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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
Australia’s wealthiest investors expose a higher proportion of their portfolios to direct property than other merely well-heeled investors with a few million dollars to invest. And their fondness for business real estate rapidly grows along with their wealth. 
The current High Net Worth Investor Report, published by specialist research company Investment Trends, shows that investors with $10 million to $60 million portfolios have 30% of their investments in direct property. On average, they have a 17% exposure to residential property and 13% in business property. 
Compare this with the “poorest” of the high-net-worth investors surveyed by Investment Trends. Investors with $1 million to $2.5 million to invest have 23% of their money in residential property, with just 4% in business property. (Assets held in self-managed super funds are included while family homes are excluded.) 
A little digging elsewhere by Property Observer suggests that many wealthy investors prefer to hold their business property in their self-managed super funds rather in their own names or related entities. 
This favouring of SMSFs for business property is not surprising given superannuation’s concessional taxation and asset protection as well as the special treatment of business property under superannuation law. 
Superannuation assets are inaccessible to trustees in bankruptcy – provided contributions or asset transfers were not made to avoid creditors. And business property is among the few assets that funds are permitted to acquire from their members.
Further, business property is among the few types of assets that SMSFs are allowed to lease to related parties, including the members’ family businesses, without a limit on its value. 
The Australian Tax Office reveals that the poorest of Australia’s top 100 richest SMSFs have more than $20 million in assets, with the average being about $33 million. Annual caps on superannuation contributions mean that the richest of the rich SMSFs – which have assets up to $40 million-plus – will never again be created. 
The latest Self-Managed Super Fund Statistical Report, published by the ATO, shows that SMSFs with $10 million-plus in assets have close to 14% of their portfolios in direct business property. Just 2% of their portfolios are in direct residential property. 
By contrast, SMSFs in the $1 million to $2 million asset range hold a little over 9% of their portfolios in direct business property and a squeak over 4% in residential. 
Australia’s richest SMSFs have a mixed relationship with direct property; some won’t touch it – others own hardly anything else. 
Philip La Greca, technical services director of self-managed fund administrator Multiport, has given Property Observer a perhaps unprecedented insight into the six richest SMSFs receiving its administration services. La Greca has made the details sufficiently vague so they could not be identified. 
These Multiport client funds – which have between $9 million and $10 million in assets – have highly individualised approaches to investing in direct property: 
Rich fund one
Almost 8% of its huge portfolio is invested in a high value apartment. The remainder is invested in Australian shares (60%), fixed interest (17%), cash (%) and overseas shares (7%).
 
Rich fund two
Almost a third of this fund’s assets are in two commercial properties, including the trustees’ business premises, and two residential properties. The rest of the portfolio is invested in cash (30%), Australian shares (22.5%), fixed interest (8.5%) and indirect property (7%). 
The business property could be held in the fund as a family/business succession strategy. The members are baby-boomer parents and their adult child. 
Rich fund three
This fund is rather unusual. Despite its size, it has no direct property. The sole trustee, an elderly retiree, has 95% of the portfolio in blue-chip shares with the remainder in cash. 
Rich fund four
More than 22% of its portfolio is invested in two commercial properties. The remainder is held in Australian shares (64%), cash (12.5%), and fixed interest (1%). 
La Greca says that if one of the two trustee were to unexpectedly die – both are in their 60s – the large share exposure means that a property would not have to be sold to pay death benefits. 
Rich fund five
Again this fund is different from most with multimillion-dollar portfolios. It holds no direct property and a minuscule amount of indirect property. The fund’s other assets comprise fixed interest (67%), Australian shares (19%) and international shares (0.5%). The trustees, both in their early 60s, are taking few chances. 
Rich fund six
The trustees – an elderly couple and their middle-aged children – have 77% of their portfolio in direct commercial property. The remainder is invested in Australian shares (17%), cash (2.5%) and a tiny amount of fixed interest.
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Super-rich build their SMSF nest eggs with property, particularly commercial

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
We recently looked at the new draft <a href="https://www.propertyobserver.com.au/news/tips-for-borrowing-through-your-diy-super-for-property-investment/2011101151890" target="_blank">ATO ruling surrounding borrowing via your self-managed super fund and property</a>. The rules are more lenient, but investors still need to be careful.
Understand the difference between repairs and improvements of geared property
 
Detail: Under last year’s amendments, superannuation law specifies that money borrowed by a SMSF under a limited recourse loan arrangement must only be used to buy and maintain an asset – not to improve it.
Draft ruling: An improvement of an asset, in contrast to a repair, will improve its efficiency and/or substantially increase its value. 
Crucially, a fund can use its own money to improve a property – provided those improvements are not so extensive so as create a new asset, according to the ruling. 
The draft ruling stresses that what the ATO regards as the difference between repairs and improvements for tax deductibility is not necessarily the same as its interpretation in relation to SMSF gearing. Meg Heffron, co-principal of specialist SMSF administrator Heffron and a former member of the Cooper superannuation review, says the draft ruling shows the ATO will take a “fairly liberal view” about the difference between a repair and an improvement. 
The draft ruling states that a repair may include restoration to an asset’s former appearance or condition – without changing its character. 
“These issues will always be a matter of degree,” comments Heffron, “but the ATO clearly envisages quite a wide range of activities which might incidentally add to the value of the property falling into the repairs category. 
“This is obviously highly beneficial to funds that have borrowed to acquire real property.” 
Case studies from draft ruling: A SMSF borrows to buy a house with broken windows. Not surprisingly, the ATO would treat the replacement of the windows as a repair, not an improvement. Therefore, the new windows could be financed under a borrowing arrangement.
SMSF trustees renovate a rundown house immediately following its purchase. Under the draft ruling, the ATO would treat renovations that improve the efficiency of the asset and substantially increase its value as an improvement. This means that the renovations could not be financed under the loan arrangement. 
A SMSF renovates a property and adds a bathroom. Property investors, of course, commonly undertake such projects. The ATO would regard the addition of the bathroom as an improvement.
A kitchen is restored following a fire that damages the stove, benches and walls. Under the draft ruling, the ATO would regard the kitchen’s restoration as a repair. But if the kitchen is extended at the same time, the extension would be treated as an improvement. 
A SMSF adds a swimming pool or garage to a geared property. The ATO would view the changes as improvements, which could not be financed under a borrowing arrangement. 
Understand what improvements create a new asset 
 
Detail: A basic challenge for property investors is whether proposed improvements to a geared property are so extensive as to effectively create a new asset. 
Under superannuation law, a fund cannot even use its own cash, let alone borrowed money, to finance improvements to a geared asset that lead to the creation of a new asset. The fund would have to wait until the gearing expired before using its own money to pay for such improvements. 
Drafting ruling: “The ATO has previously taken the view that improving a property will necessarily trigger the replacement of one asset, the unimproved one, with a new asset,” says Heffron. 
“The ruling takes a far more liberal position,” she says, “and indicates that in the ATO’s view, not all improvements will necessarily result in a replacement asset.” 
The draft ruling gives the ATO’s opinion that an improvement that fundamentally changes the character of an asset amounts to the creation of a new asset. 
Case studies from draft ruling: A SMSF owns a geared house and land. The house is then demolished and replaced with three strata units. New assets would be created. 
A SMSF owns a geared house and land. The land is rezoned and the house converted into commercial premises. Again, a new asset would be created. 
A fire destroys a fund-owned, four-bedroom house. The fund uses the insurance payout to build a replacement four-bedroom house. The fundamental character of the property has not changed. The proceeds of an insurance payout could finance the replacement.
For more on self-managed super and property, download our e-book.
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What you need to know about borrowing via a SMSF and property repairs

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
Suddenly, borrowing to invest in direct property through self-managed super funds is much more appealing. Following the recent release of a SMSF draft ruling, countless fund trustees would be feeling more confidence in the strategy – particularly when investing in older properties. 
In <a target="_blank" href="https://law.ato.gov.au/pdf/pbr/smsfr2011-d001.pdf">the draft ruling</a>, the ATO explains in detail its interpretation of the SMSF borrowing laws in relation to the purchase, maintenance, improvement and other fundamental changes to geared real estate.  
And the regulator effectively provides a blueprint for SMSF trustees on how far they can go in looking after and improving their properties within strictly-controlled borrowing arrangements – according to its interpretation of the law. 
For most SMSF investors in geared direct property, the draft ruling suggests they can maintain their assets with a fair degree of freedom using money borrowed under the original loan arrangement. 
Meg Heffron, co-principal of specialist SMSF administrator Heffron and a former member of the Cooper superannuation review, puts the draft ruling into perspective. 
“This is a ruling – and a draft ruling at that – rather than a legislative change,” Heffron emphasises. “It is simply the view that the ATO intends to take in regulating SMSF borrowing.” 
Although noting that a court could one day reach different interpretations on some issues, Heffron realistically adds that many SMSFs prefer to follow the ATO’s thinking rather than risk a clash with the regulator. 
Sydney tax lawyer Robert Richards succinctly adds: “The value of the draft ruling is the examples [see case studies below] as to what will, and as to what will not be, acceptable to the Tax Office.” 
In other words, SMSF trustees who are considering gearing property should pay close attention to the draft ruling. 
Although the final ruling will no doubt contain some changes after consultations and submissions, it will almost certainly mirror what has been described as a pragmatic and practical approach to interpreting the laws involving maintaining and improving geared property in SMSFs. 
Previously, many SMSFs would have been uncertain about the extent they could go to with renovations, maintenance, improvements and changes to geared properties without contravening the law – or at least the ATO’s interpretation of the law. (The final ruling will apply to gearing from July last year when key changes were made to the SMSF borrowing laws.) 
SMSF advisers are typically expecting a marked pickup in the gearing of properties by funds. It would be difficult to believe otherwise. 
Here is our three-point, no-nonsense guide to the draft ruling: 
Understand what is an acceptable geared asset
 
Detail: In July last year, superannuation law was amended to stipulate that a SMSF is only permitted to borrow to buy what is called a “single acquirable asset”. This means that a separate borrowing arrangement is necessarily for each geared asset. A difficulty is that it is not always clear to fund trustees whether a property – such as a building constructed across two titles – is a single asset or not. 
Draft ruling: Here the ATO displays its pragmatism. “Fortunately,” says Heffron, “the ruling indicates that the ATO will take the view that where the two [assets] cannot be separated, they will be treated as a single asset.” This is the position even if a property is over more than one title. 
“This is a new, far broader and more practical interpretation,” Heffron adds. “Previously, the ATO has effectively equated ‘asset’ with ‘title’.” 
Case studies from draft ruling: A factory is built over three titles yet, under the draft ruling, the ATO would treat the property as a single asset that could be acquired with a single borrowing arrangement. 
An apartment and its car park are on separate titles. And state law, in this case, does not allow the properties to be sold separately. Under the ruling, the ATO would treat the properties as one asset. 
A SMSF wants to buy two adjacent blocks of land that the vendor will only sell together. However, there is no physical or legal reason why the blocks are not sold separately. The ATO would treat the blocks as separate assets. And therefore, the fund must enter into separate loan arrangements to gear the properties. 
A SMSF wants to buy an off-the-plan apartment. Under the draft ruling, the ATO would allow the fund to use its own cash to secure the purchase. And then the fund could enter a borrowing arrangement to buy what the ATO would treat as a single asset.
<a href="https://www.propertyobserver.com.au/renovating/what-you-need-to-know-about-borrowing-via-a-smsf-and-property-repairs/2011101251901">Tomorrow we will review the difference between repairs and improvements and discuss what improvements create a new asset.</a>
For more on self-managed super funds and property, download our e-book.
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Tips for borrowing through your DIY super for property investment

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Yesterday we noted that self-managed super funds often ignore residential property and put all of their money into commercial property. However, there are some significant benefits for SMSFs that are willing to buck the trend.
<a href="https://www.propertyobserver.com.au/residential/why-diy-super-funds-shouldn-t-snub-residential-property/2011092851730" target="_blank">Residential property can be an appropriate asset for SMSFs.</a> Here are 10 tips for investing in residential real estate. 
1. Buy your future retirement home through your SMSF
Under this strategy, your self-managed fund gears a house or apartment, receives a concessionally taxed rent, pays off the loan while you are still working, and finally transfers the property to you upon retirement. 
After your retirement, you can either: 
<ul>
<li>Take the property as a non-cash, lump-sum benefit. (Although CGT is payable on any capital profit, the tax rate is an effective 10% – provided the property was owned by the fund for at least 12 months.) </li>
</ul>
<ul>
<li>Buy the property from the fund for its market price. (No CGT is payable if the property is backing the payment of a superannuation pension. But you are personally liable for stamp duty on the purchase.) </li>
</ul>
Martin Murden, director of SMSF consulting for services provider to accountants Partners Group in Melbourne, suggests that you compare the CGT with the stamp duty – and take the cheaper option. 
2. Sidestep CGT on sale of a fund-owned property
Even if the property has multiplied in value during the fund’s ownership, it is still possible to legally sidestep CGT on its eventual sale by your fund. 
Provided the property is backing the payment of a superannuation pension, no CGT is payable by the fund. A popular strategy is to wait until the pension phase before selling a property. 
3. Expect lower yields, higher capital growth
Dean Kitchin, general manager of property with the Partners Group, emphasises that gross residential yields are typically between about 3% and 5% compared with, say, 6.5% to 7% for office or industrial property.
But Kitchin, a certified practising valuer, says that residential property historically produces higher long-term capital growth than office and industrial property. 
Kitchin has found that younger SMSF members are often willing to put up with lower yields in the expectation of long-term capital gains. By contrast, older members tend to seek higher yields. 
A key consideration here is whether a SMSF can comfortably meet interest payments for a geared residential property, given its circumstances – including the actual yield being received, loan-to-valuation ratio and level of member contributions. 
Sean Preece, managing director of residential property adviser and buyer’s agency Capital 360, believes that most SMSFs borrow 40% to 50% of a property’s value, making repayments less of a challenge. 
4. Gain comfort from low residential vacancy rates
Residential property with the rent set at market levels is most unlikely to remain vacant for long between tenants. 
It is obviously in a fund’s best interests to minimise the length of time between tenants – particularly if a property is geared and largely relies on rent to repay the loan. 
Kitchin says the residential vacancy rate in <city><place>Melbourne</place></city> is a very low 1%to 2.5%. (A vacancy rate of 3 per cent is generally regarded as suitable for a smooth changeover between tenants.) “We are seeing vacancy rates for commercial and office properties well in excess of 3%,” Kitchin adds. 
5. Beware of SMSF restrictions involving residential property
Self-managed funds are barred from acquiring residential real estate from related parties – who, of course, include fund members. 
And a SMSF is prohibited under the in-house asset rules in superannuation law from leasing or having investments with related parties involving assets that are worth more than 5% of the fund’s total market value. Business property – but not residential property – is among the few exceptions to the rule. 
This means that a fund with a valuable residential asset needs an exceptionally high total asset value in order to rent a residential property to a related party. 
6. Forget (in most cases) about owning a holiday house in your SMSF
Two problems immediately arise if you are thinking about holding your holiday house in your self-managed super fund: 
First, the sole purpose test – perhaps key provision in superannuation law – specifies that a super fund must be maintained for the sole purpose of providing retirement and death benefits. In practice, this means that a holiday house must stand up in its own right as an investment. 
Second, the in-house asset rules in superannuation law, as mentioned, stipulate that the market value of fund-owned asset leased to related parties (including members) must not exceed more than 5% of a fund’s total value. 
Michael Vrisakis, superannuation partner with national law firm Freehills, says a SMSF will not breach the sole purpose test by renting a fund-owned holiday home to its members at a commercial rent. However, he emphasises that a fund would need substantial assets not to breach the in-house asset rule. 
7. Watch for non-diversification trap
One of the biggest traps for SMSFs investing in residential property (or any other property for that matter) is to become overly dependent on the investment success of a single costly asset to provide retirement benefits. 
The reality is that a valuable residential property is likely to account for a large chunk of a SMSF’s assets. You should question whether this is a smart move given your fund’s circumstances.
Superannuation law does not prohibit a fund from owning only one asset. In fact, some funds are set up specifically to buy a property. 
However when preparing their compulsory investment strategy, fund trustees must consider diversification, investment risk, liquidity of investments and ability to pay member benefits. 
A costly residential property cannot always be readily sold at an acceptable price to pay member benefits. 
8. Calculate whether you are better off gearing in your name
High-income-earners in particular should calculate whether negatively gearing a property in their own names will produce superior after-tax returns over the long-term than gearing through a SMSF. 
Much will depend on the circumstances including the level of gearing, personal tax rates, extent of expected capital growth, and when the property is eventually sold. As discussed, if the property is sold when it is backing the payment of a superannuation pension, no CGT is payable. 
Keep in mind that any shortfall between the rent and deductible costs (mainly interest) is deductible against a personal investor’s other income. 
 
9. Question whether now is a smart time to buy 
Does the fall in national house prices over the past year create a buying opportunity or a warning to stay away?
Dean Kitchin of the Partners Group expects that the <city><place>Melbourne</place></city> market, for example, will produce “very modest growth” over the next three to five years. And he says there is a view that <city><place>Sydney</place></city> housing is better buying than <city><place>Melbourne</place></city> because it was hit harder with the GFC. 
Sean Preece of Capital 360 argues that buying opportunities are available in any market for astute investors. “It is really about finding the gold nuggets,” he says. 
“The residential property market is extremely inefficient; and opportunities present themselves in a range of ways,” Preece adds. “The obvious ones are non-local real estate agents trying to sell properties they don’t know about, divorce cases and distressed sales. 
10. Don’t ignore difference between a repair and an improvement
Following the release of a draft SMSF ruling last week, superannuation and property specialists report a jump in the number of self-managed funds interested in borrowing to invest in property 
With a few days of the draft ruling, buyers’ agent Capital 360 had nine inquiries from SMSFs about gearing residential property. And Dean Kitchin of the Partners Group says it is logical that the draft ruling will encourage more SMSFs to gear. 
<a href="https://www.propertyobserver.com.au/industry-news/smsf-renovation-tax-ruling-makes-property-investment-more-alluring/2011091451543" target="_blank">In the draft ruling, the ATO attempts to clarify its interpretation of the borrowing laws concerning the maintenance, renovation and alteration of geared assets in SMSFs.</a> 
Under superannuation law, a self-managed fund can drawdown on a non-recourse property loan to pay for the repair and maintenance a geared asset. But it is not allowed to drawdown on an existing loan to improve that asset.
The ATO gives a series of examples of what will be regarded as maintenance and improvements if the draft ruling is implemented. For instance, adding a bedroom, extending a kitchen or putting on another storey is regarded as an improvement.
Under superannuation law, a fund can only use a non-resource loan to buy a single asset. And the draft ruling gives examples of what actions may create a different asset. For instance, demolishing a geared house and replacing it with three strata units creates new assets, and is therefore unacceptable under its interpretation of the borrowing laws.
For more on property and self-managed super funds, download our e-book 16 questions self-managed super fund trustees should ask before investing in property.
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Ten tips for SMSFs investing in residential property

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Self-managed super funds overwhelmingly favour business property to residential property – sometimes to the detriment of the members’ retirement savings. 
ATO statistics shows that SMSFs have less than a quarter of their $58.9 billion direct property investments in residential. This immediately raising a straightforward question: Why? 
Martin Murden, director of SMSF consulting for services provider to accountants Partners Group in Melbourne, attributes a substantial part of the gap in popularity to the fact that many owners of small and medium businesses hold their business premises in their own funds. 
And Sean Preece, managing director of residential property adviser and buyer’s agency Capital 360, attributes the popularity gap to the higher average yield of commercial properties. As Preece explains, many fund trustees seek a higher yield to service investment loans on geared properties. 
However Preece, who advises many SMSFs on their property investments, argues that residential real estate is an “absolutely” appropriate asset for superannuation. 
Lower average yields aside, residential property potentially has a range of positive features for SMSFs including relatively low volatility compared with other growth asset classes, an inefficient market that opens up buying opportunities, and, historically, solid long-term capital gains on well-selected properties. 
And if a SMSF sells a property when the asset is backing the payment of a superannuation pension, no capital gains tax is payable. (This tax treatment, of course, applies to any growth assets.) 
Further, fund-held residential property can lend itself to some innovative, highly rewarding strategies. For instance, Preece says Capital 360 recently arranged for three SMSFs and three personal investors to each buy an apartment in a six-unit block. The owner of the block agreed to a 15% discount. And an inexpensive makeover of the flats boosted the yields. 
An innovative strategy for couple fund trustees is to buy their future retirement homes through their SMSFs. This strategy can provide excellent retirement savings, tax and lifestyle advantages. 
But be warned there are plenty of pitfalls for SMSFs when buying residential property – particularly if the property is geared.
For more on SMSF and property, see our e-book.
Tomorrow we will look at the top 10 tips for SMSFs investing in residential property.
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Why DIY super funds shouldn't snub residential property

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As we look to what's ahead for 2012, Property Observer is republishing some of our most noteworthy stories of 2011.
 
<a target="_blank" title="Retail tenants have upper hand" href="https://www.propertyobserver.com.au/commercial/retail/some-retail-tenants-have-the-upper-hand-in-rent-negotiation/2011082351267">Recently</a> we noted a trend that the current tough retail environment sometimes gives tenants the upper hand when it comes to rent negotiation. The Australian Bureau of Statistics has released data that show retail growth is the slowest it has been in 50 years, and no one disputes that retail strips have been hit hard.
However, there are things retail landlords can do to put themselves in a better position. Property Observer asked retail property specialists for their tips on how smart landlords can try to protect their positions in the face of falling retail sales:
1. Understand your tenant’s business: “You need to understand the success drivers of a retail business are and understand what that means for you as a landlord,” says Simon Rumbold, national director of property economics with property forecaster and researcher Urbis.
 
In turn, this puts the landlord in a stronger position to help attract shoppers to a particular tenant.
2. Treat your tenants as your customers: “I always quote Frank Lowy, who says his customers are his retailers,” Rumbold says. 
“And Westfield is a customer-focused business and so is entirely focused on the relationship with its tenants – as opposed to its relationship with their customers walking through the front door and spending money in the shops,” he explains. 
Rumbold says shopping centre landlords should be thinking about the marketing of the centre for the tenants’ benefit and “optimising the tenant mix so overall everyone succeeds – drawing from their common strengths”.
3. Help struggling tenants: In this way, retail landlords step in and help an ailing tenant before it fails. 
“Good shopping centre managers will walk the floor everyday of the shopping centre,” Rumbold says. “If they see a shop where stock is getting run down or not well-presented, or a shop that doesn’t seem to be operating every well, they will have a chat to the retailer, making suggestions for improvements.” 
“They are obviously not able to pry into the personal financial position of a shop or retailer – that’s not their business – but they are there, ultimately, to make sure retailers succeed as far as possible,” he explains. 
Duncan Johnston, executive chairman of Collins Booksellers, also manages 15 to 20 retail and commercial properties for self-managed super funds. And in his role as a landlord, Johnston keeps a close watch for retail tenants that may be experiencing difficulties. 
“If our tenants are suffering, we look at ways to assist them,” he says. In one recent example, <city><place>Johnston</place></city> has arranged to share advertising with a tenant to give its business a boost. 
With another tenant, Johnston says his SMSF investors have agreed to cut the rent by 20% until November. “This will ensure they have a good lead-in to Christmas,” he says. If rent relief is being given, <city><place>Johnston</place></city> tells the tenants they have to spend more on marketing.
4. Ensure tenants have a viable business and a good track record: This is a time for picking tenants with even more caution than usual because of depressed retail sales and because the viability of retail businesses varies greatly. 
In attempting to ensure that a tenant has a viable operation, Rumbold suggests that landlords take care not to duplicate businesses already in a shopping centre or nearby in a shopping strip. 
And landlords should satisfy themselves that a would-be tenant’s type of business is likely to generate enough income to succeed.  Rumbold gives the example of a video outlet wanting to rent a shop. He says a landlord who believes that the internet is taking over from video shops might favour a tenant with a different type of business.
5. Get the basics right: Whether you are a residential, commercial or industrial landlord, there are a range of basic dos and don’ts that should be followed without fail, Rumbold emphasises. 
These include don’t try to charge above market rents, look after good tenants, and don’t put tenants into properties they can’t afford. 
Rumbold says landlords can only get away charging above-market rents for a short time – if at all. “If tenants can’t or are unwilling to pay their rent, you are wasting your time as a property owner.” He stresses that rents are dictated by the market and landlords should charge whatever rents they think the market will bear.
6. Buy smart: <city><place>Johnston</place></city> believes that the troubled state of retail sales is producing some opportunities to buy retail property at excellent prices – “no doubt about it”. 
He says some landlords have geared their properties to their previous rental income but are now being forced to sell if their rents returns have fallen. 
On behalf of some SMSF investors, Johnston is looking at buying 11 neighbouring strip shops in a Victorian regional town. “The owner is obviously struggling,” he says. 
Johnston underlines the need to have a good mix of neighbouring tenants – whether buying a single shop or several shops.
Simon Wheatley, executive director for real estate research at Goldman Sachs, says buyers of property in shopping strips should ideally seek property with a long lease in place. “If a property has a short-term lease or a rent review coming in the short-term, your risks would generally increase,” he says. 
When assessing a property to possibly buy, Rumbold suggests asking such questions as: “How many people are going to walk past the shop every day? How busy is the location? How successful are the adjacent tenants? What is the condition of the building? Where is the parking?” 
Parking is a particularly important issue for the success or otherwise of a retail investment. “Most people still drive to shopping centres,” Rumbold says. This means that shops in locations with poor parking should ideally be near a train station or supermarket or something else that will generate potential customers. 
“Otherwise, you could find yourself in a low-traffic area that struggles to attract good business,” Rumbold adds. 
Smart buyers of retail property also make themselves aware of any planned changes in a location that could either weaken or strengthen the viability of a retail investment. 
Check, for instance, whether a new supermarket is being built nearby – it could be positive or a negative for your intended investment. And keep in mind that changes to traffic conditions could affect the number of shoppers in an area.
Photo courtesy of Tourism Victoria
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Six tips for retail landlords in tough climate

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Duncan Johnston, executive chairman of Collins Booksellers, cannot quite believe the rent-crunching deal just negotiated for one of the chain’s bookshops to take a large space in a top Westfield shopping centre. 
Johnston says Collins has negotiated a 50% reduction on the rent paid by the previous tenant, Angus &amp; Robertson. “They came chasing us,” says Johnston. “They really wanted a bookshop.” 
While <city><place>Johnston</place></city> says the big shopping centres can really “take a hit” when a major tenant fails, he readily agrees that shopping strips are being much worst hit as shoppers effectively go on strike. 
The plight facing retail landlords and retailers was starkly documented this month when the Australian Bureau of Statistics released its June quarter retail trade figures showing that sales rose by only 2.6% in 2011-12. This is the slowest annual growth in 50 years. 
Countless landlords in shopping strips are immediately facing rising vacancy rates, falling rents and departing tenants while heavyweight shopping centre landlords remain relatively insulated – at least over the short-term. 
This is widening the gulf in the fortunes of shopping centres and shopping strips. 
Johnston says Collins would have had had more approaches in the past three weeks than over the past 12 months from landlords asking the chain to take leases on vacant strip shops in the Melbourne CBD. 
Simon Wheatley, executive director for real estate research at Goldman Sachs, says shopping centre landlords are relatively cushioned from the retail downturn, in part because just 2% of their revenue is from turnover rents. The remainder flows from rents set in their long-term leases, which allow for annual rate rises. 
And generally major shopping centres can immediately fill vacancies left open by departing tenants. But, in some cases, the centres may have to offer special deals to win particular types of tenants – as illustrated by the sharply discounted rent recently negotiated by Collins. 
However, Wheatley emphasises that the big shopping centres will only remain cushioned for a limited time. “The occupancy cost ratios – the rent and outgoings as a percentage of total sales – have gone from about 15% for regional malls in 2005 to about 18% now, he says. 
“That’s a fairly substantial increase and is not sustainable long-term,” he says. “It is sustainable now because arrears levels are fairly low and we are seeing virtually no vacancies in shopping centres.”
Tomorrow Property Observer will give six tips for retail landlords.
Photograph by Ben King, courtesy of Tourism Victoria
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Some retail tenants have the upper hand in rent negotiation

<html><body>
Tax and superannuation lawyer Robert Richards is among a growing group of professionals and business owners to hold their business premises in their self-managed super funds. 
His legal practice pays his SMSF a commercial rent for use of its small strata-title office on the top floor off a 1930s office block, overlooking 
<address>
<street>Martin Place</street>, <city>Sydney</city>
</address>. 
The property is ungeared, having been bought before amendments to superannuation law four years ago unequivocally allowed SMSFs to gear property and other investments under strict conditions. 
Richards says his SMSF acquired the commercial property for the main purpose of increasing his retirement savings in a tax-efficient way. And there are the added benefits of having a centrally located office for a tax lawyer and not having to deal with an unrelated landlord. 
Philip La Greca, technical services director for self-managed super fund administrator Multiport, says many more professionals and business owners are considering holding their business premises through their SMSFs. 
La Greca attributes this growing interest in business property to SMSF trustees wanting to take more advantage of superannuation’s concessional tax treatment and asset-protection attributes. And, he says, more trustees are seeking an alternative to shares given the level of sharemarket volatility. 
He points out that when business owners eventually retire, the trustees can decide whether to sell the business premises together with the business or to keep the premises in the fund to provide a retirement income. 
The latest Multiport SMSF Investments Pattern Survey, conducted in late March, shows that a least 13% of the 1400 SMSFs administered by the firm are borrowing to invest using limited-recourse loans. (Multiport will publish an updated report over the next couple of weeks.) 
The average property loan among Multiport client funds is $200,000, compared with $110,000 for shares and managed investments. And 56% of the loans taken by these SMSFs are invested in property. 
La Greca describes the average $200,000 property loan as conservative, considering that the SMSFs administered by Multiport have an average asset value of almost $900,000. 
“The funds are dipping their toes [into borrowing for property], not making a head-long plunge,” he says. 
La Greca agrees that interest among SMSFs in borrowing to invest under the borrowing provisions introduced four years ago was relatively low until early this year. But he says that interest has since accelerated. 
SMSF trustees were gaining more of an understanding about the borrowing rules. And financial institutions were becoming more comfortable about lending to SMSFs despite the requirement in superannuation law for the use of limited recourse loans. 
As discussed in Property Observer’s latest e-book, 16 questions SMSF trustees should ask before investing in property, geared assets in self-managed funds must be held in trust until payment of the final loan instalment. And lenders cannot make a claim against any other assets of the super fund, apart from the geared asset, in the event of a default on the loan. 
La Greca says about four SMSFs a month – among those administered by Multiport – are entering new gearing arrangements, up from about one a month last year. 
“And there is no question that the prime asset for SMSF gearing is real estate,” La Greca adds.
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More business owners holding premises through DIY super

<html><body>
<a href="https://www.propertyobserver.com.au/commercial/after-borders-a-new-chapter-in-retail/2011062850630" title="After Borders, a new chapter in retail" target="_blank">Yesterday</a> we looked at the collapse of REDGroup and the departure of Borders stores from shopping centres, and what it means for landlords. Today, in the second part of our two-part series on the impact the collapse of major chains has on retail landlords and shopping centres, we ask how much due diligence REDGroup's landlords would have done and what the state of the industry looks like. 
Property Observer asked several retail specialists about the impact from the mass store closures, the lessons for landlords and tenants, how landlords vet tenants and about the true state of retail property.
 Are the landlords usually owed money when tenants suddenly depart?
“Absolutely,” says retail specialist Simon Rumbold, national director of property economics with property forecaster and researcher Urbis. “When a tenant simply just walks away, cash flow stops immediately.
“In all likelihood, there are rental arrears with possible legal arguments over who is owed what.”
Additionally, it usually takes a few months before new tenants occupy the spaces, which can cost landlords money in lost rent. 
Is the entry of such international retail giants as Gap and Zara into <country-region><place>Australia</place></country-region> fortuitous for landlords, given Borders’ demise? 
Unquestionably. “We are aware of two or three other international groups occupying large-format stores that are looking at coming into the Australian market right now,” Rumbold says.
“At least one, possibly two, of those international groups is looking at taking ex-Border spaces right now.” 
How highly do landlords value big brand names when vetting prospective tenants?
Rumbold says the strength of the trading brand is the landlord’s number-one concern. Landlords asked themselves such questions as: Is this brand going to succeed in our shopping centre? What is the track record of this brand in other shopping centres?
“Ultimately, they want the rent from the shops, but they also want the brand to add to the appeal of the whole shopping centre,” he says. “They want the money and the brand.
“Less-known retailers are basically working off the shopping centres, whereas the big brands can contribute to the strength of the shopping centre.”
 
How deeply do landlords check a prospective tenant’s finances?
“The financial security of the lease and the lessee is obviously of primary concern for a landlord,” Rumbold emphasises. Landlords want to closely review a would-be tenant’s financial statements.
And the monitoring a tenants’ finances continues after the signing of the leases. “In the shopping centres [as opposed to strip shopping areas], landlords are on your back the whole time,” says Duncan <city><place>Johnston, executive chairman of Collins Booksellers</place></city>. Johnston and his associates also manage 15 to 20 retail and commercial properties for self-managed super funds, including his family’s fund.
What financial sureties are sought from tenants?
Rumbold says a landlord would want a guarantee that a tenant will pay the rent, and typically a bond is required.
“That means that if something happens and if the tenant vacates or doesn’t pay rent, they can draw upon the guarantee or the bond,” he explains.
However, it seems that shopping centres might not be as demanding with some heavyweight tenants regarding rental guarantees.
“With such companies as <state><place>Colorado</place></state>, Borders or whatever, I can’t tell you what sort of guarantees would have been in place with individual leases,” Rumbold says. “They would have varied from landlord to landlord. But there would have been some guarantees in place.”
But he stresses that if a business fails financially, a guarantee “may count for nothing”, depending upon the type of guarantee.
Do shopping centres require tenants to provide personal guarantees for rent? 
Personal guarantees would not, according to Rumbold, be sought from the big retail chains “But mum-and-dad retailers would have to provide personal guarantees.”
Is the level of retail vacancies in good or bad shape?
“It is still in very good shape,” Rumbold says. The latest Urbis annual national survey of shopping centres, conducted last year, reported a vacancy rate of 2.9 % in large regional shopping centres, and 3.9% in second-tier centres.
Despite the impact from the jump in household savings and the slowdown in consumer spending, shops are not lying vacant for long between tenants.
“The vacancy [level] has increased very marginally since the previous year,” says Rumbold, “but is still at a very low. It is not at a level of concern and it is well below international benchmarks. Australian shopping centres have always performed exceptionally well in terms of vacancy rate.”
Rumbold comments that that a 3% vacancy rate for retail property is sustainable, but a 2% vacancy rate is preferable – giving sufficient flexibility for a changeover between tenants.
He stresses that any vacancies in many shopping centres such as those in Chatswood and <place>North Bondi</place>, in NSW, “often fill at the drop of a hat”.
“Although retail conditions overall have been fair to soft, they haven’t been negative. Landlords have been reporting reasonably stable or improving sales.”
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Landlords coping with the loss of anchor tenants

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Veteran retail property and business professional Duncan Johnston argues that the wholesale closure of book and fashion stores this year should send a blunt message to retail landlords: Don’t be greedy.
As both a landlord and a tenant, <city><place>Johnston</place></city> has a unique perspective on the fallout for retail property from the collapses of the giant REDGroup and <state><place>Colorado</place></state> chains.
In his role as an accountant and property entrepreneur, Johnston and his associates personally manage 15 to 20 retail and commercial properties for self-managed super funds, including his family’s fund.
And as executive chairman of Collins Booksellers as well as the joint owner of five Collins franchises, <city><place>Johnston</place></city> negotiates hard with retail landlords get the best deal for his fellow franchisees.
Retail property specialists say that although new tenants should rapidly fill the spaces left by the REDGroup (owner of the Borders and Angus &amp; Robertson book chains) and Colorado Group, shopping centres will pay a high price.
The shopping centres will inevitably lose revenue with the changeover of tenants as well as facing the costs of breaking up huge of areas occupied by Borders into much smaller shops.
And there is a strong possibility that some departing tenants will still owe at least some money – particularly because centres typically demand fewer financial securities from their anchor tenants.
But probably the biggest cost for the shopping centres is the loss of Borders as a major drawcard to bring shoppers into the centres, providing a flow of potential customers for small retailers.
“Borders had become an important linchpin in the leisure and entertainment centre of these shopping centres,” says retail specialist Simon Rumbold, national director of property economics with property forecaster and researcher Urbis.
“Borders became a very popular place for people to hang out, browse and spend time,” he adds. “[The loss of] Borders certainly creates holes in some of the larger shopping centres.”
Property Observer asked several retail specialists about the impact from the mass store closures, the lessons for landlords and tenants, how landlords vet tenants and about the true state of retail property.
Are such wholesale stores closures a rare event? 
While smaller retailers go out of business with some regularity, Rumbold says the departure of large retailers is relatively unusual. 
 
“No landlord wants to lose larger tenancies, particularly iconic ones like Borders which attract people into their centres for purposes other than buying just clothes or food.”
A <city style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Westfield</place></city> spokesperson says the task of replacing departing tenants is part of the group’s normal business practices. 
 How quickly will the vacated stores be filled?
Landlords will feel the closure of the REDGroup stores much more sharply than the demise of the <state style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Colorado</place></state> chain. It comes down to size of the areas – as well as the ability to draw shoppers into the centres.
A typical shopping centre has between 50 and 300 shops so the closure of one, two or three average-sized shops is “not a big deal” for landlords, Rumbold says.
“<state style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Colorado</place></state> stores [and most Angus &amp; Robertson stores] were typically 100 to <metricconverter style="outline-style: none; outline-width: initial; outline-color: initial;" productid="150 square metres">150 square metres</metricconverter>, which are relatively small shops,” he says. “And the better shopping centres would have waiting lists of tenants looking for those spaces.” 
What are the lessons for landlords from the mass shop closures?
“Don’t kill the golden goose,” says Johnston of Collins Booksellers. “Shopping centres should be investors in caravan parks; they put a lot of people into them.
In his other role as a manager/landlord of commercial and retail properties for self-managed super funds, Johnston says an approach is taken not to squeeze as much rent as possible from tenants.
“We are about making sure have a long-term tenant who is successful and is there for the long term,” he adds.
Before accepting a tenant for one of the properties he manages, <city style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Johnston</place></city> vets prospective tenants with extreme care. “We go through their business model, making sure it is going to be successful.”
<city style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Johnston</place></city> says Collins won’t rent from a major shopping centre unless the occupancy costs for its stores can be kept to 12% or less of the turnover.
And he is strongly opposed to the practice of many large shopping centres of having turnover clauses in their leases, stipulating that tenants pay a share of their profits in extra rent after turnover reaches a certain level. “Turnover clauses are common with shopping centres,” he says. “The clauses are in almost every bloody lease.”
Rumbold comments that although most shopping centres have turnover provisions in their leases, very few retailers actually paid turnover rent.
But what about the ex-Border stores?
Rumbold says the much large floor spaces occupied by each Border store – typically about <metricconverter style="outline-style: none; outline-width: initial; outline-color: initial;" productid="1500 square metres">1,500 square metres</metricconverter> – creates much more of a problem for their former landlords.
“It is obviously harder to fill those large spaces than the small ones,” he says.
A spokesperson for <city style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Westfield</place></city> says all of the vacated Borders stores in its centres have been leased to new tenants. (The majority of Borders stores were in <city style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Westfield</place></city> centres.)
Duncan Johnston of Collins understands that <city style="outline-style: none; outline-width: initial; outline-color: initial;"><place style="outline-style: none; outline-width: initial; outline-color: initial;">Westfield</place></city> has divided some former Borders shops into two or three small retail spaces in order to attract tenants.
Does bookselling in general face financial problems?
Both Rumbold and Johnston are emphatic that bookselling, including from bricks-and-mortar outlets, is not in trouble.
"There has been a lot of comment around about why Borders and Angus &amp; Robertson went bust,” says Rumbold. “I agree with most of the comment about private equity taking over retail businesses that they don’t really know how to run properly and with too much debt. And Borders was very slow to adapt in the <country-region><place>US</place></country-region> and in <country-region><place>Australia</place></country-region> to the online challenge.”
 But he points out that the giant US book chain Barnes &amp; Noble has had a 7%  increase in its in-store sales over the past year, and its sales last Christmas were the biggest in 10 years.
 "The idea that the REDGroup failure is due to the disappearing book market is completely misconstrued and incorrect,” Rumbold adds. “That is not to say that booksellers or book sales have not been hard hit by on-line; they have.”
 "People will buy books online and in bookshops, and the two will happily co-exist for along time to come.”
</body></html>

After Borders, a new chapter in retail

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

Joel Robinson

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

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

Nova Rêve arrives as Reve Group bets on Castle Hill's next growth phase

A collection of just 25 large-format apartments and penthouses overlooking Goodwin Park is entering the Coolangatta market, with <a href="https://www.apartments.com.au/new-apartments/marea-residences-coolangatta-27-27a-dixon-street-coolangatta-qld-4225">Maréa Residences</a> combining a low-density, residential-only approach with uninterrupted park and Pacific Ocean outlooks.

Located at 27 Dixon Street, Maréa comprises three and four-bedroom residences alongside a limited number of dual-level penthouses, with the project positioned between Goodwin Park and <a href="https://www.apartments.com.au/developments/coolangatta-qld-4225">Coolangatta</a>’s coastal precinct.

Construction has commenced, with completion currently estimated for late 2027. Three-bedroom residences are priced from $1.8 million.

[smartcode_project:default project_id=150999 project_image_fid=374005]

The project has been designed around its northern outlook across the park, with the building’s architecture, landscaping and material palette intended to establish a connection with the neighbouring green space. The residences have been configured to maximise natural light and views across Goodwin Park towards the ocean.

Inside, the material palette incorporates timber, stone and brushed brass, complemented by curved detailing and ambient lighting. Kitchens and bathrooms carry the same natural material approach, while residences also include basement parking, storage and lift access.

Maréa’s penthouses are arranged over two levels and include private pools, adding another layer to the project’s focus on larger-format apartment living. Across the development, residences are configured with three or four bedrooms rather than the broader mix of smaller apartment types commonly found in larger projects.

[smartcode_project:default project_id=150999 project_image_fid=374010]

Resident amenity is concentrated at rooftop level, where landscaped entertaining terraces and pools take advantage of elevated views across Coolangatta and the Pacific Ocean.

The project has so far been particularly well received by local owner-occupiers and downsizers, according to Urban Activation Property Sales and Marketing Director Matt George, with the residential-only format, construction quality and northern park outlook among the features resonating with purchasers.

“The uninterrupted northern aspect overlooking Goodwin Park has been a key point of difference, with buyers attracted to the sense of serenity and open space the park provides, while still enjoying easy access to the ocean and being within walking distance of the lifestyle and amenities Coolangatta has to offer,” George said.

[smartcode_project:default project_id=150999 project_image_fid=374002]

“The combination of high-quality construction, a residential-only building, park outlook and proximity to the beach has resonated strongly with the local downsizer market.”

The Dixon Street address is within walking distance of Coolangatta Beach and the broader southern Gold Coast coastline, including the surf breaks at Snapper Rocks and Kirra. Coolangatta’s cafés, restaurants and retail are nearby, while Gold Coast Airport is also within close proximity.

[smartcode_project_cta:default project_id=150999]

Maréa Residences brings parkside apartments to Coolangatta

Melbourne developer PDG has secured Victorian Government approval for its $1.5 billion Southbank development <a href="https://www.apartments.com.au/new-apartments/the-one-1-queens-bridge-street-southbank-vic-3006">The One</a>, clearing the way for the long-dormant riverfront site opposite Crown to finally be developed.

The Minister for Planning has approved the project at 1-29 Queens Bridge Street, with the Department of Transport and Planning issuing the planning permit following its assessment.

The approval will allow PDG to develop the prominent 5,059 sqm site with a major mixed-use tower comprising premium apartments, including branded residences, a luxury hotel and boutique office space.

PDG acquired the site in late 2024, with its position directly opposite Crown's main entrance and near Melbourne's Arts Precinct making it one of Southbank's most significant remaining development opportunities.

<img alt="PDG" data-entity-type="file" data-entity-uuid="3933013e-6332-4386-b9be-089df05caf17" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.22%E2%80%AFAM.png?VersionId=sITIgBqDL0N3VNSMwWEmF5UA.uvcsRyu" />

Designed by COX in collaboration with ODO and PDG, the tower's architecture draws on the movement of the Yarra River, with six vertical pleats running the height of the sculpted facade.

The project will also see the heritage-listed Queens Bridge Hotel restored and incorporated into the development&nbsp;with new hospitality and public uses, including a rooftop venue.

A significant component of The One will be its residential amenity.

More than 5,000 sqm of resident facilities will be delivered across a single level, making it one of the largest consolidated residential amenity offerings proposed in an Australian apartment development.

The planning approval also incorporates a major upgrade of Queensbridge Square, which PDG will deliver in partnership with the City of Melbourne.

<img alt="PDG" data-entity-type="file" data-entity-uuid="73167fcd-1031-4b6f-a408-a064cfe45ed1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-08-27%20at%209.29.17%E2%80%AFAM.png?VersionId=Pf1AEWxw6SNmBqR0zQW5lyEze.MtxgFp" />

The existing square will be revitalised as a new civic and pedestrian space along the Yarra River, strengthening the connection between the project, Southbank and the riverfront.

PDG Founder and Managing Director Vince Giuliano said the approval represented a major milestone for a site which has remained largely underutilised for more than 15 years.

“This is the most significant Planning Permit approval Melbourne has seen in recent years,” Giuliano said.

“For more than 15 years, this site has remained underutilised. This approval enables us to deliver a project that will contribute meaningfully to the revitalisation of Southbank, restore and reactivate an important heritage building, and create a new civic and hospitality destination for Melbourne.”

The latest approval follows an earlier planning permit issued by the City of Melbourne covering demolition works across part of the site at 9-29 Queens Bridge Street. Those demolition and early works are already underway.

PDG has also started generating early interest in the residential component from owner-occupiers ahead of a planned public launch in early 2027.

PDG secures approval for $1.5bn Southbank apartment development, The One

Local developer Harridan is seeking to turn its Woolloongabba apartment project into the first stage of a broader transformation of Burke Street, using a new 16-storey mixed-use building to establish a greener pedestrian connection toward the rapidly evolving Boggo Road transport and knowledge precinct.

The South East Queensland developer has filed plans for 154 apartments on the <a href="https://www.apartments.com.au/new-apartments/4-burke-street-woolloongabba-qld-4102">southern side of Burke Street</a>, where its proposal has been designed alongside a wider vision by LatStudios for the street.

That vision positions the southern side of Burke Street for buildings of 15 storeys and above, while envisaging lower-rise development of up to five storeys on the northern side to transition into Woolloongabba's existing character housing. It also proposes wider pedestrian verges, deep planting, new street trees and upgrades to the pedestrian approach to Boggo Road Station.

The Harridan development itself has been designed by Brisbane-based Arqus Design and will comprise 154 apartments across 16 storeys. The mix is weighted heavily toward two-bedroom apartments, with 121 proposed alongside 10 one-bedroom and 23 three-bedroom residences. There will typically be around 14 units per floor.

A lower-ground car park and three podium levels will accommodate 156 resident parking spaces, along with visitor and commercial parking. There will also be 154 resident bicycle spaces and 40 visitor bicycle parks.

&nbsp;

Harridan is a family-owned developer and part of the Holmwood Highgate Group, with more than three decades of development activity across South East Queensland. Its portfolio spans residential, commercial and industrial property, with current residential projects including Riverbank on Byron in Bulimba, Esperance Residences in Carina and The Precinct at Kinross Road in Thornlands.

Wooloongabba has been popular for apartment developers, particularly since the announcement of the 2032 Summer Olympics games in Brisbane.

While there have been a lot of development applications, it has failed to materialize into real supply.&nbsp;

Sarazin has been the major player in the area. They are under construction at Murcia Residences, on the fringe of East Brisbane and Woolloongabba. They have just launched <a href="https://www.apartments.com.au/new-apartments/the-stanley-residences-woolloongabba-8-trafalgar-street-woolloongabba-qld-4102">The Stanley Residences</a>, in Woolloongabba on Trafalagar Street. They also have Nuage coming soon on the nearby <a href="https://www.apartments.com.au/new-apartments/nuage-woolloongabba-14-wellington-road-woolloongabba-qld-4102">Wellington Road</a>.

Michael Laurence

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