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GUEST OBSERVATION
The recent <a href="/expert-insights/investing/pie-face-bakery-chain-collapses-into-administration">voluntary administration of Pie Face</a> has highlighted the uncertainty faced by franchisees if their franchisor goes into administration.
Here are 10 key risks to franchisees of insolvent systems:
1. The risk of little useful information
Many insolvency practitioners do not understand franchising and the nature of the franchise relationship.
Administrators will apply considerable effort to keep staff and creditors informed during an insolvency – the first to ensure they keep the business operating or provide access to records while the administrators sort out the business’ position, and the second to ensure continuity of key supplies. However, franchisees are generally given the bare minimum of information.
Because staff and suppliers are recognised as creditors, they are usually better-informed than franchisees, who may be circulated a form letter when the business is placed in administration, and then hear no further meaningful information until a sale or winding-up announcement is made. Franchisees of insolvent chains often learn more from the media about the future of their livelihoods than they do from the administrators.
2. Loss of consumer confidence
In previous franchise insolvencies such as that of book retailer Angus &amp; Robertson in 2011 and whitegoods retailer Kleenmaid in 2009, the loss of consumer confidence when the businesses went into administration was so great that it accelerated the final collapse.
Angus &amp; Robertson customers were outraged when administrators announced that gift vouchers (many of which were given as Christmas presents only a couple of months earlier) would no longer be honoured, prompting a consumer backlash. During this highly damaging PR, the remaining company-owned and franchised stores were expected to trade on as usual.
When Kleenmaid went under, its franchised and company-owned stores were besieged by angry customers trying to claim the goods for which they had collectively paid more than $25 million in deposits. In rare cases, some were able to buy their goods all over again in liquidation sales to ensure that their newly-built or renovated kitchens or laundries could be completed without further modifications, but many swore they would never buy Kleenmaid again, and actively campaigned against the brand in revenge.
3. Disruption to supply chains
Some franchise systems have preferred supplier arrangements, and others are the primary supplier to their franchisees themselves.
A manufacturer may supply its retail network of company-owned and franchised stores with the majority of their product lines. If the manufacturing facilities are scaled-back, closed or sold separately from the retail network, then a significant risk of disruption to normal supplies exists. A new buyer of the group could decide to close the factory and outsource manufacturing altogether, in which case it is likely that teething problems with a new set of arrangements could also result in supply issues for franchisees.
While it is possible for a franchisee to continue to operate when a franchisor goes bust in networks that have preferred supplier arrangements, the franchisee might find that creditors will become more risk averse and tighten their credit terms, insist on cash up front, or otherwise cap franchisee purchases to a low limit to reduce future risk.
4. Stock dumping
Franchisees of fashion accessory chain Kleins, which collapsed in 2008, found themselves selling goods at cost or below as the administrator sought to liquidate inventory held by the franchisor that could not be returned to suppliers.
In any group where the franchisor has embedded itself into the supply chain and provides inventory to the franchisees, there is the risk that administrators will seek to liquidate inventory as quickly as possible through the network to generate cash, and this may be done at the expense of franchisee margins or in breach of the brand’s established price positioning.
Either way, this can be damaging to a franchisee’s business.
5. Diminished franchisor support
Administrators will question all costs in a business, particularly labour costs. Franchisor head office staff who survived the franchisor’s descent into administration may still be made redundant by the administrators in an attempt to restore profitability and improve the saleability of the business as a going concern, but in doing so often reduce the very resources for which franchisees pay royalties.
Consequently, franchisees of an insolvent system might find that their field support officer has been let go, or now has two or three times more franchisees to support as his colleagues have left.
A reduction in field support is likely to occur concurrently with a reduction in marketing personnel and other head office functions that directly or indirectly provided support, meaning that franchisees will be left more and more to their own devices, and while some may see this as a good thing, it further exacerbates damage to the brand (and therefore, network value) as inconsistencies develop in the group.
At its worst, this could lead to open revolt by franchisees, as happened with Angus &amp; Robertson in 2011 when nearly half the franchisees sought to leave the group en masse while it was under administration.
This article continues on the next page. Please click below.
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6. Pursuit of outstanding royalties
Administrators have no capacity to offset debts owed by an insolvent franchisor to its franchisees, against the royalties owed by the franchisees.
In other words, franchisees have to claim their debt owed by the franchisor like any other creditor, and end up with whatever cents in the dollar might be paid at some future point, but in the meantime must pay 100% of all outstanding royalties to the administrators on demand without argument.
If franchisors have allowed franchisees to fall behind in their royalty payments, administrators will ditch such arrangements and demand full payment immediately as they scrape together cash to keep the business afloat. Unfortunately, this can result in considerable financial pain to any franchisees who owe royalties, and whose business may also be struggling (the reason why they fell behind in their royalties in the first place).
7. Disclaiming of leases or other agreements
When Kleins was placed into voluntary administration in 2008, it was subsequently revealed that the franchisor held the leases on all the stores in the network, including the franchised outlets. Franchisees would then sub-lease the stores from the franchisor, to whom they would pay rent, and then the franchisor in turn would pay rent to the landlord (many of which were major shopping centres).
However, under this arrangement, the rents paid by the franchisees to Kleins were not being passed to the landlords, and the store rents fell behind.
When the administrators took control of the business, they exercised their unique power to disclaim (i.e. terminate) the leases, to reduce their ongoing liabilities in operating the business. The unfortunate byproduct of this action was that the franchisees in terminated outlets were suddenly left with two choices: close the shop and wear the losses caused by the premature ending of their business, or negotiate new leases directly with the landlords and attempt to continue trading.
Many chose to negotiate new leases with the landlords, but found this to be a double-whammy.
In some cases their rent increased because they were now independent operators, and no longer part of a national chain. In all cases, the franchisee would have had to find the cash to lodge the usual rental guarantee (up to three months rent in advance), plus invest in new signage and fitouts, etc, to trade as independents, while at the same time writing-off as unrecoverable large sums of money owed to them by the franchisor under Kleins’ unique income guarantee.
Administrators can and will disclaim leases and other commercial agreements if they feel it is in the best interests of the insolvent entity, even if it is not in the best interests of the franchisees.
However, the reverse does not apply to franchisees, who usually have no rights to terminate their franchise agreements even if their franchisor is in administration.
8. Loss of business value
It goes without saying that any franchisee who might have been planning to sell their business before their franchisor goes into administration will subsequently find it almost impossible to complete a sale until the system recovers from this emergency.
Such a recovery, if one is possible at all, could take years.
Even if the system does recover, a franchisee’s business in future may be worth less than it would have been prior to the administration. This loss of business value can cause major problems for franchisees who are heavily geared and may ultimately sell at a loss, or who planned to fund their retirement using the proceeds from the sale of their business, which may now be insufficient.
Unless franchisees themselves are creditors (which is rare), this loss of franchisee business value, or the imperative to maintain franchisee business value, is incidental to administrators whose sole focus is to maximise the returns to creditors.
9. Significant ongoing personal liabilities
If a franchisor collapses, franchisees may be left without a business to trade if their supply of unique products ceases to exist.
Because Kleenmaid stores sold only Kleenmaid products, when these were no longer available following the collapse of the franchisor, the stores could not switch suppliers and continue to trade.
If this occurs, franchisees may have no choice but to close their stores, while continuing to pay the significant ongoing costs of shop leases, business loan repayments, and chattel mortgages for shop fit outs, fixtures and fittings. These ongoing liabilities can be a blight that weighs down a franchisee long after the collapse of their franchisor.
10. Radicalisation of corporate culture
If a buyer is found for an insolvent franchisor, the new owner will inevitably want to put their own stamp on the business and make changes to ensure its ongoing survival.
The nature of the buyer, and the changes they will seek to implement, might clash with franchisees and appear at odds with the corporate culture under the former owners. For many franchisees, a change of ownership will require them to adapt to new management and new ways of doing things. These changes can be relatively minor, incremental and easily adaptable, or can be major, radical and disruptive to the organisational culture and brand values.
Conclusion
This is not an exhaustive list, but should give pause for thought to any existing franchisee concerned about the future of their network, any potential franchisee who needs to asses the risks of what might happen in a worst-case scenario, and any insolvency practitioner who might one day find themselves managing a franchise network in administration.
Most importantly, this list should also serve as a reminder to franchisors that an inability to adapt to a changing market and poor management has consequences for those around them, especially their franchisees.
Jason Gehrke is the director of the <a href="https://www.franchiseadvice.com.au/" target="_blank">Franchise Advisory Centre </a>and has been involved in franchising for 20 years at franchisee, franchisor and advisor level.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.
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10 risks to franchisees when companies go bust

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For more than a century, Sydney’s Upper North Shore has held an impressive reputation for its stately homes on large blocks of land with established private gardens. 
This week our property contrarians Jonathan Chancellor and Margie Blok peer at grand garden estates in leafy avenues of this peculiarly “Australian Arcadia” and discuss the essential requirements for choosing a trophy home in this rarefied area.
HE SAID:<img src="/images/stories/2013/09/06/jc-silhouette-5.jpg" alt="jc-silhouette-5" width="130" height="195" style="float: right;">
<ul>
<li>
Location is of utmost importance. The upper north shore encompasses suburbs north of Chatswood, south of Hornsby’s northern border and east of the Lane Cove River - but the best estates are on the east side of the Pacific Highway in Roseville, Lindfield, Killara, Gordon, Pymble, Turramurra, Warrawee and Wahroonga. 
</li>
<li>The property must have “the house, court, pool package”, a phrase coined by Julia Burns, the legendary Upper North Shore agent who sold prestige properties at record prices from the 1980s heyday until her retirement about five years ago. For a property to be considered prestigious, Burns insisted it have a big home set in beautiful gardens with a full-size tennis court and swimming pool – and I agree with her. </li>
<li>
A significant architect is essential. And the architect’s name must be included in the marketing of a property to show its quality provenance. Among architects known for designing beautiful homes on the Upper North Shore are Howard Joseland, John Brogan, Augustus Aley, F. Glynn Gilling, Hardy Wilson and Walter Liberty Vernon. It’s no secret I admire the Spanish Mission style, but on the Upper North Shore I also appreciate Stockbroker Tudor-style such the house at 1 Springdale Avenue, Killlara designed by architect John Brogan. 
</li>
<li>
My pick of properties on the market is the Pymble home of dentists Richard Medway and Isabel Silva who are hoping to set a suburb record of more than $8 million for their Spanish Mission style residence on Telegraph Road when the marketing campaign closes on Tuesday November 25 through agent Scott Chadwick. 
</li>
</ul>
<img src="/images/2014/11/24/pymble%20nov%2024%20one.jpg" alt="">
Designed by architect Geoffrey Loveridge, the grand 1930s house stands in manicured gardens with a tennis court and pool. It was built during the 1930s for Carpenter Group chairman, R.B. Carpenter, and his wife, Gladys.
<img src="/images/2014/11/24/pymble%20nov%2024%20two.jpg" alt="">
The subsequent owners include medico Dr John Drummond, architect Steve Gunns and, most recently, property developer David Blaynie and his wife, Joanne, who sold it a decade ago for around $4.7 million.
<img src="/images/2014/11/24/pymble%20nov%2024%20three.jpg" alt="">
I remember when LJ Hooker Pymble’s David Johnson was selling 42 Telegraph Road back in 2004 and successfully advising the then vendor to replace the roof of the home with slate tiles. It cost the vendor more than $150,000, but Johnson suggested it certainly helped achieved the $4.7 million sale price of the 3,389 square metre property.
<img src="/images/2014/11/24/pymble%20nov%2024%20four.jpg" alt="">
<img src="/images/stories/2013/09/06/mb-silhouette-4.jpg" alt="mb-silhouette-4" width="130" height="195" style="float: left;">SHE SAID:
East side of the train line is essential – and not too far east. Be it Killara, Wahroonga, Warrawee, Pymble, Gordon or Roseville, the property must be within easy walking distance of a train station for Mums and Dads who commute to work in the city, and kids travelling to schools.
<ul>
<li>
The house should have at least four bedrooms, as well as huge sitting and dining rooms and a big open-plan kitchen and family living area with easy access to outdoor entertaining/barbecue areas with an outdoor kitchen. 
</li>
<li>While ballrooms and train rooms once were popular with North Shore mansions, these days home theatres and cinema rooms are the go – or a yoga room for mum and her friends. </li>
<li>A huge landscaped garden is de rigeuer – and preferably one designed by Annie Wilkes. While topiary and manicured hedges suit some properties, I prefer rambling gardens. It’s a pity the Upper North Shore doesn’t have any gardens designed by Enda Walling. </li>
<li>The property needs to be close to good primary school given families with young children are predominant buyers for Upper North Shore properties. Burns Road Wahroonga is a fine example of a good east side address, for it has the Bush School and nearby Prouille for Catholic kids. </li>
<li>
Among the best properties for sale, in my view, is “Hazeldean” at 14 Burns Road, Wahroonga. Ticking all the boxes including buxus hedges in the garden, “Hazeldean” has a circa 1898 residence built in the Queen Anne style and updated with an award-winning heritage restoration.  
</li>
</ul>
<img src="/images/2014/11/24/wahroonga%20nov%2024%20six.jpg" alt="">
Described by McGrath selling agents, Phillip Waller and Samuel Lynch, as “presenting unparalleled grandeur and prominence”, it stands in about 3,422 square metres of landscaped gardens with a championship-size tennis court and heated swimming pool.
<img src="/images/2014/11/24/wahroonga%20nov%2024%20two.jpg" alt="">
Designed by architect Varney Parkes (the seventh child of politician, Sir Henry Parkes, and his first wife Clarinda), it has six bedrooms, an expensive designer gas kitchen (by Scullery and Holtz), grand formal sitting and dining rooms (with high ornate ceilings and original circa 1890s embossed wallpaper) and self-contained guest accommodation in a separate wing.
<img src="/images/2014/11/24/wahroonga%20nov%2024%20three.jpg" alt="">
The property is an easy walk to the train station and village shops as well as Knox and Abbotsleigh schools.
<img src="/images/2014/11/24/wahroonga%20nov%2024%20seven.jpg" alt="">
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The Upper North Shore, Sydney trophy home essentials: He Said/She Said

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Airbnb has rolled out <a href="https://blog.airbnb.com/airbnb-host-protection-insurance/" target="_blank">an additional liability insurance program</a> that will provide up to US$1 million (A$1.16 million) worth of protection to Airbnb hosts for their listings in the US.
The company, founded in California in 2008, allows people to list, discover and book accommodation around the world, whether it’s an apartment for the night or a shack for a week.
It already provides hosts and guests with information about how they can make their listing safer and more secure, and a $1 million Host Guarantee provides reimbursement in cases of property damage.
The additional liability insurance program, Airbnb Host Protection Insurance, will provide up to $1 million worth of protection to hosts for their listings in the US if a guest is accidently injured anywhere in a host’s building or property during their stay.
It provides coverage for Airbnb hosts and, where applicable, their landlords. The coverage will be automatic at every stay at a listing in the United States and the company is actively working on ways to expand it internationally.
This article first appeared on <a href="https://www.smartcompany.com.au/" target="_blank">SmartCompany</a>.<a href="https://www.smartcompany.com.au/" target="_blank"></a>
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Airbnb rolls out US$1 million liability insurance for accommodation hosts

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GUEST OBSERVATION
Last week brought the latest instalment in the continuing Australian financial planning industry saga. Senators Jacqui Lambie and Ricky Muir blocked the Abbott government’s <a href="https://www.comlaw.gov.au/Details/F2014L00891/Explanatory%20Statement/Text" target="_blank">rollback</a> of some of Labor’s Future of Financial Advice (FoFA) reforms.
The proposed changes to FoFA watered down some of its more controversial aspects. They included the provisions establishing a “best interests” duty for financial planners and restrictions on conflicted remuneration. Other rollbacks included changes that required fee disclosure statements and the obligation for clients paying ongoing fees to “opt in” by written consent every two years.
The Abbott government maintained the reforms were merely to streamline regulation, prompted by the need to reduce bureaucracy and red tape. However, the recent and continuing <a href="https://www.smh.com.au/business/timbercorp-victims-set-to-sue-financial-planners-while-liquidator-presses-for-loans-to-be-repaid-20140810-102gco" target="_blank">financial planning scandals</a> made such streamlining politically unsustainable.
So we are back to Labor’s original FoFA legislation. But where does this leave the financial planning industry and the thousands of Australians in need of financial advice?
There are claims within the financial planning industry the blocking of the regulation will cause further <a href="https://www.theage.com.au/business/banking-and-finance/fofa-reforms-senate-shock-spurs-financial-adviser-scramble-20141119-11q2te">instability</a>. This is as firms scramble to meet the FoFA requirements, particularly those relating to fee disclosure and opt in obligations.
Yet FoFA has been law since 1 July 2013, so it is difficult at first glance to understand why the blocked rollback would significantly impact the industry.
It seems that large sections of the industry have been operating on the basis the coalition’s FoFA rollback changes would become law.
It is a view reflected by the Australian Securities and Investments Commission. It <a href="https://www.asic.gov.au/about-asic/media-centre/find-a-media-release/2013-releases/13-355mr-asic-update-on-fofa/" target="_blank">said</a> in December 2013 it would take a “facilitative” approach to FoFA enforcement in light of the proposed changes and would “not take enforcement action in relation to the specific FoFA provisions that the government is planning to repeal”.
After the reforms were disallowed in the Senate, ASIC said this week it would take a “<a href="https://www.asic.gov.au/about-asic/media-centre/find-a-media-release/2014-releases/14-307mr-disallowance-of-fofa-regulations/" target="_blank">practical and measured approach</a>” to administering FoFA as it now stands. The regulator says it recognises that compliance with FoFA will require systems changes for many Australian financial services licensees. This facilitative approach to FoFA compliance will continue until 1 July 2015.
It seems unlikely there is any need for panic within the industry as there is still some time before ASIC will enforce FOFA compliance. Nonetheless, those licensees who deferred making costly system changes in line with Labor’s legislation may now find themselves having to make those changes rapidly in a highly uncertain regulatory environment.
In the long run, this situation is likely to lead to less affordable financial advice for Australian consumers.
Despite the reform rollback not going ahead, there still isn’t an easy solution for the financial advice industry. The unchanged legislation now retains greater consumer protection. But it does <a href="https://www.theage.com.au/business/comment-and-analysis/fofa-doesnt-clean-up-the-financial-advice-minefield-20141121-11riwk" target="_blank">little to address </a>what many regard as the fundamental cause of the poor reputation of the Australian financial planning industry – the need to raise the professional, ethical and educational standards of financial advisers.
While consumers will get some greater level of protection through increased fee disclosure, this comes at a price. This protection also relies on consumers taking the time to read and understand the disclosures made by their financial planners. Financial planners can continue to give poor quality advice. What will change is increased upfront fees and greater disclosure around these fees resulting in higher costs. There will be less scope for scaled advice which was part of the Abbott government reforms.
FoFA still fails to set educational or professional standards for financial planners. Until industry entry standards are lifted, FoFA will not deliver accessible financial advice for the Australians who need it.
Absent an urgent rethink by the Abbott government on FoFA, after last week’s events it seems the goal of access to affordable and trustworthy financial advice for Australian consumers is more elusive than ever.
<img src="https://counter.theconversation.edu.au/content/34486/count.gif" alt="The Conversation" width="1" height="1">Julie Walker is associate professor in accounting at The University of Queensland.
<a href="https://theconversation.com/institutions/university-of-queensland"></a>
Julie Walker has previously received research funding from the Institute of Chartered Accountants in Australia. She is affiliated with Chartered Accountants Australia New Zealand.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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FoFA fiasco: No quick fix for the advice industry

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GUEST OBSERVATION
It’s interesting that we’re waiting to see what’s in store for 2015. But it’s us – the buyers, sellers and onlookers – whose behaviour moves our market. In the cycle of Sydney property, it goes something like this…
<ol>
<li>
Street level: The buyers/sellers on the front line, listing, inspecting, bidding and exchanging. 
</li>
<li>
Data reporting: Street level activity is distilled into bite-sized graphs and reports. 
</li>
<li>
Headlines: Data reporting drives what we hear in the media, whether relevant or not. Headlines are formed, as sensationalism fuels speculation. 
</li>
<li>
Fear and optimism: Speculation shifts confidence, and new outlooks and expectations are formed. 
</li>
<li>
Repeat: These expectations change buyer/seller behaviour, and the cycle continues.
</li>
</ol>
In a market sustained with consumer confidence, what is this love of data-cherry-picking actually telling us? Watching at street level cuts out that speculation, providing a better sense of where the market is going.
<div class="aspectRatioPlaceholder is-locked"><img class="graf-image" src="https://d262ilb51hltx0.cloudfront.net/max/1400/1*b9pK2cwYhBhOHIS_Wur3SQ.jpeg" data-image-id="1*b9pK2cwYhBhOHIS_Wur3SQ.jpeg" data-width="2835" data-height="1890" data-action="zoom" data-action-value="1*b9pK2cwYhBhOHIS_Wur3SQ.jpeg"></div>
17 Bridge Road, Glebe  (pictured above)  sold for $950,000, showing inner-city terraces can still be found for under $1 million.
Yet we wait on reports with anticipation. Take clearance rates, we thrive on those.
If they’re above 80% it’s a boom. The minute they dip below we’re destined for gloom. A recent report cited the Sydney clearance rate as below 80% for the first time in nine weeks. But that new figure was 79.3%. The angle was, ‘the end of boom time’.
Perhaps pricing simply outpaced buyers that weekend. Of course, that’s not sexy as a headline.
<div class="aspectRatioPlaceholder is-locked"><img class="graf-image" src="https://d262ilb51hltx0.cloudfront.net/max/1400/1*ya6qXIOdQjlGZUUjKw_jAg.jpeg" data-image-id="1*ya6qXIOdQjlGZUUjKw_jAg.jpeg" data-width="2835" data-height="1890" data-action="zoom" data-action-value="1*ya6qXIOdQjlGZUUjKw_jAg.jpeg"></div>
56 Fitzroy Street, Surry Hills  (pictured above)  sold for $2.6 million, it was one of a string of properties that showed high activity in this luxury price point.
Consider how we found ourselves in this ‘boom’. Demand is what drove the initial heat. We saw value and started buying up. Buyer-enthusiasm outpaced seller-expectations, leading to price increases, rising clearance rates, and juicy headlines.
Vendor hopes skyrocketed with every new headline and they began setting a new level of pricing with their exuberance. Momentum continued while buyers saw value and were happy to accept these new prices as the norm.
Of course, in any upswing, buyers will inevitably reach a point when they say ‘no’. They won’t pay 10%-more-than-next-door forever.
That’s perfect for ‘slower market’ headlines, ‘fewer buyers at auction’ and ‘clearance rates drop’. Then, confidence will shift again.
It’s not always impending doom. The buyers are still there. They wait to identify value each time our market gets overexcited. We often ignore this logic and the fact the market is subtler than reports suggest.
<div class="aspectRatioPlaceholder is-locked"><img class="graf-image" src="https://d262ilb51hltx0.cloudfront.net/max/1400/1*sNG0OP0Z8kTiqz5R69S_ww.jpeg" data-image-id="1*sNG0OP0Z8kTiqz5R69S_ww.jpeg" data-width="3543" data-height="2362" data-action="zoom" data-action-value="1*sNG0OP0Z8kTiqz5R69S_ww.jpeg"></div>
311/1 Marian Street, Redfern (pictured above) sold for $905,000, it’s tipping into that million-dollar-apartment category that is hotly contested.
And let’s not forget our micro market<a class="markup--anchor markup--p-anchor" href="https://medium.com/@BresicWhitneyEA/uncovering-sydneys-micro-markets-d35f2ee3325a" style="line-height: 1.3em;" data-href="https://medium.com/@BresicWhitneyEA/uncovering-sydneys-micro-markets-d35f2ee3325a">s</a>. In certain sub-markets of Sydney real estate, prices outpaced buying long ago. Some executive residences in the Eastern Suburbs have wavered while plenty of entry-level houses in, say, the Inner West continue to rally strongly.
Bystanders will claim to have all the answers in 2015. But if buyers and sellers are shifting markets with their behaviour and sentiment, watching at street level keeps us one step ahead as we look for value and see what’s really happening.
The best buying and selling will still come from players who immerse themselves in their favoured pocket of the market.
<a href="https://www.bresicwhitney.com.au/" target="_blank">BresicWhitney</a> is a boutique real estate group founded in Darlinghurst in 2003.
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How to stay ahead of the pack next year in Sydney's market

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GUEST OBSERVATION
Heatwaves — Australia’s <a href="https://australia.gov.au/about-australia/australian-story/natural-disasters" target="_blank">biggest natural killers</a> — are getting <a href="https://theconversation.com/climate-council-heatwaves-are-getting-hotter-and-more-frequent-23253" target="_blank">more frequent and hotter</a> thanks to climate change. One day cities such as Melbourne may see unprecedented heat, perhaps 48C or higher.
But our research shows that smart urban design can create refuges in cities that could feel more than 10C cooler, and without increasing energy use.
Recently the Victorian Auditor-General released a report that found Victoria is not adequately prepared to deal with <a href="https://www.audit.vic.gov.au/reports_and_publications/latest_reports/2014-15/20141014-heatwave-management.aspx" target="_blank">heat disasters</a>.
While this report focused on the ability of our services to respond to and communicate about extreme heat events, it also raises an important question: how do we better prepare our cities for <a href="https://theconversation.com/climate-council-heatwaves-are-getting-hotter-and-more-frequent-23253" target="_blank">more frequent and hotter</a> heat waves?
<h3>Record-breaking heat</h3>
In Australia, 2013 was the <a href="https://theconversation.com/human-hands-are-all-over-australias-hottest-ever-year-32267">hottest year on record</a>. Globally, 2014 is on course to <a href="https://www.scientificamerican.com/article/2014-on-track-to-be-hottest-year-on-record/" target="_blank">break records again</a>.
With increasing predicted temperatures and the impact of the urban heat island effect (where urban space is much hotter than surrounding areas) to consider, there is increasing pressure on Australian cities to support the health of their populations during extreme heat events.
In Victoria, statistics show that the last two heat waves, in 2009 and 2014, caused as many as <a href="https://www.audit.vic.gov.au/publications/20141014-Heatwave-Management/20141014-Heatwave-Management.pdf" target="_blank">500 deaths</a>. (see also <a href="https://www.climatecouncil.org.au/uploads/9901f6614a2cac7b2b888f55b4dff9cc.pdf" target="_blank">here</a>). This figure is set to <a href="https://www.climatechange.gov.au/climate-change/climate-science/climate-change-impacts/victoria">quadruple between now and 2050</a> (see also <a href="https://www.bom.gov.au/state-of-the-climate/" target="_blank">here</a>)
Whilst it’s important to make sure our emergency services are able to cope in the best way possible, this is a reactive response that will help manage crisis situations. Reinforcing the electricity grid to make sure that outages are minimised is also valuable.
However, proactively dealing with mitigation of extreme heat can take the pressure off services, minimise expense and most importantly, reduce heat stress.
<h3>How do we mitigate extreme heat?</h3>
There is an important body of work on reducing the urban heat island effect, particularly through urban greening infrastructure and building performance. A notable example of green infrastructure is the <a href="https://www.melbourne.vic.gov.au/Sustainability/UrbanForest/Documents/Urban_Forest_Strategy.pdf" target="_blank">Melbourne Urban Forest Strategy</a>.
Urban forests have been found to be very effective methods for city heat mitigation. However, vegetation takes a long time to grow and may not be as appropriate in every part of a city, so we need a greater diversity of solutions.
It is important to design at the street level scale: particularly in those places used the most. The spaces between buildings are necessary to urban functionality and where people spend most outdoor time.
A recent study in Sydney found that streetscapes have <a href="https://www.propertyobserver.com.au/https://www.ccsenet.org/journal/index.php/jsd/article/viewFile/35128/20347" target="_blank">higher minimum temperatures than rooftops</a> indicating the importance of cooling this highly used part of the city. Streets, train stations, even car parks can be designed to contribute towards much cooler experiences.
<h3>Keeping cool on the streets</h3>
Research on urban microclimates from around the world has shown that we can control the thermal comfort of smaller spaces, <a href="https://www.vcccar.org.au/sites/default/files/publications/VCCCAR%20Green%20Infrastructure%20Guide%20Final.pdf" target="_blank">without using more energy</a> (see also <a href="https://www.sciencedirect.com/science/article/pii/S096014811400336X">here</a> and <a href="https://www.sciencedirect.com/science/article/pii/S0169204613002399">here</a>). This is not just about reducing the absolute temperature, it’s also about making people feel comfortable.
The experience of temperature is controlled by both personal and environmental factors. Combinations of air temperature, wind, humidity and radiated heat will change the feeling, or <a href="https://www.bom.gov.au/info/thermal_stress/index.shtml" target="_blank">apparent temperature</a>, of the weather.
We can create spaces with optimum comfort levels through a combination of shading, reduced heat build up in materials, humidity and wind management. Rather than trying to change the temperature of the whole city, we can provide heat refuges at street level to make the city more functional on hot days.
We know that a comprehensive toolkit is needed to understand how we can cool the city in different places. Trees and greening are important but aren’t practical everywhere, and certainly not when they are used in isolation.
Designs that also include redirecting wind, controlling humidity and water and that consider thermal qualities of materials are necessary. There are also further opportunities for enhanced cooling that use virtually no energy.
For example, geothermal cooling (where wind is tunnelled underground and cooled by the earth) and misting are two tools that can actively reinforce cool space within cities.
This article continues on the next page. Please click below.
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<h3>A winning design</h3>
In a recent <a href="https://moorabbinjunction.com.au/tag/street-14-2/">Street14 ideas competition</a> run by the Australian Institute of Landscape Architects and Kingston City council we tested these design ideas on a site in the Melbourne suburb of Moorabbin. Our entry won Best Urban Tactic.
Our research using on site temperature and humidity sensors revealed temperature differences of up to 10C across a small urban block. In addition, whilst exposed sites were the hottest, they were also often the quickest to cool off.
This gives us big clues into designing urban spaces for use across a whole day, where it’s important to minimise heat build-up but also to encourage rapid heat loss.
Key to this idea of designing microclimates is designing responses to the local conditions.
In Moorabbin, having the sensors on site was important because it meant we weren’t designing using generalised ideas, but instead able to work with the specific events on site.
<h3>Global movement</h3>
This kind of work on design with atmospheric conditions is beginning to be explored in cities around the world.
Examples include climate engineers <a href="https://www.transsolar.com/" target="_blank">Transsolar</a>, who were instrumental in demonstrating that Qatar’s 2022 World Cup bid was viable, showing how well designed stadia could mitigate the extreme temperatures of a <a href="https://www.transsolar.com/blog/design-for-outdoor-comfort/index" target="_blank">Qatar summer</a> (see also <a href="https://www.ted.com/talks/wolfgang_kessling_how_to_air_condition_outdoor_spaces" target="_blank">here</a>).
In Taiwan construction is underway on the <a href="/news">Jade Eco Park</a>, a climatically controlled park that works to vary temperature, humidity and to provide clean air within microclimates to counter or enhance <a href="https://www.youtube.com/watch?v=UDr-6UtlUu8" target="_blank">local climactic conditions</a>.
Australian cities, with very particular weather conditions, need responsive design solutions that work with those kinds of factors.
For example, Melbourne’s very dry summers are more suited to cooling tactics that involve evaporation than other more humid capital cities.
Urban design can create spaces of heat refuge at street level within cities. Tram stops, train stations and streets that need to be used even during the most extreme heatwave are places that can be cooled.
If we can drop the temperature of these spaces by even a few degrees, we can <a href="https://wiki.csiro.au/download/attachments/442597561/Thursday%20Chen_1140Th.pdf?version=1&amp;modificationDate=1334212028180&amp;api=v2" target="_blank">save lives</a>.
<img src="https://counter.theconversation.edu.au/content/33246/count.gif" alt="The Conversation" width="1" height="1">Joseph Barrins is senior tutor in environments at University of Melbourne.
Wendy Walls is a PhD candidate at University of Melbourne.
Wendy Walls received prize money from the Street14 ideas competition. She is the recipient of the David Yencken scholarship in Landscape Architecture.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Smart urban design could save lives in future heatwaves

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GUEST OBSERVATION
Banks borrow short and lend long. So if all of a bank’s depositors suddenly want their money, the bank would be unable to pay them. A bank may have made great loans but it can only unwind these loans slowly over time.
In most situations this doesn’t matter. Banks know their cash flows and play the probabilities, making sure they have a buffer of liquid assets to meet normal withdrawals.
However, a crisis can trigger a run on banks. Every depositor wants to get his or her money out of the bank before everyone else. The bank runs out of cash and closes its doors. It fails.
Bank regulation is at the heart of the current <a href="https://fsi.gov.au" target="_blank">Financial System Inquiry</a> chaired by David Murray. It will consider which regulations are important, which need to be strengthened and how <a href="https://www.bis.org/bcbs/index.htm" target="_blank">international banking rules</a> should apply in Australia.
Our recent <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2478496" target="_blank">research</a> compares some of the different rules that may be used to limit bank risk. We find that increased bank capital requirements are the most effective policy but must be applied across all institutions to stabilise the banking system.
The global financial crisis
The 2008 crisis resulted in plenty of traditional bank runs. In the United Kingdom, retail depositors lined the streets to take their money out of the failing Northern Rock.
We also saw a different type of bank run during this period. For example, a bank run led to the collapse of Lehman Brothers. Yet this didn’t involve retail depositors. It was institutions that stopped lending to Lehman Brothers on the wholesale market.
Australia’s banking system in 2008 was fundamentally sound. Our banks didn’t have abnormal levels of bad loans. Legal differences meant the default issues plaguing bank mortgages in California, Florida and elsewhere in the United States couldn’t occur in Australia.
Yet our banks were still exposed to the crisis through their reliance on imported wholesale funds. The Australian government responded to this risk of an “imported crisis”. In October 2008, it introduced explicit deposit insurance and guaranteed bank wholesale borrowing.
But why did Australia’s sound banking system come under pressure in 2008? Is there potential for Australia to import a banking crisis in the future? And what sort of banking regulations do we need to deal with this possibility?
Importing a banking crisis
Wholesale funds now provide a large part of the total funds available to banks in many countries. This has changed the nature of the risks they face.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/63663/width668/sd32vc8q-1415143968.png" alt="">
 <a class="source" href="https://www.rba.gov.au/publications/rdp/2013/pdf/rdp2013-15.pdf" target="_blank" rel="nofollow">RBA Discussion Paper 2013-15 “Trends in the Funding and Lending Behaviour of Australian Banks“ Chris Stewart, Benn Robertson and Alexandra Heath</a>
Australian banks source much of their wholesale funding offshore. This inflow of capital allows Australia to undertake more investment, generating higher levels of growth and enhanced well-being.
Before the crisis, Australian banks were borrowing internationally an amount equal to 5% of our gross domestic product each year. In 2008, international funds flowing though the banks funded about one-fifth of Australia’s total investment.
The flow of international funds did not stop during the crisis. However, they became more expensive, transmitting the pain felt by European and US institutions to Australia.
Banks were not the only institutions affected by the sudden rise in the cost of foreign funds. Foreign direct investment, foreign portfolio investment, offshore capital raisings by Australian companies, and government borrowings were also impacted.
However, the impact on banks was more significant. Unlike other institutions, banks borrow money for relatively short periods but use the money to lend to companies and individuals for the long term. When they depend on short-term international funds, a sudden rise in the price of those funds exposes banks to higher costs and potential failure. Any failure can also have significant economic and political implications. The failure of one bank can lead to a run and the failure of other banks.
This means governments tend to intervene if bank failure is imminent. For example, Bankwest in 2008 was owned by flailing UK bank HBOS. It was facing failure and, following government intervention, was bought by the Commonwealth Bank.
The government’s move to insure bank deposits and wholesale funding stabilised the banking system during the crisis. Yet these were ad hoc policy responses. Australia still needs to develop long-term policies to deal with the next financial crisis.
Article continues on the next page. Please click below.
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Developing the right regulation
Our recent research compares some of the different rules that are used, or might be used, to try to limit bank risk from offshore funding. This research is unique as we consider the consequences of specific policies at times of crisis and also during usual operations.
A policy may be effective at preventing a crisis but if it means that borrowers pay more and depositors receive less most of the time, then the protection provided by the policy may be overwhelmed by the day-to-day cost to the Australian public.
We take it as given that ordinary retail depositors will have some form of implicit or explicit government protection, so our focus is on the risk of bank default on bondholders. A bank fails if an increase in the cost of wholesale funds cuts its cash flows so that it cannot meet its debt obligations.
Regulators can do many things to limit banks’ exposure to imported wholesale funds and maybe make them less exposed to importing a banking crisis.
Regulations may require that banks use limited or no imported wholesale funds at all. Banks would have to be fully funded by domestic savings. Some countries like China have policies like this.
This policy is unlikely to work in Australia because it would significantly limit investment during normal operations. There would be no risk of importing a crisis but there would also be less domestic investment as borrowers would face higher interest rates. India has adopted this type of policy for many years and it has adversely impacted growth.
Depositors may gain from being a source of scarce investment funds but there would also be other costs. The banking sector would contract due to the restriction on fund access resulting in less competition.
Another policy that would reduce the likelihood of importing a financial crisis is for the government to have an explicit or implicit policy of bailing out bondholders. This occurred in the UK and US during 2008.
This policy has undesirable implications. If banks know that taxpayers effectively insure their bondholders, they will reduce the amount of equity issued and increase their amount of bonds. This would result in an increase in new entrants to the market based on excessively risky funding models.
Having a larger number of banks adopting a fragile funding model increases the likelihood of bank failures. If banks know they will be bailed out if they fail, then banks are more likely to fail. A bail-out policy actually increases the likelihood of future crises.
The most effective policy for dealing with wholesale funding risk is to increase the amount of capital banks are required to hold. While regulators have asked banks to hold more equity capital as insurance against lending risks, this policy can also reduce funding risks.
If a wholesale funding squeeze means that a bank cannot pay its bondholders, then the bank fails. If the squeeze simply reduces the dividend to shareholders, then the bank continues to operate. So requiring banks to hold more capital and less debt directly reduces the risk of failure.
While our research suggests that uniform minimum capital requirements can stabilise our banking system, it has been suggested these requirements only apply to “big” banks. Such an asymmetric policy would be undesirable. If there are weak funding restrictions on small banks, this will encourage the entry of a greater number of smaller and potentially more fragile banks. The result is an increased risk of future crises.
An asymmetric policy of increasing the capital requirements on large banks but not on small banks could have a stabilising effect if the government resolved never to bail out the small banks. Small banks could enter and leave the industry as funding conditions allowed and act as a shock-absorber to the system.
Politically, however, this is unlikely to work. Bankwest was not allowed to fail but was folded into the Commonwealth Bank. Even a small credit union like the Fitzroy and Carlton Community Credit Co-operative was <a href="https://www.bankmecu.com.au/why-bank-with-us/news-media/media/bankmecu-and-fitzroy-carlton-community-credit-co-operative" target="_blank">folded into a larger bank</a> last year rather than being allowed to fail.
Any new regulations to deal with the possibility of a future crisis must also deal with political reality. Minimum capital requirements on all banks can stabilise the banking system. However, a policy that just targets the big banks is unlikely to succeed.
Rodney Maddock is Vice Chancellor's fellow at Victoria University and adjunct professor of economics at <a href="https://www.monash.edu.au/" target="_blank" style="line-height: 1.3em;">Monash University</a>.
Stephen King is professor, Department of Economics at <a href="https://www.monash.edu.au/" target="_blank" style="line-height: 1.3em;">Monash University</a>.
Stephen King and Rodney Maddock received funding from CIFR for this project.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Don’t just target the big banks: Why all banks need higher capital

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GUEST OBSERVATION
Whether it’s your first property or 21st, buying an investment property is a completely different process to purchasing a family home.
Buying the family home is an emotional decision-making process.
“Is the property big enough? Is that the part of town that we want to live? How does it fit in with the kids commute to school? Do we like it?”
These are all emotional questions which are very important in achieving the primary objective of buying the family home – the objective of being happy at home.
The primary objective of investing is different – to make money over the longer term. So, it’s important to totally remove all emotion from the purchase decision and to treat the asset not as a property, but a financial instrument.
The majority of investors purchase properties within 10 kilometres of where they live.  When asked why, these people often say “I know the market”. Knowing a local neighbourhood and knowing a property market are completely different. Buying locally for no other reason or with no other research than it is simply close to where we live, would be like a share investor saying “...Qantas is my preferred airline so I’ll invest in Qantas shares” – the shares have performed abysmally.
Australia is not one single property market; even Brisbane/Sydney/Melbourne have markets within their own market. With over 9.6 million properties in Australia, it is unlikely that you would be lucky enough to have ‘the best’ investment opportunity in your own neighbourhood.
Property investors would do well to adopt a business owner mindset to building and managing their property portfolio.  You’re in the business to make money through providing accommodation to people. You’ll make more money from the growth of your asset value over time than from the net rental income collected each year.
It is irrelevant whether or not an investment property resembles something that you would live in – that’s not the objective, that’s emotions clouding a financial decision. Remember that different people have different preferences for the cars they drive, the food they eat, the clothes they wear, and the type of property they live in.
It is important that an investment property has general demand from a broad market. Demand for accommodation is most influenced by affordability (the more people who can afford it, the higher demand) and where people work. Ongoing demand creates competition and price growth.
I’m not saying rush out and find the ugliest property, but we need to keep in mind that whilst an exceptionally well presented property may look pretty, it will also more often than not come with a larger price tag. The property must be structurally sound and presentable for potential tenants (that means neat, tidy and everything in working order).   
After a few years of tenants occupying a property, the shine will wear off the ‘pretty’ property with the even prettier price tag. We want a property looking its best when it comes time to sell – not when you are buying it.
Purchasing an investment property is a financial transaction; not an emotional one!
Bryan Loughnan is a buyer’s agent with <a href="https://www.propertyology.com.au/" target="_blank">Propertyology</a>. Bryan has a Bachelor of Applied Science majoring in property economics. 
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Make sure property investing is a financial decision, not an emotional one

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GUEST OBSERVATION
Australia’s policies to cut greenhouse emissions have been shrouded in uncertainty over the past few months. The contentious <a href="https://theconversation.com/au/topics/renewable-energy-target-review" target="_blank">Renewable Energy Target review</a> and the swapping of the <a href="https://theconversation.com/search?q=carbon+tax+repeal" target="_blank">carbon price</a> for <a href="https://theconversation.com/au/topics/direct-action-plan" target="_blank">Direct Action</a> have garnered most of the headlines. But another policy, which has quietly been cutting emissions for the past four years, is now also under scrutiny.
The <a href="https://www.cbd.gov.au">Commercial Building Disclosure</a> (CBD) program is the latest federal environmental policy to be placed under review. The scheme encourages energy efficiency by requiring owners to detail whether their buildings are high or low energy users. It has strong support in both industry and <a href="https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22chamber%2Fhansardr%2Fa275472e-b699-46e7-ac29-bcf2fb8ee942%2F0165%22" target="_blank">politics</a>.
The review creates uncertainty about the future of a proven program which has been effective in improving energy efficiency.
The introduction of the CBD program in 2010 radically improved the visibility of building energy consumption and operating costs to prospective owners and tenants. This has created an effective market-based incentive to improve energy efficiency, without significant regulatory involvement or administrative overheads.
Improving the energy efficiency of existing buildings is one of the quickest, easiest and cheapest ways to cut greenhouse emissions. Some 85% of Australia’s buildings were built before energy-efficiency regulations were introduced, and turnover is slow: just 1-3% of buildings are replaced each year. Commercial buildings account for about 10% of Australia’s greenhouse emissions.
Cutting emissions saves money as well. The Intergovernmental Panel on Climate Change <a href="https://report.mitigation2014.org/drafts/final-draft-postplenary/ipcc_wg3_ar5_final-draft_postplenary_chapter9.pdf" target="_blank">reports that</a> cutting emissions in the building sector by 30% would have net economic benefits. In Australia, commercial building retrofitting is among the most economically attractive ways to reduce emissions.
How does the CBD program work?
The CBD program, also known as “mandatory disclosure”, encourages commercial building managers to drive emissions down. The scheme requires the disclosure of energy efficiency information on a building whenever a commercial office space larger than 2,000 square metres is offered for sale or lease. This includes giving the building a star rating (under a scheme called <a href="https://www.nabers.gov.au/public/WebPages/ContentStandard.aspx?module=10&amp;template=3&amp;id=5&amp;include=HowNabersWorks.htm&amp;side=factsheets.htm" target="_blank">NABERS</a>), detailing the efficiency of its lighting, and making recommendations for further improvements.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/64431/width668/vpfdgmzy-1415838189.jpg" alt="">
Example of the signage required for compliance with CBD obligations Australian Government Department of Industry
This empowers potential tenants or buyers to choose more efficient buildings, and thus creates market pressure for owners to improve their energy efficiency. Since the announcement of the program, the average star rating <a href="https://cbd.gov.au/files/files//IPD-Department%20Of%20Industry%20NABERS%20Energy%20Office%20Market%20Analysis%20Q4%202013.pdf" target="_blank">has jumped</a> from 3.3 to 4.1, while the amount of floor area covered by the NABERS rating scheme has almost doubled.
Individual buildings rated more than once whilst CBD has been in operation have <a href="https://www.nabers.gov.au/AnnualReport/2010-14-cbd-statistics" target="_blank">reduced their energy</a> use by an average of 8.6%. This would deliver an almost 1% reduction in Australia’s total greenhouse emissions if implemented across the entire commercial building stock.
The program has been particularly effective at targeting smaller, poorer-performing buildings, in contrast to flagship office buildings where being green is already a key consideration. Compared with <a href="https://www.nabers.gov.au/AnnualReport/index" target="_blank">other schemes</a> targeting this sector the market-based CBD program has been a huge success.
This article continues on the next page. Please click below.
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So why review the scheme?
The CBD program has <a href="https://www.propertyobserver.com.au/https://www.thefifthestate.com.au/politics/government/cbd-program-up-for-review-and-axing/67608" target="_blank">strong support</a> from both the property and sustainability industries, including the companies that work to retrofit old buildings. The Green Building Council of Australia has <a href="https://www.gbca.org.au/uploads/180/35252/GBCA%20Pre-Budget%20submission%20to%202014-15%20Federal%20Budget%20FINAL%20310114.pdf" target="_blank">singled out the scheme</a> as playing an important role in raising awareness and setting minimum standards for energy efficiency.
The <a href="https://cbd.gov.au/overview-of-the-program/cbd-review-201415/terms-of-reference" target="_blank">review</a> will be carried out by ACIL Allen, the company that also provided modelling for the controversia<a href="https://theconversation.com/au/topics/renewable-energy-target" target="_blank">l Renewable Energy Target Review</a>. It will advise on whether the scheme should continue or be scrapped, but will also be free to make broader recommendations that it be broadened out to include smaller buildings or non-commercial properties. This wide remit has <a href="https://www.propertyobserver.com.au/https://www.thefifthestate.com.au/business/trends/behind-the-lines-in-energy-efficiency-land/68141" target="_blank">already been blamed</a> for creating damaging uncertainty in the energy-efficiency industry.
Meanwhile, the federal government has outlined a method for <a href="https://www.environment.gov.au/system/files/pages/a6d1ee7d-2e4d-42b2-b9c8-43a5564c2302/files/commercial-buildings-determination.pdf" target="_blank">including commercial building emissions reductions in the Carbon Farming Initiative</a>, as part of the newly approved Direct Action plan. The proposed method uses the NABERS star rating of a building as a measure of energy consumption.
In some ways the CBD program would be a natural fit with the proposed method. A building owner required to get a star rating under mandatory disclosure could potentially then bid for Direct Action funding to improve it. But Direct Action, which is focused primarily on large projects, requires bidders to achieve minimum emissions reductions of 2,000 tonnes of carbon dioxide per year – 10 times larger than the level <a href="https://www.environment.gov.au/submissions/emissions-reduction/green-paper/263-property-council-of-australia.pdf" target="_blank">advocated for</a> by the Property Council of Australia.
This means that an average commercial building attempting to cut its energy use by a very ambitious 30% would need to have a floor area of at least 18,000 sq m to be eligible for Direct Action. This would exclude almost 80% of office buildings, unless the savings from various different buildings were lumped together to form a bigger project.
It seems unlikely that the CBD program will be entirely scrapped, particularly as it has proved to be effective in cutting emissions without direct government subsidies. Its alignment with Direct Action plan also further strengthens the case for the CBD to be retained in its current form.
But there’s a danger that the large minimum emissions reductions required for Direct Action funding and ongoing policy uncertainty will act as barriers to efficiency improvements being made in much of the commercial building sector.
Daniel Daly is a PhD candidate at the Sustainable Buildings Research Centre at University of Wollongong. He is a current member of The Greens.
Paul Cooper is professor and director of the Sustainable Buildings Research Centre (SBRC) at University of Wollongong.
This article was originally published on <a href="https://theconversation.com" target="_blank">The Conversation</a>.
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Green building scheme review adds yet more policy uncertainty

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GUEST OBSERVATION
The Australian television satire <a href="https://www.abc.net.au/tv/programs/utopia/" target="_blank">Utopia</a> invited the public along for a laugh that architects and planners have been sharing for decades. We laugh at the idea of utopia to disassociate ourselves from the disasters brought on by utopian visions.
Le Corbusier’s is perhaps the most famous. He dreamt of people living in racks of council flats rather than old building stock on the ground.
The only architects who have not gotten too savvy to dream of utopias are men in their 90s who missed the change in public opinion.
<a href="https://www.thevenusproject.com/" target="_blank">Jacque Fresco</a> hopes one day that machines will build mega-structures while we humans relax. Paolo Soleri’s hyper-dense prototype, <a href="https://arcosanti.org/" target="_blank">Arcosanti</a>, remains permanently stalled with 97% of the work incomplete.
These examples are goofy-faced totems for a demon that we actually fear. Serious architectural writers bring up examples like Albert Speer’s plan for Berlin and concentration camps.
Karl Popper cemented the association between utopianism and totalitarianism. Writing <a href="https://en.wikipedia.org/wiki/The_Poverty_of_Historicism" target="_blank">in 1957</a> after making a name for himself as a critic of Marxist epistemology, he said social engineering (especially of the Marxist variety) was despotic, delusional and — you guessed it – utopian. The word has had Orwellian overtones ever since.
Our urban landscapes have utopian pedigrees
That’s fair enough if we’re talking about religious or ideological utopian visions. Urban planning is different. It depends on utopian visions as touchstones. Urban planners need to be granted a unique dispensation and allowed to talk in utopian strains.
One reason was explained by architectural writers <a href="https://books.google.com.au/books/about/Concepts_of_urban_design?id=JKU2AQAAIAAJ&amp;amp;redir_esc=y" target="_blank">David Gosling and Barry Maitland</a>. While acknowledging Popper’s concerns, they argued that utopian visions in urban design are catalytic – never mind the handful of fools who treat them as prescriptions. Utopian visions bring clarity to real-world debates, they argued, “by postulating alternative hypotheses in a pure and crystalline form".
Another theorist, <a href="https://books.google.com.au/books/about/The_Rule_and_the_Model?id=cUlQAAAAMAAJ&amp;amp;redir_esc=y" target="_blank">Françoise Choay</a>, argues the enterprise we call urbanism would not exist without utopian models. All urban theories, she says, have been indelibly stamped by past utopian models.
Surely that can’t be true of urban theories today, when architects and urban planners laugh at a show called Utopia? It is undeniably true. Current urban theories have utopian pedigrees, some now 100 years old.
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/62809/width237/m24c8x7p-1414374134.jpg" alt="">
We see the mark of Ebenezer Howard’s utopian <a class="source" href="https://en.wikipedia.org/wiki/Garden_city_movement" rel="nofollow">Wikimedia Commons</a>
Take the principle of consolidating development within walking distance of train stations: it has been indelibly stamped by Ebeneza Howard’s <a href="https://en.wikipedia.org/wiki/Ebenezer_Howard#mediaviewer/File:Garden_City_Concept_by_Howard.jpg" target="_blank">circular diagram</a> for transit-based <a href="https://en.wikipedia.org/wiki/Garden_city_movement" target="_blank">“garden cities”</a>.
Less flatteringly, our permissiveness of ongoing sprawl betrays the indelible stamp of Frank Lloyd Wright’s <a href="https://en.wikipedia.org/wiki/Broadacre_City#mediaviewer/File:Wright_Sketches_for_Broadacre_City.jpg" target="_blank">Broadacre City</a>. Wright thought the natural outworking of personal mobility machines (cars) was that every person should get enough land of their own to pretend they are farmers.
Most embarrassing of all are our inner-city apartments. Built over batteries of multi-storey car parking, and beside roads that look like great venues for Formula One racing, most bear the indelible stamp of the General Motors <a href="https://www.1939nyworldsfair.com/worlds_fair/wf_tour/zone-6/general_motors.htm" target="_blank">“Highways and Horizons”</a> pavilion with its Futurama exhibition at the 1939 World’s Fair in New York.
Rarely these days are utopian visions rolled out all at once. They are more typically in the background, like the rules of a game, informing piecemeal implementation.
Many of us will have had firsthand experience with one, the Broadacre game, if ever we have built a house on a large block of land. We would have asked ourselves how the car could be parked between the kitchen and road, and what travel times (never mind distances) that road could promise to roadside amenities.
Velotopia: a new vision
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/62921/area14mp/ynyj89x5-1414450200.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/62921/width668/ynyj89x5-1414450200.png" alt=""></a>
<a class="source" href="https://cycle-space.com" rel="nofollow">Author/Cycle Space</a>, Author provided
As two authors who choose to rely on our bikes for most of our transport, it bothers us that the rules of our game are not well understood. When we choose where to live, shop, work or send our children to school, we don’t care so much about walking distances, the frequency of public transport or congestion on roads. We want to know where the cycleways are.
Cycleways tend to follow historic rail easements and waterways. This means that as cyclists our cognitive maps of most cities are dominated by the flatlands on the wrong side of the tracks that these cycleways often pass through. Ironically, it is often these very flatlands that, in time, become the new sites for <a href="https://observer.com/2014/06/that-zaha-moment-new-york-finally-gets-the-avant-garde-buildings-it-deserves/" target="_blank">“starchitect” development</a>.
We want to offer a new utopian dream. It is not borne of signature buildings but rather built on a bicycle-oriented lifestyle and informed by a utopian dream we call Velotopia.
In its crystalline form, Velotopia uses pedal power for virtually everything, even <a href="https://www.trisled.com.au/maxi-taxi.asp" target="_blank">taxis</a> and <a href="https://federation.cyclelogistics.eu/" target="_blank">freight</a> — a trend in European town centres already. In this utopia, cyclists cover 10-kilometre trips in 30 minutes of safe and social bliss. There to meet them at both ends are secure and convenient bike-parking facilities inside most buildings; our bikes are as welcome as wheelchairs or prams.
We’re not asking that the rules of our game obliterate those of car lovers, walkers or <a href="https://www.tarasgrescoe.com/straphanger/about" target="_blank">straphangers</a>. We’re simply following the conventions of our disciplines to imagine that our cities could accommodate an extra utopian dream, one that creates a safe cycling space. Put like that, it is a remarkably simple and profoundly utilitarian ask.
Our work is to bring Velotopia into plain view, as a catalytic vision. Some of our ideas for bike-access building types and ground planes designed to prioritise cycling will be on display in the Queensland Museum in Brisbane from November 28, 2014, to June 2015, as part of the National Museum of Australia’s Freewheeling exhibition. In late November we will meet policymakers in Brisbane to explore the principles of Velotopia as a catalyst for bicycle-orientated development.
As Velotopia becomes visible, we envisage a safer and more enjoyable cycling space, which can take its place among other utopias that influence the structure and spaces of our cities.
<img src="https://counter.theconversation.edu.au/content/33358/count.gif" alt="The Conversation" width="1" height="1">Steven Fleming is senior lecturer, School of Architecture &amp; Design at University of Tasmania. Steven is a member of the Reference &amp; Experts Panel of the Australian Cyclists Party.
Angelina Russo is professor of cultural practice at University of Canberra. Angelina has received funding from the Australia Research Council. She is an invited member of the Reference &amp; Expert Panel of the newly formed Australian Cyclist Party.
This article was originally published on <a href="https://theconversation.com">The Conversation</a>. Read the <a href="https://theconversation.com/utopia-seriously-good-urban-planning-should-aspire-to-it-33358">original article</a>.
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Utopia: seriously, good urban planning should aspire to it

National Australia Bank (NAB) will fund <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera</a>, a $1 billion, 52-level luxury residential tower being developed by Central Equity in one of the Gold Coast’s most tightly held coastal locations at Northcliffe.

The project, launched recently by <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a>, one of Victoria’s largest private residential developers, comes at a time when construction funding for large residential developments has become increasingly competitive as lenders tighten exposure to the sector.

Multiplex has been appointed the builder, and construction is now underway.

[smartcode_project:default project_id=108274 project_image_fid=365784]

Since its first project, Central Equity has delivered more than 85 residential developments with a combined end value exceeding $8 billion.

Palmera reflects Central Equity’s growing focus on the Gold Coast luxury apartment market and continues a relationship between Central Equity and NAB that dates back to the late 1980s, when the bank funded one of Melbourne’s earliest inner-city residential towers at a time when high-rise apartment living in the CBD was largely unproven.

“NAB’s funding of Central Equity’s $36 million CBD development in the late 1980’s to the financing of the billion-dollar tower today highlights the long-term relationship between the two organisations in delivering major residential projects” said Central Equity Founder and Chairman Eddie Kutner.

He said NAB’s early support was instrumental in helping establish the company’s development model.

“When we commenced our first residential tower in the late 1980s the concept of funding off-the-plan apartments was still largely untested in Australia,” Kutner said.

“NAB recognised the opportunity early and supported the project when others were uncertain. That relationship has now continued for more than 37 years across many developments.”

[smartcode_project:default project_id=108274 project_image_fid=365771]

Central Equity was established in 1987 when Melbourne’s CBD and Southbank precinct were still dominated by warehouses and commercial buildings. Fewer than 100 residents lived in Southbank at the time, and large-scale residential development in the inner city was not widely considered.

Recognising changing demographics and lifestyle preferences, the company began developing high-rise residential projects designed to bring permanent residents into the city centre.

Central Equity has provided accommodation for approximately 40,000 residents across Melbourne’s CBD and Southbank, while also incorporating supporting infrastructure including essential lifestyle facilities like retail spaces, childcare facilities and neighbourhood activity centres.

Central Equity has spent many years assembling the Palmera development site on the corner of Garfield Terrace and Frederick Street in Northcliffe, creating a supersite of around 3,300 sqm.

The developer said the Palmera apartment tower reflects its long-term view of the Gold Coast as a growing and increasingly diversified economy.

[smartcode_project:default project_id=108274 project_image_fid=365768]

Supported by infrastructure including the light rail network, major road upgrades expanded education, hospital and medical facilities and continued expansion at the Gold Coast Airport with more internation and domestic flights.

Positioned in the tightly held Northcliffe precinct, the 52-level tower will deliver 347 apartments, targeting buyers seeking a high-end coastal lifestyle, from downsizers to interstate investors.

Designed by Marchese Partners with interiors by DBI, Palmera has been conceived as a next-generation residential offering, featuring a collection of oversized apartments, with premium three-bedroom residences offering sweeping northern views stretching from Surfers Paradise through to Burleigh Heads.

[smartcode_project_cta:default project_id=108274]

Joel Robinson

NAB funds $1 billion Surfers Paradise apartment development, Palmera

Two years after completing one of the newest developments in North Sydney, developer <a href="https://www.apartments.com.au/developers/aqualand-australia">Aqualand</a> is turning its attention to the rapidly evolving St Leonards apartment market.

The developer, which completed AURA by Aqualand on North Sydney's Walker Street, has lodged plans for a 5,918 sqm site at <a href="https://www.apartments.com.au/new-apartments/33-37-herbert-street-st-leonards-nsw-2065">33-37 Herbert Street, St Leonards,</a> seeking approval for a pair of residential towers rising above a shared podium opposite Royal North Shore Hospital.

The proposal forms part of the broader transformation underway across the St Leonards-Crows Nest precinct, where former industrial and commercial sites are increasingly being redeveloped into high-density mixed-use projects tied to major transport infrastructure.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="2cc428cf-fe70-4cac-9cd5-264ad53af62c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.56%E2%80%AFAM.png?VersionId=otKSnHtbjAvAddOnovyXQMgcAwE6DMe1" />

According to the planning documents, the site sits “within the St Leonards–Crows Nest Strategic Centre, identified by the NSW Government as a key area for accommodating future jobs and housing across Sydney.”

The proposal has been designed by fjcstudio, formerly FJMT Studio, and is being progressed through the State Significant Development pathway due to its scale and affordable housing provision.

The scheme would comprise 413 apartments, including 46 affordable housing units, alongside retail and commercial uses fronting Herbert Street. The project would also include communal open space, landscaping, a swimming pool, gymnasium, children’s play areas and podium-level resident amenities.

Planning documents show the development would consist of a part-13, part-39 storey tower form positioned above a four-storey podium.

“The development comprises a unified podium that activates the street interface, and two setback towers to accommodate new housing supply while maintaining an appropriate human scale at ground level,” fjcstudio noted in its Design Report.

The northern and southern towers have been shaped to respond to the surrounding skyline while also limiting overshadowing impacts to nearby public open space, particularly Talus Reserve.

The design report said the differing tower heights were intended to “contribute to a varied skyline while responding to the surrounding built form context and solar access considerations.”

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="36da62dc-ff9e-41f2-a7e3-7be38373751c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.45%E2%80%AFAM_0.png?VersionId=Mo6Rp2r.XRLTzIfg_PEEpw8NepDH8UBs" />

The site sits directly opposite Royal North Shore Hospital and within walking distance of both St Leonards Station and the new Crows Nest Metro station.

While the site itself sits just outside the formal Crows Nest Transport Oriented Development boundary, the planning documents repeatedly reference its alignment with the broader TOD objectives reshaping the Lower North Shore.

“The site is located adjacent to St Leonards Station and in close proximity to Crows Nest Metro which is within the Crows Nest Transit Orientated Development Accelerated Precinct which has been identified by the NSW Government to support housing delivery,” the Design Verification Statement noted.

According to fjcstudio, the project has been designed to respond to the broader transition occurring across St Leonards, where increasing residential density is being concentrated around transport infrastructure and employment hubs.

“The broader precinct is undergoing significant change, with a mix of existing mid-rise buildings and newer high-density developments,” the report stated.

“Recent and approved projects indicate a consistent shift toward taller built form, typically organised as tower-and-podium typologies with more active ground levels.”

The proposal includes close to 6,000 sqm of retail and commercial space across the ground floor and podium levels, designed to create a more activated street edge along Herbert Street.

Aqualand’s plans would also introduce a landscaped podium shared between the two towers, with communal open space in the form of a podium rooftop designed to support resident interaction and improve urban greening outcomes. The scheme would also introduce pocket parks at the northern and southern ends of the site, including a landscaped area at the corner of Herbert and Ella streets designed to improve pedestrian amenity and soften the streetscape.

&nbsp;

The proposal is being progressed through the NSW Government’s Housing Delivery Authority pathway, which was introduced to accelerate housing supply across the state. The application was declared State Significant Development in April 2025 following an expression of interest process.

<img alt="Aqualand" data-entity-type="file" data-entity-uuid="faf6d97d-2671-454f-b85a-fe1c6a7be608" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%209.51.49%E2%80%AFAM.png?VersionId=diVd28OBVr5.YV.7prrOz.uAanwwwm7a" />

St Leonards has been particularly active with new developments in recent weeks. Developer SP Setia’s <a href="https://www.apartments.com.au/news/nsw/first-look-sp-setia-targets-st-leonards-skyline-with-40-storey-tod-tower">plans for a new 42-storey tower</a> recently went on exhibition through the same pathway, while <a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">Stockland’s 52-storey tower proposal</a> was also recently unveiled.

Aside from the St Leonards project, which is expected to take around nine months to move through the approvals process ahead of a potential 2027 launch, Aqualand is also preparing to launch Boronia, a new apartment project in Roseville comprising around 111 apartments on Larkin Street.

The developer also has approvals in place for the next stage of the Barangaroo precinct, which will feature new residential, retail, hospitality and community uses, alongside a new metro entry across the five-hectare site.

More than 50 new retail destinations are planned for Central Barangaroo, alongside a 270-metre-long boulevard connecting Hickson Park to Nawi Cove. Together with Harbour Park, more than 50 per cent of the precinct will comprise public open space and parkland.

First look: Aqualand joins St Leonards apartment party

<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>

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>

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