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Two sagas – Centro and Charter Hall Office REIT - grabbed the headlines in Australia’s listed property trust sector in 2011, during a year marked by consolidation, risk aversion and reduced volatility.
Thirty out of 40 A-REITs recorded a positive total return for the 2010-11 financial year, with the volatility of the S&amp;P/ASX 200 Property Index lower than the All Ordinaries at June 30, 2011, according to research by accountants BDO. The total return (capital and dividends) for the Property Index for the 12 months to June 30, 2011 was 5.8%, compared with an equivalent return for the S&amp;P/ASX 200 All Ordinaries Index of 9.3% with BDO describing 2011 as a year of “modest recover” with the sector having some ground to make up on other equity indices since the GFC. There was an average 0.6% increase in property values across the sector and while A-REITs continue to trade at significant discounts to their net tangible assets of 23%, this has decreased from a discount of 37% in 2010 and 55% in 2009.
According to Sebastian Stevens, national leader of BDO Corporate Finance, the overall A-REIT sector is in a much stronger position than at any time in the last four years.
“The hard work done in 2009 and 2010 to get balance sheets in order has clearly paid off for the major players, with their look-through gearing levels significantly reducing from around 40% in June 2008 to approximately 30% currently,” Stevens says.
“2011 also saw the continuation of divestment strategies for offshore assets in favour of less risky Australian-based assets. Larger REITs are now well positioned to withstand any near-term pressures that may be experienced by the property sector.”
Arguably the most notable story of the year was the tricky but ultimately successful restructure of shopping centre owner Centro Group, its sister trust Centro Retail Trust, and the group's unlisted funds and syndicates, into a single listed retail trust, Centro Retail Australia.
Trading in the new A-REIT kicked off on December 5 with the share price closing at $1.74, valuing the company at $2.3 billion, up from a listing price of $1.70. The share price has since fallen back to just below its listing price following news that the US hedge funds that own 70% of the trust plan to sell their stakes within 18 months to three years. 
Before the listing, Centro fought hard to win approval from creditors, shareholders and former auditor PricewaterhouseCoopers, which argued all the way to the NSW Supreme Court that the restructure should not proceed. 
The new entity comprises 99 shopping centres, with Woolworths and K-Mart the biggest tenants.
The second biggest A-REIT story of the year – and one that has not yet run its course – is the future ownership and direction of the Charter Hall Office REIT.
At the end of July a <a href="https://www.propertyobserver.com.au/news/proxy-votes-in-charter-hall-office-reit-battle-line-up-to-reject-takeover-proposal/2011072750930" target="_blank">bid by a trio of US hedge funds</a> to instigate a management takeover of the trust and ultimately liquidate its Australian assets was soundly defeated, with Mark Wist, senior asset consultant at Atchison Consultants, describing the vote as a “barometer for sentiment in the A-REIT space” indicating little appetite for change.
Little appetite for change perhaps, but there has been investor appetite aplenty since the failed takeover. with a Macquarie Group-led consortium making a $2.39 per share offer for the business on August 29.
On October 5 the consortium upped its offer to $2.43 a share and two months later sweetened the deal with a $2.49 per share offer.
Charter Hall Office REIT management is backing the proposal, with a shareholder meeting pencilled in for March 2012 to decide whether to accept it or not.
The consortium is made up of the Government of Singapore Investment Corporation, Canada’s Public Sector Pension Investment Board as well as the trust’s head stock Charter Hall, indicating the appeal of Australian commercial property assets to offshore sovereign funds.
In its 2011 A-REIT Survey, accountants BDO ranked the Charter Hall Office REIT its top performer of the year managing a total unit-holder return of 43% the highest return of any of the S&amp;P/ASX 200 Property Index members. 
“Consistent with the strong performance exhibited by the office subsector through the year, the A-REIT delivered increased earnings, higher distributions, lower debt and strong portfolio management metrics,” noted BDO. 
“Units in CQO also demonstrated a high level of liquidity, with CQO being one of the most actively traded REITs on the ASX during the 2011 financial year.” 
Among the key achievements noted by BDO include Charter Hall Office REIT increasing in statutory earnings to $69.2 million, up from a loss of $91 million in 2010 financial year, reducing look-through gearing from 45% to 43% and repaying, refinancing or removed all debt due to mature prior to the 2014 financial year. 
The diversified GPT group ranked second with the Investa Office Fund third. 
S&amp;P/ASX 200 Property Accumulation Index share price performance over 2011
 
 
<table style="width: 470px;" border="0" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="205" valign="top">
Company (ASX code)
</td>
<td width="205" valign="top">
Closing share price:  Jan 4 2011
</td>
<td width="205" valign="top">
Closing share price:  December 22 2011
</td>
</tr>
<tr>
<td width="205" valign="top">
Stockland Trust Group (SGP) 
</td>
<td width="205" valign="top">
$3.54
</td>
<td width="205" valign="top">
$3.23
</td>
</tr>
<tr>
<td width="205" valign="top">
GPT Group (GPT) 
</td>
<td width="205" valign="top">
$2.94
</td>
<td width="205" valign="top">
$3.09
</td>
</tr>
<tr>
<td width="205" valign="top">
Mirvac Group (MGR) 
</td>
<td width="205" valign="top">
$1.22
</td>
<td width="205" valign="top">
$1.21
</td>
</tr>
<tr>
<td width="205" valign="top">
Dexus Property Group (DXS) 
</td>
<td width="205" valign="top">
$0.77
</td>
<td width="205" valign="top">
$0.845
</td>
</tr>
<tr>
<td width="205" valign="top">
Australand Property Group (ALZ) 
</td>
<td width="205" valign="top">
$2.89
</td>
<td width="205" valign="top">
$2.59
</td>
</tr>
<tr>
<td width="205" valign="top">
Charter Hall Group (CHC) 
</td>
<td width="205" valign="top">
$2.46
</td>
<td width="205" valign="top">
$2.13
</td>
</tr>
<tr>
<td width="205" valign="top">
Abacus Property Group (ABP) 
</td>
<td width="205" valign="top">
$2.27
</td>
<td width="205" valign="top">
$1.945
</td>
</tr>
<tr>
<td width="205" valign="top">
Westfield Group (WDC) 
</td>
<td width="205" valign="top">
$9.53
</td>
<td width="205" valign="top">
$7.99
</td>
</tr>
<tr>
<td width="205" valign="top">
CFS Retail Property Trust (CFX) 
</td>
<td width="205" valign="top">
$1.78
</td>
<td width="205" valign="top">
$1.735
</td>
</tr>
<tr>
<td width="205" valign="top">
Charter Hall Retail (CQR) 
</td>
<td width="205" valign="top">
$2.93
</td>
<td width="205" valign="top">
$3.22
</td>
</tr>
<tr>
<td width="205" valign="top">
Bunnings Warehouse Property Trust (BWP)
</td>
<td width="205" valign="top">
$1.74
</td>
<td width="205" valign="top">
$1.74
</td>
</tr>
<tr>
<td width="205" valign="top">
Commonwealth Property Office Fund (CPA)
</td>
<td width="205" valign="top">
$0.83
</td>
<td width="205" valign="top">
$0.955
</td>
</tr>
<tr>
<td width="205" valign="top">
ING Office Trust (IOF)
</td>
<td width="205" valign="top">
$0.55
</td>
<td width="205" valign="top">
$0.61
</td>
</tr>
<tr>
<td width="205" valign="top">
Charter Hall Office (CQO)
</td>
<td width="205" valign="top">
$2.86
</td>
<td width="205" valign="top">
$3.50
</td>
</tr>
<tr>
<td width="205" valign="top">
Goodman Group GMG)
</td>
<td width="205" valign="top">
$0.65
</td>
<td width="205" valign="top">
$0.585
</td>
</tr>
</tbody></table>
 
In his analysis of the sector, Stevens says managers at the larger funds have been able to turn their attention to executing against their core strategies and portfolio management. 
"While the larger A-REITs have substantially de-risked their balance sheets, smaller A-REITs continue to possess weaker balance sheets and trade at a much greater discount to NTA.
"This represents the emergence of a two-tier industry.
“Not surprisingly, transaction activity picked up during the year with larger players and offshore pension funds acquiring a number of smaller trusts, and this can be expected to continue," he says.
"The larger funds have built strong foundations for the future both in terms of growth platforms and the ability to withstand any future shocks while the smaller funds are still struggling with heavily geared balance sheets and are finding access to both equity and debt difficult," Stevens says.
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Year in review: Centro and Charter Hall dominate year of consolidation for A-REITS

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Risk will be the buzzword in 2012, with investors seeking stable investments like bonds and commercial property, according to diversified fund manager Centuria.
Centuria believes the current volatile environment will continue into 2012 and says it could take up to two years before any kind of “normality” returns.
In this risk-averse environment, investors in search of low-risk, low-volatility investments will be drawn to commercial property as part of reweighting and re-diversifying their portfolios, the company says.
“Investors will move towards a ‘back to basics’ approach that sees a return to favour of the traditional one-third shares, one-third property and one-third cash allocations, at least as a starting point,” the company forecasts.
According to Centuria further reductions in interest rates in early in 2012 would further boost the appeal of commercial property.
And it believes that ongoing market volatility will offer further “attractively priced investment property opportunities” that can be packaged to offer investors steady income streams.
“In the past 10 or more years, many investors have been focused on returns, returns, returns. In 2012, the risk aversion that’s been growing will become even more prevalent, as investors realise that market volatility is here to stay. Risk will be the new “R” word,” says John McBain, chief executive of Centuria Capital.
“Instead of just sitting in cash as they have been, investors will realise that it’s time to make some considered decisions and return to a more defensive and balanced asset allocation.
“Investors should be looking to more conservative investment strategies such as equal allocations between shares, property and cash,” says McBain. 
For investors balancing their asset allocations more evenly, the property and bond markets will benefit, particularly as falling interest rates steer them away from cash and make direct property and bonds a more attractive long-term investment return proposition, he says.
During 2011, Centuria’s portfolio comprising office, industrial and homemaker centres grew beyond $1 billion worth of funds under management following the purchase in April of a newly constructed five-level commercial building at 8 Australia Avenue, Sydney Olympic Park for $30.15 million. 
The building, completed in 2010, is 100% leased with tenants including Fujitsu, The Sydney Olympic Park Authority and Watpac.
 
 
 
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Commercial property will appeal to risk-averse investors in 2012: Centuria

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Suggestions by Mortgage Choice CEO Michael Russell that overly conservative property valuers are hampering the recovery of the property market have been affirmed by residential property developers in Queensland, who say valuers are to blame for one in two sales contracts to falling over.
Property developers claim that in some cases valuations are coming in 15% to 30% below the contracted sales prices, with Des Ryan from Demac Homes telling the Australian Financial Review the sale of a three-bedroom duplex for $340,000 fell through after the valuation came through at $280,000.
Ryan says the accuracy of valuations needs to be questioned, labelling valuers “a cancer in the building industry”.
“I have had one valuer in here boast that he has had to value the same property seven times before it finally got sold.” 
Another developer, David Horder from Gorman Property, told a similar story, with a $175,000 land sale near Ipswich falling over after the bank-instructed valuer said it was only worth $130,000.
Horder believes valuers are lowering their valuations under pressure from the banks, which are facing tougher capital restrictions.
However, the banks have dismissed the suggestion, with Westpac senior product risk manager Matthew Miller telling the AFR valuers were under no pressure to report more conservative valuations.
Propell National Valuers chief executive Bart Mead says in addition to “highly publicised market trends, competitive property sales and demand levels”, factors such as property presentation, renovations and location have had a major impact on values in 2011.
Mead says owners must consider not only the capacity for a property to expand, extend or renovate, but also its capacity to be demolished and replaced.
“Renovations and extensions need to be sympathetic to the rest of the property, and building permission and certificates should be sighted, as amateur work can often detract,” he says.
According to Mead, particular location issues also affect valuations, even if the property itself is comparable to others in the suburb.
“T-junctions, bus stops, cul-de-sacs, views, hills and access to the city can all detract or add value to a property,” he says.
 
 
 
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Queensland developers say overly conservative valuers to blame for sales failures

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The major banks may have a hard time getting across the message that they are facing increased funding cost pressures after both St George and Bank of Melbourne cut their fixed-rate mortgage rates.
NSW-based St George and Victoria-based Bank of Melbourne, both subsidiaries of Westpac, cut their fixed rates by between 14 and 19 basis points effective immediately. 
One-year fixed-rate loans reduce from 6.33% to 6.14%, two-year fixed-rate loans reduce from 6.14% to 5.99% and three-year fixed rates have come down from 6.24% to 6.09% for both banks. 
The cheaper rates are available for limited time for new customers and existing customers switching into a new fixed-rate mortgage. 
Rob Chapman, chief executive of St George Bank, says the latest fixed-rate cut is seventh reduction since July. 
The cycle of fixed-rate cuts, which peaked in October bef0re the November and December rate cuts is forecast to ease as interest rate sentiment shifts towards further rate cuts in 2012.
Damian Smith, CEO of comparison website RateCity.com.au, says the relative attractiveness of fixed rates is decreasing, with variable rates falling faster than fixed rates over the past two months.
“There has been some small movement in some fixed rates, but no 30- or 40-basis-point cuts,” he says.
“Over the course of a cycle, consumers are generally better off with a variable rate loan, but there are windows of opportunity for taking out a fixed-rate loan.
“The last window was between August and November, following fixed rates falling very hard over the previous six months.
“That window is now closed.”
 
 
 
 
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St George and Bank of Melbourne cut fixed rates as trend for fixed-rate cuts slows

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Property market analyst Michael Matusik has dismissed government forecasts that Australia is heading for a massive undersupply of housing over the next two decades, arguing that politics and “vested interests” are at play.
 
The National Housing Supply Council’s State of Supply Report for 2011 forecasts that at the current rate of new housing construction, Australia will have a shortfall of 640,000 dwellings by 2030.
<img src="/images/stories/housingsupply.gif">
Source: State of Supply Report
According to the report, the gap between housing demand and supply increased by 28,200, (nearly 18%) to 186,800 housing units in the 12 months to the end of June 2010, with NSW and Queensland having the largest shortfalls of 73,700 and 61,900 homes respectively. 
The Real Estate Institute of Australia, Housing Industry Association , Urban Taskforce Australia, Master Builders Australia and lobbying group Australians for Affordable Housing have all responded to the report by demanding government action to address the shortfall in housing. 
But Matusik says the people who compiled the report have a “vested interest in finding an undersupply – they keep their posts”. 
According to Matusik, there will be no undersupply unless migration picks up enormously. 
“Once you look into the facts and ignore the spin, you find that Australia’s new housing market isn’t that undersupplied at all. 
“Housing industry and banking economists keep reminding Australians of a massive housing shortfall of around 300,000 new homes that will double in size over the next decade,” he says.
“Australia’s population growth has slowed by close to 150,000 in just two years, with a 100,000 drop in the actual growth rate over the last 12 months.  As a result, the underlying demand for new housing has dropped from 180,000 starts per annum to around 125,000.  While dwelling starts are declining, we are now building too much stock.
“Unless new housing starts decline in earnest or population growth accelerates, Victoria, South Australia, Tasmania and the Northern Territory face an oversupply.  Perth and Canberra are better positioned, with Queensland currently at equilibrium and New South Wales undersupplied.”
“Yes, we don’t have enough affordable new homes, but we have an ample supply of new dwellings pitched at speculators,” he says.
Matusik occupies a lonely position. 
AAH campaign manager Sarah Toohey says the report “shows an unacceptable shortfall in the supply of housing in Australia”. 
“Australia has a structural problem in the housing market and only a comprehensive plan that includes extra affordable housing supply, taxation reform, increases to and reform of Commonwealth Rent Assistance and better and more targeted support to first-home buyers will deliver the affordable housing solutions that low- and middle-income Australians need,” she says. 
HIA chief executive Graham Wolfe says the modelling in the report and forecast of a 640,000-dwelling shortfall by 2030 is “not inconsistent with the trends that HIA’s own modelling has identified”. 
“As a nation, we must embark on a significant housing policy reform agenda if we are to reinvigorate the residential building sector and keep the great Australian dream of home ownership a reality,” he says. 
Wilhelm Harnisch, CEO of Master Builders, says the report highlights the growing problem of undersupply of housing and the urgent need for all governments to address the problem through a co-ordinated policy response. 
“The continuing global economic uncertainty has contributed to the current sluggish housing market conditions but is masking the true extent of the housing undersupply challenge,” he says. 
The State of Supply Report says that despite weaker market conditions, the housing shortage continues to widen. 
It says that for the year to June 30, 2010 an additional 131,000 houses were built, 9,700 fewer than were projected in the previous report. 
At the same time underlying demand for housing grew by an estimated 159,200 dwellings over this period resulting in a shortfall 28,200 for the year and pushing up the revised 2009  shortfall of 158,500 to 186,800 in 2010. 
According to the report, a large reason for the gap widening is “a growing divergence between underlying demand, which is demographically driven, and effective demand, which is what actually happens in the market and is driven by economic as well as demographic factors”. 
“The building industry has also had to face up to a weaker market, and the volume of property being built has fallen significantly. Approvals for building dwellings other than detached houses (largely multi-unit apartment buildings) saw a longer downturn than those for building houses following the global financial crisis,” the report says. 
“The council believes that this is partly due to more limited access to development finance for this form of development subsequent to the GFC and in the light of market conditions.” 
The report was launched by new Minister for Housing and Homelessness Robert McClelland, who says housing undersupply challenges will be examined as part of the Housing Supply and Affordability Reform agenda. 
“The government is working with the states to finalise this examination of supply constraints in the housing market, with a report to be delivered to the Council of Australian Governments soon,” he says.
 
 
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Michael Matusik dismisses housing undersupply findings as 'spin'

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Consolidation in the property valuation space has continued, with WBP Property Group acquiring Adelaide-based Mason Gray Strange Real Estate Valuations (MGS).
The acquisition follows <a href="https://www.propertyobserver.com.au/residential/valuers-must-diversify-to-survive-wbp/2011120552674" target="_blank">WBP forming an alliance with Queensland-based firm Herriots</a> earlier this month.
Pabst says the MGS acquisition is part of the company’s strategy to diversify its services and expand its national footprint.
He says that the Australian valuation industry is rapidly evolving and estimates only a handful of national valuation groups will be in operation in the future.
“At WBP we have embraced the changing face of the valuation and property industries in Australia and identified early opportunities to expand and develop our business in the valuation and property advice space,” he says.
The MGS acquisition will strengthen WBP’s position in the Adelaide market.
Under the arrangement MGS Valuers will commence trading as WBP Property Group from January 1st 2012. MGS director Chris Wakeham will continue to manage the business locally alongside WBP state manager for South Australia Bart Quinn.
 
 
 
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WBP adds  South Australian valuer MGS to growing stable

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Westpac chief economist Bill Evans has joined the <a href="https://www.propertyobserver.com.au/economy/anz-and-commonwealth-bank-tip-february-rate-cut/2011122052904" target="_blank">Commonwealth Bank and ANZ</a> by forecasting the Reserve Bank will cut the cash rate for the third consecutive time when it next meets on February 7. 
A third rate cut would take the cash rate back to the 4% last seen in March 2010. 
Evans says the minutes of the RBA’s December monetary policy meeting indicate that the key theme “was the concern that sovereign credit and banking problems would weigh heavily on economic activity in Europe, which continued to pose downside risks to the global economy and, consequently, Australia”. 
“There was also further recognition of the mixed outlook for Australia with housing; consumers; and employment all looking subdued. 
“On the other hand business investment, particularly mining, looked robust. With prospects for Europe steadily deteriorating and the interest rate sensitive parts of the economy remaining weak we believe there is ample scope for a further rate cut in February,” Evans says.
In addition to the February rate cut expectation, Westpac is forecasting one more interest rate cut in 2012, in line with its prediction of a 100-basis-point rate cut cycle, which kicked off in November.
Evans made his prediction following publication of the annualised growth rate of the Westpac–Melbourne Institute Leading Index, which indicates the likely pace of economic activity three to nine months into the future. It was 2.6% in October 2011, below its long-term trend of 3%.
“It appears that the boost to above trend growth we saw in July and August has quickly faded and the ‘around trend’ story which has been generally the case since the beginning of 2011 is now appropriate,” says Evans. 
Westpac is forecasting growth in 2012 of 3% – slightly below trend growth for the economy.
 
 
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Westpac tips February rate cut

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Listed property trust Growthpoint has spent $290 million on three Brisbane office properties and an office development site on Sydney’s north shore as it builds up the office component of its $1.54 billion portfolio. 
The new Sydney development is located at 219?247 Pacific Highway, Artarmon, within the Gore Hill Technology Park, and was purchased for $82.7 million, providing an initial passing yield of 8.1% on completion. 
Fox Sports will lease 48% of the 14,136 square metres of the net lettable area in a 10-year deal with two renewal options of five years each. 
The building is due to be completed in late 2012 or early 2013 and is targeting a five-star NABERS rating and five green star ratings. It will comprise six upper levels, a lower ground floor and two basement car park levels. 
The Artarmon sale was negotiated by Richard Horne, national director of investment sales at Knight Frank. 
The three other buildings that make up the transaction include two modern office buildings in South Brisbane bought for $96.8 million at an initial passing yield of 8.6% with 11,561 square metres of net lettable area and an A-grade 24-level office building at 333 Ann Street in the Brisbane CBD bought for $109.9 million, providing an initial passing yield of 9.1%. 
South Brisbane tenants include Fusion, Roche and the Queensland government while Anne Street tenants include Runge Limited, Robert Bird Group and Xtract Mining Consultants. 
The Brisbane deals were negotiated by Bruce Baker and Flint Davidson of CBRE. 
The four properties will bring Growthpoint’s portfolio to 40 properties and increase its book value to about $1.54 billion. 
Commenting on the acquisitions, Growthpoint managing director Timothy Collyer says they are consistent with its strategy to “acquire quality modern properties that are well tenanted to enable future growth of the group’s distributable income”. 
“The acquisitions continue our diversification into the Australian office sector,” he says. 
Following these acquisitions, the property portfolio will comprise 47% office property and 53% industrial property. 
Growthpoint’s properties are located in each of the mainland states close to CBD infrastructure such as airports and ports. 
The purchases will be financed via a $166.4 million equity raising, with the balance funded through extended debt facilities.
 
 
 
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Growthpoint snaps up new Fox Sports Sydney building in $290 million buying spree 

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Singapore-based developer Frasers’ enormous Central Park residential development on Sydney’s Broadway has helped drive the number of apartment projects being built by offshore developers in Australia to a 20-year high, according to research by CBRE.
Dominated by Asian firms, offshore developers now have almost a third of the new apartment market, with more than 13,000 apartments either planned or in the marketing/construction phase in 37 separate projects across the country.
Based on average apartment completions in Australia in 2011 this represents a market share as high as 32%.
According to CBRE, developers from Singapore are proposing or building more apartments in Australia than developers from any other foreign country at present, and by a big margin.
<img src="/images/stories/offshoreinvest.gif">
Singaporean developers are responsible for almost 5,000 apartments presently planned or underway, with 58% by Frasers Property, and 65% of these in the Central Park project in Sydney.
To date, more than 500 apartments have been sold off-the-plan for the first residential stage, One Central Park, which is due for completion by mid-2013 with prices ranging from $460,000 to $1.25 million.
In October, Frasers and Japanese joint venture partner Sekisui House secured $550 million in funding for the 5.8-hectare mixed-use Central Park development.
The next most significant source of development capital is Hong Kong, with a single developer (Far East Consortium) behind 2,700 apartments in two Melbourne projects.
Malaysia (12%), China (9%), Korea (9%) and India (6%) make up the balance of what is a broad spread of Asian sources presently facilitating apartment projects in Australia.
According to CBRE executive director of global research and consulting Kevin Stanley,  foreign developers had not been this active in Australia since the building boom of the late 1980s/early 1990s, when mostly Japanese companies were active in developing offices, shopping centres and hotels.
The level of offshore investment in residential apartments mirrors the dramatic increase in the participation of <a target="_blank" href="https://www.propertyobserver.com.au/commercial/offshore-investment-in-australian-commercial-property-at-20-year-high/2011122052916">overseas investors in Australian commercial property</a>, which has also reached a two-decade high.
Like commercial property, overseas developers view Australia as a safe and steady market to diversify their activities and grow their businesses and one where there is steady occupier and investor demand for apartments.
Sydney and Melbourne account for four out of five apartments projects (79%) with the Gold Coast (10% of total), Brisbane (6%), Perth (3%) and Adelaide (2%) also popular destinations for offshore developers.
<img src="/images/stories/offshoreinvest2.gif">
“In a surprising result, Melbourne has a greater number of apartments proposed by foreign developers than Sydney, despite being a city with 450,000 fewer people,” says Stanley.
Earlier this week, <a href="https://www.propertyobserver.com.au/developments/chinese-developer-snaps-up-south-yarra-site-for-%2418-million/2011122052909">Chinese developer acquired a South Yarra residential development site for $18 million.</a>
Stanley says reasons for Melbourne’s appeal include its long-term connection to Asian countries through education and tourism; the greater availability and lower relative price of sites; and the city’s national reputation for the ease of conducting property business.
Melbourne is experiencing the highest concentration of CBD projects of any of the major cities while Sydney has a much more balanced distribution of apartments between the CBD, city fringe and suburban submarkets.
“This is a function of the tightness of site availability and the expense of land in the CBD, along with a growing acceptance of high-density living in suburban nodes, especially near railway stations,” says Stanley.
“In Brisbane, the city fringe has been much more popular with foreign apartment developers than the CBD, although there is a much smaller relative penetration by foreign developers generally into the Brisbane market to date, with a greater focus on nearby Gold Coast instead.”
Stanley says the impacts of foreign involvement in the apartment market were many and were mostly positive.
“Critically, it’s providing a stimulus to the construction sector at a time when development activity is generally at a low level,” Stanley says.
“Second, it’s providing new ideas, standards and designs to broaden the product range in Australia and introduce fresh competition in these areas. Coupled with development by local companies, it’s also leading to the urban renewal of precincts of Australian cities that have previously been underdeveloped and activating these areas with a new range of quality facilities, often in a mixed-use environment. The northern fringe of the Melbourne CBD and the southern area of the Sydney CBD stand out in this regard.”
 
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Frasers’ Central Park boosts offshore apartment projects to 20-year high: CBRE

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Refund Home Loans business founder Wayne Ormond has come under heavy fire from the man he sought to usurp as the king of mortgages, John Symond, as he finally broke his silence on the reasons behind the collapse of his franchise empire.
Ormond built a significant media profile on the back of numerous appearances on shows like Today Tonight, where he presented himself as a John Symond-like figure battling the banks while sharing lender commissions with borrowers.
Symond, though, has little sympathy for the collapse of Ormond’s business, which with around 350 franchisees had grown to rival Aussie Home Loans in size and reach – though without the same deep pockets – before its fall from grace.
“I’m not surprised what’s happened because I thought [Refund Home Loans] was a fundamentally flawed model,” Symond told BRW magazine.
“You can’t afford to say, ‘Hey, here’s $1,000’. You have to put that money in technology, business infrastructure and people coaching, everything that goes towards building your brand... How can you do that under his model?”
Symond’s comments come more than a month after Refund Home Loans collapsed owing 119 creditors a combined $9.7 million and as Ormond explains some of the factors that led to its sudden demise.
Ormond blames the franchise group’s lender for it being placed in administration as well as shouldering some of the blame himself for the business failing.
He accepts that he should have focused on its core proposition – mortgage broking – rather than diversifying into a number of other ventures including financial planning and real estate services.
Ormond had ambitions to open 400 real estate franchises nationally, operating along the same business lines as the mortgage broking business, with estate agents sharing up to half of their sales commissions with the buyer and seller.
Refund Real Estate and Refund Financial Planning were placed in voluntary administration two weeks after parent business Refund Home collapsed.
“We got away from our core business right at the end,” Ormond told BRW. “My advice is stick to what you know. Opportunities come along that will be tempting, but your core business is your bread and butter.”
Ormond says troubles began for Refund Home Loans when its lender (identified by BRW as Bankwest) demanded an audit report before providing any further funding.
The report revealed that Refund owed creditors and the Australian Taxation Office money and had entered into a deferred payment plan with them. It also identified other issues such as the company not having a chief financial officer at the time, and that it requiring a new accounting system as well as better financial management systems.
As a result of the audit report, the bank required Refund clear its debts before providing any more funding.
“The bank’s belief was that I required an equity solution, not a debt solution,” he says.
Ormond says he managed to raise $1.5 million from two investors but could not raise enough money after the share market collapsed and the business environment turned sour.
He says he is now focusing on “ensuring a smooth and easy transition for franchisees and considering new business opportunities outside of the real estate sector”.
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Wayne Ormond says mea culpa and cops serve from John Symond over Refund's collapse

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.

&nbsp;

[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.

&nbsp;

[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.

[smartcode_project_cta:default project_id=146717]

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.

[smartcode_project:default project_id=134323 project_image_fid=6395]

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.”

[smartcode_project:default project_id=134323 project_image_fid=6399]

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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