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The Charter Hall group will continue to manage the Charter Hall Office A-REIT following unit holders voting overwhelmingly against a resolution for a management takeover by a consortium of hedge funds.
A tally of both proxy and in-person votes at an extraordinary meeting in Sydney show 68% (270 million votes) against the resolution and 32% (128 million votes) in favour.
The meeting was held at the Grand Ballroom, Sheraton on the Park on Elizabeth Street.
Mark Wist, senior asset consultant at Atchison Consultants, says the vote could be seen as a “barometer for sentiment in the A-REIT space” indicating little appetite for change.
Given the strong majority vote achieved in support of Charter Hall management, it may discourage other organisations from undertaking something similar.
Wist says it is his understanding that there are other hedge funds on A-REIT registers with the firepower to repeat the failed process undertaken by Orange Capital.
Hedge fund Orange Capital had proposing a resolution that Moss Capital Funds Management replace the existing Charter Hall management team as the responsible entity of the listed trust.
Orange leads a consortium of hedge funds that collectively hold 20% of shares in the A-REIT.
Before the meeting Charter Hall board had written to its unit holders urging them to vote against the resolution.
It rejected an assertion by Orange Capital that the board of Charter Hall Office management has an inherent conflict of interest and is incentivised to favour the interests of Charter Hall and not make decisions that are in the best interests of unit holders.
The hedge funds are seeking a management takeover so they can sell off the assets held by the fund and cash in on their investment.
In a letter to unit holders, Roger Davis, chairman of Charter Hall Office REIT, says the current management strategy is to “drive earnings growth and reduce the discount between the trusts stated net tangible asset backing and the trading price of its units”.
A vote against the resolution is unlikely to deter the hedge funds, with the AFR reporting that they may shop out their 20% stake to a hostile investor.
Orange Capital has been calling for a management change since the start of the year.
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Charter Hall defeats management takeover challenge

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Four strata retail lots at the iconic Finger Wharf in Woolloomooloo are up for sale for combined price hopes of $25 million.
The four lots – 5, 6, 7 and 8 – are occupied by high-profile restaurants Manta, Kingsleys and Otto are being sold on behalf of property investment syndicate Quantum Group by Michael Gilbert and Michael Stokes from Chesterton International.
Information on the Quantum Group website lists Cooper Wharf Road syndicate as having a 2000 fund vintage and a total value of $16.5 million. 
In late 2004, the leaseholds covering the four properties were transferred at $22 million to Tower Trust Limited, which replaced JP Morgan as custodian of Quantum’s property trusts. There were 80 members of the syndicate after its $22 million acquisition. 
A consultancy report compiled by Urbis at the same time reveals that total turnover from the four restaurants rose from $15.3 million per year in 2001 to $21.7 million per year in 2004, equating to an average turnover productivity level of $12,400 per square metre.
All tenants pay a variable turnover rent, which Chesterton gives as $450,000 per year for the four lots combined in the July 2011 investment report
The four lots comprise a net letable area of 1,857 square metres and generate income of $1.86 million a year.
In a December 2007 investor presentation the properties were valued at $28.5 million, a 30% increase on the purchase price, with a gearing level of 58%.
They are being sold in one line by expressions of interest closing Thursday, August 25, 2011. However, the buyer may undertake a strata division upon purchase.
Gilbert told Property Observer sales around the asking price would generate a yield of around 7%.
“There has been a good response from the advert: sexy waterfront real estate with long leases to high-profile tenants,” Gilbert says.
They are located on the western side of the Finger Wharf with spectacular views of the Sydney CBD skyline.
The properties are leased by three of Sydney’s highest-profile restaurants.
Lot 5, which comprises 540 square metres, is tenanted by specialist seafood restaurant Manta until September 2020 with a 10-year renewal option. It generates base rent of around $527,667 per year, including outgoings.
Lots 6 and 7 comprise a total of 746 square metres and are tenanted by Otto Ristorante until 2032 with a 10-year renewal option, generating annual rents of $527,667.
Lot 8 comprises 571 square metres and is tenanted by Kingsleys Steak &amp; Crabhouse until July 2020. It generates rent of $524,650 per year. 
Lot 5 was previously listed for auction by Colliers agents Stephen Kovacs and John Bowie Wilson on June 8, 2011 but was passed in and withdrawn.
Finger Wharf is the largest timber-piled building in the world and was completed in 1915. Having fallen into disrepair in the late 1970s, the wharf was comprehensively refurbished in the 1990s and is anchored by the 104-room Blue Hotel, as well as some of the most expensive apartments in Sydney.
It also includes 104 apartments, with owners including actor Russell Crowe and broadcaster John Laws.
Crowe paid $14 million for his 1,300-square-metre penthouse suite at the end of the wharf, purchased in 2003, at the time the most expensive apartment purchase in Sydney.
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Woolloomooloo wharf restaurant offerings comes with $25 million hopes

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Shopping centre fund Centro Properties Group is seeking buyers for its Centro Albion Park shopping centre in Albion Park, a suburb of Wollongong in the Illawarra region of NSW.
The shopping centre has a book value of $15.2 million.
The property, on the corner of Terry and Russell streets, is being sold by Colliers agent Heath Crampton by expressions of interest closing on August 23.
The shopping centre is one of three in an $83 million syndicate Centro is looking to wind up in order fund redemption requests made by investors.
The other two, which have not yet been listed for sale, are Centro Townsville and Centro Newcomb, valued at $35.5 million and $26.5 million respectively.
The listing of the Albion Mall follows research from Burgess Rawson that has found that the average yield on supermarket transactions has contracted from 9.5% in 1991 to just 7% in 2011.
A 3,300-square-metre Woolworths supermarket in Umina in regional NSW, about 8o kilometres north of Sydney, was recently sold to a private investor for $18.25 million at a yield of 7%.
Crampton has told Property Observer he has received a “reasonable number of enquiries” to date and is expecting the mall, which has a gross leasing area of around 5,570 square metres, to generate a yield of between 8.5% and 9% on a fully leased basis.
The shopping centre has a book value of $15.2 million and brings in $1.48 million per annum when fully leased. More than half of this income comes from anchor tenant Woolworths. It serves a population of about 25,000.
Beside anchor tenants Woolworths and The Reject Shop, Albion Park centre has 12 speciality tenants including Millers Fashion Club, Horizon Credit Union, Michel’s Patisserie, Subway, Civic Video, Illawarra Mutual Building Society, one ATM and a freestanding Woolworths Petrol station. 
The 20-year Woolworths lease (including four renewal options of five years) commenced in November 1998 when the mall opened and is due to expire in November 2018. 
Woolworths pays gross rent of $860,000 per annum to lease 3,200 square metres of retail space.
Crampton says shopping centre investment activity is expected to pick-up significantly in the second half of the year, primarily due to the introduction of several new institutional managed wholesale funds with a focus to acquire sub regional and neighbourhood assets with a capital value of sub $100m.
“This sub $100m market has predominantly been limited to private investors in the last 24 months,” he says.
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Centro seeking buyer for Illawarra shopping centre

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The troubled Sunshine Coast residential market is expected to recover at a slower pace than the Brisbane market, according to research by PRDnationwide.
During the past six months, the Sunshine Coast has recorded an annual softening of 1%, culminating to a median price of $475,000.
Currently the market is characterised by a shortage of purchasers and excess stock, with fears about rising interest rates and increasing cost of living creating uncertainty and deterred potential purchasers.
In comparison BIS Shrapnel predicts the Brisbane market will turn around this financial year with an impending mining boom. Analyst Angie Zigomanis is tipping Brisbane's median house to increase 15% from $440,000 to $505,000 over the next three years.
Josh Brown, research analyst at PRDnationwide, expects the Sunshine Coast market will remain flat at least until the end of the year.
“One of the key differences between the Sunshine Coast and Brisbane markets is that many markets within the Sunshine Coast are viewed as holiday markets such as Noosa, Coolum and Caloundra,” he tells Property Observer.
“This is why the Sunshine Coast was so strongly affected during the GFC, as people began liquidating their non-primary assets such as holiday apartment and houses.
“The local economy of the Sunshine Coast is also seen to be affected by the strong Australian dollar and slow tourism sector, which makes up a larger part of its economy than Brisbane,” he adds.
And despite the change in RBA interest rate sentiment and forecasts of a possible rate cut rather than increase as a possible next move, Brown says the issue remains the “increased debt aversion of households” reflected in the average household savings rate increasing. “People’s attitudes have changed, and it will take a while before they regain confidence in the market. The RBA’s seemingly new stance on interest rates is a step in the right direction, though sales volumes will likely remain at lower levels over the short term,” Brown says.
According to PRDnationwide the Sunshine Coast housing market has been in a “strong and sustained downturn” since the GFC unfolded in 2008, with sales volumes and house prices falling.
Analysis by PRDnationwide reveals that Sunshine Coast home owners who before the GFC saw greater capital growth than those who held onto their houses and sold within the past two years, where capital values have softened.
<img src="/images/stories/prdjuly26.jpg">
The only respite for the Sunshine Coast market occurred following the introduction of the government’s First Home Buyers Boost (between October 14, 2008 and December 31, 2009) in tandem with the RBA cutting interest rates from 7% to a record low of 3.25% from September 2008 to April 2009.
Following the transition from the incentive-driven period in 2009 to the six-month period ending December 2010 sales activity has softened by 31%, taking the volume of settled transactions on the Sunshine Coast to its lowest level in the past decade, with only 2,089 transactions.
Analysis of the most active price points during the six months to December 2010 shows 23% of houses sold were under $400,000. This was followed by the $400,000 to $449,999 price point, which represented 17% of total transactions. Over the six months to December 2010, the most significant tightening in sales activity occurred houses under $500,000.</body></html>

Sunshine Coast market recovery to lag behind Brisbane: PRDnationwide

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Two-thirds of Gen Y borrowers are willing to eat less, while nearly half are willing to miss out on a holiday in order to buy their first investment property, research compiled by Mortgage Choice has found.
According to the mortgage broker, 43% of Generation Y first-time property buyers will buy an investment property as their first purchase, foregoing the first home owner grant and first home buyer concessions to “build a nest egg rather than build a nest”.
The 2011 First Time Property Investors Survey found that buyers in Gen Y – those buyers born between 1980 and 1994 – do not conform to the commonly held stereotype of wanting everything delivered on a platter.
Instead they are willing to make significant lifestyle sacrifices in order to buy an investment property.
The findings come as first-home buyer numbers continue to fall, with just 20,000 (16% of buyers) buying their first property in the March 2011 quarter according to research by the Real Estate Institute of Australia and Deposit Power.
Two-thirds of Gen Y borrowers say they will cut back on general day-to-day spending, while 40% say they will spend less on alcohol to get onto the property ladder.
A quarter will delay buying a car, take a higher-paying job, take an additional job or delay having children to help fund their first purchase.
Mortgage Choice spokeswoman Kristy Sheppard says the findings call into question the concept of the “Great Australian Dream” for people under 30.
“Is it still a home, is it property in general – whichever type they can afford – or is it simply about investing in an asset they expect to bring in income and/or appreciate in value?”
Property analysts such as Margaret Lomas have commented on the increasing trend among Gen Y borrowers to make their first home purchase an investment property.
Lomas told SMH there is a group of young investors who elect to rent in the inner city and then deploy their discretionary income to "get an investment property somewhere else that is cheaper, has better [rental] yield than the inner city and a better prognosis for future growth".
According to Sue Prestney, a tax specialist with the Institute of Chartered Accountants, there are “a hell of a lot of” young investors on good salaries who are paying some board and “happily buying their [first] investment property”. 
The increasing desire among Gen Y to buy an investment property is in line with a key finding of the survey that the renter-investor market is set to nearly double over the next two years.
Out of the 1,060 respondents who plan to buy their first investment property over the next two years, 19% will be first-time buyers.
More than a quarter of respondents (28%) were classified as Gen Y, with a fifth of these saying they are likely to rent out one or more rooms in their houses to help cut costs.
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Gen Ys willing to miss out on food and alcohol to buy investment property

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A luxury apartment complex that will replace a demolished commercial building on the border of Mosman and Cremorne on the Sydney north shore will be marketed off the plan by CBRE agent Paul Tutt.
“Esque” will incorporate 29 apartments in a four-storey complex at 100 Glover Street on the edge of Cremorne Junction on the North Sydney shore.
It is being developed by Sydney-based developer Helm, which paid $9.8 million for the 1,906-square-metre, three-storey commercial building in September 2010.
It was sold with the development application by the Charter Hall Diversified Property Fund at 10% above the book value in a deal negotiated by Simon Fenn and Stuart Cox of CBRE and Geoff Smith and Tim Abbott of LJ Hooker Mosman.
The fund bought the building for $10.3 million in June 2007 in a deal negotiated by Jones Lang LaSalle. It was leased by EMI up until 2011 as its state headquarters with a yield of 8%.
The sale of the site to developer Helm  for $9.8 million equated to $280,000 per unit site, according to CBRE agent Stuart Cox.
In February 2002 it was bought by the Kador Group for $8.1 million.
The commercial building, the former state headquarters of music group EMI, has been completely demolished to make way for the apartment complex.
Construction will begin in November and is due for completion in early 2013.
The project has been designed by Peter Conley, the architect behind Abode Property’s Sanctum at Cronulla, winner of the HIA’s 2010 National Award for Australian Apartment Project of the Year.
Helm is seeking prices in excess of $1.35 million for a three-bedroom unit, $875,000 for a two-bedroom unit and $565,000 for a one-bedroom unit.
The four three-bedroom penthouses range in size from 127 to 167 square metres internally (plus 28- to 124-square-metre balconies) and 10 three-bedroom apartments ranging in size from 110 to 136 square metres (plus 21- to 28-square-metre balconies).
The five two-bedroom apartments range in size from 84 to 91 square metres, and the 10 one-bedroom apartments range in size from 52 to 74 square metres internally, excluding balconies.
Sustainability will be a key feature, with the design incorporating a 75,000-litre underground tank to harvest rainwater. The recycled water will be used for landscaping irrigation as well as providing water for car wash bays.
Other green features include a range of passive energy saving innovations, urban ecology techniques and permaculture initiatives.
Apartments on the eastern side of the upper floors will gain views of Sydney Harbour.
The development is close to the cosmopolitan Military Road retail strip, which includes the Art Deco Hayden Orpheum Picture Palace and is due for completion in early 2013. Construction is due to start in November.
Esque will feature handcrafted face bricks, glass balustrades, a combination of fixed and moveable louvre screens and a naturally weathered zinc tactile outer “skin”.
Other noteworthy features include a lobby of textured bluestone flooring and a feature wall of Pietra marble, intimate garden spaces and a four-storey high wall of evergreen climbing plants.
According to Mark Monk, general manager of Helm, the apartments will be ideal for those buyers who want to live in a spacious apartment close to the city.
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New life for Charter Hall Cremorne commercial holding

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Unit holders are expected to vote against a management takeover of the Charter Hall A-REIT when they gather on Wednesday (July 27) in Sydney.
The vote will be held at 10am at the Grand Ballroom of Sheraton on the Park on Elizabeth Street, Sydney.
Hedge fund Orange Capital is proposing a resolution that Moss Capital Funds replace the existing Charter Hall Office management team as the responsible entity of listed trust.
Orange leads a consortium of hedge funds that collectively hold 20% of shares in the A-REIT.
Charter Hall has already written to its unit holders urging them to vote against the resolution.
It rejects an assertion by Orange Capital that the board of Charter Hall Office management has an inherent conflict of interest and is incentivised to favour the interests of Charter Hall and not make decisions that are in the best interests of unit holders.
The hedge funds are seeking a management takeover so they can sell off the assets held by the fund and cash in on their investment.
In a letter to unit holders, Roger Davis, chairman of Charter Hall Office REIT, says the current management strategy is to “drive earnings growth and reduce the discount between the trusts stated net tangible asset backing and the trading price of its units”.
A vote against the resolution is unlikely to deter the hedge funds, with the AFR reporting that they may shop out their 20% stake to a hostile investor.
Orange Capital has been calling for a management change since the start of the year.
Over this time shares in the REIT have been trading strongly and have risen from around $2.90 in January to around $3.40 currently, though still at a substantial discount to its net tangible asset backing of $3.93 per share.
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Unit holders expected to vote in favour of Charter Hall in REIT battle

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Investment manager Implemented Portfolios says Australia’s listed property trusts are not trading at a discount to net tangible assets and is steering clear of the asset class.
In its latest update, Implemented Portfolio’s asset allocation and investment committee says A-REITs are “fully priced at best, if not expensive”.
The committee says although A-REIT values are returning to more reasonable levels, “current upside potential is not sufficiently compelling, and the local sector is dominated by retail which is facing a very difficult environment”.
As a result, the fund manager is maintaining its “zero allocation to listed property” across all of its individually managed accounts.
Shopping centre group Westfield and its spin-off Westfield Retail Trust make up more than a third of the total A-REITS market, with a combined market capitalisation of about $30 billion.
Other retail-focused A-REITS include CFS Retail Trust ($5.5 billion) and Charter Hall Retail ($1.1 billion).
This view is somewhat at odds with the assessment of A-REITs made by other fund managers.
Writing for Property Observer, <a target="_blank" title="Martin Lamb writing for Property Observer" href="https://www.propertyobserver.com.au/news/modest-a-reit-performance-reflects-stabilising-property-market/2011062250560">Martin Lamb</a>, head of property in Asia-Pacific for Russell Investments, says a number of factors working are currently in favour of A-REITs investment, including “average modest discount of share prices from net tangible assets”.
Other positive influences include the structural changes to A-REITs post-GFC (gearing ratios down to 30%), the stable outlook for Australian property fundamentals and the historically high component of income to overall return.
“The combination of these elements means that A-REIT shares now appear to offer a reasonable risk-return trade-off,” Lamb says.
David Curtis, portfolio manager at A-REITs specialist Reliance Investment, says investors can currently buy any number of A-REITs from big, well-known companies (Westfield, GBPT, Dexus, etc) at a reasonable discount to underlying asset backing.
“This gives investors a little bit of comfort because they’re buying something they know is worth ‘X’ at only 0.8 of ‘X’,” he says.
Implemented Portfolios asset allocation committee member Jon Reilly says its decisions this quarter reflect a cautious outlook.
“The remainder of the year is likely to be characterised by ongoing sluggish economic growth in the developed world which has the potential to be exacerbated by political and regulatory responses to debt problems in Europe and budget and debt ceiling negotiations in the US. "As a result, we have positioned the portfolios defensively but will add to equities allocations when valuations become more attractive. We believe this is the best approach to ensure investors avoid disasters and protect their capital.”</body></html>

Steer clear of A-REITs, says investment manager

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The inner-city suburb of <a target="_blank" title="Alexandria" href="/news">Alexandria</a>, just five kilometres west of the Sydney CBD, is Australia’s number one investment suburb, according to Your Investment Property’s Top 100 survey for 2011. 
Alexandria ranked top due to a combination of affordable prices, a history of strong rental growth, rising house and unit prices and expectations of a major boost from the nearby Green Square urban redevelopment project. 
Other inner-Sydney suburbs to make it in the Top 10 include <a target="_blank" title="Newtown" href="/news">Newtown </a>(ranked fifth) and <a target="_blank" title="Potts Point" href="/news">Potts Point</a> (ranked sixth), both within four kilometres of the CBD. 
Regional towns are also well represented in the Top 10. 
With several massive infrastructure projects planned or underway, the Queensland harbour town of Gladstone, 550 kilometres north of Brisbane, ranked second on the list. 
Gladstone has enjoyed capital growth of 5% over the last 12 months and rental yields of between 5% and 6%. 
WA’s remote <a target="_blank" title="South Heland" href="/news">South Headland</a>, 1,600 kilometres from Perth, ranks third, with Queensland regional towns of Toowoomba and <a target="_blank" title="Chincilla" href="/news">Chinchilla </a>(just 6,200 residents) ranking seventh and ninth respectively. 
Houses have gone up 15% over the last year in Chinchilla, and rental yields are at a very healthy 7.25%. 
Property analysts say prices of houses and units in Alexandria are an “aberration”.
Recent sales include a 56-square-metre, one-bedroom unit at 63 Euston Road sold by Richard Movsessian from Century 21 for $410,000.
Current Alexandria listings include Christian Ziade from Cobden &amp; Hayson selling a 154-square-metre, two-bedroom apartment at 147-161 McEvoy Street with prices over $480,000 and Marnie Seinor from NG Farah selling a two-bedroom unit at 12/4 Gillespie Avenue and considering offers above $600,000. 
The suburb is poised to benefit from the massive urban redevelopment in nearby Green Square. 
“The Green Square area is set to become a major employment hub comparable to Chatswood but situated in a far superior location,” says Andrew Donnelly, CEO of property investment advisors Whiterock Capital.
“Green Square is seen as the most important urban redevelopment project in Sydney at present and is considered to be one of the largest urban renewal projects in Australia comprising 278 hectares of land in Sydney’s oldest industrial area. 
“Once completed in 2021, Green Square will be home to more than 33,000 people, and more than 28,000 people are expected to work in the area by 2021,” Donnelly says.
Alexandria’s media unit price is $449,000, $30,000 lower than Sydney’s median unit price of $479,000. 
Median rents for units rose 11% or $50 per week to $500 during the past year, according to RP Data. 
This healthy increase in rent, combined with the affordable median price has pushed average gross rental yields to 5.8%. 
While, the median unit price dropped by 18% over the three months ending March 2011 as buyers sought out lower priced offerings, the year-on-year figures show a 12% rise, indicating the growth momentum is still in place.
Alexandria’s long-term average annual growth of 4% also suggests there is still room for strong growth over the medium term as it moves to catch up. 
According to realestate.com.au, there are 38 people viewing every available Alexandria property. 
The current auction clearance rate is 73%, which is significantly above Sydney’s overall auction clearance of about 55%. 
A unit in Alexandria takes just 30 days to sell a unit, among the shortest on the market. 
Alexandria, like other inner Sydney suburbs benefits from low vacancy rates across the city pushing up demand for rental properties. 
The latest data from the Real Estate Institute of NSW showed vacancy rates falling 0.2% to just 0.9% during April – the lowest in 12 months. 
Units in Alexandria are $141,000 cheaper by than the neighbouring suburb of Zetland, $96,000 cheaper than nearby Kensington and $76,000 lower than Erskineville to its immediate west. 
“Alexandria has been undergoing gentrification over the past 10 years,” says Rich Harvey, managing director of buyers’ agent, www.propertybuyer.com.au. 
“It’s slowly being transformed from a medium industrial area to residential, which makes it an attractive choice for city workers due to its proximity to the Sydney CBD.” 
The suburb is also located close to three universities: Sydney University, University of NSW and the University of Technology, Sydney, which means it’s benefiting from student and staff demand for housing. 
Another key factor in its top ranking is its excellent transport links to the Sydney CBD. Residents can access the Green Square train station, and it’s within easy walking distance to Erskineville, St Peters and Bankstown railway stations. 
The Top 100 was made up of 25 suburbs in Sydney, 12 from Melbourne, seven from Perth, eight from Adelaide, five from Canberra, three from Hobart, two from Darwin and 26 from regional areas. 
Analysts who helped compiled the list included Charles Tarbey, chairman, Century 21, Tim Lawless, research director, RP Data, valuers WBP and Herron Todd White and Terry Ryder, director of www.hotspotting.com.au. 
Rankings were compiled based on affordability, accessibility, amenities, demographics and population growth, employment opportunities and rental yield and rental growth potential.
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Alexandria ranks as top investment suburb: Survey

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A slowdown in population growth in Victoria could have damaging consequences for its housing sector, according to the June quarter business outlook report compiled by Deloitte and Access Economics.
The report, which provides economic forecasts until 2016, expects private housing investment in Victoria to slow down over the next two years before heading into negative territory during the following two years.
Private sector investment in housing construction increased by 7.8% in 2010-11 to $20.6 billion but is expected to grow by only 5.1% in 2011-12 and by 1.3% in 2012-13.
In 2013-14 investment in Victorian housing is expected to decrease by 3.6% and then to remain stagnant the following year (0.5%) before returning to growth 0f 7.3% in 2015-16.
Private housing investment forecasts – growth rates
<table border="1" cellspacing="0" cellpadding="0"><tbody>
<tr>
<td width="104" valign="top">
 
</td>
<td width="85" valign="top">
2010/11
</td>
<td width="76" valign="top">
2011/12
</td>
<td width="76" valign="top">
2012/13
</td>
<td width="76" valign="top">
2013/14
</td>
<td width="76" valign="top">
2014/15
</td>
<td width="102" valign="top">
2015/16
</td>
</tr>
<tr>
<td width="104" valign="top">
Victoria
</td>
<td width="85">
7.8%
</td>
<td width="76">
5.1%
</td>
<td width="76">
1.3%
</td>
<td width="76">
-3.6%
</td>
<td width="76">
-0.5%
</td>
<td width="102">
7.3%
</td>
</tr>
<tr>
<td width="104" valign="top">
NSW
</td>
<td width="85">
10%
</td>
<td width="76">
10%
</td>
<td width="76">
10.5%
</td>
<td width="76">
2.3%
</td>
<td width="76">
4%
</td>
<td width="102">
10.5%
</td>
</tr>
<tr>
<td width="104" valign="top">
Queensland
</td>
<td width="85">
-12.6%
</td>
<td width="76">
11.3%
</td>
<td width="76">
12%
</td>
<td width="76">
0.6%
</td>
<td width="76">
5.1%
</td>
<td width="102">
11.6%
</td>
</tr>
<tr>
<td width="104" valign="top">
WA
</td>
<td width="85">
5.5%
</td>
<td width="76">
5.2%
</td>
<td width="76">
5.6%
</td>
<td width="76">
0.5%
</td>
<td width="76">
3%
</td>
<td width="102">
9.9%
</td>
</tr>
<tr>
<td width="104" valign="top">
SA
</td>
<td width="85">
-0.8%
</td>
<td width="76">
0.6%
</td>
<td width="76">
6.7%
</td>
<td width="76">
0.9%
</td>
<td width="76">
2.6%
</td>
<td width="102">
9.4%
</td>
</tr>
</tbody></table>
Source: Deloitte Access Economics
In contrast, the private sector is expected to pour money into Queensland housing, with Deloitte forecasting growth rates in excess of 10% over the next three years.
Demand is expected to be driven by the construction required to rebuild homes destroyed or damaged by the floods as well as the recovering construction and mining sectors attracting workers from other states following a bit of “kicking and scratching”.
Deloitte Access Economics forecast strong growth in housing investment over the next three years at above 10%, slowing down from 2013 to 2015 before picking up again in 2016.
Investment in housing in resource-rich WA will grow above 5% over the next three years before slowing down, says Deloitte.
The report says the performance of the Victoria’s housing construction sector has a “hint of defying gravity” due to its ability release land more easily than other states.
Although Deloitte Access Economics expects Victoria will maintain its relative strength, it expects the gap between Victoria and other states to narrow during the next few years.
Victoria’s population is expected to grow at just 1.2% over the 2011-12 and by about 1.4% over the next three years, compared with 1.7% growth forecast over the last year.
The outlook is significantly better for the Victorian commercial sector with construction activity expected to grow by greater than 15% over the next three years following a contraction of 2.7% in the last 12 months.
Major commercial projects expected to be completed over the next few years include Grocon’s $1.2 billion redevelopment of the former Carlton and United Breweries site in Melbourne, with work due to be completed in 2014, the mixed use $700 million Bourke Junction project (including offices, a hotel and shops) currently underway at Docklands, the $400 million Greensborough town centre redevelopment due to be completed next year, and $130 million Southbank cultural precinct.
Planned works to begin in the next few months include a new $1.1 billion comprehensive cancer centre at Parkville, a $407 million redevelopment of the Box Hill hospital and a new Ikea megastore at Campbellfield.</body></html>

Housing investment to fall in Victoria: Deloitte

Sydney developer&nbsp;<a href="https://www.apartments.com.au/developers/central-element">Central Element</a>&nbsp;is doubling down in Drummoyne, lodging plans for a boutique apartment development on St Georges Crescent, only one-kilometre down the road from its first Drummoyne development, Bianca.

The new project at 15A-21 St Georges Crescent,&nbsp;a&nbsp;1,701sqm north-facing site overlooking Iron Cove, will have 45 apartmnts across 10 levels. Eight of the units will be dedicated to affordable housing.

The site sits within walking distance of Drummoyne Village, Birkenhead Point, ferry services and the Bay Run, and offers harbour views towards the Sydney Harbour Bridge and CBD skyline.

Designed by MHN Design Union, the development will deliver a mix of one, two and three-bedroom apartments, alongside resident amenity including a gym, landscaped communal open space and three levels of basement parking.

The project has been lodged under the NSW Government's Low and Mid-Rise Housing reforms, with Drummoyne Village identified as a town centre capable of accommodating additional housing supply.

Central Element acquired the site earlier this year as part of its continued expansion across Sydney's eastern suburbs, lower north shore and inner west.

The developer's current pipeline includes luxury apartment projects Pearl Bondi and a separate development on Lamrock Avenue in Bondi, a residential project in Barry Street, Neutral Bay, and a mixed-use seniors living community in Greenwich.

Central Element Managing Director Nathan Chivas said the project would address a shortage of new owner-occupier housing opportunities in Drummoyne.

"While we're seeing a significant shift across Canada Bay as major infrastructure investment, population growth and planning reform drive a new chapter for the region, in suburbs like Drummoyne there remains a genuine shortage of new boutique luxury housing opportunities for owner occupiers," Chivas said.

"Sites of this nature are increasingly difficult to secure, particularly those that combine a north-facing aspect with direct water outlook. Our St Georges Crescent project responds directly to the market demand, offering a level of exclusivity, outlook and lifestyle in the highly sought after suburb."

The development application has been lodged with the City of Canada Bay Council, with the project expected to launch to market in early 2027.

&nbsp;

Joel Robinson

Central Element seeks second Drummoyne apartment development

The NSW Government has unveiled plans that could deliver around 1,300 new homes across Nowra and Kiama, continuing its push to unlock housing in well-located regional centres along the South Coast.

The proposals, now on public exhibition, would pave the way for around 830 homes in Nowra and a further 450 homes in Kiama, while also introducing affordable housing requirements and increased building heights in key locations.

The larger of the two proposals is centred on Nowra, where the NSW Government is seeking to rezone land within the Mandalay and Riverfront precincts.

The Mandalay sub-precinct, located close to Shoalhaven Memorial Hospital, Nowra Library and the city's aquatic centre, could accommodate around 530 new homes. Around 30 per cent of housing delivered on Homes NSW-owned land would be dedicated to social and affordable housing, equating to roughly 100 homes. Building heights would increase from the current two-storey limit to between three and six storeys.

A separate rezoning proposal for the Nowra Riverfront Precinct would unlock a further 377 homes while creating stronger connections between the Shoalhaven River and the CBD. The plans include building heights ranging from five to 12 storeys, floor space ratios of up to 2:1 and a requirement for two per cent affordable housing.

Together, the two proposals would deliver more than 900 homes across the broader Nowra area, reinforcing the city's role as one of regional NSW's key growth centres.

The housing push builds on previous infrastructure commitments in the Shoalhaven, including government funding aimed at supporting thousands of future homes in West Nowra through upgrades to water and wastewater infrastructure.

Further north, the NSW Government is also progressing plans for the former Kiama Depot site, a two-hectare parcel near Kiama's town centre.

The rezoning proposal would transform the former industrial site into a residential community capable of delivering up to 450 homes. Buildings would range between six and eight storeys, with at least 10 per cent of homes allocated as affordable housing. The proposal also includes approximately 600 parking spaces and improved walking and cycling connections.

Planning Minister Paul Scully said the proposals are designed to increase housing supply in locations close to jobs, transport and services.

"For too long, families have struggled to find somewhere to live, and activating underutilised sites allows us to deliver the new homes these families need," Scully said.

"The Minns Labor Government is getting on with the job of unlocking well-located sites close to transport, jobs, and town centres and building the homes our communities need.

"These rezonings are about removing barriers to housing delivery and making sure land is put to better use so more people can find a place to call home within the communities they choose."

The latest rezonings form part of the Minns Government's broader strategy to accelerate housing delivery across NSW, particularly in established centres where existing infrastructure can support additional population growth.

Community consultation on the proposals is now underway, with feedback set to inform the final planning controls before the rezonings are determined.

Around 1,300 new homes earmarked for Nowra and Kiama as NSW Government pushes housing supply

<a href="https://www.apartments.com.au/developers/mrcb">MRCB International</a> has commenced construction on its latest Gold Coast apartment development, Maris, on the site of the former Sundale Motel in Southport.

The start of construction by <a href="https://www.apartments.com.au/builders/binah-constructions">Binah</a> follows an exceptionally strong sales campaign, with more than 90 per cent of apartments sold since launch. Every purchaser has been local, an&nbsp;indicator of confidence in both the development and Southport's evolution into a thriving CBD.

<a href="https://www.apartments.com.au/new-apartments/maris-southport-20-queen-street-southport-qld-4215">Maris</a> will deliver 192 residences across 20 levels. The project forms part of MRCB's Australian and New Zealand development pipeline now exceeding $1.6 billion in gross development value, alongside a growing portfolio of projects globally.

[smartcode_project:default project_id=134403 project_image_fid=350663]

The company also commenced construction on its $600 million 26 Vista residences in Surfers Paradise last year, following strong sales momentum, with over 70 per cent of residences sold.

Maris has been designed to meet evolving buyer demand, offering architecturally designed layouts suited to long-term liveability. The approach reflects a growing preference for quality and adaptability among Gold Coast buyers.

Positioned next to the Broadwater in the <a href="https://www.apartments.com.au/developments/southport-qld-4215">Southport</a> CBD, Maris sits directly opposite the Broadwater Parklands light rail station and within easy reach of retail, dining and lifestyle precincts, placing residents at the centre of one of the Gold Coast's most connected and rapidly maturing urban centres.

[smartcode_project:default project_id=134403 project_image_fid=372756]

Maris will offer a full suite of resort-style residential amenities, including a pool, gym and sauna, along with a rooftop level featuring decks, lounges and dining and yoga areas that command sweeping views across the Broadwater and out to the ocean.

Binah, a New South Wales headquartered company co-founded by Amen Zoabi and Khalil Hafza in 2008, has expressed its excitement at establishing its first partnership with MRCB.

Binah's Managing Director Khalil Hafza said partnering with MRCB on Maris is a significant moment for Binah.

"MRCB's financial strength and a track record that speaks for itself give this project a solid foundation, and this marks the beginning of what will be a long and successful relationship.

"With the right people, systems and partnerships behind it, Maris is set to become a significant addition to the Gold Coast's premium residential market."

[smartcode_project:default project_id=134403 project_image_fid=350664]

MRCB International CEO Ravi Krishnan said the project's progression to construction reflects both sustained demand and tightening conditions across the apartment sector, as well as MRCB's continued confidence in the Gold Coast market.

"Commencing construction at Maris is a significant step and reflects the depth of demand for quality apartments in well-connected urban locations," said Krishnan.

"Across Southeast Queensland, new apartment supply remains constrained, particularly in established precincts with infrastructure and amenity already in place. Projects like Maris are increasingly critical in meeting that demand, especially on the Gold Coast and in the city's CBD precinct."

[smartcode_project:default project_id=134403 project_image_fid=372761]

Krishnan said Southport's ongoing transformation, supported by infrastructure investment and long-term planning, was underpinning renewed buyer confidence.

"We're seeing a clear shift back towards well-located urban centres where infrastructure, connectivity and amenity are already established," said Mr Krishnan. "Southport is evolving into a more mature CBD environment, and that is being reflected in buyer behaviour."

Construction at Maris is anticipated to be completed in 2029.

[smartcode_project_cta:default project_id=134403]

Construction commences on MRCB’s $200m Maris Residences in Southport

Moonee Valley Park’s latest residential release <a href="https://www.apartments.com.au/new-apartments/the-eveline-at-moonee-valley-park-moonee-ponds-100-thomas-street-moonee-ponds-vic-3039">The Eveline</a>, has achieved a new benchmark for off-the-plan apartment sales in the suburb, with the sale of The Alexandra penthouse selling for $5,435,000.

Positioned on the top floor of a 16-level residential building, the three-bedroom, three and-a-half-bathroom penthouse features uninterrupted city skyline views across the future Valley racetrack.&nbsp;

The landmark sale comes as momentum at the precinct continues to build, with the Moonee Valley Racing Club progressing works on its new racetrack ahead of the 2027 Cox Plate. The transformative development will see MVRC reimagine the beloved Valley as a vibrant year-round entertainment and lifestyle destination.

Alongside a world-class racing experience, the historic precinct will be activated with events, hospitality and public green spaces designed to attract broader audiences, while breathing new life into one of Melbourne’s most iconic destinations.&nbsp;

[smartcode_project:default project_id=142519 project_image_fid=372786]

Development partners <a href="https://www.apartments.com.au/developers/hamton">Hamton Property Group</a> and Hostplus have delivered five residential stages over the past four years, the most recent in November 2025 with Trackside House and Stonepine House. The flourishing community is now home to almost 500 families.&nbsp;

The latest residential release, The Eveline, has recorded strong demand since launching publicly last July, securing more than $200 million in sales to date, satisfying its pre sales hurdle for construction to commence.&nbsp;

Hamton Founder and Executive Chairman, Paul Hameister OAM said, the sales&nbsp;team have been overwhelmed by demand for these unique homes in this unique project.

"Buyers continue to be predominantly hyperlocal and attracted by the 40 hectare botanic masterplan in Melbourne’s inner north west," Hameister said.

[smartcode_project:default project_id=142519 project_image_fid=372788]

Hamton’s Sales and Marketing Director Fergus Humphries said the team has achieved more than 70 sales over the past eight weeks, including the penthouse purchase by a local buyer.

"These results reinforce that, even in a challenging market, purchasers continue to be drawn to quality projects that offer more than just a home, they offer a lifestyle.”

Designed by Cera Stribley, the penthouse has been created with entertaining in mind, spanning close to 400 sqm of indoor and outdoor living space, including multiple terraces designed to capture sweeping views across Melbourne’s skyline, the new Valley racecourse and sunset views over Moonee Ponds.

Moonee Valley Park is one of Melbourne’s largest urban renewal projects, transforming the iconic racecourse site into a vibrant mixed-use neighbourhood integrating homes, parklands, retail, racing and community amenities.

[smartcode_project_cta:default project_id=142519]

Moonee Valley Park penthouse sets suburb record as sales surge clears construction benchmark

A company linked to one of Australia's largest privately owned cattle businesses has lodged plans for a new residential tower in <a href="https://www.apartments.com.au/developments/newstead-qld-4006">Newstead</a>, continuing the rapid transformation of one of Brisbane's most sought-after, inner-city precincts.

Bottletree Holdings, an entity associated with Stanbroke Managing Director Brendan Menegazzo, has submitted a development application for a 28-storey mixed-use tower at <a href="https://www.apartments.com.au/new-apartments/9-longland-street-newstead-qld-4006">9 Longland Street</a>, a site that made headlines last year when it changed hands in an off-market transaction that reportedly set a benchmark land rate for the suburb.

The proposal would replace an existing two-storey commercial building on the 1,510 sqm corner site with a Bureau Proberts-designed tower comprising 76 apartments, ground-floor retail, office space and a suite of resident wellness amenities.

<img alt="9 Longland" data-entity-type="file" data-entity-uuid="c710a836-568e-4382-bc91-3c34b8e80a8b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-22%20at%209.41.45%E2%80%AFAM.png?VersionId=Vy.mQWBc7GA_a.vIBdxKqRC9XGjWalo2" />

According to planning documents lodged with Brisbane City Council, the development would comprise a mix of 36 two-bedroom apartments, 24 three-bedroom apartments and 16 four-bedroom residences, positioning the project firmly at the premium end of the market. The apartments would sit above a podium containing retail and commercial space, with three levels of communal recreation facilities spread throughout the tower. The proposal also includes 198 car spaces and 95 bicycle spaces.

Bureau Proberts has drawn heavily on Newstead's industrial heritage in developing the architectural response.

"Occupying a prominent corner in the heart of Newstead, the proposal draws from the area's industrial lineage of robust brick warehouses to deliver a distinctly contemporary response," the architects said in the design statement.

"It is conceived as a subtropical sanctuary and elevated private retreat embedded within one of Brisbane's most vibrant lifestyle precincts."

The design seeks to reinterpret the traditional Queensland vernacular through wraparound verandahs, deep shading elements and permeable facades that respond to Brisbane's subtropical climate.

<img alt="9 Longland" data-entity-type="file" data-entity-uuid="25524f59-395c-4825-8fad-9b639822fa8a" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-22%20at%209.42.09%E2%80%AFAM.png?VersionId=dlWlbpCc_g3Y6yTLGqRVKvGJvO2ubMJ3" />

Planning documents describe the building as embodying the principles of "buildings that breathe", a design approach increasingly favoured in Brisbane's apartment market as developers focus on natural ventilation and outdoor living spaces.

The tower itself would rise above a heavily landscaped podium designed to reference the woolstore architecture that helped define Newstead and neighbouring Teneriffe for generations. At ground level, fine-grain retail tenancies would activate Longland Street, Wyandra Street and the existing Wyatt Street laneway, further extending the pedestrian network that has become a hallmark of the Gasworks precinct.

The application notes that more than 54 per cent of the site would be dedicated to landscaping and deep planting, while approximately 1,750 sqm of communal recreation space would be delivered across multiple levels.

<img alt="Planning" data-entity-type="file" data-entity-uuid="fed3b189-1054-4b68-af5f-b0befc4a66e5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-22%20at%209.42.19%E2%80%AFAM.png?VersionId=gqeE3cjsbnLAfeTUKA1HtPZfqDs6S4Xa" />

Bottletree paid $22 million for the 1,510 sqm development site, equating to more than $14,500 per sqm, a reflection of the strong demand for development opportunities in Newstead. The suburb continues to attract both developers and buyers, underpinned by the ongoing evolution of the Gasworks and Teneriffe precincts into some of Brisbane's most sought-after lifestyle destinations.

Brisbane City Council's Sustainable Growth Strategy and Inner City Strategy both identify Newstead as a priority growth precinct capable of accommodating additional housing density due to its proximity to employment hubs, public transport and lifestyle infrastructure.

The proposed tower joins a growing pipeline of high-end apartment developments in the suburb. Fortis recently launched <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a>, a 65-apartment owner-occupier-focused development on Kyabra Street, while Consolidated Properties Group is preparing to launch <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a 227-apartment waterfront project on Skyring Terrace.

Meanwhile, builder-developer BPG is planning its own Newstead project on Maud Street, comprising just over 100 apartments and more than 1,380 sqm of dedicated wellness and resident amenity spaces, further highlighting the shift towards lifestyle-driven apartment developments in Brisbane's inner-city market.

Larry Schlesinger

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