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Assets held in a super fund are legally inaccessible to trustees in bankruptcy – provided contributions or asset transfers were not made with the “main purpose” of avoiding creditors.
This makes super such a prized method of asset protection, particularly as there is no dollar limit on the protection.
Many small-medium business owners, for example, place their busines spremises in an SMSF partly as an asset protection strategy.
Take the example of husband-and-wife business partners who currently own business premises in their own names.
Depending upon the circumstances (including any professional advice received), this couple may decide to either sell the property to their SMSF at market value or make a non-cash contribution of the property to the fund.
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This article is part of the <a href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors" style="color: #000000; font-size: 15px;">free eBook: 21 do’s and don’ts for SMSF property investors</a>.
 
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Do know the asset-protection advantages of SMSF property

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Small and medium-sized enterprise (SME) owners are examining alternative ways to acquire and gear their business premises in the event that the government bars self-managed super funds from directly borrowing to invest using increasingly-popular limited recourse borrowing arrangements (LRBAs).
These SME owners are responding to a recommendation in the <a href="https://fsi.gov.au/publications/final-report/" target="_blank">final report</a> of the Financial System Inquiry, chaired by David Murray, that this form of borrowing be prospectively barred. There is speculation that the borrowing rules for SMSFs could significantly change in the months leading to the May budget.
Since September 2007, super funds have been permitted to borrow to invest – as an exemption to the general bar on borrowing – using limited recourse borrowing arrangements. The geared asset must be held in a holding trust until the loan is repaid and creditors cannot make claims against a super fund’s assets other than the geared asset.
SME owners are believed to be among the biggest, if not the biggest, users of limited recourse borrowing arrangements to gear investments – typically to their own business premises – through their SMSFs.
Significantly, business property is one the few types of assets that SMSFs are allowed to acquire from their members and other related parties. As well, business property is one of the few types of assets that funds can lease to related parties, including the members’ businesses, without being limited by the in-house asset rules in superannuation law.
In her latest newsletter, Meg Heffron, co-principal of SMSF administration group Heffron, asks a telling question for SME owners wanting to buy their business premises through their SMSFs: Does the possible demise of limited recourse loan arrangements “represent the end of the world as we know it” for SMSFs to acquire property if they don’t already have the cash?
It seems the answer is a resounding “no”, according to Heffron and Chris Malkin, senior consultant auditor with Baumgartner Superannuation.
Heffron and Malkin says the strategy that SME owners are likely to most use if limited recourse loan arrangements are barred is to arrange for their SMSFs to progressively buy their business premises through ungeared trusts or companies.
“I think ungeared trusts are much underutilised,” says Heffron, “probably because they are poorly understood.”
A typical strategy would involve the members of an SMSF and the SMSF itself owning units in the ungeared trust which acquires the business premises. And then the SMSF progressively acquires more units to eventually gain full ownership. Although the trust is ungeared, the law does not prohibit SMSF members from personal borrowing to acquire units in the trust.
Factors to think about when considering an ungeared trust as an alternative to a limited recourse borrowing arrangement include:
1. Security for the loan
With limited recourse loan arrangements, the geared business premises (or whatever other asset is being acquired) provide security for the loan whereas with a typical ungeared trust arrangement, SMSF members often borrow against the equity in their homes.
2. What’s at stake if the investment fails
This is, of course, linked to point one above. On the face of it with limited recourse loan arrangements, the geared business premises would be at risk if the investment did not succeed. Whereas with the typical ungeared trust arrangement, fund members would have borrowed against the family home and therefore the family home would be at stake. In practice, however, the contrast is not so clear cut.
Malkin emphasises that although with limited recourse loan arrangements, a financier can only make a claim against the geared asset, SMSFs often use almost all of their assets to pay the deposit or initial instalments on the investment. And lenders often require SMSF members to provide a personal guarantee, which typically means that their homes may also be at risk.
“Speaking as an owner of an SME, I usually try to divorce my personal assets from what I do with the business,” Heffron comments. “If I borrow to buy the business premises, I would like to have the loan secured on the business premises – not secured on my personal assets.”
3. Intended improvements to business premises
Under existing law, SMSFs using a limited recourse loan arrangement can only drawdown on the loan to make repairs not improvements to a geared property. (This applies to arrangements entered into after July 7, 2010.)
Heffron says that this bar on using borrowed money borrowed under limited recourse loan arrangements may make ungeared trusts more appropriate for an SME wanting to acquire business premises through their SMSFs and then to make significant improvements. Much depends on the circumstances, including professional advice received.
“The super fund or the family trust can buy more units in the ungeared trust,” says Heffron, “and that will provide the money to make improvements.”
4. Simplicity of strategies
Opinions differ among superannuation specialists about which strategy is simpler – limited recourse loan arrangements or ungeared trusts. Again much will depend on the circumstances.
Heffron believes that the limited recourse loan arrangement is generally simpler if the super fund does not intend to make improvements to the property and wants to simply rent it to the members’ business. This is partly because the geared asset is held in a holding trust until the SMSF makes the final instalments on the loan. There is no CGT event or transaction whenever the super fund makes loan instalments.
By contrast, Heffron says there is a CGT event with the ungeared trust strategy whenever the super fund acquires more units. Also Heffron warns in her newsletter that an ungeared trust is “permanently comprised” and loses its concessional treatment if it breaches the “fairly stringent” rules after a super fund invests in it.
5. Gearing tax benefits
From this perspective, the ungeared trust strategy would typically be the clear winner.
As Malkin explains, an SMSF member personally borrowing to buy units in the ungeared trust acquiring the business premises would be entitled to claim tax deductions for interest payments at his or her marginal tax rate. By contrast, an SMSF borrowing under a limited recourse loan arrangement would only be entitled to tax deductions at the standard superannuation tax rate of 15%.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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SMSFs and geared business premises: Five factors to consider

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A Federal Court judgment this month provides telling lessons for members of self-managed super funds (SMSFs), including those operating small-medium businesses.
The court personally fined the husband-and-wife directors of their SMSF’s corporate trustee a total of $50,000 for a series of contraventions of superannuation law, including the making of 80 “loans” to members, namely themselves.
Fund money was also used to buy study cattle “for hobby purposes” as well as to pay veterinary bills and other related expenses without the fund earning income from the expenditure. The couple, who were the only members of their SMSF, operates a livestock business in Victoria.
Further, the trustees allowed their son to live in a fund-owned property without paying the rent required under the lease. And the fund had spent $48,500 on furniture before the lease commenced.
This court case – <a href="https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1101">Deputy Commissioner of Taxation (Superannuation) versus Graham Family Superannuation Pty Ltd, Ian Christopher Graham and Carolyn Ann Graham</a> – illustrates the risks when SMSF members mix their superannuation and their non-superannuation finances.
Peter Bobbin, principal of lawyers Rockwell Olivier in Sydney, says: “Without doubt, the couple used the super fund as a personal bank to fund their [pre-retirement] lifestyles.”
There is no suggestion in the judgment that the husband-and-wife trustee directors/members in this case used money from their SMSF in relationship to their business. However, Bobbin and Chris Malkin, the senior consultant auditor with Baumgartner Superannuation, say the case represents a warning for SME owners about the dangers of mixing their super, their business and personal finances.
“This case reminds me of the need for SME owners to quarantine their superannuation from their business activities,” says Bobbin. And Malkin believes that SME owners can face a greater temptation than other members to use their super money for purposes other than for their retirement.
“The simple reason is that the cash-flows of SME owners are sometimes stretched and some may see their super fund as a pseudo bank,” says Malkin.
The couple’s contraventions of superannuation law included breaching superannuation’s sole purpose test, providing financial assistance to members, exceeding the limits on in-house assets and failing to conduct dealings on an arm’s length basis.
This case should reinforce to SMSF members regarding some of the most fundamental provisions in superannuation law. These include:
<ol>
<li>The sole-purpose test: A super fund must be maintained for the purpose of providing retirement or death benefits to members.</li>
<li>The ban on providing financial assistance, including loans, to members or their relatives: Significantly, there is no exemption under the in-house rule (see next point) to the ban on providing financial assistance to members.</li>
<li>The in-house asset rule: SMSFs are generally prohibited from making loans, providing leases or having investments with related parties and entities that exceed 5% of its total asset value. (One of the very few exemptions to the in-house asset rule is business real estate.)</li>
<li>Arm’s length investments: A fund must make investments on an arm’s length, commercial basis.
</li>
</ol>
As Peter Bobbin of Rockwell Olivier says, the ATO in this instance did not revoke the SMSF’s complying status but had decided to pursue the trustees through the court.
When an SMSF is declared non-complying, its assets – less any after-tax, non-concessional contributions – are taxed at the highest marginal rate. This is widely regarded as an ultimate sanction against an SMSF.
Stuart Jones, author of the Australian Superannuation Handbook 2014-15 (published by Thomson Reuters) expects that the ATO is likely to apply its new administrative penalty regime, in force from July this year, to similar cases in the future.
Under the new penalty regime, the Tax Office can directly and personally fine SMSF trustees by imposing an administrative penalty (ranging from $850 to $10,200) intended to match the seriousness of the contravention. Therefore, the ATO does not have to go through the expensive and time-consuming process of seeking court-imposed penalties.
Jones says the commissioner still has the option of applying for a civil penalty court order of up to $220,000 for each offence, or even instituting criminal proceedings in certain cases.
Given the large number of contraventions in the Graham family matter, Malkin suspects the overall penalties would have been significantly higher if it had been dealt with under the new penalty regime.
This article first appeared on <a href="https://www.SmartCompany.com.au" target="_blank">SmartCompany</a>.
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SMSFs warned against using fund as 'personal bank'

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Trustees of self-managed super funds (SMSFs) are increasingly putting their retirement savings in jeopardy by granting high-risk, high-interest loans to unrelated businesses in an effort to boost returns in a low-interest environment.
Chris Malkin, senior consultant auditor with Baumgartner Superannuation, suspects that many of the SMSF trustees granting these commercial loans do not understand the extra risks and legal complications involved.
“Some funds are effectively turning themselves into lenders of last resort,” Malkin says. “High-interest, high-risk loans are hardly appropriate investments for super funds.”
Typically when SMSFs strike difficulties with lending money, <a href="https://www.smartcompany.com.au/finance/superannuation/44336-risky-business-using-a-self-managed-super-fund-as-a-personal-bank" target="_blank">the loans have been made to related parties</a>. However, a recent Federal Court case highlights the potential extra risks for super funds when making high-interest loans to unrelated parties.
In the case of <a href="https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1034" target="_blank">Pozzebon (Trustee) v Australian Gaming and Entertainment Ltd (in liquidation)</a>, a husband-and-wife SMSF agreed in December 2013 to grant a $250,000 secured loan to a Perth-based business, which had agreed to provide security over corporate assets. Five months later, the company went into voluntary liquidation.
The SMSF then claimed that the liquidated company owed the fund $348,713 – $98,713 higher than the amount of the initial loan.
However, the Federal Court ruled the SMSF was an unsecured creditor after finding the fund had not registered the “security interest” on the relatively new Personal Property Securities Register within the required time.
Stuart Jones, author of the Australian Superannuation Handbook 2014-15, says: “The Pozzebon case serves as a warning to SMSF trustees chasing a higher yield that commercial loan investments are intrinsically problematic for most trustees in terms of the skills required to assess and manage the additional risks in such loans.”
Martin Murden, a director of SMSF consulting and auditing with the Partners Wealth Group, says his annual auditing of SMSFs show more funds are granting high-interest commercial loans. And he expects this trend to grow during the current financial year.
Murden believes that most of the SMSFs being drawn into investing in high-interest, high-risk loans already hold a high proportion of their assets in fixed interest and have become dissatisfied with prevailing interest rates.
He says such SMSF trustees typically don’t want to invest in residential real estate because of their concerns about a property bubble yet find the share market too volatile.
Stuart Jones of Thomson Reuters says there is nothing under the Superannuation Industry (Supervision) Act (SIS) to prohibit an SMSF from investing in a loan to an unrelated borrower.
However, Jones says the loan would still need to comply with SIS investment rules including the sole-purpose test, trustee duties, arm’s length dealings and mandatory investment strategy. (Under the sole-purpose test, a super fund must be maintained for the purpose of providing retirement or death benefits to members.)
“The risks associated with a commercial loan would also need to be suitable as part of the fund’s written investment strategy,” Jones stresses. “Therefore, at minimum, a trustee considering an investment loan would need to establish a detailed risk-management plan for the life of the loan.”
Jones says if an SMSF trustee is going to “make loans like a bank”, it needs to assess the loan application and take security, ideally real estate, “like a bank”. This would typically require specialist and accounting advice to assess the loan investment and to ensure security for the loan or priority status among creditors in the event of a default.
This article first appeared on <a href="https://www.smartcompany.com.au" target="_blank">SmartCompany</a>.
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Beware the property bubble loan trap for SMSFs chasing high yields

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If your self-managed super fund is intending to sell an investment property and the members plan to begin a superannuation pension in the new financial year, consider delaying the sale until after June 30 if it makes commercial sense.
As tax lawyer Robert Richards says, super fund assets backing the payment of a pension are no longer subject to tax – including capital gains tax.
See our free ebook on the <a target="_blank" href="http://propertyobserver.com.au/ebooks/free-ebook-top-24-tax-strategies">top 24 tax strategies</a> for property investors.
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The sale of self-managed super fund property to eliminate capital gains tax

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The ATO – as tax collector and regulator of self-managed super– repeatedly warns SMSFs about complying with superannuation and tax laws regarding property.
The tax office isconcentrating much attention to geared SMSF property.
Superannuation commentator Trish Power writes in her online self-managed super publication, SuperGuide:
“The Australian Taxation Office is worried about SMSF trustees and property."
"Although the ATO doesn’t express it thisway, the SMSF regulator is particularly worried about the sheer weight of money controlled by SMSF trustees, and a bit edgy that this financially powerful group may go feral.”
For instance, the ATO issued a Taxpayer Alert late last year, which included the warning:
“It is important to ensure that any arrangements entered into by an SMSF to invest in property are properly implemented, particularly those involving limited-recourse borrowing arrangements or the use of a related united trust.”
 
<hr>
 This article is part of Property Observer's <a href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors" style="color: #000000; font-size: 15px;">free eBook: 21 do’s and don’ts for SMSF property investors</a>.
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Do understand where the ATO is looking

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Fund trustees should consider eventual disposal of a property even before their fund even buys it, says Martin Murden, director of SMSF consulting with the Partners Group in Melbourne.
For instance, many trustees plan for their SMSFs to own a direct property until the point of their retirement.
Such long-term planning helps minimise the risk of having to quickly sell a property to pay membe rbenefits or to switch to higher-yield investments in retirement.
Upon retirement, SMSF trustees can decide whether to:
• Sell the property to distribute retirement benefits to members. (If the property is backing the payment of a superannuation pension at the time of sale, no CGT is payable under current law.)
• Allow a member to acquire the property as a retirement benefit. (The trustees would have to consider possible CGT implications.) Some members use a former fund-owned property as thei rretirement home.
• Keep the property in the SMSF togenerate income for the members’ superannuation pensions.
 
<hr>
 This article is part of Property Observer's <a href="http://propertyobserver.com.au/ebooks/free-ebook-21-dos-and-donts-for-smsf-property-investors" style="color: #000000; font-size: 15px;">free eBook: 21 do’s and don’ts for SMSF property investors</a>.
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Do consider how SMSF will eventually dispose of a property

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SME owners are likely to accelerate existing plans to gear their business premises through their self-managed super funds after renewed debate about whether to bar future superannuation gearing, say advisers to SMSFs and small-medium businesses.
Business owners are among the biggest supporters of self-managed super with superannuation gearing to acquire business premises becoming an increasingly popular strategy.
The recent <a href="https://fsi.gov.au/files/2014/07/FSI_Report_Final_Reduced20140715.pdf" target="_blank">interim report</a> of the Australian government’s current inquiry into the financial system, chaired by David Murray, is calling for views about whether superannuation gearing should be prospectively prohibited.
“If allowed to continue, growth in direct leverage by superannuation funds, although embryonic, may create vulnerabilities for the superannuation and financial systems,” the inquiry observes.
The inquiry’s final report is scheduled to be delivered to the Treasurer by November 14, although it is not known how long the government may take to react to its final recommendations.
SMSF specialist adviser Peter Crump says: “Where there is a hint that an investment opportunity may be closing, people who have been thinking about it should stop vacillating and make a decision – one way or the other.”
Crump, superannuation strategist for financial advice company ipac South Australia, believes that the financial inquiry’s call for views about the possible future barring of super gearing may prompt SME owners who have already been considering gearing their premises to focus their attention.
And Crump says good advisers have a responsibility to alert clients who had been discussing the gearing strategy with them about the possible impact of the financial inquiry.
“I think as advisers, we have a responsibility to keep our clients fully aware; otherwise we have let them down,” he adds. Crump is chairman of the SMSF Professionals’ Association of Australia (SPAA).
SMSF auditor Martin Murden believes the raising of the possible removal of superannuation gearing is a “potential trigger” for SME owners who had been examining whether to gear their business premises through their SMSFs to reach a decision.
Murden, a director of SMSF consulting and auditing with the Partners Wealth Group and author of How to invest in property through your self managed super fund, says the financial inquiry provides something of a deadline for SMEs to make up their minds.
And Naree Brooks, a partner at PwC Private Clients, makes a similar comment: “If SMEs had been thinking about gearing their premises through their SMSFs, the Murray inquiry may bring forward the decision making.”
Article continues on the next page. Please click below.
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Sue Prestney, a partner at PwC Private Clients, says the majority of her medium-sized business clients up to August 1999 had acquired their business premises through their SMSFs, using geared trusts associated with the members. (The law had changed at that date, making such trusts so-called in-house assets of the funds and effectively ending the future gearing of SMSFs in that way.)
Prestney estimates that at least 30% of SMEs who have become her clients since 1999 now hold their business premises in their SMSFs with some of their SMSFs gearing through limited recourse loans, permitted under strict conditions for the past seven years.
“SMEs generally have their resources tied up in their businesses,” Prestney adds, “and usually the only way they can buy their business premises is through their super funds.”
Depending upon the circumstances, the holding business premises in a business owner’s SMSF can provide tax, asset protection, estate planning and business succession benefits.
Since September 2007, super funds have been permitted to borrow to invest – as an exemption to the general bar on borrowing – using limited recourse borrowing arrangements. Geared asset must be held in a holding trust until the loan is repaid.
SMEs owners who hold their business premises in their SMSF must pay an arm’s length rent to the fund, which pays concessional tax on the rental income.
Business property is one the few types of assets that SMSFs are allowed to acquire from their members and other related parties. As well, business property is one of the few types of assets that funds can lease to related parties, including the members’ businesses – without being limited by the in-house asset rules in superannuation law.
The ATO’s latest <a href="https://www.ato.gov.au/Super/Self-managed-super-funds/In-detail/Statistics/Quarterly-reports/Self-managed-super-fund-statistical-report---March-2014/">self-managed super fund statistical report</a> shows SMSFs owed $2.72 billion in limited resource loans in March, up from $497 million in June 2009. These loans represent half a percent of total SMSF assets. The value of commercial property held by SMSFs is three times greater than the value of their residential property.
PwC’s Brooks says the gearing of businesses premises through SMSFs is increasingly popular among SME owners. Brooks believes a “second wave” of business owners are following the strategy, having progressively built-up their super balances under the more restrictive contribution caps. Further, limited recourse loans are more competitively priced.
Surveys by Investment Trends suggest that 38,000 SMSFs hold geared investments and that one of the main reasons why members of large super funds say they intend to setup an SMSF in the future is to invest in property.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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Small business owners pushing for self-managed super gearing of business premises

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A recent Federal Court case underlines the potentially destructive consequences when the assets of a family’s self-managed super fund are used in an attempt to save a family’s struggling small business.
The trustee of the super fund in this case made six back-to-back loans totalling $190,000 to his brother-in-law who immediately transferred the money to the trustee’s Sunshine Coast convenience store.
A high price is being paid by the SMSF’s two members – Anthony Shaune Lyons and his wife, Julianne Marie – for the decision to use their super money as working capital for their financially-troubled business:
<ul>
<li>Their savings in the SMSF have been lost. None of the superannuation injected into their family business has been repaid and is, according to the court, irrecoverable. (The $190,000 in loans represented almost all of the super fund’s $193,000 in assets.) </li>
</ul>
<ul>
<li>The court has personally fined the trustee Anthony Shaune Lyons $32,500 plus $5000 towards costs for contravening a range of the most fundamental laws including the bar on providing financial assistance to members or their relatives.</li>
</ul>
<ul>
<li>By using their SMSF assets to prop up their failing business, the couple lost the protection of superannuation as a means to quarantine their super savings from the fate of their convenience store. Superannuation is widely regarded as an effective means for small business operators to gain asset-protection subject to certain conditions.</li>
</ul>
The couple is now bankrupt because of personal debts incurred in running their business. Their plight is setout in stark detail in the court’s judgment, <a href="https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2014/2014fca1353">Deputy Commissioner of Taxation (Superannuation) v Anthony Shaune Lyons</a>.
Peter Crump, superannuation strategist for ipac South Australia, is emphatically against business owners using their super savings to try to save their financially-troubled businesses.
Crump, who is chairman of the SMSF Professionals’ Association of Australia, says owners of small businesses that are experiencing difficulties may tend to look at their business’s chances of recovering with “very rose-coloured” glasses.
“They may say to themselves, ‘I only need to put in a little more money to see the business through’. It is in a similar vein to gambling,” Crump believes.
The sad experience of the business couple in this court case highlights why SME business owners should:
<ol>
<li>
Not overlook the excellent asset-protection qualities of superannuation  Assets held in a super fund are generally inaccessible to trustees in bankruptcy – provided contributions were not made with the main purpose of defeating creditors. “By moving savings outside super,” says Crump, “you are exposing those savings. Keeping super and business assets separate is one of the key advantages of superannuation.” 
</li>
<li>
Know when to quit a failing business and understand the need for quality professional advice Rather than chasing good money after bad in a failing business, Crump says business owners should listen to expert and independent professional advice about when to quit. “You should have advisers with the courage and conviction to tell you when to quit a business,” he stresses. 
</li>
<li>
Never overlook thefundamental laws of super  The trustee in this court case contravened the most basic laws of super. The trustee breached the sole-purpose test (a super fund must be maintained to provide retirement benefits); the ban on providing financial assistance or loans to fund members and their relatives; the in-house asset rule (with a few exceptions, super funds are prohibited from making loans or having investments with related parties and entities that exceed 5% of its total asset value); and the requirement that transactions must be conducted on an arm’s length basis. 
</li>
<li>
Recognise the “certainty of detection” for illegal payments from a super fund  Crump says a superannuation auditor conducting the compulsory annual audit of a super fund will inevitably detect and ask for an explanation about such transactions as loans to members or their relatives.</li>
</ol>
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>. 
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SMSF money lost in failed attempt to save business: Four ways to protect your SMSF

<section data-scroll-anchor="false" data-testid="conversation-turn-5" data-turn="user" data-turn-id="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" data-turn-id-container="e65dbe94-e3b6-47f7-b62a-9cbb30c9bf79" dir="auto">Time &amp; Place’s plans to transform the former David Jones factory building in Surry Hills into a mixed-use residential precinct have gone on exhibition through the NSW Government’s In-fill Affordable Housing pathway.</section>

<section data-scroll-anchor="false" data-testid="conversation-turn-6" data-turn="assistant" data-turn-id="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" data-turn-id-container="request-WEB:f4d533b7-64a5-413d-86fd-5c99649c2b73-2" dir="auto">
The Marlborough House proposal, lodged for the <a href="https://www.apartments.com.au/new-apartments/marlborough-house-47-97-marlborough-street-surry-hills-nsw-2010">47-97 Marlborough Street</a> site, would see the adaptive reuse of the heritage-listed warehouse building alongside the construction of new residential additions and a separate apartment building on the northern portion of the site.

The proposal seeks approval for 172 apartments across three buildings, including 15 per cent affordable housing managed by a community housing provider for at least 15 years from occupation.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="5d1d3c2a-bf13-47d6-a335-7c01102cdee1" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.36%E2%80%AFAM.png?VersionId=cjMYrbR.BLUlWH4dar0RVDDo0bG.u2YT" />

Interior view from the Northern Building Penthouse overlooking the park

&nbsp;

The redevelopment is planned for the prominent 3,413 sqm site bounded by Marlborough Street, Goodlet Street and Lansdowne Street, directly opposite Eddie Ward Park and around 200 metres from the Surry Hills light rail stop.

Time &amp; Place acquired the former David Jones building in 2024, marking the first time the property had changed hands in around 50 years.

Designed by Wardle, the proposal centres around the adaptive reuse of the former David Jones factory, originally constructed between 1913 and 1935 in the Inter-War Chicagoesque architectural style.

Wardle noted in its Architectural Design Report that the building “occupies a significant place in the industrial and cultural history of Surry Hills” and at its peak was “the largest department store manufacturing facility in Australia, employing over 800 people and fuelling the growth of Sydney’s fashion and retail industries.”

The practice said the project positions itself “not as an isolated intervention, but as a contributor to the civic, social, and architectural grain of the precinct.”

The proposal would deliver 75 apartments within the retained southern heritage building, 59 apartments within the central addition, and a further 38 apartments within the new northern building fronting Lansdowne Street.

Planning documents show the scheme would comprise a mix of heritage apartments, new-build apartments, townhouses and penthouses.

<img alt="Marlborough" data-entity-type="file" data-entity-uuid="57758518-40a3-4b83-958c-d06e96a2cffa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.42%E2%80%AFAM.png?VersionId=VerlX9ST5xgBi8.1_YRsqdWTJeT6ygjs" />Interior View of the Heritage Building Apartment

The development would also include a ground-floor retail tenancy on the corner of Marlborough and Lansdowne streets, rooftop communal open space, a landscaped pedestrian link along the western edge of the site, and basement parking accessed from Lansdowne Street via a car stacker system.

&nbsp;

The scheme emerged from a competitive design process run by Urbis, with Wardle ultimately selected as the winning architect ahead of FJC Studio, TZG, Architectus and Wilkinson Eyre.

The Design Integrity Panel later described several aspects of the Wardle scheme as fundamental to the project, including “the stepped character of the new addition to the north of the site”, the landscaped western pedestrian link, and the “garden arrival” experience separating the original Marlborough House from the heritage addition.

Wardle’s design heavily references the site’s industrial and heritage history, while also responding to the surrounding Surry Hills streetscape.

The Architectural Design Report describes Surry Hills as “a finely grained neighbourhood with beautiful and expressive brickworks throughout the suburb,” with the proposal introducing a material palette intended to sit comfortably alongside the existing warehouse fabric and neighbouring terraces.

The report also outlines the project’s relationship with Eddie Ward Park and the broader landscape context of the area.

“Marlborough House occupies a site of deep cultural memory and the neighbouring Eddie Ward Park is of local ecological significance, where natural systems, topography, and stories have long shaped human experience,” Wardle noted in the report.

The architects said the proposal sought to “rebind built form to Country” through landscape, materiality and the adaptive reuse of the heritage structure.

<img alt="Marlborough House" data-entity-type="file" data-entity-uuid="9ae3f2f9-c85f-477a-a6f8-b43f6cb97c41" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.29.53%E2%80%AFAM.png?VersionId=B.qUCLqRvJOR.n9CvYcTpaknIX9LuqKZ" />

The project is also being progressed under the NSW Government’s in-fill affordable housing provisions, allowing developments that include affordable housing to access additional height and floor space incentives.

Under the plans, 2,593 sqm of the project’s floor space would be dedicated to affordable housing, slightly exceeding the required 15 per cent threshold.

In its Design Excellence Strategy, Urbis said the project aimed to “sensitively adapt and enhance the heritage-listed building on site through alterations and additions that preserve its historical significance” while delivering “high-quality market and infill affordable housing development in Surry Hills.”

Time &amp; Place has been one of the most active developers nationally in the last 12 to 24 months. Late last year they completed&nbsp;The Queensbridge in&nbsp;<a href="https://www.apartments.com.au/developments/southbank-vic-3006">Southbank</a>, a mixed-use tower with 353 apartments and a hotel. They are currently selling Park Modern, 246 apartments near the famous Botanic Gardens in&nbsp;<a href="https://www.apartments.com.au/developments/south-melbourne-vic-3205">South Melbourne</a>, and have future projects, <a href="https://www.apartments.com.au/new-apartments/the-wilmot-173-burke-road-28-hope-street-glen-iris-vic-3146">The Wilmot</a>&nbsp;in&nbsp;<a href="https://www.apartments.com.au/new-apartments/glen-iris-vic-3146">Glen Iris</a>, the redevelopment of the Northcote Plaza, and another tower in South Melbourne.

The developer broke into Sydney just a few years ago with Two Tides in Manly. They have another project nearby, which is at the ultra-luxury end of the market on&nbsp;<a href="https://www.apartments.com.au/buildings/shoreline-manly-beach-89-90-north-steyne-manly">North Steyne</a>, fronting the beach.

It is also continuing to work through the <a href="https://www.apartments.com.au/news/nsw/first-look-time-place-settles-on-design-for-the-chimes-potts-point-redevelopment">redevelopment of The Chimes building</a> on Macleay Street in&nbsp;<a href="https://www.apartments.com.au/developments/potts-point-nsw-2011">Potts Point</a>, as well as a project on <a href="https://www.apartments.com.au/news/nsw/time-place-to-take-on-mosman-apartment-market">Mosman's Redan Street</a>.
</section>

Joel Robinson

First look: Time & Place unveils Marlborough House redevelopment designs for former David Jones warehouse in Surry Hills

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.

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;

Michael Laurence

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