane suburb of Enoggera.
St Hilliers is also working on building project within the St Lucia campus of the University of Queensland and an accommodation project for Xstrata Coal’s Glenden Mine near Mackay.
ACT projects include a $27 million school in Bonner for ACT Department of Education, a maintenance training facility for the Department of Defence and headquarters for the government’s Air Services Australia.
Some government projects had only recently been awarded to St Hilliers Construction, including a tender awarded in March to take over failed public housing projects in Wollongong, the Shoalhaven and Coffs Harbour (pictured below).
<img src="/images/stories/coffsharbour2.jpg">
These projects are almost complete, but contractors have not been paid.
Speaking to the ABC, Coffs Harbour MP Andrew Fraser said he was “absolutely livid” at the decision to award the tenders to St Hilliers. "The Department of Housing ought to be hung out to dry.
"I've got a call into the minister, I'm waiting to hear back from him, but as far as I'm concerned we as a state government must make good these losses,” Fraser said.
According to NSW finance minister Greg Pearce the fate of 12 public housing projects that St Hilliers was contracted complete remains unclear.
The NSW government has organised a meeting with the management of St Hilliers and the administrator to discuss the status of the government contracts.
According to St Hilliers, its other funds management, property development and asset management are all operating as normal. The websites for these businesses all link through to the voluntary administration statement, and previous press releases and statements about projects cannot be accessed.
St Hilliers joint venture project with New Zealand firm Hawkins to redevelop the prison has been placed in liquidation.
<img src="/images/stories/araratprison.jpg">
Victoria State Corrections Minister Andrew McIntosh is touring the Ararat prison site (artist's impression above) today following the collapse of the joint venture project.
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Anxious wait for creditors and contractors as 30 St Hilliers projects worth $300 million stuck in limbo

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For the first time in more than a decade retailers are paying more on average to lease super-prime locations on Melbourne’s Bourke Street mall than on Sydney’s much-lauded Pitt Street mall, according to research by CBRE. 
The property group has calculated that the indicative rental on Pitt Street mall has fallen to $7,560 per square metre net per annum below the indicative rental of $7,700 per square metre net per annum on Melbourne’s Bourke Street mall.
<img width="470" src="/images/stories/cbremay17.png">
According to CBRE executive director for global research and consulting Kevin Stanley, the indicative rental measures is a better indicator of what retailers are paying rather than the traditional focus on the highest rents achievable, which are generally a very small component of the market (with the title still held by Sydney). 
Based on the indicative measure, Stanley says “Melbourne was now well outclassing Sydney in both the super prime market (that being Bourke Street Mall in Melbourne and Pitt Street Mall in Sydney) and the prime market”.
Sydney lost its crown after indicative rents for super-prime space in and immediately around the Pitt Street mall dropped 6.2% in the final quarter of 2011, the first drop in 10 years. 
According to Stanley, Sydney super-prime retail market has failed to recover after slumping last year, while the market was also disrupted by development of Westfield Sydney, which increased vacancies around the mall. 
CBRE notes that while the total retail vacancy rate in both Sydney and Melbourne remains low, they have crept higher over the past few years, with Sydney’s latest count showing a total rate of 3.1%, up from 0.6% in late 2009. 
Stanley says the 3.1% rate in Sydney is, in fact, the 10-year average, but the increase from such a low point just a few years ago had clearly caused some stress on rents. 
The gap is even greater in the prime space – the areas around pedestrian malls such as Pitt Street mall and Bourke Street mall. 
In these locations, indicative rents in Melbourne are now 18% above those of Sydney at $3,056 per square metre per annum vs $2,496 per square metre per annum net. 
“Similar to the change in super-prime rents, it’s the 16% fall in Sydney’s Prime rents over the last couple of years which has helped put Melbourne ahead,” says Stanley. 
Stanley does point that if you look at highest achievable rents, Sydney continues to outstrip Melbourne. 
“The highest Super Prime rent quoted in the Sydney CBD market is $11,560 per square metre, which is still 33% above the equivalent in Melbourne,” he says.
Bourke Street mall photograph courtesy of <a target="_blank" href="https://www.flickr.com/">Flickr</a>.
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Melbourne’s Bourke Street mall rents trump Sydney’s Pitt Street mall as most expensive for first time in a decade: CBRE

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Listed property group Charter Hall has paid $96 million to acquire the remaining 50% interest in 225 St Georges Terrace, a 19-level A-grade office building in the Perth CBD. 
The tower, which comprises 21,000 square metres of office space and 1,000 square metres of retail space, has been acquired by Charter Hall’s $1.5 billion wholesale Core Plus Office Fund (CPOF). 
CPOF acquired the remaining 50% from the privately owned Wylie Group at yield of around 9%. 
The fund acquired the original 50% of St Georges Terrace in 2006 for $61.5 million from the Wylie Group. 
According to CBRE, the <a target="_blank" href="https://www.propertyobserver.com.au/office/perth-to-lead-growth-in-cbd-office-rents-to-2016-but-melbourne-risks-oversupply-cbre-and-bis-shrapnel/2012032153958">Perth office market is forecast to be the strongest performer in terms of rental growth over the next few years</a>. 
Last year <a target="_blank" href="https://www.propertyobserver.com.au/western-australia/after-a-year-of-few-sales-perth-cbd-office-market-heats-up/2011071750826">Stockland sold its 50% holding in the 52-level BankWest Tower, also on St Georges Terrace</a>, for $130 million to joint owner Brookfield Prime Property Fund. 
At the same time the South Australia’s Motor Accident Commission picked up the CBD’s most eco-friendly new building at 226 Adelaide Terrace for about $100 million from the First State Group. 
The 225 St Georges Terrace building is 100% leased to major tenants including mining giant BHP Billiton, which occupies 71% of the net lettable area, with Wilson Parking leasing and operating the three-level car park.
The acquisition is being funded via a combination of equity from the recent raising and debt through CPOF?s new syndicated debt facility. 
Charter Hall joint managing director David Harrison says the acquisition consolidates CPOF’s investment “in one of Perth’s best-located prime office towers”. 
He adds that the acquisition “is in line with the fund’s investment mandate to own institutional quality assets where incremental value may be generated from rental reversions and possible expansion of the floor space”. 
“Perth has been a strong contributor to CPOF’s performance and we see this continuing within the lowest CBD vacancy office market in Australia,” he says.
 
 
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Charter Hall pays $96 million to complete 100% acquisition of Perth office tower

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Following on from May 1 RBA decision to cut the cash rate by 0.5 percentage points, Westpac has cut its headline three year-fixed mortgage by 20 basis points to 6.19%.
HSBC has cut its three year fixed-rate product to 6.09% or 5.99% for those investors who take up the interest-in-advance offering
ME Bank has also cut its three-year fixed rate mortgage product to 5.99%.
Currently the cheapest three-year fixed rate offering appears to be the 5.89% rate offered by IMB Building Society.
Other lenders are also expected to also drop their fixed rates as they look to lock in borrowers.
This follows ABS housing finance figures for March which showed that nearly 15% of loans taken out over the month were for fixed rate mortgages – the highest percentage since April 2008.
Here’s a guide to the range of headline three-year fixed rate products currently on offer: 
5.79% 
The three-year fixed-rate offering of Greater Building Society 
5.99% 
The three-year fixed-rate offering of Commonwealth Bank, ING Direct, ME Bank, CUA and Aussie, Citibank, IMB Building Society.
6.03% 
The three-year fixed-rate offering of LJ Hooker Finance 
6.04% 
The three-year fixed-rate offering of ANZ 
6.09% 
The three-year fixed-rate offering of HSBC Bank Australia and NAB, St.George, Bank of Melbourne, BankSA 
6.13% 
The three-year fixed-rate offering of Suncorp 
6.15% 
The three-year fixed-rate offering of Myrate.com.au 
6.19% 
The three-year fixed-rate offering of Westpac and ANZ 
6.29% 
The three-year fixed-rate offering of Heritage Bank and Homeloans Ltd 
 
6.33% 
The three-year fixed-rate offering of Bankwest
6.34% 
The three-year fixed-rate offering of Bendigo Bank 
6.37% 
The three-year fixed-rate offering of Yellow Brick Road 
6.39% 
The three-year fixed-rate offering of bankmecu
6.46% 
The three-year fixed-rate offering of Resi Mortgages
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Westpac, HSBC and ME Bank cut fixed rates: a three-year fixed-rate guide

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The North American and South American prime office markets proved the most enticing to global commercial property investors in the first three months of 2012, according to research by CBRE.
Prime office capital values in the Americas rose by 9.6% over the March quarter of 2012 compared with the March quarter of 2011.
This was actually lower than the 9.9% gain achieved by the Americas in the first quarter of 2011, but the region benefited from prime office returns decreasing in competing regions.
Notably for Australian commercial investors and landlords, Asia-Pacific capital values grew by 8%, making it the second most attractive region for investors – but less than half the 19% capital growth achieved in the first quarter of 2011.
CBRE says the Asia-Pacific office market softened during the first quarter of 2012 due to global financial market concerns as well as slower domestic economic growth.
The Europe, Middle East and Africa (EMEA) region was the poorest performing, with just a 0.7% gain in capital values.
CBRE global chief economist Dr. Raymond Torto says there has been a “marked increase in investor interest in the Americas’ prime properties over the last year” reflected in the latest index. 
“Last year at this time the Americas was showing respectable gains, but were far behind the 19% annual performance witnessed by the Asia-Pacific Capital Value Index.” 
 
<table style="width: 470px;" border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="650" colspan="3" valign="top">
CBRE Global Office Capital Value Indices Annual Growth Rates 
</td>
</tr>
<tr>
<td width="217" valign="top">
 
</td>
<td width="217" valign="top">
Q1 2011 
</td>
<td width="217" valign="top">
Q1 2012 
</td>
</tr>
<tr>
<td width="217" valign="top">
Global 
</td>
<td width="217" valign="top">
12.2% 
</td>
<td width="217" valign="top">
5.7% 
</td>
</tr>
<tr>
<td width="217" valign="top">
Americas 
</td>
<td width="217" valign="top">
9.9% 
</td>
<td width="217" valign="top">
9.6% 
</td>
</tr>
<tr>
<td width="217" valign="top">
Asia Pacific 
</td>
<td width="217" valign="top">
19.0% 
</td>
<td width="217" valign="top">
8.0% 
</td>
</tr>
<tr>
<td width="217" valign="top">
EMEA 
</td>
<td width="217" valign="top">
7.6% 
</td>
<td width="217" valign="top">
0.7% 
</td>
</tr>
</tbody></table>
Over the last year the Global Capital Value Index rose 5.7% while the Global Rent Index rose 3.4%.
According to CBRE, investors remain risk adverse and highly selective and are most willing to divert capital to high-quality, prime assets.
The report notes that while office capital values have been recovering for several years now, only the Asia Pacific Office Capital Value Index has surpassed its pre-recession peak and stands at 208.5.
Click to enlarge
<img src="/images/stories/cbremay161thumb.gif">
The Global Office Rent index remains 10.2% below its pre-recession peak value of 20 and the improvement over the past year has been modest, with a 3.4% growth rate. 

 
 
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North and South America best-performing prime global office market in first quarter of 2012: CBRE

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A new Asian commercial property website has been launched and includes Australian commercial properties among its listings. 
The new property portal, CommercialAsia.com, has been launched by ASX-listed iProperty Group and is targeted at investors from Hong Kong, Singapore, Malaysia and China. 
Currently the site has more than 50,000 commercial and industrial properties listed for sale and lease, including 1,000 Australian commercial properties listed from agents including Knight Frank and Burgess Rawson. 
According to research by CBRE, offshore-based institutions and private investors accounted for 37% of Australia’s commercial sale transactions in 2011.
 “Australia’s steady economy and commercial property sector, particularly in those areas connected with the resources boom, offers Asian investors attractive yields and a ‘safe haven’ to preserve and grow their wealth,” says Corey Weekes, CommercialAsia.com’s national sales manager for Australia and New Zealand. 
“Region-wide cooling measures for property investment by Asian governments are also driving many Asian investors to explore offshore options like Australia,” he adds. 
John Bowie Wilson, city sales director with Knight Frank, says the number of offshore investors interested in the Australian commercial property sector is increasing on a daily basis.
 
“The Asian investor market is more active than I’ve ever seen it before,” he says. 
“As prices rise in Singapore and Hong Kong awaits a currency correction against the US dollar; investors are seeking ‘safe havens’ like Australia to provide them with secure compound growth investment options.” 
CommercialAsia.com draws on the iProperty Group’s existing network of property portals across Asia, which attracts 3.5 million unique visitors per month and has over 25,000 property agent customers. 
For more tips and tools for property investors, sign up for tomorrow’s Property Observer webinar: 10 Top Online Research Tools for the Property Investor
 
 
 
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New Asian real estate website adds Australian commercial properties to listings

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Westpac chief economist Bill Evans says the failure of the banks to pass on the full May RBA 50-basis-point rate cut impacted on the confidence of borrowers and was a factor in a “disappointing” 0.8% rise in consumer sentiment in May, according to the Westpac Melbourne Institute Index.
Evans says evidence of the muted impact of the cuts in the official cash rate was found in the responses of those surveyed who hold a mortgage. 
“Confidence in this group increased only 3% in the survey despite the largest cut in the standard variable mortgage rate since February 2009. 
“Since October 2011 the standard variable mortgage rate has fallen by 0.76% yet the confidence of mortgage borrowers has actually fallen by 1.8%,” he says. 
Evans described the index of consumer sentiment rising from 94.5 in April to 95.3 in May as a “disappointing result” following the rate cut and “extensive media coverage that the unemployment rate had fallen from 5.2% to 4.9%”.
“However, other factors appear to have offset these positives. 
“Firstly there might have been a degree of disappointment amongst households that the standard variable mortgage rate was reduced by ‘only’ an average of 0.37%. 
“Secondly, increasingly disturbing news around Europe and specifically Greece is likely to have unnerved households,” Evans says. 
“We saw some similar evidence around these two factors in December last year. 
“At that time, despite a 0.25% reduction in the official cash rate, the Consumer Sentiment Index actually fell by 8.3%”. 
Evans says the “soft response” in confidence will be a disappointment for the Reserve Bank. 
“It seems extraordinary that the index is 2% below its level in October last year, when the official cash rate was 4.75% – a full 1% above the current level.” 
Evans says a number of issues appeared to unnerve households. 
“Firstly, and most importantly, concerns around the situation in Europe and secondly some confusion around the flow-on to the mortgage rate as banks delayed their decisions after having responded rapidly following the first official rate cut in November. 
“This issue around mortgage rates was also likely to have been a factor behind the 5% fall in the Index in March following a surprise increase in mortgage rates of 0.1% to 0.12%.” 
Evans says a negative reaction to the budget may also have played a part in the disappointing consumer sentiment result in May. 
“An additional explanation for this weak response of the Index is around the federal budget. We asked a supplementary question in the survey, ‘What impact do you expect the federal budget to have on your family finances over the next 12 months?’." 
“The results were disappointing, with only 9.9% of respondents indicating that the budget would ‘improve’ family finances while 36% indicated the budget would ‘worsen’ family finances.”
 
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Banks withholding part of RBA rate cut dampened consumer sentiment rise in May: Westpac’s Bill Evans

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Shopping centre owner and landlord Westfield has reported “modest growth” in speciality retail sales in its Australian shopping centres for the first three months of the year. 
Comparable specialty sales in its Australian portfolio rose 1.1% over the March quarter compared with growth of 2.2% in Westfield London store and New Zealand stores and a 10.1% growth in the US. 
The group said for the year to March 2012, average specialty rent for the Australian / New Zealand portfolio grew by 3.1%.
“The first quarter of this year has been pleasing with the group’s operations performing in line with expectations. Importantly, we announced a number of strategic initiatives that we expect will enhance the group’s return on contributed equity and long term earnings growth profile,” say Westfield Group co-chief executives Peter Lowy and Steven Lowy.
“The productivity of our Australian portfolio continues to be high, with specialty sales of approximately $9,800 a square metre, near full occupancy and good demand for space in both existing centres and new developments such as Fountain Gate in Victoria and Carindale in Queensland.”
Speaking at today’s AGM Frank Lowy said the last year had been a period of stability for Westfield following the GFC, with the group weathering the crisis better than some of its competitors. 
Steven Lowy said that at the end of March, the global portfolio was 97.2% leased – with the United States portfolio at 91.6%, the UK at over 99% leased and the Australian/New Zealand portfolio remaining over 99.5%. 
“Last year we completed over 5,100 leasing transactions, or the equivalent of 10 large regional malls, across the entire portfolio. Approximately 3,000 of these leasing deals were to new retailers,” Steven Lowy said. 
“In the first quarter of this year, we have completed 1,100 leasing deals of which around 640 are to new retailers,” he added. 
During today’s AGM chairman Frank Lowy and Steven Lowy stressed the importance of malls being interactive and adapting to the changing needs of shoppers: 
“It is true that the retail industry is constantly changing. There are new types of retail, and the rapid take up of digital technology is changing how consumers think about shopping in all sorts of ways,” Steven Lowy said. 
“But I have witnessed constant change in the retail industry for more than 50 years. 
“The kinds of shopping centres we build today are unrecognisable from those of the 90s, let alone the 60s.” 
Steven Lowy said Westfield shopping centres needed to keep pace with the rapid evolution of digital technology to remain relevant. 
“We have introduced wi-fi to many of our centres and we are actively promoting our business online through the social media such as Facebook and Twitter. 
“As an example, when we opened Stratford in the UK last year, we used social media and online marketing techniques extensively in our launch campaign. 
“That campaign played an important role in helping us achieve over 1 million shopper visits to Stratford in the first week and an average of 800,000 customer visits per week since opening,” Steven Lowy said. 
Westfield expects 1.1 billion visits to shopping centres this year, generating spending of around $40 billion. 
“Our philosophy is to have very strong assets in very strong markets” Frank Lowy said, with the focus being on iconic and flagship projects such as the centres opened<a target="_blank" href="https://www.propertyobserver.com.au/retail/one-million-weekly-london-shoppers-buoy-westfield/2011110852254"> in London</a>, <a target="_blank" href="https://www.propertyobserver.com.au/news/westfield-to-sign-deal-at-rebuilt-world-trade-center/2011072850959">the World Trade Centre project in New York </a>and another project in in Milan.
Westfield announced to investors that its distribution for the 12 months was $1.1 billion or 48.4¢ per security, in line with its forecast at the start of 2011.
 
 
 
 
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With 640 new leases signed and rents up, Westfield records ‘modest’ sales growth

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International investors are likely to see Australia as a safe haven and pour their funds into the country if the eurozone collapses, according to former treasury secretary Ken Henry.

However, the flip side of this investment would be a rise in the Australian dollar, with repercussions for export-driven sectors of the economy such as manufacturing.

In an interview on the ABC’s 7.30 report, Henry said that if the “worse things happens [in Europe]” it would be quite possible that “Australia will be seen as offering something of a safe haven for global capital movements”. 

“That'll be the first time in the post-war period, but it's possible to imagine it now,” he said.

Asked if Europe’s collapse could be a good thing for Australia, Henry hedged his bets, saying that on the one hand it would make it easier for Australia to fund its current account deficit, but on the other hand it would mean “a high-valued Australian dollar, and as you know that's an issue already causing some concern for some sectors of the Australian [economy].”

In the current two-speed economy Henry said the high Australian dollar placed real pressures on industries like manufacturing, which are configured “on the assumption of 72-cent exchange rate”.

He also said that wage growth had been quite muted except for the mining sector, though wages earned by miners were “nowhere near the prices growth in the mining sector”.

He described the current mining boom as “Mark 2”, with the effects not being passed onto households in terms of their wages as they were in the first phase of the mining boom before the GFC.

“In the what is being referred to these days of Mining Boom Mark 1, that is the mining boom Australia experienced up to the GFC… There was a lot of revenue coming in, huge amount of revenue actually,” Henry said.

During “mining boom Mark 1” Henry said the Howard government was handing out a lot of money to households through big tax cuts and big increases in family payments, with the result that “households actually felt quite good”. 

“They felt that they were getting something from this mining boom and of course in this mining boom Mark 2 the revenue is simply not there and it's much more difficult therefore for governments to make people to feel good,” he said.
 
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Investor funds could flow into ‘safe haven’ Australia if eurozone collapses: former treasury secretary Ken Henry

The Gold Coast economy has grown by 25 per cent since 2020/21 to surpass $55 billion, but perhaps the more significant story is what sits behind the headline number.

For decades, the Gold Coast has been viewed through the lens of tourism, lifestyle and population growth. The latest State of the City Report suggests that perception is increasingly out of step with reality.

Released by Invest Gold Coast, the report ranks the Gold Coast as Australia's largest non-capital city economy and, perhaps more notably, second nationally behind Sydney for Economic Complexity, a measure that assesses the diversity and sophistication of an economy.

It's a result that places the Gold Coast ahead of Melbourne, Brisbane, Perth and Adelaide, highlighting the extent to which the city's economic base has broadened beyond its traditional industries.

Today, the Gold Coast supports more than 350,000 jobs, is home to over 83,000 businesses and generates $19 billion in annual exports. Manufacturing now accounts for 62 per cent of international export growth, while sectors including health, education, advanced manufacturing, technology and professional services are becoming increasingly important contributors to the local economy.

[smartcode_project:default project_id=150017 project_image_fid=372547]

Gold Coast Mayor Tom Tate said the report confirmed the city's evolution into one of Australia's most significant economies.

"The Gold Coast economy continues to grow at an incredible pace. This is no surprise to those of us who have watched the evolution up close," Mayor Tate said.

"As one of the most entrepreneurial, investment driven and opportunity focused economies in the country our ambition has been realised and possibilities are endless.

"The Gold Coast has built a reputation as the city that says yes. We say yes to investment, yes to opportunity and yes to people who want to build something.

"It's this mindset helping us drive major growth across health, advanced manufacturing, screen production, marine, technology and the knowledge economy."

[smartcode_project:default project_id=149670 project_image_fid=360975]

While population growth has been one of the defining stories of the past decade, the report points to a broader economic transformation taking place.

The city's knowledge economy now contributes $7.9 billion annually and supports around 31,000 jobs, while the health and wellbeing sector contributes $5.2 billion and employs more than 42,000 people. Together, the six priority sectors identified in the report account for almost $24 billion in economic output and more than 145,000 jobs.

One of the strongest examples is the Gold Coast Health and Knowledge Precinct at Southport. The 200-hectare precinct now contains more than $5 billion worth of health, education, research and innovation infrastructure and supports over 16,000 jobs.

The report also highlights the growing role of advanced manufacturing, particularly in aerospace, defence and modular construction.

Gold Coast-based Gilmour Space Technologies recently became the first Australian commercial company to attempt an orbital launch, while companies including Modscape and ModnPods are helping establish the Yatala-Stapylton corridor as one of Australia's fastest-growing advanced manufacturing hubs.

The city's entrepreneurial culture is also translating into business growth.

Since 2019/20, the number of businesses operating on the Gold Coast has increased by 22 per cent, while firms employing more than 200 people have grown by 80 per cent. The report suggests the next challenge is converting more local start-ups and medium-sized businesses into nationally significant companies.

Development activity remains another key indicator of confidence.

There are currently more than $23 billion worth of major projects underway across the Gold Coast, supported by a record 75 active cranes, a figure that now exceeds Brisbane and represents a 150 per cent increase since 2016.

[smartcode_project:default project_id=112024 project_image_fid=343235]

Importantly, the report notes the next phase of investment will need to extend beyond residential development.

While 93 per cent of crane activity is currently tied to housing, Invest Gold Coast argues future investment will increasingly need to focus on cultural, civic, infrastructure and industry-enabling projects that strengthen the city's long-term economic resilience.

Invest Gold Coast Chair Will Hodgman said the city was now benefiting from years of economic diversification.

"What is happening on the Gold Coast is the result of the city's economic base broadening, fuelled by industries with long-term, high-growth potential," Mr Hodgman said.

"This is no longer a secondary Australian economy, the Gold Coast is becoming a globally connected city with deeper capability across health, knowledge and creative industries, advanced manufacturing, technology and exports."

[smartcode_project:default project_id=108274 project_image_fid=365786]

Looking ahead, the Gold Coast's population is projected to exceed one million residents by 2046.

For a city that was once largely defined by tourism and lifestyle, the latest figures suggest the Gold Coast is becoming something more significant, one of Australia's most diverse and economically sophisticated urban economies, and increasingly one that national and international investors can no longer afford to overlook.

Joel Robinson

75 cranes, $23 billion pipeline and a $55 billion economy: Inside the Gold Coast economic boom

Ron Bakir's Homecorp has sold more than 75 per cent of the apartments in its wellness-driven Florence Residences in Surfers Paradise following its first weekend release.

The <a href="https://www.apartments.com.au/new-apartments/florence-residences-24-monte-carlo-avenue-surfers-paradise-qld-4217">26-storey project on Monte Carlo Avenue</a>, which commenced construction earlier this year, has seen a flurry of buyers secure their slice of the Gold Coast's latest wellbeing-focused offering in one of the nation's most competitive property markets.

Since the pandemic, the Gold Coast's population has grown by more than 11 per cent, a rate approximately four times faster than Sydney's, driven largely by lifestyle changes and interstate migration. While buyer activity has moderated in some markets nationally, demand for newly built dwellings on the Gold Coast continues to gain momentum as purchasers increasingly prioritise lifestyle, amenity, wellbeing, liveability and long-term investment potential.

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[smartcode_project:default project_id=150414 project_image_fid=372743]

Homecorp CEO Ron Bakir says buyers today are looking for more than just a home.

"What we are seeing is a shift in how people define value in property," Bakir says.

"What attracts residents to new developments is a desire for more than just a residence. They are looking for a place that complements their lifestyle, supports their wellbeing and reflects the way they want to live into the future.

"Lifestyle, longevity, proactive health, wellbeing, connection and a sense of community are increasingly shaping purchasing decisions, particularly on the Gold Coast, where these factors continue to be a major drawcard."

[smartcode_project:default project_id=150414 project_image_fid=372744]

Bakir says Homecorp is responding to this shift through an approach that places greater emphasis on design, amenity and experience working together to create places that feel considered, connected and enduring in value.

Inspired by Eastern European design, Florence Residences will comprise 120 apartments alongside a private residents-only wellness club featuring a resort-style rooftop pool, hot and cold plunge pools, a spa retreat, contemporary gymnasium, and a spacious yoga and Pilates studio.

The development will also feature a residents-only lounge with private dining facilities and a rooftop bar, premium outdoor entertaining areas, a hotel-style lobby lounge, generous bike parking, and pet-friendly amenities including a heated dog wash.

[smartcode_project:default project_id=150414 project_image_fid=372742]

A limited number of apartments remain available, with an exclusive collection of four-bedroom sub-penthouses set to be released in the coming months.

Florence is one of the latest additions to Homecorp's expanding multi-billion-dollar property portfolio, which also includes plans for a <a href="https://www.apartments.com.au/news/qld/homecorp-lodges-plans-for-260-million-moroccan-bathhouse-inspired-tower-in-budds-beach">$260 million development in Budds Beach</a> tailored to the growing wellness market.

A development application has been lodged for a 27-storey, 156-residence tower at 8–10 Acacia Avenue and 25–27 Oak Avenue, featuring a residents-only Moroccan spa-inspired sanctuary.

Apartments at Florence Residences are priced from $1,249,000, with construction expected to be completed by late 2027.

[smartcode_project_cta:default project_id=150414]

Buyers rush to Homecorp's Florence Residences as Gold Coast wellness trend gains momentum

The NSW Government has expanded its $1 billion Pre-sale Finance Guarantee program, broadening access for affordable housing providers and smaller residential developments as it seeks to accelerate housing delivery across the state.

The Minns Government says the program has already helped bring forward more than 600 homes across Sydney and regional NSW since launching in September 2025, with similar models now adopted in South Australia and Western Australia.

The latest changes, announced by Treasurer Daniel Mookhey and Minister for Planning and Public Spaces Paul Scully, are designed to improve access to finance for projects that have planning approval but are struggling to secure funding.

Among the key changes is an expansion of support for community housing providers. The program will now support up to 100 per cent affordable housing projects valued at up to $30 million when delivered by not-for-profit providers, while support for larger affordable housing developments will increase for projects worth up to $80 million.

The government says the changes will help accelerate the delivery of housing for low-income workers, older people, people living with disability, and those at risk of homelessness, while reducing reliance on direct grants or subsidised loans to bridge funding gaps.

The eligibility criteria for smaller residential developments have also been broadened. The previous $5 million minimum project value threshold has been removed and replaced with a requirement that projects deliver at least four homes.

Support has also increased for projects delivering fewer than 20 homes, with the guarantee now able to cover up to 75 per cent of dwellings in a development, capped at $30 million per project.

The changes are expected to particularly benefit smaller-scale and regional developments, which often face greater challenges meeting pre-sale requirements imposed by lenders.

Treasurer Daniel Mookhey said the scheme demonstrates how government can use its balance sheet to stimulate housing supply without relying solely on taxpayer-funded grants.

"The Pre-sale Finance Guarantee shows how this Government is using its balance sheet to reduce risk and unlock private investment, enabling new homes to move from design to construction faster," Mookhey said.

"This landmark reform allows us to deliver homes for working families at a lower cost to taxpayers, while also maintaining strong financial discipline."

Planning Minister Paul Scully said the program had already proven effective in bringing stalled projects to market.

"The Pre-sale Finance Guarantee has already proven it can unlock stalled projects and accelerate housing delivery by giving lenders the confidence they need to back good developments," Scully said.

"These changes will allow more affordable housing and smaller developments to access support so more homes can be built faster where communities need them most."

Housing Minister Rose Jackson said the expansion would help community housing providers overcome financing barriers that often delay projects.

"We know community housing providers are ready to build more homes, too often they're held back by barriers to finance," Jackson said.

"Expanding the Pre-sale Finance Guarantee helps remove those barriers so more affordable homes can get off the ground sooner."

The announcement was welcomed by the Property Council of Australia, which has long advocated for measures aimed at improving project feasibility and access to finance.

Property Council NSW Executive Director Katie Stevenson described the expansion as a practical intervention that addresses one of the most immediate constraints on housing delivery.

"This is exactly the kind of practical intervention we need right now, focused on getting projects out of the ground, not just approved," Stevenson said.

"It builds on a model the Property Council has worked closely with government to develop following calls for such a scheme ahead of last year's NSW Budget, so it's great to see it being expanded."

Stevenson said the reforms would help unlock projects that are ready to proceed but have been delayed by financing challenges. However, she noted that broader feasibility issues remain a significant barrier to increasing housing supply.

"The biggest challenge in NSW housing today is delivery. Too many projects have planning approval but are simply not financially viable to proceed under current settings," she said.

Speaking at the Property Council's NSW Housing Summit, Housing Minister Rose Jackson acknowledged that feasibility and financing pressures continue to constrain housing delivery, while reaffirming the government's commitment to work with industry on solutions.

Stevenson said the government's recognition of those challenges was encouraging ahead of next week's state budget.

"It's positive to see the government clearly recognising that feasibility pressures are now a binding constraint on supply," she said.

"With the Budget just days away, the focus must be on backing delivery, making sure projects stack up, finance can flow, and more homes can move from approval to construction."

The expanded Pre-sale Finance Guarantee forms part of the NSW Government's broader housing agenda, which also includes planning reforms, the NSW Housing Pattern Book, and a series of rezonings intended to increase housing capacity across the state.

NSW expands Pre-sale Finance Guarantee to unlock more affordable and regional housing

Design-led developer-builder Lowe Living has unveiled its latest residential development, Jardin House, marking its first foray into Melbourne's blue-chip City of Boroondara.

Located a short walk from Camberwell Junction, <a href="https://www.apartments.com.au/new-apartments/jardin-house-by-lowe-living-camberwell-335-camberwell-road-camberwell-vic-3124">Jardin House</a> has been designed to appeal to affluent local downsizers and established families seeking a low-maintenance alternative to the large homes that have long defined Camberwell and surrounding suburbs.

The project will comprise a collection of two and three-bedroom apartments ranging from 92 sqm to 280 sqm, alongside a limited number of penthouse residences featuring rooftop terraces spanning more than 100 sqm, with optional private pools.

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[smartcode_project:default project_id=146717 project_image_fid=372212]

Lowe Living Co-Founder and Managing Director Tim Lowe said Camberwell represented a natural next step for the developer as it expands into some of Melbourne's most tightly held residential markets.

"Jardin House is an important project for our team as it marks the next evolution of our portfolio into different well-established blue-chip pockets of Melbourne," Lowe said.

"Camberwell, with its incredible walkability, family-led neighbourhood feel and superb access to education and transport, makes it a natural choice for us."

[smartcode_project:default project_id=146717 project_image_fid=372227]

Designed by Tristan Wong Architects, with interiors by Hecker Guthrie and landscaping by Acre, the development takes inspiration from the Art Deco architecture that remains a defining feature of many of Camberwell's established streets.

A curved facade, arched openings, textured brickwork and sculpted forms reference the suburb's architectural heritage, while extensive landscaping softens the building's presence and creates a strong connection to the surrounding tree-lined streetscape.

The project will be set behind a secure gated entrance, with residents arriving through landscaped gardens designed to create a transition between the public realm and private residences.

Inside, the residences feature natural stone and timber finishes, full-height glazing, Miele appliances and generous open-plan living areas designed for long-term owner occupation.

[smartcode_project:default project_id=146717 project_image_fid=372225]

While the apartments themselves have been designed to attract discerning owner-occupiers, it is the amenity offering that sets Jardin House apart from many other boutique projects currently launching across Melbourne.

The centrepiece is a 350 sqm private bathhouse curated in partnership with Aurora Spa &amp; Bathhouse founder Lyndall Mitchell.

The wellness precinct includes mineral pools, hydrotherapy experiences, a Himalayan salt room, sauna, steam room, cold plunge pools and dedicated relaxation spaces, creating what Lowe Living describes as a private wellness retreat exclusively for residents.

[smartcode_project:default project_id=146717 project_image_fid=372222]

The collaboration follows Lowe Living's recent partnership with Aurora at Maison Savoy in Brighton, although Jardin House is the first project to incorporate both indoor and outdoor wellness experiences.

Emma Lowe, Co-Founder and Managing Director of Lowe Living, said wellness was becoming an increasingly important consideration for apartment buyers.

"Collaborating with Lyndall Mitchell from Aurora Spa &amp; Bathhouse for a second time is an intentional nod to creating residences that are more than just homes, but a way to enrich the lives of our residents through wellness and longevity," Lowe said.

The amenity offering is complemented by a Technogym fitness studio, residents' lounge, private dining spaces and concierge services.

The launch comes as developers increasingly target Melbourne's established eastern suburbs, where rising land values, ageing housing stock and growing downsizer demand are creating opportunities for boutique apartment projects.

Lowe said the company expects significant generational wealth transfer across suburbs such as Camberwell in coming years, creating further demand for luxury apartment living.

"Camberwell is a blue-chip suburb where homes regularly transact for multiple millions of dollars," he said.

"The generational change of wealth in these locations expected in the coming years is significant, so we see an opportunity to create exclusive residences that appeal to older families and downsizers in order to meet this demand."

Apartments at Jardin house start from $1,195,000. The project forms part of Lowe Living's near-$1 billion portfolio of new developments across Melbourne.

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Lowe Living launches Jardin House in Camberwell

As <a href="https://www.apartments.com.au/developments/north-sydney-nsw-2060">North Sydney</a> continues its transition from a commercial centre into a more layered residential and lifestyle precinct, a new generation of apartment developments is reshaping expectations around scale, amenity, and long-term liveability.

Improved transport connections through the Victoria Cross Metro, continued investment in dining and public spaces, and a constrained supply of new luxury apartments have sharpened demand for homes that combine proximity to the CBD with the privacy and outlook traditionally associated with harbourside houses.

At 177 Walker Street, <a href="https://www.apartments.com.au/developers/aland">ALAND</a>’s new apartment development <a href="https://www.apartments.com.au/new-apartments/the-walden-north-sydney-177-walker-street-north-sydney-nsw-2060">The Walden</a> enters the market with a distinctly residential approach to high-rise living. The 30-level tower will deliver 161 residences, ranging from one-bedroom apartments through to sub-penthouses and a full-floor penthouse, all oriented to capture uninterrupted views across Sydney Harbour, the Opera House, and out toward the Pacific Ocean.

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Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a>, the project takes advantage of the site’s natural topography and elevated position above the harbour. Rather than relying on density alone, the architecture focuses on outlook, orientation, and spatial flow, with every apartment occupying a corner position to maximise natural light and cross ventilation.

Rothelowman says the site itself shaped much of the architectural response.

“The site has a long history in terms of its inevitable transformation and when we came in, we took inspiration from the idea of reestablishing a sense of the site’s natural terrain and fall. Our scheme aims to integrate with the terrain and the landscape, using the undulating site to slowly reveal glimpses and views of the harbour. The rotation of the tower off grid means every apartment has a view and is naturally cross ventilated. The building's colour palette is quintessentially Sydney, with bronze and sandstone and a luminescent green colour in the glass, making it very earthy and grounded in its location.”

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Inside the residences, the emphasis moves toward larger-format living typically associated with standalone homes. Kitchens sit at the centre of the apartments, connecting directly to open-plan dining and living areas before extending outward into expansive winter gardens and balconies. Calacatta marble, bespoke joinery, integrated appliances, and custom metal detailing are used throughout, while three distinct interior palettes, Terrace, Opera, and Harbour, allow buyers to personalise the spaces without compromising the architectural consistency of the project.

The larger residences place particular attention on separation between entertaining and private zones. In many apartments, master suites occupy the outer corners of the floorplates, allowing bedrooms to benefit from floor-to-ceiling glazing and harbour outlooks independent of the living spaces. Dressing rooms and ensuites continue the material palette through fluted detailing, freestanding baths, and layered stone finishes.

Rothelowman says the design intent centred on creating homes that feel enduring rather than transient.

“Our philosophy is all about the way people live in these spaces, and we wanted to create homes that reflect the quality of life in this unique Sydney location. The apartments showcase expansive living spaces that are generous, sophisticated, and bold, with the ability to connect with views throughout each apartment.”

[smartcode_project:default project_id=134323 project_image_fid=353235]

A separate four-storey amenity building known as The Pavilion expands the residential offering beyond the apartments themselves. Positioned alongside the tower, the building consolidates wellness, recreation, and social spaces into a dedicated resident retreat. Facilities include a 20-metre rooftop pool and sundeck, sauna, spa, ice bath, wellness studio, gymnasium, concierge service, wine cellar, residents’ lounge, private dining spaces, and dedicated co-working areas with meeting rooms and boardroom facilities.

The amenity mix reflects the buyer profile emerging in North Sydney, where owner-occupiers and downsizers are increasingly prioritising convenience, apartment scale, and long-term usability over purely investment-driven decisions.

The Walden also represents a significant milestone for ALAND, marking the company’s first major move into Sydney’s inner-city luxury apartment market after more than two decades delivering large-scale residential communities across Greater Sydney. Founder Andrew Hrsto says the Walker Street site stood apart because of both its positioning and its rarity.

[smartcode_project:default project_id=134323 project_image_fid=6390]

“As a company, we had been searching for a site in one of Sydney’s blue-chip locations, spanning the Eastern Suburbs, the Sydney CBD and the North Shore, and when we had the opportunity to purchase this site, we immediately recognised that it could be something iconic.”

At launch, The Walden recorded more than $103 million in sales, with buyers drawn to the project’s harbour positioning, apartment scale, and proximity to the Metro, which now connects North Sydney to Barangaroo in three minutes and Martin Place in five.

ALAND has commenced construction, and is expecting a completion date in 2028.

[smartcode_project_cta:default project_id=134323]

Larry Schlesinger

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