<a href="https://www.apartments.com.au/new-apartments/smith-by-valli-collingwood-224-228-smith-street-collingwood-vic-3066">Smith Collingwood</a> is a new boutique apartment development bringing a refined, design-led approach to one of Melbourne’s most established inner-city neighbourhoods.

Designed by <a href="https://www.apartments.com.au/architects/pandolfini-architects">Pandolfini Architects</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/lisa-buxton-interiors">Lisa Buxton</a>, Smith by Valli sits on iconic Smith Street and comprises just 22 residences tailored toward owner-occupiers seeking a more considered style of apartment living.

[smartcode_project:default project_id=140747 project_image_fid=367540]

The design of Smith focuses on a north-facing orientation across all residences, a relatively uncommon feature in dense inner-Melbourne settings. Each apartment has been planned to maximise natural light and outlook, alongside a material palette defined by warm tones, custom joinery, and a full suite of Gaggenau appliances.

The development comprises a mix of one, two, and three-bedroom apartments, with pricing currently ranging from just under $1 million to around $4.85 million for the premium penthouse-level residences, reflecting growing demand for luxury owner-occupier product in Melbourne’s inner urban market.

Residents will also have access to a private rooftop garden designed as an elevated retreat above the city, &nbsp;featuring curated landscaping, veggie boxes, intimate seating areas and spaces for relaxed gatherings. Sustainability has also been integrated into the project through a 7-star energy rating and two secure bicycle facilities for every residence.

[smartcode_project:default project_id=140747 project_image_fid=367529]

Smith by Valli sits in the heart of one of Melbourne’s most established retail and hospitality strips, within walking distance of venues such as Falco Bakery, Carnation Canteen and Alimentari, alongside parks and everyday services. With a Walk Score of 99, the location reinforces the project’s positioning toward buyers prioritising walkability and access over car dependency.

With only a limited number of residences, Smith reflects growing demand for smaller, highly curated apartment developments that prioritise design quality, liveability, and connection to neighbourhood character.

[smartcode_project_cta:default project_id=140747]

Joel Robinson

Smith by Valli delivers a refined collection of luxury residences to Melbourne’s inner north

<a href="https://www.urban.com.au/developers/far-east-consortium">Far East Consortium</a>’s 640 Bourke Street stands as a testament to&nbsp;<a href="https://www.urban.com.au/developments/melbourne-vic-3000">Melbourne</a>’s ability to bridge its storied past with a bold vision for the future.&nbsp;

Rising above the heritage-listed Eliza Tinsley building, the development reflects a broader shift toward adaptive reuse in the city, where historical assets are retained and reinterpreted as part of new residential development.

Designed by <a href="https://www.urban.com.au/architects/rothelowman">Rothelowman</a>, <a href="https://www.apartments.com.au/new-apartments/640-bourke-street-melbourne-640-bourke-street-melbourne-vic-3000">640 Bourke Street</a> incorporates the Eliza Tinsley building as its foundation, housing a grand gallery and lobby space that serve as both a functional and symbolic centrepiece. The heritage façade informs the tower’s design, creating a connection between Melbourne’s past and its contemporary skyline.

"It's a significant asset and wants to be celebrated and experienced by all residents every single time they go in and out of the building," Rothelowman Principal Stuart Marsland said.

[smartcode_project:default project_id=509 project_image_fid=365684]

Above this historic base, the 68-storey tower will deliver just over 600 residences, a notable reduction from earlier schemes, reflecting a deliberate move toward larger-format apartments and a stronger owner-occupier focus.

Unlike traditional CBD developments that prioritised investor stock, 640 Bourke Street has been repositioned to respond to changing buyer expectations.

"The discussion was all around making 640 Bourke Street the best residence to live in, to be much more focused on the people in the building rather than people looking at the building," Marsland explained.&nbsp;

This shift is evident in the development’s interiors, which emphasise practical luxury with spacious layouts, high ceilings, and floor-to-ceiling windows framing sweeping views of Melbourne and Port Phillip Bay.&nbsp;

“What it's meant for 640 Bourke is we've actually reduced the number of apartments. We've increased the overall size of the apartments. We don't have any studios in here, and what that does for a project is it elevates it," Lauren Sheldon, Far East Consortium’s Director of Sales and Marketing, said.&nbsp;

[smartcode_project:default project_id=509 project_image_fid=365687]

Rothelowman Associate Jun Chang added, "We were given the opportunity to be more generous. The apartments became bigger and squarer than any other apartments which had been designed in the CBD before that."&nbsp;

Amenities spanning more than 3,000 sqm across multiple levels further reinforce this focus on resident experience. These include a pool, gym, co-working areas, and a range of hospitality-inspired spaces such as a whisky lounge, library, and private dining rooms, many drawing reference from traditional bathhouses and Melbourne’s laneway culture.

"We wanted to make both the pool and the gym area to be absolutely destinational, and when you traverse across to these spaces, there is a gentle familiarity to the beautiful notions of the hammams and the Roman baths, a gentle nod to history," Chang noted.

At street level, the project contributes to the ongoing transformation of the western CBD, with upgrades to Langs Lane and the introduction of retail, hospitality, and gallery spaces designed to activate the precinct and strengthen its connection to the surrounding city fabric.

[smartcode_project:default project_id=509 project_image_fid=365689]

The location places residents within walking distance of Southern Cross Station, Flagstaff Gardens, Queen Victoria Market, and the Docklands waterfront, positioning the development within a rapidly evolving inner-city neighbourhood.

"We believe it's the best site left in the city of Melbourne," Craig Williams, Executive Director at Far East Consortium, said.&nbsp;

640 Bourke Street is Far East Consortium’s 14th building in Melbourne’s western CBD.

"A very elegant designed building. It's going to be a Melbourne statement for many, many years to come."

One-bedroom apartments are priced from around $640,000, with 640 Bourke Street targeting completion in 2029.

Renders shown are Artist's Impressions correct as of May 2026.

[smartcode_project_cta:default project_id=509]

Heritage-led design anchors Far East Consortium’s 640 Bourke St, Melbourne

<a href="https://www.apartments.com.au/developers/mayd-group">MAYD Group</a> has set a new residential price record in Queensland with the $30 million sale of the penthouse at its <a href="https://www.apartments.com.au/new-apartments/one-burleigh-88-the-esplanade-burleigh-heads-qld-4220">ONE Burleigh</a> development in Burleigh Heads.

The sale equates to around $37,500 per sqm.

The two-level, 800 sqm penthouse, featuring five bedrooms, five bathrooms, five car spaces, and a private infinity pool overlooking the Pacific Ocean, was acquired by a Gold Coast-based entrepreneur, highlighting continued demand for ultra-premium beachfront product.

Selling agent Freddie Tehle of PRD Burleigh Heads said the result reflects tightening supply of high-quality, large-format apartments in Burleigh.

“There’s very limited opportunity to secure this level of scale and absolute beachfront position in <a href="https://www.apartments.com.au/developments/burleigh-heads-qld-4220">Burleigh Heads</a>,” Tehle said.

“Buyers are increasingly seeking apartments that genuinely replace a standalone home, and this penthouse delivers that with its size, privacy, and direct ocean frontage.”

[smartcode_project:default project_id=146358 project_image_fid=323057]

The sale comes as construction progresses on ONE Burleigh, a boutique development of 17 full-floor residences at 88 The Esplanade, scheduled for completion in early 2027.

Developed by MAYD Group and designed by <a href="https://www.apartments.com.au/architects/mas-architecture-studio">MAS Architecture</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/sici-design">Sici Design</a>, the project has been positioned as a collection of house-sized beachfront apartments, each occupying an entire floor with around 381 sqm of internal and external living space.

When construction commenced, MAYD director Todd Mould pointed to the long-term resilience of premium coastal real estate as a key driver behind the project.

“Real estate, particularly at the premium end, remains one of the most resilient and proven long-term investment avenues,” Mould said.

“Our ambition is that anyone who buys a MAYD-built product can genuinely feel the care, craftsmanship and commitment we bring to every detail.”

[smartcode_project:default project_id=146358 project_image_fid=323055]

Each residence has been configured with four bedrooms, multiple living zones, a private office, and expansive ocean-facing terraces. Interiors draw on a restrained material palette, including travertine stone, timber joinery, and integrated premium appliances.

Interior designer Sici Design said the approach was to reflect the project’s coastal setting through both materiality and spatial planning.

“ONE Burleigh is our vision of luxury living, designed to bring the essence of Burleigh Heads' vibrant coastal beauty into an unparalleled residential experience.”

Residents will have access to a suite of wellness-focused amenities, including pools, sauna facilities, and dedicated relaxation spaces, reflecting a broader shift toward lifestyle-driven apartment design on the Gold Coast.

[smartcode_project:default project_id=146358 project_image_fid=323052]

The project occupies a southern Esplanade site with uninterrupted beachfront frontage, an increasingly rare offering in Burleigh Heads, free from the Norfolk Pines that line much of the coastline and often limit direct ocean outlook.

Mould said the design intent was to balance that outlook with a sense of retreat.

“Living at ONE Burleigh is about how your day naturally unfolds, morning light across the ocean, coffee on the balcony, and being in Burleigh but elevated above the noise.”

The result further reinforces Burleigh Heads’ emergence as one of the Gold Coast’s most tightly held and supply-constrained beachfront markets, where boutique, owner-occupier-focused developments are increasingly setting new price benchmarks.

[smartcode_project_cta:default project_id=146358]

MAYD Group sets Queensland record with $30 million penthouse sale at ONE Burleigh in Burleigh Heads

Apartment developers in the Gold Coast are finding new, creative ways to differentiate themselves from competing projects, as new supply starts to flow through up and down the Coast.

Developer BIG Projects brought in the renowned Sydney-based design studio YSG Studio to craft the interiors for The Frederick, BIG Projects' new Mermaid Beach project and YSG Studio's first move into the multi-residential development space.

[smartcode_project:default project_id=110588 project_image_fid=5346]

It was a strategic move for BIG Projects to bring in a Sydney eye to the development.

“Our role is to give our design partners the space and freedom to explore,” says Matt Barrett, Director of BIG Projects.

“We wanted YSG Studio to capture the essence of Nobby’s, to design a building that embraces life, light and connection, while creating a genuine sense of place.”

There are only 39 apartments in The Frederick, including a striking beach house, just 100 metres from the booming Nobby Beach precinct.&nbsp;

[smartcode_project:default project_id=110588 project_image_fid=5347]

Yasmine Ghoniem, Director of YSG Studio, says their vision&nbsp;for The Frederick "reinvents coastal living."

“Nobby’s has such an iconic energy, it’s one of those rare pockets of the Gold Coast where the community, the beach, and the streets all feel connected,” Ghoniem says.

"Responding to the neighbouring coastline, soothing curves add a relaxing regional overlay, while unique detailing really sets it apart. It’s a place that feels lived in from the moment you step inside.”

A standout feature of The Frederick is its rooftop terrace, an uncommon inclusion for a boutique, low-rise building, where amenity is typically concentrated at ground level.

[smartcode_project:default project_id=110588 project_image_fid=5360]

Positioned to capture panoramic views from the hinterland to the ocean, the rooftop has been designed as a series of intimate zones. It includes a pool, sauna, sun decks, workspaces and dedicated entertaining areas.

“The rooftop was conceived as a collection of spaces where residents can unwind and connect, an extension of the Nobby’s lifestyle,” Barrett says.

Architecture for the project was led by Plus Studio, with landscape design by LDG Landscape Architecture.

SRQ Projects Director Nick Clydsdale, who is handling sales at The Frederick, says the majority of enquiry is coming from South East QLD and Victorian buyers who have been actively searching between Broadbeach and Mermaid Beach for some time.

"They’ve reviewed a number of projects, however this one has stood out for its unique detailing and compelling design,"&nbsp;Clydsdale says.

Site demolition is slated for this month, with construction commencing soon after. BIG Projects is targeting a late 2027 completion.

[smartcode_project_cta:default project_id=110588]

Sydney’s YSG Studio makes Gold Coast multi-residential debut with BIG Projects at The Frederick

Melbourne-based property developer ALTA Property has this week achieved planning approval for the adaptive re-use of a former commercial tower into a $200 million, 169-apartment project at 10 Queens Road, one of the last developable sites along the Albert Park Lake-fronting boulevard.&nbsp;

Set within one of Melbourne’s most sought-after precincts and designed by <a href="https://www.apartments.com.au/architects/fraser-partners-0">Fraser and Partners</a>, the illustrious building will offer unparalleled views across Albert Park Lake, Port Phillip Bay and Melbourne CBD.&nbsp;

The mix of 1, 2 and 3-bedroom residences will be complemented by a ground-floor amenity featuring private dining, a lounge bar, gym and wellness spaces, co-working, outdoor communal gardens, and retail.&nbsp;

The 17-storey building is a masterclass in adaptive re-use, with the existing commercial building’s façade, shell and internal structure to be retained, before high-end residences are built from the ground up in a newly built Albert Park facing addition to the building.&nbsp;

Sitting atop the building will be two 320+sqm penthouses with private rooftop terraces, which are expected to be priced between $9 - $11 million.&nbsp;

<img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="aa11211b-5581-43f9-940c-fc84d30a0e61" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/C_04.png?VersionId=Yhf5p_1EgGDu_zOIMFgvA8Ug8j3sTFQs" />

Architecturally, the building will feature a curved, geometric façade that celebrates and elevates the existing structure, with warm, muted tones which were selected to extend the materiality of the existing building rather than contrast it.&nbsp;

Interiors will bring together three metre high ceilings with waffle concrete in some spaces, natural timber, granite and Australian materials, culminating in crafted, generous and considered spaces that are defined by authenticity.&nbsp;

The adaptive re-use means that the Queens Road project will be a sustainability led, high-quality finished product, with a 62% saving in carbon emissions by re-using the existing structure rather than knocking it down and rebuilding.&nbsp;

ALTA Property was launched by Nigel Givoni in 2023, bringing over 25 years of experience in multi level residential delivery.&nbsp;

Melbourne’s property market growth is currently led by apartments. According to RPM VIC Apartments &amp; Townhomes Market Report (April 2026), units are outpacing houses, especially in the middle ring suburbs where median prices hit $757,500 – a four-year high that represents 2.9 percent growth quarter-on-quarter.&nbsp;

<img alt="ALTA Property achieves permit approval for $200 million Queens Road tower" data-entity-type="file" data-entity-uuid="647e13d7-b4bc-433a-9bc9-fe3c3dd4f2ec" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/V_06.png?VersionId=ou4NUCWUgA3NAy.6CQJlEdKX50j3dOk6" />

For ALTA Property Founder Nigel Givoni, this performance speaks to the confidence he has in the Melbourne market.&nbsp;

“Queens Road represents a rare opportunity to continue to shape our presence in the Melbourne market.,"&nbsp;Givoni says.

"With a considered project team and a premier site along one of the city’s most sought-after boulevards, we look forward to contributing to the fabric of this established address.

“Other Australian markets are getting a lot of attention, but I believe the depth of value in Melbourne is being overlooked. The fundamentals are strong, population growth is steady and, based on our preliminary conversations with a leading builder, construction costs are beginning to normalise, creating further opportunity."

Givoni says the project is a&nbsp;highly considered example of adaptive re-use, delivering quality, high-end residences, premium hotel-inspired amenities and an architecturally striking façade, all achieved without the need to remove the existing structure.

"We are really looking forward to the market’s response,” he said.&nbsp;

ALTA Property to deliver $200 million Queens Road apartment tower

Prominent New Zealand apartment and hotel operator, <a href="/developers/safari-group">Safari Group</a>, is offering up a prime investment opportunity for Australians to purchase off the plan in one of the world’s most popular ski destinations.

They recently took to market Mountain Oak Queenstown Apartments, in the growing precinct of Remarkables Park in Frankton, near the airport and at the foot of The Remarkables - the mountain range the locals like to call “The Remarks”.&nbsp;

Sydney investors have shown interest in the one, two and three-bedroom apartments that secure high-season occupancy six months over the year, primarily over summer and winter months.

They average 90 per cent occupancy across their portfolio over January, February, March, August, November and December, while shoulder season months of April, July, September and October are still occupied 70 per cent of the time, with the growing appeal of Queenstown becoming not just a hotspot for the snow, but a lifestyle destination.

Even in the low seasons of May and June, occupancy levels reach around 40 per cent.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_auto/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Ext_Cam15_Sunny.jpg?VersionId=SJAROUM_1s.Tr5ciMk4EEj5oAt_Vewmv" />

Safari’s Safari Hotels arm can also manage the holiday letting for an investor, from the listing on holiday accommodation websites such as Airbnb and Booking.com to the cleaning and maintenance of the investment. They’ve been in the short stay management business for 15 years and offer 24/7 support for investors, an important convenience benefit for any overseas investor

Another major drawcard for Australians is that New Zealand doesn’t have a stamp duty policy - so the entry price of NZ$639,000 (AU$586,000), is all that is payable on completion.

<img alt="Safari Group’s Mountain Oak Apartments brings new investment potential to Queenstown" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/313_Livingv2_WEB.jpg?VersionId=nV229fM0ZeYpoxOrX372HyGjfwY_LR8c" />

Safari is starting construction of the 141 apartments in Q2 this year, with a two-year build estimated to complete in mid-to-late 2027.<img alt="" data-entity-type="" data-entity-uuid="" height="15" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXczFpFAb7WuA6f4f9TtKWcqXyNwR8qqtakWv352ERkpqNlP3KwIo8YKxw67jZNHfpjEGIZGv5MQTbnvLZwNt8iu9IVdOrswOjCvBZ4zhSoOOLrpt6etVEZTN1gkBho0r_R72zdHNA?key=yq3daOanqHSb88QFd8jGYKdb" title="Click and drag to move" width="15" />​

The apartments will feature modern amenities and contemporary designs with expansive windows capturing sweeping views of The Remarkables mountain range.&nbsp;

Interiors are equipped with modern finishes, premium appliances, and secure electronic key-locked doors, ensuring a comfortable living experience for residents and guests alike.

With its strategic location near Coronet Peak and Cardrona Alpine Resort, as well as key retail and dining precincts such as Market Street, Five Mile Shopping Centre, and Remarkables Market, Mountain Oak offers a strong proposition for investors seeking high rental yields and capital appreciation in one of New Zealand’s most sought-after locations.&nbsp;

Queenstown’s sustained demand for visitor accommodation and rental properties is underpinned by a shortage of housing options, attracting both local and international buyers.

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

<html><body>
Greenland Australia have confirmed Woolworths Metro will be the anchor tenant in Stage 1 of mixed-use residential development Park Sydney in the inner-west suburb of Erskineville. 
Woolworths Metro will form part of the Stage 1 retail centre, which will occupy the ground level of Park Sydney’s Cascade building, due for completion in mid to late-2020.
The retail centre will also feature a childcare facility plus food, beverage and lifestyle retail, with about 70 basement parking spaces.
Greenland Australia’s Managing Director, Sherwood Luo, said the Woolworths Metro is ideal for delivering the vibrant retail mix required for Park Sydney. 
“Park Sydney will be a unique integrated community with Stage 1 including 330 apartments and the Woolworths Metro that will cater perfectly to its residents and those in the surrounding area,” he explained.  
Park Sydney Village will offer in the order of 10,000 square metres of retail amenity.
It includes a 4,000 square metre full-range supermarket as part of a future stage, 1,000 square metres of specialty shops, multiple lifestyle and food, beverage and dining experiences, with Stage 1 including 1,650 square metres of convenience retail, as well as a childcare and medical centre.  
The site will also offer secure underground customer parking in both Stage 1 and 2.
There will be an alfresco outdoor dining space overlooking the adjacent 7,450 square metre parkland. 
Greenland Golden Horse is also looking forward to announcing the operator of the childcare centre within Stage 1 soon.
</body></html>

j.ballantyne1990-6AQqhLzZaK

Park Sydney development in Erskineville announces anchor tenant Woolworths Metro

<html><body>
GUEST OBSERVATION
In Australia, renewable energy is growing at a per capita rate ten times faster than the world average. Between 2018 and 2020, Australia will install more than 16 gigawatts of wind and solar, an average rate of 220 watts per person per year.
This is nearly three times faster than the next fastest country, Germany. Australia is demonstrating to the world how rapidly an industrialised country with a fossil-fuel-dominated electricity system can transition towards low-carbon, renewable power generation.
<a href="https://images.theconversation.com/files/292952/original/file-20190918-187974-8j0coj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/292952/original/file-20190918-187974-8j0coj.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Renewable energy capacity installations per capita. International capacity data for 2018 from the International Renewable Energy Agency. Australian data from the Clean Energy Regulator., Author provided
When the <a href="http://www.cleanenergyregulator.gov.au/About/Pages/News%20and%20updates/NewsItem.aspx?ListId=19b4efbb-6f5d-4637-94c4-121c1f96fcfe&amp;ItemId=683" target="_blank">Clean Energy Regulator accredited</a> Tasmania’s 148.5 megawatt (MW) Cattle Hill Wind Farm in August, Australia met its <a href="http://www.cleanenergyregulator.gov.au/RET/Pages/News%20and%20updates/NewsItem.aspx?ListId=19b4efbb-6f5d-4637-94c4-121c1f96fcfe&amp;ItemId=683" target="_blank">Renewable Energy Target</a> well ahead of schedule.
We have <a href="https://energy.anu.edu.au/files/Renewable%20energy%20target%20report%20September%202019_1_0.pdf" target="_blank">analysed</a> data from the regulator which tracks large- and small-scale renewable energy generation (including credible future projects), and found the record-high installation rates of 2018 will continue through 2019 and 2020.
<h2>Record renewable energy installation rates</h2>
While <a href="https://theconversation.com/australia-has-met-its-renewable-energy-target-but-dont-pop-the-champagne-122939" target="_blank">other analyses</a> have pointed out that investment dollars in renewable energy fell in 2019, actual generation capacity has risen. Reductions in building costs may be contributing, as less investment will buy you the more capacity.
Last was a record year for renewable energy installations, with 5.1 gigawatts (GW) accredited in 2018, far exceeding the previous record of 2.2GW in 2017.
The increase was driven by the dramatic rise of large-scale solar farms, which comprised half of the new-build capacity accredited in 2018. There was a tenfold increase in solar farm construction from 2017.
We have projected the remaining builds for 2019 and those for 2020, based on data from the Clean Energy Regulator for public firm announcements for projects.
A project is considered firm if it has a power purchase agreement (PPA, a contract to sell the energy generated), has reached financial close, or is under construction. We assume six months for financial close and start of construction after a long-term supply contract is signed, and 12 or 18 months for solar farm or wind farm construction, respectively.
This year is on track to be another record year, with 6.5GW projected to be complete by the end of 2019.
The increase is largely attributable to a significant increase in the number of wind farms approaching completion. Rooftop solar has also increased, with current installation rates putting Australia on track for 1.9GW in 2019, also a new record.
This is attributed to the continued cost reductions in rooftop solar, with less than A$1,000 per kilowatt now considered routine and payback periods of the order of two to seven years.
<a href="https://images.theconversation.com/files/292954/original/file-20190918-187985-r9h3yc.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/292954/original/file-20190918-187985-r9h3yc.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a>
Current (solid) and forecast (hashed) installations of renewable electricity capacity in Australia. Author provided
Looking ahead to 2020, almost 6GW of large-scale projects are expected to be completed, comprising 2.5GW of solar farms and 3.5GW of wind. Around the end of 2020, this additional generation would deliver the old Renewable Energy Target of 41,000 gigawatt hours (GWh) per annum. That target was legislated in 2009 by the Rudd Labor government but <a href="https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BriefingBook45p/RenewableEnergy" target="_blank">reduced to 33,000GWh</a> by the Abbott Coalition government in 2015.
<h2>Maintaining the pipeline</h2>
There are strong prospects for continued high installation rates of renewables. Currently available renewable energy energy contracts are routinely offering <a href="https://reneweconomy.com.au/snowy-says-cost-of-firm-wind-and-solar-significantly-below-current-base-load-prices-76846/">less than A$50 per MWh</a>. Long-term contracts for future energy supply have an average price of more than A$58 per MWh. This is a very reasonable profit margin, suggesting a <a href="https://www.asx.com.au/products/energy-derivatives/australian-electricity.htm">strong economic case</a> for continued installations. Wind and solar prices are likely to decline further throughout the 2020s.
State governments programs are also supporting renewable electricity growth. The ACT has completed contracts for 100% renewable electricity. Victoria and Queensland both have renewable energy targets of 50% renewable electricity by 2030. South Australia is expecting to reach 100% by 2025.
The main impediment to continued renewables growth is transmission. Transmission constraints have resulted in bottlenecks in moving electricity from some wind and solar farms to cities.
Tasmania’s strong wind resource requires a new connection to the mainland to unlock more projects. The limitations of current planning frameworks for this transition were recognised in Chief Scientist Alan Finkel’s review of the National Electricity Market, with strong recommendations to overcome these problems and, in particular, to <a href="https://www.energy.gov.au/publications/independent-review-future-security-national-electricity-market-blueprint-future" target="_blank">strengthen the role of the Australian Energy Market Operator</a>.
Now we need state and federal governments to unlock or directly support transmission expansion. For example, the <a href="https://www.dnrme.qld.gov.au/energy/initiatives/poweringqueensland#targetText=The%20Powering%20Queensland%20Plan%20sets,and%20secure%%2020supply%20of%20electricity" target="_blank">Queensland government</a> has committed to supporting new transmission to unlock solar and wind projects in the far north, including the Genex/Kidston 250MW pumped hydro storage system. The New South Wales government will expedite planning approval for an <a href="https://www.transgrid.com.au/news-views/news/2019/Pages/Project-EnergyConnect-deemed-critical-infrastructure-in-NSW.aspx">interconnector</a> between that state and South Australia, defining it as “critical infrastructure”.
These investments are key to Australia maintaining its renewable energy leadership into the next decade.<img src="https://counter.theconversation.com/content/123694/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/matthew-stocks-335116" target="_blank">Matthew Stocks</a>, Research Fellow, ANU College of Engineering and Computer Science, <a href="http://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a>; <a href="https://theconversation.com/profiles/andrew-blakers-3328">Andrew Blakers</a>, Professor of Engineering, <a href="http://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a>, and <a href="https://theconversation.com/profiles/ken-baldwin-11848" target="_blank">Ken Baldwin</a>, Director, Energy Change Institute, <a href="http://theconversation.com/institutions/australian-national-university-877" target="_blank">Australian National University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/australia-is-the-runaway-global-leader-in-building-new-renewable-energy-123694" target="_blank">original article</a>.
</body></html>

Australia is the runaway global leader in building new renewable energy

<html><body>
A South Melbourne office investment occupied by architects Ewert Leaf has been sold for $10.2 million.
The four-level, 1,078sqm fully refurbished building at 49-51 Stead Street was snapped up by a local investor before the close of EOI after just 20 days on the market.
Architects Will Leaf and Toby Ewert, with Ed Farquharson, the owner of developer, Moda, purchased the site in 2018 for $6 million with plans to refurbish the entire building and sell.   
It was listed by Colliers International’s Ted Dwyer, Ben Baines and Michael Gross of Gross Waddell, 
The whole of the property is leased to Ewert Leaf and occupied by Ewert Leaf and associated businesses.
Originally built in 1985, the 49-51 Stead Street building has been fully refurbished throughout, with completion in July 2019.  
The property consists of ground floor retail/commercial premises and three upper levels of open commercial floor plates.
It also features six undercover car spaces accessed from Palmerston Crescent.  
“Positioned within a highly desirable commercial and residential location, the surrounding area provides workers and residents access to landmark destinations including Albert Park Lake, Melbourne Sports and Aquatic Centre, Albert Park Golf Course, South Melbourne Market, Clarendon Street retail precinct and Royal Botanical Gardens,” Mr Baines said.
</body></html>

Private investor snaps up South Melbourne office building in 20 days

<html><body>
EXPERT OBSERVER
The Australian economy is tepid, with consumer spending the weakest in ten years, business investment shrinking, and economic growth too weak to cover population growth.
Were it not for very strong growth in export income and the biggest surge in government spending in 15 years, the economy would have shrunk.
The Treasury believes the Australian economy is capable of growing at a sustained annual pace of <a href="https://www.smh.com.au/business/the-economy/myefo-treasury-downgrades-its-budget-projections-20151124-gl6mfd" target="_blank">2.75%</a>. The growth rate in the past financial year of <a href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/5206.0" target="_blank">1.4%</a> reported on Wednesday is only half that.
Not since September 2009 has the gap between what the Australian economy is capable of and what it has been delivering been so wide. 2009 was the year of the global financial crisis.
Real GDP growth
<a href="https://images.theconversation.com/files/290848/original/file-20190904-175710-w8sxqs.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/290848/original/file-20190904-175710-w8sxqs.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
Economic growth has rarely been as low as 1.4% outside of a recession.
When account is taken of population growth, income and production per citizen went backwards. The last time that happened was during the financial crisis. The last time before that was during the early 1990s recession.
Household spending, which accounts for more than half of total spending, also failed to keep pace with population growth. The inflation-adjusted growth rate of 1.4% was also the lowest since the financial crisis.
<hr>
Growth in household consumption
<a href="https://images.theconversation.com/files/290854/original/file-20190904-175682-1td1jy.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/290854/original/file-20190904-175682-1td1jy.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
Other figures released on Tuesday show retail spending dipped a further 0.1% in July.
Hardest hit in the 2018-19 financial year was spending on cars. Updated figures released at the same time as the national accounts show sales of new cars down 10% over the year to August.
Treasurer Josh Frydenberg said he preferred to think that households were delaying rather than abandoning purchases of cars, waiting until the economic outlook was clearer.
<hr>
Growth in consumption by category
<a href="https://images.theconversation.com/files/290863/original/file-20190904-175710-1vl9blt.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/290863/original/file-20190904-175710-1vl9blt.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> June quarter 2019. Note: Discretionary consumption is as classified by Treasury. Commonwealth Treasury
<hr>
Weighing on consumers is an extended period of unusually low wage growth that the national accounts show has brought the share of national income paid out as wages down to just about its lowest point since 1964.
Although the wage and superannuation bill increased, climbing 5% over the year as employment grew, the share of national income paid out as wages and super fell to 52% – the lowest since the global financial crisis, and before that the lowest since the <a href="https://www.smh.com.au/entertainment/the-beatles-let-it-be-in-australia-1964-20140606-zrvui" target="_blank">Beatles toured Australia</a> and Donald Horne published <a href="https://www.penguin.com.au/books/the-lucky-country-9781742531571" target="_blank">The Lucky Country</a>.
<hr>
<a href="https://images.theconversation.com/files/290879/original/file-20190904-175705-mnrpnw.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/290879/original/file-20190904-175705-mnrpnw.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> <a class="source" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5206.0Jun%202019?OpenDocument">ABS 5206.0, Table 35</a>
<hr>
Also weighing on consumers has been housing. Investment in housing (including alterations and additions) was down 9.1% over the year. Business investment fell 10%.
Company profits grew 12.8%, but leaving aside mining companies, whose profits grew strongly on the back of higher prices and export volumes, other profits grew only weakly, climbing 1.8%.
Mining income pushed up nominal GDP (the raw dollars unadjusted for prices that drive nominal incomes) up a healthy 5.4%, probably delivering the government a budget surplus one year earlier than promised, in 2018-19. Frydenberg said he already knew the result and would unveil it in a fortnight. His smiles suggested it’s one he likes.
<hr>
Nominal GDP growth
<a href="https://images.theconversation.com/files/290883/original/file-20190904-175678-1e6pzpc.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=1000&amp;fit=clip"><img src="https://images.theconversation.com/files/290883/original/file-20190904-175678-1e6pzpc.JPG?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""></a> Commonwealth Treasury
<hr>
Mining income also pushed up what the Reserve Bank regards as the best measure of actual living standards, which (perhaps surprisingly) is not GDP per capita, which is going backwards, but a lesser known and purpose-designed measure known as “real net disposable income per capita”. It grew a healthy 2.65% over the year and a very healthy 1% over the quarter.
It is true that much of it was paid out in mining profits, but it is also true that it isn’t necessarily right to latch on to the cruder measure of GDP per capita and say that living standards are going backwards.
Helping maintain living standards was a very healthy growth in government spending, the highest for some time – not government infrastructure spending, that actually fell over the year as some state projects wound up, but day-to-day spending on things such as the National Disability Insurance Scheme.
<hr>
<img src="https://images.theconversation.com/files/290908/original/file-20190904-175686-un189b.png?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt=""><a class="source" href="https://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/5625.0Jun%202019?OpenDocument" target="_blank">ABS 5625.0, Table 2</a>
<hr>
Oddly, because of the way the national accounts work, economic growth was also helped by a slump in imports, down 2.8% over the year due largely to a slump in imports of consumer goods.
The economy is in a bad way. Aside from mining and government spending, the only real bright spot is employment growth, and as the Reserve Bank often points out, employment growth doesn’t tell us much about what’s going to happen.
It tends to lag everything else in the economy, by <a href="https://www.rba.gov.au/publications/smp/2019/may/pdf/domestic-economic-conditions.pdf" target="_blank">up to nine months</a>. By the time it turns down, other things already have.
<h2>Few clear ways out</h2>
Frydenberg doesn’t seem too worried. For now he is banking on the tax cuts and the interest rate cuts in June and July to lift investment and spending.
The treasurer has two Plan Bs. One is an aggressive investment allowance for business. He <a href="https://theconversation.com/back-yourself-treasurer-frydenberg-tells-business-but-its-not-that-simple-122397" target="_blank">spoke about introducing one</a> last week, but on Wednesday he indicated that he wasn’t planning to do so until next year’s May budget. If needed, he could bring the date forward.
The other is another Reserve Bank rate cut, most likely at the board’s meeting on Melbourne Cup Day, by which time it will have before it an updated set of inflation figures.
Frydenberg revealed on Wednesday that he is taking a close look at the government’s contract with the Reserve Bank, a <a href="https://rba.gov.au/monetary-policy/framework/stmt-conduct-mp-7-2016-09-19" target="_blank">formal written agreement</a> which is renewed after each election.
He has asked the Treasury to look at it to see whether it needs to be tightened to make the bank more responsive to the state of the economy. This would mean more boldly cutting or pushing up rates.
In Britain, if inflation is 1 percentage point above or below the Bank of England’s target, it has to write to the government to explain why.<img src="https://counter.theconversation.com/content/122942/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1" style="border: none !important; box-shadow: none !important; margin: 0 !important; max-height: 1px !important; max-width: 1px !important; min-height: 1px !important; min-width: 1px !important; opacity: 0 !important; outline: none !important; padding: 0 !important; text-shadow: none !important;">
<a href="https://theconversation.com/profiles/peter-martin-682709" target="_blank">Peter Martin.</a>, Visiting Fellow, <a href="http://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292" target="_blank">Crawford School of Public Policy, Australian National University</a>
This article is republished from <a href="http://theconversation.com" target="_blank">The Conversation</a> under a Creative Commons license. Read the <a href="https://theconversation.com/why-weve-the-weakest-economy-since-the-global-financial-crisis-with-few-clear-ways-out-122942" target="_blank">original article</a>.
</body></html>

jrobinson-rf4aSBido9

Why we’ve the weakest economy since the global financial crisis, with few clear ways out

<html><body>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">EXPERT OBSERVER </div>
<div class="column"> </div>
<div class="column">The past 10 years have seen pretty good returns for well- diversified investors.</div>
<div class="column"> </div>
<div class="column">The median balanced growth superannuation fund returned 7.3% pa over the five years to July and 8.2% pa over 10 years and that’s after fees and taxes. This is impressive given that inflation has been around 2%.</div>
<div class="column"> </div>
<div class="column">
<a href="https://www.propertyobserver.com.au/images/2019/9/25/medium%20term%20returns%201%20.jpg" target="_blank">Click here</a> to enlarge: </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/25/medium%20term%20returns%201%20.jpg" alt=""></div>
<div class="column">
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
Shares and growth assets have literally climbed a wall of worry this decade with a revolving door list of worries around public debt, the Eurozone, deflation, inflation, rate hikes, Trump, North Korea, China, trade wars, growth, house prices, etc. 
But returns benefitted from the recovery after the GFC and a search for yield as interest rates have collapsed depressing yields on most assets. But – while it sounds like a broken record – the decline in yields points to eventually more constrained returns ahead.
Declining yields = falling medium-term return potential
Investment returns have two components: yield (or income flow) and capital growth. 
Looking at both of these components points to lower average investment returns over the next five years compared to the last five years.
 It’s basic to investing that the price of an asset moves inversely to its yield all other things being equal. Suppose an asset pays $10 a year in income and suppose its price is $100, which means an income flow or yield of 10%. 
If interest rates are cut resulting in increased demand for the asset, as investors search for a higher yield, such that its price rises to $120 given the $10 annual income flow its yield will have fallen to 8.3% (ie $10 divided by $120) as its price has gone up by 20%. So, yield moves inversely to price. But as yields decline it means a lower return potential going forward.
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
Since the early 1980s investment yields have collapsed. Back then the RBA's "cash rate" was around 14%, 1-year bank term deposit rates were nearly 14%, 10-year bond yields were around 13.5%, commercial and residential property yields were around 8-9% and dividend yields on shares were around 6.5% in Australia and 5% globally. 
This meant that investments were already providing very high income so only modest capital growth was needed for growth assets to generate good returns. 
So, most assets had very strong returns and balanced growth super fund returns averaged 14.1% in nominal terms and 9.4% in real terms between 1982 and 1999 (after taxes and fees).
Over the last four decades, investment yields have mostly fallen quite sharply. See the next chart.
<a href="https://www.propertyobserver.com.au/images/2019/9/25/medium%20term%20returns%202.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/25/medium%20term%20returns%202.jpg" alt="">
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
Today the cash rate is 1%, 1-year bank term deposit rates are 1.5%, 10-year bond yields are 0.9%, gross residential property yields are around 3%, commercial property yields are just below 5%, dividend yields are still around 5.5% for Australian shares (with franking credits) but they are 2.5% for global shares. 
This points to a lower return potential for a diversified mix of assets.
What’s more, the capital growth potential from growth assets is likely to be constrained relative to the past reflecting more constrained nominal economic growth. Several megatrends are likely to impact growth over the medium term. These include:
<ul>
<li>
Continued slower growth in household debt.
</li>
<li>
An ongoing retreat from globalisation, deregulation and small government in favour of populist, less market friendly policies.
</li>
<li>
A shift in corporate focus from profit to “balanced scorecards”.
</li>
<li>
Rising geopolitical tensions – notably as the US attempts to constrain the rising power of China as evident in the trade war.
</li>
<li>
Aging and slowing populations – resulting in slowing labour force growth and rising pressure on public sector budgets.
</li>
<li>
Technological innovation and automation.
</li>
</ul>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<ul>
<li>
Continuing rapid growth in Asia and China’s middle class.
</li>
<li>
Pressure to slow emissions &amp; the impact of global warning.
</li>
<li>
A large shift to sustainable energy as its cost continues to fall. Most of these will constrain economic growth &amp; hence returns.
</li>
</ul>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
Medium-term return projections
Our approach to get a handle on medium-term return potential is to start with current yields for each asset class and apply simple and consistent assumptions regarding capital growth reflecting the above-mentioned megatrends. We also prefer to avoid forecasting and like to keep the analysis simple.
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<ul>
<li>For bonds, the best predictor of future medium-term returns is current bond yields as can be seen historically in the next chart. If a 10-year bond yield is held to maturity its initial yield (0.93% right now in Australia) will be its return over 10 years (ie 0.93%). We use 5-year bond yields as they more closely match the maturity of bond indexes.</li>
</ul>
<a href="https://www.propertyobserver.com.au/images/2019/9/25/medium%20term%20returns%203.jpg" target="_blank">Click here</a> to enlarge:
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/25/medium%20term%20returns%203.jpg" alt="">
<ul>
<li>
For equities, current dividend yields plus trend nominal GDP growth (a proxy for capital growth) does a good job of predicting medium-term returns.1
</li>
<li>
For property, we use current rental yields and likely trend inflation as a proxy for rental and capital growth.
</li>
<li>
For unlisted infrastructure, we use current average yields and capital growth just ahead of inflation.
</li>
<li>
In the case of cash, the current rate is of no value in assessing its medium-term return. So we allow for some rise in cash rates over time.
</li>
</ul>
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">Our latest return projections are shown in the next table.</div>
<div class="column"> </div>
<div class="column">
<a href="https://www.propertyobserver.com.au/images/2019/9/25/medium%20term%20returns%204.jpg" target="_blank">Click here</a> to enlarge: </div>
<div class="column"><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/25/medium%20term%20returns%204.jpg" alt=""></div>
<div class="column">
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
The second column shows each asset’s current income yield, the third shows their 5-10 year growth potential, and the final column their total return potential. Note that:
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<ul>
<li>We assume inflation averages around or just below central bank targets.</li>
</ul>
<ul>
<li>For Australia we have adopted a relatively conservative growth assumption reflecting slower productivity growth.</li>
</ul>
<ul>
<li>We allow for forward points in the return projections for global assets based around current market pricing. </li>
</ul>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
Key observations
Several things are worth noting from these projections. 
</div>
</div>
</div>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
<ul>
<li>The medium-term return potential has continued to fall due largely to the rally in most assets and fall in investment yields. Projected returns using this approach for a diversified growth mix of assets have fallen from 10.3% pa at the low point of the GFC in March 2009, to 8.6% five years ago, to 6.2% a year ago and to now just 5.6%.</li>
</ul>
<a href="https://www.propertyobserver.com.au/images/2019/9/25/medium%20term%20returns%205.jpg" target="_blank">Click here</a> to enlarge: 
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/9/25/medium%20term%20returns%205.jpg" alt="">
<ul>
<li>Government bonds offer low returns due to ultra-low yields. Yes, bond returns have been strong lately as yields have collapsed pushing up bond prices. But this is no guide to future returns, particularly if bond yields stop falling.</li>
</ul>
<ul>
<li>Unlisted commercial property and infrastructure continue to come out relatively well, reflecting their higher yields.</li>
</ul>
<ul>
<li>Australian shares stack up well on the basis of yield, but it’s still hard to beat Asian/emerging shares for growth potential.</li>
</ul>
<ul>
<li>The downside risks to our medium-term return projections are that: the world plunges into a recession driving another major bear market in shares or that investment yields are pushed up to more normal levels as inflation rebounds causing large capital losses. Just allow that drawdowns in returns tend to be infrequent but concentrated and it’s been a while since the last big one. See the first chart.</li>
</ul>
<ul>
<li>The upside risks are (always) less obvious but could occur if we see improving global growth but inflation remaining low.</li>
</ul>
<div class="page" title="Page 2">
<div class="layoutArea">
<div class="column">
Implications for investors
<ul>
<li>
First, have reasonable return expectations. Low yields &amp; constrained GDP growth indicate it’s not reasonable to expect sustained double-digit or even high single digit returns. In fact, the trend decline in the rolling 10-year average of both nominal and real super fund returns since the 1990s indicates we have been in a lower-return world for many years – it’s just that it only becomes clear every so often with bear markets and then strong returns in between.
</li>
<li>
Second, remember that responding to a lower return potential from major asset classes by allocating more to growth assets does mean taking on more risk.
</li>
<li>
Third, bear markets are painful, but they do push up the medium-term return potential of investment markets to higher levels and so provide opportunities for investors.
</li>
<li>
Fourth, some of the decline in return potential reflects very low inflation – real returns haven’t fallen as much.
</li>
<li>
Finally, focus on assets with decent sustainable income flow as they provide confidence regarding future returns.
</li>
</ul>
</div>
</div>
</div>
</div>
</div>
</div>
<div class="page" title="Page 2"> Key points </div>
<div class="page" title="Page 2">
<div class="page" title="Page 1">
<div class="layoutArea">
<div class="column">
<ul>
<li>
The ongoing slide in investment yields across major asset classes points to a more constrained medium- term return outlook. For a diversified mix of assets, this has now fallen to around 5.6% pa on our projections.
</li>
<li>
The key for investors is to have realistic return expectations; allow that inflation is also low so real returns aren’t down as much; and focus on assets with decent and sustainable income.
</li>
</ul>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
</div>
 DR SHANE OLIVER Head of Investment Strategy and Chief Economist AMP Capital
</body></html>

soliver-smf6LQXgW9

Investment returns have been good, but likely to slow over the next five years: Shane Oliver 

<html><body>
The office market on the Sunshine Coast has continued to remain relatively stable during 2019, according to the latest report from valuation firm Herron Todd White.
The property valuation firm found, one of the big questions has been, “What will be the effects be of the large supply of which entered the market during 2018?” The answer to this has generally been a reduction in rentals for tenants, though in prime locations and A-grade stock, that reduction has been lower than the remainder of the market.
They have seen significant incentives for vacant space, though overall reductions in market reviews for existing tenants are not as significant.
One of the reasons for this is likely the high costs associated with moving work spaces for the majority of tenants with over 150 square metres of space.
Therefore there have been numerous sales of existing offices in the market.
These sales indicate that the market is still liquid for a range of holdings.
The report authors said, "the owner-occupier market is still dominating sales up to $1.5 million with owners looking to secure high quality space generally above $4000 per square metre with lower quality space typically in the $3000 to $4000 per square metre range."
"Investors are looking for multi-tenanted holdings to spread overall cash flow risk in this market, which has high vacancy, with sales typically being seen in the seven to eight per cent range depending on WALE, quality of complex, location and redevelopment potential."
"We have not seen a higher end sale over $5 million in the office space to date in 2019, though there has not been stock available to the market in this range."
"The next influx of supply is due to enter the market during the early months of 2020 with the first building within SunCentral due to be completed at that time with construction recently commenced," they concluded.
</body></html>

Sunshine Coast office market continues stabilising: HTW Commercial

<html><body>
The Cairns office market is relatively shallow and experiences limited sales activity, according to the latest report from property valuation firm Herron Todd White.
They found, the market has also experienced limited new development, with the last very large office building constructed in Cairns being the state government office tower completed in 2010.
The level of general commercial property sales in Cairns, inclusive of retail and commercial office premises, highlights that activity in the Cairns commercial market remains well below the levels achieved in the 2003 to 2007 period.
Sales volumes have been gradually rebuilding over the past nine years, but are still only averaging around 90 to 100 sales per annum.
The report authors said, "median prices paid specifically for strata titled premises have increased mildly over the past seven years, but our general impression is that prices per square metre of floor area are mostly stable within the $2,500 to $4,500 range."
"Most new office space leasing demand is for smaller areas and for modern, good quality green star rated premises, however there is only a handful of such buildings in Cairns. These buildings achieve high levels of occupancy and are experiencing stable rent levels typically of $350 to $450 per square metre per annum."
"Demand for lesser quality space remains limited and there is a large oversupply of good quality non-inner CBD and well exposed secondary space in the $200 to $300 per square metre per annum rental range. These conditions have placed downward pressure on secondary rents and have seen the emergence of incentives."
"The most recent sale of a large office building was the design and construct of the new Ergon premises in Bunda Street, Cairns City."
"The property sold for $14.7 million in May 2019 providing an analysed yield of 6.4%. The building comprised two levels of high quality office with a total area of 2,400 square meters, 68 car parks and an initial ten year lease term," they said.
</body></html>

Cairns office market subdued and stable: HTW Commercial

<html><body>
Adelaide’s office market continues its solid performance with vacancy rates dropping to their lowest level in over four years, according to the latest report from Herron Todd White.
The property valuation firm found, in our previous office market update, Adelaide CBD total vacancies were recorded at 14.2%, whereas now, according to statistics published by the Property Council of Australia, CBD vacancies measure just 12.8%.
Adelaide’s fringe office market, which encompasses the arterial roads of Greenhill Road to the south of the city and Fullarton Road and Dequetteville Terrace to the east, has recorded vacancies of 13.1%, a slight increase since our their June update.
The report said, this reflects the desire of tenants to base themselves within the CBD, as Adelaide continues to present itself as an attractive base for both international and local businesses.
"Furthermore, within the CBD office market, A-grade vacancies decreased by 0.5% and B-grade vacancies also reduced by 0.2%, while C-grade office vacancies increased by 0.5%, reflecting tenant demand for high quality and sustainable office space."
"Nationwide vacancies are forecast to reduce to 7.7% over the next two years, with modest improvements in South Australia, Queensland and Western Australia offsetting slight vacancy increases in New South Wales and Victoria. Owners are continuing to reposition B and C-grade space to increase the quality and fuel the flight to quality within the Adelaide CBD, further closing the gap between premium and secondary space."
"Overall, sentiment in the office market is encouraging, with net absorption remaining positive. As businesses grow and expand, office space continues to be sold and leased and pressure is put on B and C-grade space to adapt and improve to remain attractive to prospective tenants," the report noted.
</body></html>

Adelaide office vacancy rates drop to four year low: HTW Commercial

<html><body>
To date in 2019, the Perth office leasing market has seen both rental incentives and rental rates stabilise, according to the latest report from Herron Todd White.
The most recent Property Council of Australia (PCA) Office Market Report indicates the total vacancy rate for office space in the Perth CBD dropped marginally from 18.5% to 18.4% in the six months to July 2019.
The reduction is attributed to positive demand for premium and B-grade buildings.
The property valuation firm found, whilst it's an encouraging sign, Perth’s CBD has the highest vacancy rate of all capital cities in Australia.
There are no significant building projects in the pipeline until 2020 and the revitalisation of the CBD landscape, with major infrastructure projects such as Elizabeth Quay continuing to move ahead.
The report noted, "incentives for quality buildings in Perth’s core CBD have even experienced some downward pressure with early signs of growth in the space needs of particular tenants."
"Property owners continue to be proactive in trying to entice existing tenants to recommit and in order to attract new tenants."
"Accordingly, incentives are still being offered in the market place (typically between 25 and 50%). Furthermore, landlords are providing their existing and prospective tenants with bespoke floor plates, flexible work spaces, meeting hubs, refurbished foyers, some featuring concierge services, gymnasiums or wellness centres with some more innovative landlords looking at child care or child minding facilities within their buildings, in addition to the obligatory end of trip facilities, bike storage rooms and, in some cases, bike repair shops," the report stated.
In terms of capital transactions, demand for office property in the Perth CBD has been felt predominantly from institutions and foreign (south-east Asian) buyers seeking counter-cyclical acquisitions of secondary assets with good prospects for re-positioning.
The West Perth office market has not fared as well as the CBD for the six months to July 2019 as the total vacancy rate rose from 14.8% to 16.9%.
Similar to the Perth CBD however, vacancy rates for A-grade space actually tightened during this period however this was off-set by a substantial increase in vacancies for lower grade premises.
The authors said, "the total vacancy rate for office space in the Perth CBD dropped marginally from 18.5% to 18.4% in the six months to July 2019."
"The lack of quality office stock with medium to long term WALEs combined with subdued economic conditions has affected transaction activity. We expect these trends to continue in the short term," they concluded.
</body></html>

Perth's rental office market evens out: HTW commercial

<html><body>
2019 has seen vacancy rates continue to tighten for A-grade office stock in the nation’s capital, having fallen to 5% from 5.4% in the six months to July 2019 and having already decreased from 8.6% for the six months prior to that, according to the latest report from Herron Todd White.
The property valuation firm found, absorption of A-grade stock has continued to improve, primarily for property in close proximity to the CBD and predominantly by Commonwealth government departments.
While the supply level for premium office stock is currently tight, new stock coming on-line in 2020 and 2021 will relieve this pressure and potentially offset any significant rental growth experienced currently, especially in the premium sector.
Notable office development currently taking place within the CBD includes Amalgamated Property Group’s Civic Quarter, situated alongside the Northbourne Avenue development corridor with direct exposure to the light rail system. 
The report notes, "While there has been very strong interest in the above both government and corporate tenants alike, demand for office space certainly exists outside of the CBD."
"An example of a significant sale transaction is 16-18 Mort Street, Canberra City in June 2019 for $108.5 million. The property was constructed in 1992 and features a total of 14,506 square metre B-Grade office space."
"The continued popularity and growth of co-working spaces and buildings with shared facilities to satiate an ever growing mobile office population that demands more flexible spaces coupled with a move towards smarter more energy efficient buildings will see an increased proportion of current B-grade stock undergoing substantial refurbishment and modernization in order to stay competitive and garner local and offshore investment interest," it concluded.
</body></html>

Latest Investing Insights

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

Editor's Picks

Developments

New apartments

New townhouses

News

Latest Investing Insights

Safari Group offers low-touch investment proposition in Queenstown’s popular ski fields district

Editor's Picks

Receive the latest news stories to your inbox

Developments

New apartments

New townhouses

News