<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.

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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.

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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.

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Joel Robinson

Smith by Valli delivers design-led apartments 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.

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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;

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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.

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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.

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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.”

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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.”

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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.

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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;

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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.

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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

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A South Australia shopping centre has sold for $10.5 million, representing a yield of 7.25% on a fully leased basis.
Adelaide real estate investor, PPI Funds Management, acquired the Greenacres Shopping Centre via an off-market campaign that saw Savills Australia approach a select number of investors.
Capital Transactions agents Peter Isaksson and Rino Carpinelli brokered the deal on behalf of Graham Investments, achieving a rate of about $3,500 per square metre.
“PPI Funds Management had been eyeing the asset for some time,” Isaksson said.
“They already own the adjacent Coles supermarket and bulky goods site so Greenacres Shopping Centre is a strategic acquisition, as it consolidates ownership of a major metropolitan-district complex to a total site area of about 43,226 square metres.”
Specialty retailers already operating in the centre include H&amp;R Block, Greenacres Surgery medical clinic and National Pharmacies, as well as a BankSA branch.
Carpinelli said the buyer recognised the future upside potential of the property, based on its busy suburban location just 12 kilometres north-east of the CBD. 
Carpinelli said South Australian shopping centres were becoming a popular market among investors, as record sale prices being achieved for shopping centre listings on the eastern seaboard were pricing out local buyers.
 
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j.ballantyne1990-6AQqhLzZaK

Savills secures neighbour on shopping spree at SA's Greenacres

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Hub Australia has announced it has secured its first site in Brisbane.
It is a 3,900 square metre space at 200 Adelaide Street which is part of the Anzac Square heritage complex.
Entering the Brisbane market for the first time, Hub Australia will take three levels at Charter Hall’s AnzacSquare building.
It comes with direct access to Central Station and a rooftop café. 
The new coworking space, opening in late 2018, follows recent announcements regarding new locations at 162 Collins Street, Melbourne (3,500sqm), 1 Nicholson Street, Melbourne (2,700sqm), and the opening last week of Hub Australia’s new Sydney space, some 4,800sqm located at 223 Liverpool Street. 
This will take Hub Australia’s national footprint to over 20,000sqm, said Hub Australia CEO and Founder, Brad Krauskopf.
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Brad Krauskopf at 200 Adelaide St (pictured above).
John Preece, Chief Property Officer at Hub Australia, commented that while Brisbane is home to 11% of Australia’s citybased population, and 13% of the national CBD office stock, from a coworking perspective only 4% of the national footprint is located here.
"That tells us the market is completely under serviced from a capacity perspective, and there is definitely demand for high quality coworking spaces.”
 
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Hub Australia secures its first Brisbane co-working site

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The Victorian home of Foxtel in Moonee Ponds has hit the market.
The campaign, being undertaken on behalf of owners Charter Hall, is the largest metropolitan office sales campaign so far in 2018.
Comprising 7,105 sqm of net lettable area across four levels, the commercial property at 1-21 Dean Street was purpose built for Foxtel in 2004. It has recently undergone a $1.5 million refurbishment.
It has basement car parking for 67 cars and a 176 bay, two level car park adjacent to the building.
Colliers International agents Peter Bremner, Trent Preece and John Marasco are handling the marketing in conjunction with CBRE’s Neva Courts, Luke Etherington and Josh Rutman,
“This is the largest metro office building to be offered to the market so far in 2018,” Peter Bremner said.
 “It comes on the back of a third consecutive year of $1billion-plus sales in Melbourne’s metro office market and is sure to attract huge levels of interest locally, nationally and offshore from private investors, syndicates and institutions alike.”
Bremner said Foxtel staff love the location and surrounding amenity.
The property is situated around 6km north-west of the Melbourne CBD, adjacent to the south-west corner of the Moonee Valley Racecourse and in close proximity to the Puckle Street retail strip.
Trent Preece said the large 6,641sqm site offered two street frontages and Activity Centre zoning that would allow for a building height of 26 metres.
“There is potential for future residential development, or to build above the current multi-deck car park,” Preece said. 
“The property, and any future development, will also benefit from its location just 100m from Moonee Valley Racecourse which is about to undergo a $2billion re-development over the next decade providing 2,000-plus apartments plus entertainment, mixed use and world famous racecourse hosting the Cox Plate.” 
Expressions of interest close May 16.
 
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Victorian home of Foxtel in biggest 2018 metro sale campaign to date

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The Melbourne office market upswing is continuing strongly, according to BIS Oxford Economics.
They said net absorption was solid again in 2017 having been backed by strong economic and employment growth in Victoria.
Minimal net additions to stock in the year helped vacancy rates to contract in both CBD and non-CBD markets.
The metropolitan vacancy rate of around 5% is the lowest in almost a decade. Leasing incentives are being scaled back and rents are growing strongly, a recent BIS report found.
BIS did caution however that once rental growth stops – and reverses – yields are likely to correct sharply.
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“As always, circumstances can change and there's a risk that yields soften sooner than we expect. Investors need to go into the market with their eyes wide open," senior project manager and report author Maria Lee said.
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In the investment market, robust demand has pushed yields down – and prices up – further.
Some are concerned that the upswing in prices has run its course, however BIS suggest they do not share this view.
In the company’s latest Melbourne office market reports, it assesses prime grade CBD offices as being fairly valued (in relation to prospective returns) over a five-year horizon, while non-CBD assets are considerably undervalued.
“We’re looking at a prospective five-year IRR of around 10% on average across Melbourne’s non-CBD office markets” says Lee.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/MCOPE.jpg" target="_blank">to enlarge.</a>
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This forecast is based on a continued favourable demand/supply balance that will push vacancy rates lower and rents markedly higher over the next five years –albeit BIS Oxford Economics expects a temporary hiccup in the leasing market around 2019 and 2020 as the wave of development currently under construction comes on stream.
The strong returns forecast comes despite the company’s expectation that rising bond rates will result in softening yields. The critical thing here is the timing.“Certainly, falling bond rates were a key factor in promoting investor interest in property and driving down investment yields” states Lee, acknowledging that “On the face of it, rising bond rates will put upwards pressure on yields.”
However, there are several factors that BIS Oxford Economics considers will offset this impact over the next few years; indeed, near term yields could firm further. Firstly, the extent and timing of rate rises is uncertain. Moreover, the company points to the healthy buffer between office yields and bond rates, and to the lag, historically, before changing bond rates affect yields.
“In addition, and importantly, bond rates aren’t everything," Lee says.
"Investors are not consistent in the importance they attach to bond rates. As we’ve seen in the past, strong rental growth can take over as the driver of firmer yields. That’s what we believe will happen in the early 2020s.”
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BIS Oxford Economics cautioned that once rental growth stops – and reverses – yields are likely to correct sharply.
“As always, circumstances can change and there's a risk that yields soften sooner than we expect. Investors need to go into the market with their eyes wide open," Lee said.
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Melbourne office market going from strength to strength: but BIS Oxford Economics issue warning

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EXPERT OBSERVER
The NAB Commercial Property Index rose 4 points to +21 in Q1 and sits comfortably above its long-run average (+3).
By segment, CBD Hotels continues to out-perform, aided by international tourism and favourable global economic conditions. Industrial property rose again, supported by transport &amp; logistics firms, warehousing, fulfilment and distribution centres. The Office market also bounced back with healthy demand in key eastern states and supported by strong business conditions and employment growth. Retail fell deeper into negative territory as challenging retail trade conditions continued to bite.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/index.jpg" target="_blank">to enlarge.</a>
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While confidence around Industrial and Office property has lifted, Retail confidence was down heavily and negative for the first time since mid-2013. This is consistent with NAB’s Business Surveys which also show an under- performing retail sector along with our own forecasts for subdued household spending in 2018 and 2019. Confidence was also a little lower in the CBD Hotels sector, but still highest overall.
By state, sentiment rose strongly in WA (but was still negative overall). Sentiment was also higher in NSW and SA/NT, but fell in QLD and was unchanged in VIC.
Property experts in all states are more confident about the overall commercial property market in next 1-2 years (bar QLD), with NSW and VIC the most upbeat and WA least confident (but also the biggest improver).
Expectations for capital growth in Office markets in the next 1-2 years have improved in all states bar QLD. The outlook for Industrial property is also stronger, but expectations for Retail capital growth were scaled back with negative or slow growth anticipated in all states. Overall, expectations for capital growth are still strongest for CBD Hotel property.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/hotel-future.jpg" target="_blank">to enlarge.</a>
<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/2018/4/18/hotel-future.jpg" alt="">
Overall Office vacancy rose to 9.0% in Q1 with a small rise in NSW. But NSW along with VIC are still the tightest markets for Office space (and set to remain so over outlook period). Office vacancy fell in WA, SA/NT and QLD and is expected to keep tightening in next 1-2 years (but remain relatively high), with over-supply to remain a key issue in these states.
Rental growth is expected to be fastest for Industrial and Office commercial property in the next 1-2 years, with VIC and NSW out-performing. Property experts also see rents recovering in WA, especially in Office. The outlook for rents in the Retail sector however remains very weak with negative growth expected in all states bar NSW (flat).
For the first time, Retail property experts were asked to assess the strategy acquisitions of A-REIT and ‘Other’ investors for next 12 months. Most (over 1 in 2) think they will focus on acquisitions and holding assets. But 1 in 5 also said ‘Other’ investors will likely divest, significantly more than in A-REITS where just 1 in 10 think they will divest.
Retail acquisition strategies are expected to be driven by concerns over the economy and consumer confidence, opportunities to acquire traditionally tightly held assets, concerns over online retail and entry of new players (like Amazon), all time high cap rates and concerns over changing consumer spending patterns. Most experts operating in the Retail property segment also think these changes will impact landlords negatively, especially large neighbourhood, sub-regional and regional areas.
Fewer property developers are looking to use land-banked stock for their new projects and an increasing number are also seeking new acquisitions, pointing to a period of stock rebuild. A higher than usual number of developers are also looking to refurbish existing property, suggesting more developers are also seeing this as a cost effective solution for their development needs.
Accessing funds (both debt and equity) needed for their property business is still a major challenge but less so than in Q4. But survey participants expect their debt funding and equity conditions to worsen again over the next 6-12 months.
Alan Oster is group chief economist, National Australia Bank, and can be contacted <a href="https://business.nab.com.au/author/alan-oster/">here</a>.
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jrobinson-rf4aSBido9

National CBD hotels continue to out-perform as NAB's commercial property index rises

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Office market sales recorded the second highest cumulative total in the last decade in the March quarter, according to <a href="http://pdf.savills.asia/asia-pacific-research/australian-research/australia-office-/savillsresearch-quarter-times-office-q1-18.pdf?utm_source=ExactTarget&amp;utm_medium=Email&amp;utm_term=4817549&amp;utm_content=6427608&amp;utm_campaign=A2MK+-+Savills+Research+Quarter+Time+Office+Q1-2018" target="_blank">Savills Quarter Time National Office Report.</a>
The total sales of over $17.5 billion was only bettered in 2016 when total sales hovered just below $19 billion.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/sales2.jpg" target="_blank">to enlarge.</a>
<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/2018/4/18/sales2.jpg" alt="">
The majority of sales were conducted by foreign investors. 
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/investorpurch.jpg" target="_blank">to enlarge.</a>
<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/2018/4/18/investorpurch.jpg" alt="">
The highest sale came last month when Lendlease sold Two Melbourne Quarter for $550 million.
It toppled the previous high of $400 million which was set late last year when the yet to be completed 405 Bourke Street in Melbourne sold.
NAB secured its anchor tenancy.
Queensland secured the next two most expensive sales, while New South Wales could only muster one sale over $200 million. That was when 1 York Street in the Sydney CBD sold.
Click here <a href="https://www.propertyobserver.com.au/images/2018/4/18/total%20sales.jpg" target="_blank">to enlarge.</a>
<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/2018/4/18/total%20sales.jpg" alt="">
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Big money Melbourne deals push office sales to near 10 year March quarter high: Savills

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The Collingwood home of hospitality identity Shane Delia’s Biggie Smalls eatery has sold for $3.58 million, setting a new record for a single-fronted retail building in the suburb.
Chris Kombi and Terence Yeh of Fitzroys negotiated the sale of <a href="https://www.commercialrealestate.com.au/property/86-smith-street-collingwood-vic-3066-2014291572" target="_blank">86 Smith Street</a> at a land rate of $19,456 per square metre and a 3.51% yield.
The fully refurbished, three-level building of 267 square metres is leased to Biggie Smalls on the ground and basement levels on a 7x7x7-year deal, while the first floor office is also subject to a secure tenancy of 6x7x7 years.
<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/2018/4/18/smalls3.jpg" alt="">
Kombi said the property sold to an interstate Chinese investor after attracting interest from local and offshore buyers.
“The renewal of the inner north has seen a boom in trendy medium and high-density residential developments and warehouse-to-office conversion projects along and around Smith Street, attracting more students and younger professionals and enhancing the precinct’s reputation as one of Melbourne’s leading eclectic retail, food and beverage, and nightlife offerings,” he said.
“Collingwood’s industrial roots have provided Smith Street with unique long-term growth prospects, offering a substantial residential and office development pipeline whilst retaining much of its heritage and character, and supporting the exclusive mix of retail and hospitality operators.”
Yeh said the recent acquisition of a 1,000 square metre-plus site by Tribe Hotels Group for a flagship offering just metres away from Smith Street demonstrated that the area’s reputation had grown beyond a thriving inner-city cultural hotspot among locals, to a must-visit location for interstate and international tourists wanting to experience Melbourne.
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jonathanchancellor-7SQnKwU6yx

Shane Delia’s Biggie Smalls eatery premises sale sets Collingwood retail record

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The warehouse that was the home of Danks Street Produce Merchants in Waterloo until earlier this year is up for sale.
The Quattroville family closed operations in February having spent $13 million on the project at <a href="https://www.realcommercial.com.au/property-industrial+warehouse-nsw-waterloo-502779458" target="_blank">3-7 Danks Street, Waterloo.</a>
They were rumoured to have spent $3 million on renovations and $10 million on the property and a neighbouring space in 2013.
The building, which was once home to the first Fratelli Fresh outlet, is being marketed by CBRE in conjunction with Gunning Real Estate.
There's an existing net lettable area of 3,350 square metres and has the ability to be increased to 4,250 square metres.
The Produce Market, which included a 100-seat restaurant, only lasted 18 months.
It was filled with fresh food produce, butcheries and boutique food stalls.
The family's patriarch and veteran foodie Peter Quattroville cited the likes of Uber Eats and Deliveroo as changing the industry.
The Quattrville family head up Mosman's Fourth Village.
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Quatroville family list Danks Street Produce Merchants space

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The premises of Kingscliff's Taverna Restaurant on the beachfront Marine Parade has sold for the first time in over five decades.
The <a href="https://www.realestate.com.au/sold/property-house-nsw-kingscliff-127361418" target="_blank">property at 22 Marine Parade</a>, which is leased to the Greek-inspired modern restaurant, fetched $3.2 million through LJ Hooker Kingscliff in conjunction with Knight Frank Gold Coast.
It's only been leased to the restaurant since for around 18 months.
The restaurant on the 910 square metre B4 Mixed Use Zoning site has 60 seats and an ocean view.
The sale, marketed as a possible development site, included a coastal style beach house atop the hill.
It has five bedrooms, three bathrooms and an oceanfront balcony.
A local family are currently in a periodic lease agreement that yields nearly $50,000 per annum.
 
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Kingscliff's Taverna Restaurant sells for first time in 50 years

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A former Palm Beach motel has sold for $2.7 million.
Its use was changed to permanent letting three years ago.
The <a href="https://www.raywhite.com/qld/palm-beach/1801163/?lang=en" target="_blank">1203 Gold Coast Highway property</a> was sold by Anthony and Wendy Cummins to Dayview Holdings Pty Ltd.
It is linked to Harvey Norman executive Steve Cavalier.
The two-level building previously operated as the Surf 'N' Sand Motel.
Set on a 818 square metre site, the building has 11 bedrooms.
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