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Listed real estate services provider McGrath has downgraded FY16 forecasts due to weaker than expected market conditions and said EBITDA figures will be $4 to 5 million lower than the prospectus forecast.
Lower than expected listings and sales volumes in the first half of April drove the weaker forecast, along with listings in the newly-acquired Smollen Group which are now expected to be 25-30 percent lower in Q42016 than previously forecast, according to Bell Potter.
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The latest Bell Potter report on McGrath said the downgrade is disappointing given the company was tracking to budget for the first 9 months of FY16 and more so given it was largely attributed to the recently acquired Smollen Group.
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The Bell Potter report stated they have downgraded EPS forecasts in FY16, FY17 and FY18 by 15 percent, 25 percent and 24 percent respectively, with the revised FY16 EBITDA forecast of $26.5m within the guidance range of $26-27m.
"The majority of the downgrades have been in the company owned sales division, with reductions in sales per agent and EBITDA margin reflecting the tougher market conditions experienced in Q4 which are likely to extend into FY17 and FY18," it said.
"Given the severity of the 4Q slowdown our earnings downgrades are higher in FY17 and FY18. We now expect FY16 revenue of $137m compared to the revised guidance range of $136-140m, and EBITDA of $26.5m compare to revised guidance of $26-27m."
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McGrath downgrades FY16 forecasts: Bell Potter

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Foreign investors have been driving the industrial property market in Sydney over the 12 months to March 2016, accounting for 46 percent of industrial stock sales according to Savills.
The total dollar value of these transactions came exceeds $865 million, according to the April industrial briefing from Savills.
According to the report, foreign investors are looking for industrial property due to the typically high yielding and generally long lease expiry profiles attributed to these assets.
"The fourth quarter of 2015 saw Singaporean giant M&amp;G Investments, increase its Australian real estate exposure, paying $79.75 million in November for two Sydney industrial properties, in Ingleburn and Erskine Park," the report said. 
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Foreign investors driving Sydney industrial market: Savills

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Residential vacancy rates for Sydney are staying at 1.7 percent, according to the REINSW, with vacancy rates for Inner Sydney staying unchanged at 1.3 percent through March.
REINSW's Vacancy Rate Survey found Middle Sydney was at up 0.3 percent to 1.9 percent, while Outer Sydney was down 0.3 percent at 1.8 percent. 
REINSW President John Cunningham said the last time Inner Sydney had a vacancy rate of 1.3 per cent was March 2014 and the market is tight and is expected to remain tight for some time. 
“Rises in Middle Sydney and falls in Outer Sydney balanced out to see the vacancy rates for Sydney steady overall,” Mr Cunningham said.
Vacancy rates slid 0.3 percent at 2.6 percent in the Hunter region. In the Illawarra vacancy rates were up 0.1 per cent at 1.3 per cent. Wollongong slipped 0.2 per cent to 1.0 per cent. Albury fell 0.1 percent at 3.6 percent, New England rose 0.8 per ent at 3.6 percent and Orana dropped 0.4 percent to 3.3 percent. Coffs Harbour fell 0.8 percent to 1.5 percent and Northern Rivers rose 0.1 percent at 1.5 percent. 
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Sydney vacancy rates remain stable: REINSW

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GUEST OBSERVER
Australia's rebalancing act is well underway. Following the end of the mining boom, low interest rates and the lower AUD have supported a housing boom and, more recently, a strong pick-up in exports of tourism and education services. But challenges remain. 
The housing boom is now cooling. Housing prices have levelled out over the past six months and building approvals have fallen over the past year. The end of the housing boom is set to weigh on growth, while the lift in housing debt, due to the boom, may increase the risks to financial stability, particularly as there has been a significant boost to housing supply. 
We remain cautiously optimistic that the housing market will see a soft landing and that the lift in services exports will continue to create jobs, but there are risks around this central scenario. 
Australia's mining investment boom peaked in 2012 and, since then, growth has needed to rebalance to being driven by something else. As regular readers will know, we have long been optimistic that this would occur. 
The first stage of this process has been a housing price and construction boom. This has mostly been a positive story. By building more housing we have been working off an accumulated under supply of housing (Australia did not build many houses during the mining boom, which helped to keep wages and inflation contained during that episode). 
But, as with all housing booms, they cannot continue indefinitely. If housing prices and construction continued to rise rapidly, there would eventually be a housing oversupply or a price bubble. There are now clear signs that Australia's housing market is cooling. Housing prices have tracked sideways since about October 2015, following previous double-digit growth. Sydney and Melbourne, where the housing boom has been centred, have seen flat housing prices in the past six months, following annual averages of 10 percent and 6 percent in the previous four years. The cooling has been driven by a collection of factors, including tighter prudential settings and the ramp up in new housing supply (which is meeting demand). 
Our central case is for a soft landing. We see housing prices rising by 3-4 percent in 2016, following growth of 9 percent in 2015 (see 'Downunder Digest: Australia's housing market cools', 11 December 2015). Housing construction is also expected to slow. Following a 0.5ppt contribution to GDP growth in 2015, housing construction is set to contribute about 0.2ppts to GDP growth in 2016 and to be a small drag on growth by 2017. 
However, for the overall economy we expect this drag from housing construction to be offset by two key factors. First, services exports have been ramping up and we expect these to continue to contribute around 0.5ppts to GDP growth (see 'Downunder Digest: Services exports and the AUD', 30 March 2016). Second, mining investment is set to be less of a drag on GDP growth in 2017, as the mining downturn matures. All up, we see the end of the housing boom as manageable, as the next stage of the rebalancing act sees growth transitioning to being led by the services sectors. 
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But this is the central case and there are clearly some risks to the 'housing soft landing' central scenario. Here we focus on three. First, stoking a housing boom has driven housing prices higher and led to an increase in the household debt to income ratio from 167 percent to 186 percent over the past four years. Higher debts may have increased the risks to financial stability. 
Second, there has also been a substantial ramp up in housing construction, particularly on apartments in the major cities, and there is a risk of over-supply in some of these markets. Third, and importantly, our central case assumes continued household income growth, supported by job creation in the services sectors, which helps to make the higher debts sustainable. A negative shock to income growth, most likely emanating from overseas, is a risk to the central scenario. 
For each of the risks, there are also a number of mitigating factors. On the first risk, of higher housing prices and debts, our view remains that it is the allocation of debt that matters, not the absolute levels (see 'Downunder Digest: Australia's household debt: why we are not worried', 21 November 2013). As long as the households that have taken on the debt can continue to service it, the debt is sustainable. In Australia's case, we believe the debt is fairly well allocated. In Australia there are no sub-prime loans, all loans are full-recourse, lending standards have been tightening recently, the bulk of the debt is held by higher income households and the average mortgage is over two years pre-paid, leaving many households with significant equity to withdraw if required. 
On the second risk, of housing oversupply, our estimates show that this is not the national story, even though there are some clear pockets of over-building (see 'Downunder Digest: Australia's housing supply ramp up', 9 September 2015). 
In Sydney, where housing prices have risen by the most, our estimates suggest that there is still undersupply, which is likely to keep prices from falling.
 In Melbourne, the apartment market appears oversupplied, but the detached housing market does not. For apartments, some have also been bought by foreign buyers with the likely intention to hold for a long period, as a store of value, rather than for speculation. In Perth and Brisbane there are some signs of oversupply of apartments, but not of detached dwellings. Neither of these markets has seen much housing price appreciation in recent years, potentially limiting the downside. 
The third risk, of a fall in household incomes, is the hardest to guard against. Here, Australia fares comparatively well, but is not in as good shape as it was when the global financial crisis struck in 2008. The RBA still has a cash rate at 2.00 percent, which gives it room to cut further and government net debt is low, at 18 percent of GDP, giving the fiscal authorities more room to move than other countries. However, by comparison, the cash rate was 7.25 percent in mid-2008 and the government had a net asset position of 4 percent of GDP. 
Finally, it is worth considering the appropriate policy response to these risks. In terms of financial stability, the prudential regulator is continuing to tighten standards to making the banking system 'unquestionably strong'. This has included raising bank capital requirements. This should help to further protect Australia's financial system. 
In terms of protecting against weaker demand, the central bank could still cut its cash rate further (our central case is for a cut in Q2, partly to ensure the AUD remain competitive). A lower AUD (rather than one that is rising, as it has been recently), would also be helpful, as it would help to improve competitiveness and support jobs growth in the export industries. 
Fiscal authorities could also help to support growth by further reform to support productivity growth and well-planned infrastructure investment, which would support demand and also improve productivity. We remain optimistic about Australia's growth outlook, but, as always, there remain risks to the central view. 
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<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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Navigating the end of the housing boom: HSBC's Paul Bloxham

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Unit rents increased at record levels over the March quarter for the majority of capital cities despite a national apartment building boom, according to the March Quarter Rental Report from Domain.com.au.
The report found unit rents increased in Sydney, Melbourne, Brisbane, Hobart and Canberra over the March quarter, staying at record levels despite the recent unit building boom, while house rental vacancies remain low in most capitals.
Capital city vacancy rates were steady at 2.1 percent for houses but fell slightly for units to 2.3 percent, with overall dwelling vacancies remaining at 2.2 percent.
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Domain.com.au senior economist Dr. Andrew Wilson said despite the recent influx of home building, we can expect to see upward pressure on both house and unit rents in most capital cities continuing in the foreseeable future.
"The clear exceptions to tight capital city rental markets are Perth and Darwin. Rents in these cities continue to fall reflecting the impact of the downturn in the resource economy and the end of the significant rental demand driven by a fly-in fly-out workforce," he said.
"Sydney median unit rents increasing sharply over the March quarter.
“Despite the significant numbers of new apartments entering the market, Sydney unit rents bounced back this quarter with a sharp 4 per cent increase in the median weekly rental. This increase offers no relief for tenants with house rents remaining at record highs and already low vacancy rates continuing to tighten. The median unit rent was recorded at $520 per week, closing in on the $530 median weekly rent for houses. Sydney unit rents have now increased by 4 percent over the past year – second to Melbourne for annual growth. 
The report found Melbourne house rents came in at $400 per week, up 2.6 percent over the year and unit vacancy rates falling despite the recent surge in new supply.
"It has been a positive quarter for investors in Melbourne with unit rents now rising to record levels and vacancy rates falling, despite an unprecedented new apartment boom. Melbourne house rents remain at peak values as well, with low vacancy rates indicating no relief in sight for tenants," he said.
“Brisbane tenants in units and houses have experienced rising rents, with both at record highs. Vacancy rates do remain reasonably balanced, however, with some slight tightening for units in the March quarter."
Gross rental yields for investors held over the March quarter, with Hobart having highest gross returns for houses at 5.6 percent and rising. Sydney had 3.3 per cent.
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Rents continue to rise despite national building boom: Domain

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GUEST OBSERVER
The RBA held its cash rate steady at 2.00 percent, as expected, and maintained an easing bias. The biggest change to the post-meeting statement was an added paragraph noting concerns about the recent appreciation of the AUD.
The RBA stated that 'under present circumstances, an appreciating currency could complicate the adjustment under way in the economy'.
It is clear that the RBA believe that a rising currency is unhelpful, as it could slow the pace of rebalancing, particularly towards the tourism and education sectors, which are exchange-rate sensitive. We stick by our view that a further cash rate cut will be needed. On timing, our central case is for a cut before end-Q2, but we see this as 50:50, given the upcoming budget timing and the possibility of an early election.
Facts
- The cash rate was held steady today at 2.00 percent, as expected (all 26 economists in the Bloomberg survey expected a hold decision).The market was pricing a 5 percent chance of a cut just prior to the announcement.
Implications
Today's post-meeting statement appears to have shifted the RBA back into AUD 'jawboning' mode. Although the statement made no reference to an appropriate level for the currency, it relayed the RBA's concern about the recent rise in the currency.
Whereas the previous statement had noted that 'the exchange rate had been adjusting to the evolving economic outlook', today the RBA said that, although the appreciation 'in part, reflects some increase in commodity prices, monetary developments elsewhere in the world have also played a role'.
The first point of interest is that the RBA acknowledges that the rise in the currency is not just in line with commodity prices. The second point is the reference to monetary developments elsewhere in the world, which suggests that the RBA may be becoming increasingly concerned about the dovish stance of the Federal Reserve and of the negative rate settings in Europe and Japan.
The challenge for the RBA remains that global inflation and interest rates are low, which is putting upward pressure on the AUD at a time when Australia needs a more competitive currency to assist with rebalancing growth at the end of the mining boom. As they noted today, 'under present circumstances, an appreciating currency could complicate the adjustment under way in the economy'.
Their use of the words 'under present circumstances', implies that the currency is an increasingly important driver of growth as Australia's economy shifts to being more driven by services exports, such as tourism and education exports.
Although the RBA has considerable reluctance about the idea of cutting its cash rate further, it may yet have to cut, in order to keep the currency competitive.
 
<a href="https://www.about.hsbc.com.au/hsbc-in-australia/management-team" target="_blank">PAUL BLOXHAM</a> IS CHIEF ECONOMIST (AUSTRALIA AND NEW ZEALAND) FOR HSBC. 
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RBA jawboning the AUD, again: HSBC's Paul Bloxham

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The top sale of the week was a five bedroom beachside home at Bronte in Sydney's Eastern Suburbs, according to CoreLogic RP Data. 
The property, 1 Bronte Marine Drive, Bronte (above) sold for $8.5 million through Laing + Simmons  Double Bay 
Top ten sales
1 Bronte Marine Drive, Bronte, NSW  5 bed, 4 bath, 2 car house  $8,500,000  Laing + Simmons  Double Bay 
6 March Street, Bellevue Hill, NSW  4 bed, 1 bath, 2 car house  $5,265,000  Sotheby’s International Realty  Sydney 
602/14 Macleay Street,  Elizabeth Bay, NSW  3 bed, 2 bath, 2 car unit  $4,900,000 Richardson &amp; Wrench Elizabeth Bay/Potts Point 
22b Haughton Street,  Linley Point, NSW  4 bed, 3 bath, 2 car house  $4,350,000  John Ward Realty  Hunters Hill 
44 Wallis Parade,  North Bondi, NSW  4 bed, 2 bath, 4 car house  $4,275,000  Express Realty/  Raine &amp; Horne 
8 Kirkoswald Avenue,  Mosman, NSW  4 bed, 2 bath, 1 car house  $3,920,000  David Murphy  Real Estate 
53a Carlotta Road,  Double Bay, NSW  6 bed, 4 bath, 2 car house  $3,875,000  McGrath Estate Agents 
24 Northland Road,  Bellevue Hill, NSW  4 bed, 2 bath, 2 car house  $3,675,000  Goodyer Real Estate 
2/16 Thornton Street,  Darling Point, NSW  4 bed, 3 bath, 3 car house  $3,500,000  Sotheby’s International Realty Sydney 
10 Ocean Grove,  Collaroy, NSW  5 bed, 3 bath, 2 car house  $3,375,000  First National Caputo  Dee Why
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Bronte beach pad leads CoreLogic RP Data's top ten sales

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The majority of shopping centre managers polled for a recent survey expect turnover growth for the year ahead, with traditional bricks and mortar retail outlets, online sales and the economy as possible hinderances to future growth.
Some 55 percent of respondents to JLL’s Retail Centre Managers' Survey for February expect turnover growth in the year ahead, up from 51 percent in the previous survey six months ago, concerns remained from shopping centre managers about the economy.
JLL’s Australia head of property &amp; asset management Richard Fennell said the big change since the August 2015 Survey was the impact of fuel prices.  
"Fuel prices are at or near seven year lows, meaning the average motorist is spending significantly less on fuel and this could translate to more disposable income for other items such as retail goods and services," he said.
“However the volatility in the share market and low commodity prices are still cause for concern.
“Centre Managers continue to show concern with the economic outlook, with a net balance of -20 highlighting this as a factor that could impact turnover in 2016.  Although this has somewhat diminished since the last survey in August last year where the net balance was -33.
“The most positive factors for turnover outlook highlighted by Centre Mangers in the February survey continue to be issues that are specific to particular centres, such as changes to tenancy profile, growth expectations within the trade area and planned refurbishment activity,” said Mr Fennell.
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JLL Strategic Consulting director, David Snoswell said mproved speciality rental growth in both neighbourhood and sub-regional centres was a highlight in the second half of 2015 across the JLL-managed portfolio of retail centres nationally, with rents in neighbourhood shopping centres increasing by 4.2 percent in 2015 while Sub-Regional centre rents grew by 3.1 percent.
“Vacancies in Neighbourhood centre improved marginally from 3.9 percent in June 2015 to 3.7 percent in December 2015.  This continues the long-term improvement in neighbourhood centre vacancies. The vacancy rate has trended down over the last 2.5 years from 5.8 percent in June 2013.
“Tenant enquiry remains positive, but only just. The last four JLL surveys have reported positive tenant enquiry levels, although respondents have become less positive over the last 12 months. By far the most common response in the February survey was ‘no change’ to the level of tenant enquiry, with 63 percent of respondents not seeing a definitive change either way in tenant interest."
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Shopping centre managers expect turnover growth for the year ahead

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GUEST OBSERVER
Proposals by the NSW Government to reopen Parramatta Gaol will stop the exciting urban renewal proposals for North Parramatta. 
The NSW Government seems to now have two contradictory approaches for the renewal of North Parramatta.
On one hand UrbanGrowth NSW proposes new residential towers around the old gaol and the proposed light rail will connect the precinct while on the other hand the government proposes to reopen the gaol which does not send a welcoming signal to incoming residents.
The NSW Government has given a positive focus to Parramatta as the second CBD for Sydney which is reflected in strategic planning and the announcement of the proposed light rail. This has led to strong market interest in developing residential and commercial buildings in the city centre and in the North Parramatta campus.
Their proposal to relocate the Power House museum to Parramatta adds to the build-up in confidence that the city is becoming a very desirable place to live and work in.
The confidence that is growing about Parramatta’s maturity as a cosmopolitan centre could be set back by the reopening of a gaol on the city’s doorstep. The reopening would certainly be a setback for the government’s recently announced plans to provide much needed housing on the land adjacent to the old gaol. The proposed urban renewal will reinforce the connection to jobs in the Westmead Medical Precinct and have all of this connected by light rail.
There must be other options for a new gaol that does not disrupt the exciting urban renewal of Parramatta and its surroundings.
Chris Johnson is chief executive officer of property development industry group Urban Taskforce and can be contacted <a href="https://www.urbantaskforce.com.au/index.php?option=com_content&amp;view=article&amp;id=97&amp;Itemid=126#.Vdaart55dFI" target="_blank">here</a>.
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Reopening Parramatta Gaol will stop the renewal of North Parramatta: Chris Johnson

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Homes in the Sydney suburbs of Hunters Hill, Canada Bay and Ku-ring-gai are the top council areas with the most valuable real estate assets, according to a new report by Aussie Home Loans and CoreLogic RP Data.
The report found homes in Hunters Hill have an average equity level of 72.3 percent or $878,481, then Canada Bay at 70.2 percent and Ku-ring-gai with 69.2 percent.
Mortgaged homes across NSW have an average of 56.6 percent equity or $358,763.
Aussie executive chairman John Symond said the data confirms that NSW property has been a great wealth creator for owners, compared with other asset classes and property in other states across Australia.
“I believe the best investment both for security and lifestyle is still real estate and I see no reason why this will change over the next decade, especially in view of the lower interest rate climate, lack of housing supply and continuing population growth”, said.
"Fast growing Sydney council areas dominate the survey as property prices have risen at a compounding rate of 8.3 per cent over the last 20 years. 
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Councils in the Upper Hunter Valley had the lowest average home equity within New South Wales, especially Muswellbrook and Singleton.
CoreLogic RP Data research director Tim Lawless said Sydney is leading the state in home values as the population grows in the city, while many regional centres are facing neutral or falling population levels.
“The figures show that areas close to Sydney’s CBD have generally performed better as the population becomes more compressed with more medium to high density dwellings”, he said.
Average level of home equity – state by state percentages and dollar values
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Download the free <a href="https://www.aussie.com.au/home-loans/property-reports/home-equity" target="_blank">Aussie/CoreLogic Housing Equity Report here</a> or visit aussie.com.au. 
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Sydney's Hunter's Hill, Canada Bay lead councils with most valuable real estate

The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
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[smartcode_project_cta:default project_id=112661]

Michael Crawford

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