Malaysian developer <a href="https://www.apartments.com.au/developers/s-p-setia">SP Setia</a> is the latest to jump into St Leonards booming Transport Oriented Development precinct.

The developer, which has previously delivered Sapphire by the Gardens apartment development in Melbourne, identified the Atchison Street site in 2023. It filed a Scoping Report around 12 months ago, and now has revealed the designs for the new&nbsp;40-storey mixed-use tower.

The State Significant Development Application covers <a href="https://next-portal.urban.com.au/projects/14650/summary">20-22 Atchison Street</a>, a 1,374 sqm site positioned between St Leonards Station and the new Crows Nest Metro station.

Designed by <a href="https://www.apartments.com.au/architects/cox-architecture">COX Architecture</a>, the project would deliver 181 apartments, above a four-storey commercial podium, five basement levels, and new public domain works along Mitchell Street. The apartment mix comprises 35 one-bedroom apartments, 39 one-bedroom-plus-study apartments, 85 two-bedroom apartments, and 22 three-bedroom residences.

The proposal has been lodged as a shop-top housing development under the NSW Government’s TOD planning pathway, which allows increased density around key transport infrastructure. The site sits within the recently rezoned Crows Nest Accelerated TOD Precinct.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b799673d-48e2-46b0-801a-0e33a9330100" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20site.png?VersionId=dPh0UfwfaHpbFL1R7H1cbZNbIW0CHbCC" />

SP Setia acquired the Atchison Street site as part of its continued expansion into the Australian apartment market. In comments made to City &amp; Country (The Edge Malaysia) in 2023, SP Setia President and CEO Datuk Choong Kai Wai described the acquisition as “a strategic move” aligned with the group’s post-pandemic market recovery strategy.

“Our target for this exceptional development is local and overseas buyers, including first-home buyers, downsizers and investors,” Choong said.

The tower has been designed as a slender vertical form rising from a mixed-use podium, with COX Architecture positioning the development as a response to the evolving St Leonards and Crows Nest skyline.

“The purpose of the project is to facilitate the delivery of high-quality housing at a strategically located site and deliver a built tower outcome that is consistent with the desired future character of St Leonards and aligns with the TOD controls,” the design report stated.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="b1a85eee-76f7-436c-a6da-73ba827b9b13" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/atchinson%20entry.png?VersionId=dA9jHGPMcm.dDbwk4QfxqWiY5bfh3UVt" />

The podium would incorporate retail uses fronting Atchison Street, commercial tenancies, landscaped communal areas, and pedestrian improvements along Mitchell Street. Vehicle access and loading would be consolidated via Atchison Lane.

Residents would have access to more than 665 sqm of communal indoor and outdoor spaces, while the development proposes 96 parking spaces across five basement levels.

The proposal also includes a commitment for 10 per cent of residential floor space to be allocated toward affordable housing through a monetary contribution.

COX said the tower form responds directly to the emerging high-density character of the precinct while seeking to maximise solar access, cross ventilation, and outlook from apartments.

<img alt="First look: SP Setia targets St Leonards skyline with 40-storey TOD tower" data-entity-type="file" data-entity-uuid="2163f85c-f63b-4be3-aafa-f8763976cec5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Article%20Feature%20Image%20%28Grid%29_5.png?VersionId=WiAmtIKJ6.ZQ41EtYEQ1fol7AeorKBlL" />

“The building is orientated towards north,” the Apartment Design Guide compliance report noted, adding that the tower’s slim form was driven by the constrained inner-urban site dimensions.

The design also incorporates landscaped setbacks and communal open space at podium level, intended to soften the interface with surrounding streets and improve pedestrian amenity.

The project adds to a growing wave of redevelopment proposals reshaping St Leonards and Crows Nest following the opening of the Sydney Metro City line and the NSW Government’s push for higher-density housing around major transport nodes.

Last week Stockland filed plans just down the road. They want to build a <a href="https://www.apartments.com.au/new-apartments/601-pacific-highway-st-leonards-nsw-2065">52-storey tower on Pacific Highway</a>.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-stockland-plans-52-storey-538-apartment-st-leonards-tower">First look: Stockland plans 52-storey, 538-apartment St Leonards tower&nbsp;</a>

Joel Robinson

First look: SP Setia targets St Leonards skyline with 40-storey TOD tower

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> has revealed plans for a new mixed-use tower at 10 Dangar Street, Wickham, advancing a proposal that would reshape the southern gateway to Newcastle’s city centre with one of the city’s tallest residential buildings.

The State Significant Development proposal, now on exhibition, seeks approval for a <a href="https://www.apartments.com.au/new-apartments/bowline-10-dangar-street-wickham-nsw-2293">43-storey tower</a> immediately adjacent to the Newcastle Interchange. The project would deliver around 200 apartments, including 42 affordable housing dwellings, alongside 99 co-living units, a 171-room hotel, retail space, and new public domain integrated through the site.

The scheme marks a significant escalation of plans previously approved for the site. Urban Property Group took over the prominent 2,904 sqm parcel, where excavation and demolition had already commenced under an earlier consent for a 14-storey mixed-use development.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="58a96dd9-407f-4d20-86b4-94e4bfeef74b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20podium.png?VersionId=LGlf08pdFGAZDzvx_CXC4XakHNZRuEE0" />

Designed by <a href="https://www.apartments.com.au/architects/sjb-architects">SJB</a>, the tower has been conceived as a landmark transit-oriented development anchored to the Newcastle Interchange precinct. The proposal includes 245 build-to-sell apartments across a mix of one, two, and three-bedroom residences, as well as two penthouses. Fifteen apartments and one operational unit are earmarked for NDIS housing. The co-living component would add a further 99 units, while the podium would accommodate retail uses and hotel facilities.

SJB said the site presents “a valuable opportunity to anchor the precinct by setting the standard for design, active ground planes and character at the key southern gateway.”

The architecture responds directly to the site’s position beside major transport infrastructure and within one of Newcastle’s fastest-evolving urban renewal precincts. The tower form sits above a sculpted podium designed to frame new public spaces, including a through-site pedestrian link connecting Station Street to Hannell Street, landscaped plazas, and activated retail edges.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="a7bd6ff0-f7db-4ce8-a6dc-ea56e72c6149" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20lanne.png?VersionId=xzf39VADyhj7zBQY2I9fx9vI62u2tuSb" />

The design report describes the project as part of the broader transition of Wickham into “a vibrant, high-quality mixed-use urban precinct” that leverages proximity to the station, open space, and regional connectivity.

A detailed public art strategy has also been prepared for the development. The strategy positions the project as “a transit-oriented development of state significance at the gateway to Newcastle’s city centre” and outlines a series of integrated artworks responding to Newcastle’s industrial and transport heritage.

Creative Road’s curatorial framework for the project, titled Unveil, draws on “stratified surfaces, carved volumes, and light-filled apertures” while referencing Newcastle’s transformation from an industrial city into a contemporary education and technology hub.

<img alt="First look: Urban Property Group unveils Newcastle’s next supertower at Wickham interchange" data-entity-type="file" data-entity-uuid="77a882bb-14b1-4d28-99ff-9438e39508c0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/wickham%20site.png?VersionId=cevgo_vN0eKPK78P8YcEu3mKPLkpFqE7" />

The proposal is being advanced through the NSW Housing Delivery Authority pathway after being declared State Significant Development in June 2025. The accompanying scoping report states the development aims to “maximise the site’s proximity to the Newcastle Interchange by delivering transit-oriented development” while increasing housing supply and affordable housing provision within the Newcastle LGA.

Urban Property Group’s plans align with the long-term strategic vision established under the Wickham Master Plan, which identified the interchange precinct as suitable for substantial uplift in height and density. The current proposal would significantly intensify that vision, positioning the tower among the tallest developments proposed for Newcastle.

The site sits immediately north of the Newcastle Interchange, bounded by Dangar Street, Hannell Street, and Charles Street. It is surrounded by a rapidly growing cluster of residential towers and mixed-use projects that have emerged following the completion of the light rail and transport interchange.

First look: Urban Property Group unveils Newcastle’s latest tower at Wickham interchange

Bottega House has completed settlement of a landmark riverfront site in Macquarie Street, St Lucia, representing its first major Brisbane development.&nbsp;

Positioned on the banks of the Brisbane River, the <a href="https://www.apartments.com.au/new-apartments/180-macquarie-street-st-lucia-qld-4067">premium site at 180 Macquarie Street</a> features uninterrupted river frontage in one of Brisbane’s most tightly held residential precincts.&nbsp;

The proposed development, currently under assessment with Brisbane City Council, has been designed by <a href="https://www.apartments.com.au/architects/plus-studio">Plus Studio</a> with interiors by <a href="https://www.apartments.com.au/interior-designers/mim-design">Mim Design</a> and will deliver a boutique collection of premium residences positioned specifically for owner occupiers and downsizers.&nbsp;

The residences are set to redefine luxury apartment living in the area, with a focus on architectural quality, refined finishes, landscape integration and elevated amenities including curated wellness facilities, resort-style pools and recreation spaces rarely seen in the local market.&nbsp;

Exclusive sales for the project will be led by Keenan &amp; Byrne, ahead of an anticipated launch later this year.&nbsp;

Bottega House Managing Director Nick Malloch said the project reflects the group’s ambition to deliver a highly curated residential offering within one of Brisbane’s most tightly held precincts.&nbsp;

“This is an incredibly rare riverfront opportunity and one we have approached with a long-term perspective,” Malloch said.&nbsp;

“Our vision from the outset was to create a boutique collection of residences that feel more like private homes than traditional apartments, with generous proportions, refined finishes and exceptional amenity throughout."

Malloch says there is a&nbsp;lack of premium owner-occupier stock of this quality in the market, particularly for downsizers wanting space, privacy and a true lifestyle offering without compromise.&nbsp;

"Demand is expected to be strong given the scarcity of premium riverfront opportunities of this nature within Brisbane’s inner-west."&nbsp;

Bottega House secures landmark riverfront site in St Lucia 

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The arrival of the first piling rig officially marks the commencement of construction at SIERA’s new beachside apartment development, Exhale, in Northcliffe.

<a href="https://www.apartments.com.au/new-apartments/exhale-surfers-paradise-8-enderley-avenue-surfers-paradise-qld-4217">Exhale</a>, a glass-encased tower featuring 54 large-scale apartments at 8 Enderley Avenue, is SIERA’s third Gold Coast development. It follows the recently completed PIPIS Bilinga beachfront project, which achieved suburb-record prices, and the soon-to-be-completed Chevron Island development, Tapestry.

[smartcode_project:default project_id=112661 project_image_fid=359603]

<a href="https://www.apartments.com.au/developers/siera">SIERA</a> Founder and Managing Director Brent Thompson said the arrival of the piling rig represented a significant milestone for the development, which is scheduled for completion in late 2028.

Over the next month, around 260 piles are expected to be installed as work progresses on the basement structure. The building is anticipated to rise above ground level early next year, before unveiling its sculptural glass curtain wall, developed in collaboration with specialist façade engineers.

“The façade was designed to maximise panoramic coastal views while creating a distinctive architectural identity,” Thompson said.

[smartcode_project:default project_id=112661 project_image_fid=355935]

Designed by BDA Architecture, Exhale will comprise just 54 two- and three-bedroom residences across 26 levels, a level of low-density living rarely delivered in this beachside pocket between Surfers Paradise and Broadbeach.

The project has been conceived as a resident-only building, with no short-stay accommodation permitted. SIERA says the model is intended to appeal to long-term owner-occupiers rather than transient holiday demand.

[smartcode_project:default project_id=112661 project_image_fid=361052]

Residences have been designed with large-format layouts and expansive glazing, with most apartments featuring more than 30 metres of glass frontage to maximise natural light and ocean views.

The amenity offering spans two levels and centres on wellness and lifestyle, including a heated magnesium pool, sauna, yoga and Pilates studio, gymnasium, private dining facilities, cinema lounge, and dedicated surfcraft storage.

[smartcode_project:default project_id=112661 project_image_fid=359607]

More than half of the apartments have already sold. SIERA has also opened a sales gallery for Exhale at its Chevron Island commercial premises, near its Tapestry tower and the site of its second Chevron Island apartment development, which is slated to launch in early 2027.
</section>
</section>

[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

Local Little Bay residents, along with buyers from premium postcodes across Sydney’s affluent Eastern Suburbs, have dominated purchases in developer-builder Urban Property Group’s first Eastern Suburbs apartment development, <a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a>.

The $250 million coastal project, one of the first new developments in the area in several years, has proven particularly popular with downsizers, especially those from Coogee and Bondi. One Double Bay downsizer paid $4.7 million for a four-bedroom penthouse, setting a new local apartment price record in the process.

Buyers have been attracted to the combination of coastal tranquillity, premium design and amenity-rich neighbourhood living. The walkable village setting, along with proximity to three of Sydney’s leading golf courses, New South Wales Golf Club, St Michael’s Golf Club and The Coast Golf Club, has also been a key drawcard.

[smartcode_project:default project_id=112343 project_image_fid=352689]

Built across two low-rise buildings designed by <a href="https://www.apartments.com.au/architects/hill-thalis-architecture-urban-projects-pty-ltd">Hill Thalis</a> and set along a lush, landscaped green spine, designed by leading landscape architect <a href="https://www.apartments.com.au/landscape-architect/arcadia-landscape-architecture">Arcadia</a>, ESTE Little Bay offers a collection of one, two, three and four-bedroom residences with interiors by Richards Stanisich.

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a> Sales Director, Tom McIvor said the response to ESTE has been "nothing short of extraordinary."

“Buyers have been quick to recognise ESTE as a rare opportunity to invest in a coastal sanctuary that offers both seclusion and connectivity to the heart of Sydney,” McIvor said.

[smartcode_project:default project_id=112343 project_image_fid=352687]

<a href="https://www.apartments.com.au/project-marketer/srm-residential">SRM Residential</a> Senior Director, <a href="https://www.apartments.com.au/project-marketer/srm-residential">Clayton Ross</a> said the local market has responded incredibly well, driven by ESTE’s exceptional location and the rarity it offers.

“We’ve seen strong interest from a variety of buyer groups, all of whom are drawn to the exclusivity and quality of the build and construction by the 4.5-star iCIRT-rated builder / developer, Urban Property Group. There’s truly nothing else like it along Sydney’s coastline.”

[smartcode_project:default project_id=112343 project_image_fid=352690]

The project also includes robust buyer protections, including Resilience Insurance’s Latent Defects Insurance, providing 10 years of structural cover, and an independent iCIRT-rating of the developer.

“The iCIRT-rating adds another layer of confidence,” Ross added. “Buyers see it as a safeguard for their investment and their lifestyle.” A highlight of ESTE’s offering is its exclusive wellness amenities, including a heated rooftop infinity pool and outdoor heated spa, a state-of-the-art Technogym fitness centre, and a sauna.

<a href="https://www.apartments.com.au/new-apartments/este-little-bay-jennifer-street-little-bay-nsw-2036">ESTE Little Bay</a> is topped out and is on track to complete towards the end of 2026, with residents moving in before Christmas.

[smartcode_project_cta:default project_id=112343]

Eastern Suburbs buyers snap up ESTE Little Bay apartments

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 comparison of the performance of prime and secondary office property demonstrates that prime at 9.0% per annum has outperformed secondary office property at 8.6% per annum over the 28 years from 1985 to 2012 by 0.4% per annum. Through cyclical market fluctuations, performance outcomes vary. Secondary property returns are more volatile, however secondary office property can outperform prime property in the stable return periods and the subsequent initial upswing phase of market cycle.

Prime properties are located in major commercial centres with great public transport accessibility, built with quality design externally and internally, which are energy efficient, and have tenants which are financially strong. Absence of any of these criterion means that an asset will generally be rated as secondary property.

Total Return

In broad terms, prime and secondary office returns have followed the same cycle over the past 28 years, indicating that that they are significantly influenced by the same fundamental demand and supply forces. Chart one compares annualised total returns for prime and secondary office property in Australia over the period from 1985 to 2012.

Chart one – Prime and secondary office property annual total return 1985 - 2012

<img alt="niu_nov_8_chart_one" height="279" src="/images/stories/2013/11/08/niu_nov_8_chart_one.png" width="470">

Source: IPD

Table one compares the performance of prime and secondary property over different periods. Four periods have been selected which highlight the different market conditions.

Table one – Prime v secondary office property returns

<img alt="niu-nov-13-chart-one" height="105" src="/images/stories/2013/11/13/niu-nov-13-chart-one.gif" width="470">

Source: IPD

There are three key observations:

<ul>
<li>
	During the stable return period from mid 1990s to mid 2000s, secondary office properties outperformed. The higher risk of secondary office property through higher vacancy was rewarded through the higher returns achieved over the period reflecting the higher income yield of secondary office property.
	</li>
</ul>
<ul>
<li>
	Prime office properties have led the initial recovery in returns, however secondary offices gained more momentum in the later phases of upswings and surpassed prime property from 2005 to 2007. Investors sought higher returns and were willing to accept more risk in the positive market.
	</li>
</ul>
<ul>
<li>
	Returns for prime property have surpassed secondary property in the recovery stage from periods of weak return in the property market. Two examples are recoveries after the “recession we had to have” in early 1990s and global financial crisis (GFC) in 2008. Property market falls led investors to be more risk averse with a preference for prime properties with more secure rental income. As a result, prices of prime office property have recovered from weakness in advance of secondary office property.
	</li>
</ul>
Income return

Income return provides a further performance measure that differentiates prime fraom secondary office property. Chart two tracks the changes in prime and secondary office rents from 1985 to 2012. Secondary office properties have generated a higher income return that is also more variable than prime office properties.

 

 

 

 

 

 

 

 

 

 

 

 

 

Chart two – Prime and secondary office property - income returns 1985 - 2012

<img alt="niu-nov-8-chart-two" height="276" src="/images/stories/2013/11/08/niu-nov-8-chart-two.jpg" width="470">

Source: IPD

The difference in variability between prime and secondary income returns reflects the fact that prime offices fulfils the majority of market demand as an economy rebounds. However, in a sustained economic recovery, with limited availability of prime properties, tenants that could not secure or afford prime office space compromise by securing secondary property. That spill over of demand leads to improved rents in the secondary office property.

\Conversely, in an economic downturn when there is a lot of vacant space, tenants will secure prime office buildings and prime office rents will fall less than secondary rents. Secondary property will suffer more from increased vacancy. Secondary offices are generally let to less financially resilient tenants for relatively shorter terms, therefore downsizing and subsequent non-renewal of leases by tenants in a weak economy is more likely. Secondary property vacancy rates and therefore rental income are more variable.

Investment in commercial property can be implemented in a variety of ways. Prime office properties are larger in size and value and can be invested in through AREITs or wholesale unlisted property funds. Secondary properties can be invested in through retail unlisted property funds or through property syndicates.

Prime office has shown outperformance in the recent market as investors are still relatively risk averse after the GFC. Signs of recovery in corporate earnings in Australia indicate that the market is heading for a stable period. Secondary office properties will be rewarded by stable rental income at higher income yields so that higher total returns are expected in the immediate future.

 

 

<hr>
Ming Niu is an analyst at <a href="https://atchison.com.au/" target="_blank">Atchison Consultants</a>.

 

<h2>Recently listed properties:</h2>

[smartcode_project:default project_id=4939]

[smartcode_project:default project_id=27575]

[smartcode_project:default project_id=24323]
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mniu-gkBe4pvnDQ

Prime v secondary office property: Which one is more likely to outperform?

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Today I met with an old friend. I’d coached his son in soccer (yep I am a junior soccer coach – but only up to under 10s!).  He is a very successful local real estate agent. His business on Sydney’s Northern Beaches has been growing from strength to strength over the past few years.  But he was here to see me to discuss his personal investment options.
He said “Jo, despite me being in the industry, my focus hasn’t been on growing my own wealth – more growing my business and getting the best results for our vendors and landlords – I’ve been selling property not buying it.  Now I need to start planning for my retirement”.  Whilst still a way off, retirement is rightly so on his radar.
Property on the Northern Beaches of Sydney has become expensive; it’s hard to consider it from an investment perspective as the entry point is high. The rental yields low but capital growth prospects are ok tracking at around 5% but on a high base, this can be impressive.  So if you are investing in this location, it means you need to be able to support your investment with surplus cash as the rent just won’t cover the costs. The costs include interest payments, council and water rates, insurances, repairs and management fees. It’ll be a negatively geared investment.
My friend was looking for was a project where equity can be created but also an investment that would be cash flow positive. This would let him keep moving forward on his investment journey and continue to focus on growing his real estate agency business.
I presented an affordable dual occupancy development concept to him. We looked at the numbers and he said “Jo, I don’t think you can create that kind of equity within one year by just buying and holding.”
Within a year we can create around $100,000 in equity through a development like this.  I said, "Of course not because what we are doing is creating equity via the development process – from adding value and building two dwellings on one piece of land and subdividing it to create two properties.”
Not only are we creating equity, the gross yield from the rents on completion means the properties are easy to hold as they may be cashflow positive. So the rent combined with the tax benefits means that you shouldn’t need to contribute extra cash (depending on your taxable income – seek accounting advice).
But another important element to this dual occupancy development opportunity is that the regional cities we develop in have good capital growth rates currently tracking at 7% + annualised.  As a comparison, the historical growth rate of the Northern Beaches suburb I live in is 5%. Hmmm, this is looking more interesting.
This dual occupancy project would be valued at approximately $760,000 on completion – that is two freestanding three-bedrooms, two-bathrooms, single lockup garage villas at $380,000 each.  If the properties receives 7% annual growth then around $53,000 capital growth should be realised in year one. This will increase year on year based on the annualised growth rate.
Creating some equity, a strong yield and good depreciation benefits with a small development in a location with good growth prospects seemed to make sense to my real estate friend.  His next step is to take a drive around and conduct his own due diligence. I’m expecting his call back soon.

<hr>
Jo Chivers is director of <a style="font-size: 14px;" rel="nofollow" target="_blank" href="https://www.propertybloom.com.au/" title="Property Bloom">Property Bloom</a>, which manages property development.
 
 
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Is it quicker to build equity from development or buy and hold in a high capital growth location?

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With an almost ‘perfect storm’ environment in the Australian residential property market at the moment, there is a new generation looking to get in to the real estate investment market. Many first time investors will not always be aware of which costs really should be paid, and those to avoid.
This is because few first-time investors actually calculate on a spread sheet their overall initial and continual commitment costs to a property in relation to the return it is giving them. This is high-risk because if you do not know the costs associated with procuring investment property, you could be building a portfolio that reads well on paper on weak foundations.
Successful investors know that minimising all unnecessary purchase (or acquisition) costs is one of the most crucial things they can do. Remember, a dollar saved here and there is a dollar re-invested later on when you wish to grow a small portfolio into a big one. And, as we know, a dollar invested will ultimately return bigger dividends, and this compounding effect is what really enables a portfolio to accelerate in the early years.
So today I thought I’d draw on some personal experience and share with you some ways to avoid paying unnecessary up-front and ongoing costs on an investment property. Remember, good habits formed when starting out will help you throughout your investing career will pay dividends when you really ramp things up in a few years’ time.
In some instances, saving even one thousand dollars up front can make the difference between having a good investment property in your portfolio that can unlock future equity access and one that weighs down your portfolio, costing way more than it should to hold.
It is also important to note the economies of scale that can be achieved when employing some of these capital-saving strategies. Why? Because the more exponential saving you can make as you add properties to your portfolio; the more exponential growth you will get.
Avoid lenders mortgage insurance (LMI) – At (and excuse the pun) all costs!
This is absolutely dead money that should never be paid, no matter if you are a new investor, or a seasoned investor holding dozens of properties. If your deposit isn’t enough to meet that 20% threshold for the property you wish to purchase. I recommend to re-think your strategy and opt for a more affordable property that still presents similar gains offerings, but allows you finance at 20% deposit, not 12% or 15% deposit.
There will be others who will disagree with this stance on LMI arguing that paying a small amount of LMI on a property loan can get you in to your investment property sooner. However this exposes you to much more risk. Say you pay the LMI and instead of saving 20% deposit, you save just 5%. Should you fall on tough times and need to unlock some equity in this property to use elsewhere, you will not have the flexibility to do so, with such a small deposit remaining in the property. The costs involved to restructure your mortgage at this point could be substantial.
Find a good conveyance/solicitor and ask about return customer rates
Finding a good solicitor who can work efficiently and does not cost an arm or a leg is an important part of the property investment process.  However, few investors consider the value they actually add to a solicitor as a repeat customer. It is therefore worth asking and potentially negotiating up front, if they offer discounted rates for repeat customers.
When selecting a professional, you should mention up front that you are a new investor with very big ambitions and are looking for a conveyancer who can help you grow a large portfolio. You may be able to negotiate discounted professional services rates for successive new property purchases
 
Get professional independent valuations, not just bank’s internal ones
Oftentimes in business, in order to save money, you need to spend money. Many times throughout your investment career, you will need to refinance properties to draw down on the equity created in your portfolio, to enable you to acquire more properties. Every time you do, lenders will need valuations done to prove that the properties have increased in value. Inexperienced investors are easily fooled by the lender they go with offering a free valuation by their internal team. This however could cost you money in the long run. More often than not, lenders’ internal valuation team will low-ball property values, in the pursuit of protecting their company’s bottom line (not yours).
Paying a small amount (say $50-$200 depending on the property) for an independent valuer to review your property, will pay big dividends. For instance, a lender’s internal valuer may only appraise your property at say $255k, whereas an independent valuer might give a higher valuation like $265-$270k. The small outlay cost of an independent valuation has just added potentially $10-$15k of additional equity, and that is enough to cover the closing costs on your next investment purchase!
Source a specialist accountant or one who is experienced in property investor clients – don’t do it yourself
In the same vein as above (spending some money to make or save you a stack of money); if your strategy is to acquire dozens of properties and hold them over a long time, you need to plan in advance your taxation minimisation strategies by speaking with professionals who are experienced to guide you in doing so.
Many new and inexperienced investors who have just one or two properties think they can do it all themselves (the tax minimisation part, I mean). And maybe for that first couple they can. As you grow the portfolio, however, you could have made structural mistakes in setting up the first ones that will hurt you later on as you grow. Smarter instead to pay a professional who will uncover tactics that could save you thousands of dollars you may not have realised that you could have saved, by doing it yourself.
Land tax – the tax that sneaks up on you
As above, a good accountant will work with you in regard to land tax minimisation and avoidance. This is a big – and highly unnecessary – cost that investors face and really should not pay. Well, at least for the first couple of dozen properties.
For those not in the know, land tax is accessed every December for investors and is payable every year; meaning that if you qualify to pay this tax it is not a one-off payment. You can imagine how that annual payment could hurt your bottom-line over five, 10, or 20 years of property holding. The tax is payable when the value of the ‘land’ of all your owned properties in a given state or territory, exceeds a certain threshold, for that state. For instance, in NSW the current annual threshold is $406,000. This means that if the value of the land parcels that each of your physical dwellings sits on top of (i.e. not the dwelling value itself), is higher than this amount, added up, you are up for extra tax. This tax varies per state also.
Best way to avoid it? Structure a growth acquisition strategy that ensures a multi-state approach (spreading your taxation ‘risk’), as well as multiple-dwelling-types approach. For instance, units in large blocks of hundreds of units, have minimal land value, because the percentage of land value each unit owner is entitled to, must be divided up between many other occupants. However, smaller blocks of just, say, six units, in very land-value-high suburbs will likely have a much higher land-value per owner and this will push up their land tax closer to that threshold.
As a rule of thumb though, and taking the abovementioned NSW example in hand, you’d likely be able to own around six to seven modest or average units (in line with general median unit prices in NSW state, encompassing Sydney and all other regional areas), before breaching that tax threshold. Still, this is generic only and something you need to investigate with state taxation offices annually.
Needless to say, if you are only acquiring houses and not units or apartments, in just one state, land tax will become a serious concern for you and a cost that over time, will really hurt your bottom line.
 
Buyer’s agents aren’t always a good idea
Buyer’s agents have a paramount role in the real estate industry. For home buyers, they enable people who have very specific suburb/dwelling/pricing needs to access more appropriate properties, and usually before they come on to the market. For starting out investors, they enable time efficiencies by taking on many of the due diligence items you’d have to carry out yourself, if you didn’t have them on board. So, for the time-poor, amateur property investor, I do not doubt a buyer’s agent’s value add.
With that in mind; the costs are very high, in regards to the fee they charge for their services. Again, when starting out, this may be a justified cost because the buyer’s agent may get you a deal where the cost or equity saving is greater than their professional fee for doing so. However, over time, as you move on to the second or third property purchase you’ll have been around the traps long enough to have confidence to procure properties without a buyer’s agent. Or, at least you should. We are all time-poor these days but if you want to be a successful and profitable property investor, you need to know how to do the due diligence yourself, have confidence in that ability and avoid paying someone else to do that for you.

<hr>
Cameron McEvoy is a NSW-based property investor and maintains a blog, <a target="_blank" rel="nofollow" href="https://propertyspectator.blogspot.com.au/">Property Correspondent.</a>
 
 
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Saving money in property investing: the costs to avoid and the habits to maintain

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The clearance rate for property sales last weekend was 67% as racing’s Spring Carnival grabbed the spotlight.  
Across Melbourne, agents conducted 192 auctions with 95 properties sold at the drop of the hammer, 32 sold before and two sold afterwards. On top of these, 63 houses were passed in – 38 on vendor bids.  
There were also 506 private sales.
Total sales volumes for the auctions was $70.96 million and $246.91 million for the private sales.
Breaking the figures down further, 127 houses were auctioned for a clearance rate of 69%. The median price was $561,800 and the total value was $50.57 million.
Fifty-seven auctions of flats and apartments achieved a clearance rate of 68%. The median price was $506,000 and the total value was $19,384,000.  
Seven vacant land auctions achieved a clearance rate of 14%.
House sales in detail:  
TOP 5 HOUSES
{yoogallery src=[images/stories/2013/11/07/can]}
1. 13 Church Street, Canterbury $1,650,000 (pictured above)
2. 164 Nicholson Street, Fitzroy $1,450,000
3. 1 Morphett Avenue, Ascot Vale $1,120,000
4. 218 Station Street, Carlton North $1,042,000
5. 38 Oakpark Drive, Chadstone $1,030,000  
 
TOP 5 BARGAIN HOUSES
{yoogallery src=[images/stories/2013/11/07/dal]}
1. 26 Drouin Street, Dallas $277,000 (pictured above)
2. 99 Third Avenue, Rosebud $311,000
3. 396 Station Street, Lalor $312,000
4. 9 Mirang Court, Frankston $312,000
5. 14 Bacchus Drive, Epping $316,500
 
TOP 5 APARTMENTS
{yoogallery src=[images/stories/2013/11/07/mel]}
1. 1005/480 St Kilda Road, Melbourne $885,000 (pictured above)
2. 13A Andrews Street, Spotswood $830,000
3. 2/34 Evans Street, Moonee Ponds $765,000
4. 12/3 Rockley Road, South Yarra $750,500
5. 15 Hockey Lane, Ascot Vale $615,000  
 
TOP 5 BARGAIN APARTMENTS
<img alt="glen-waverley-nov-7-one" src="/images/stories/2013/11/07/glen-waverley-nov-7-one.jpg" height="353" width="470">
1. 123/270 Springvale Road, Glen Waverley $306,000 (pictured above)
2. 3/113 Noble Street, Noble Park $330,000
3. 1/201-209 High Street, Prahran $330,000
4. 108/8 Pottery Court, Brunswick $347,000
5. 3/246 Gilbert Road, Preston $390,000
 
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staylor-63KgDrKwoY

This week's most expensive and most affordable Melbourne auctions

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It seems Sydney's residential buying frenzy has extended to another property asset class - car parks.
A freehold strata title car space opportunity at Sydney Airport has attracted more than 2,000 expressions of interest since its launch just three weeks ago.
The facility, operated and tenanted by Park and Fly, has just 602 single and double car spaces and is being marketed by Cramer Property.
Cramer Property managing director Erle Cramer said "The demand has been unprecedented… Investors have realised that this investment opportunity represents an excellent chance to diversify investment portfolios, whether for self-managed super funds (SMSF) or cash that is currently sitting in the bank looking for a better return".
Such is the demand he said it had received interest from the United States of America and Asia. "There are no other opportunities in Australia where people can invest in a car park which is situated in a world class location offering returns of 6.5% per annum with assured yearly rental increases, said Mr Cramer.
Each week the car park facility in Mascot turns over 2,000 vehicles and services more than 4,000 customers.
The car park is located at 1008 Botany Road and comprises 154 single car parks are 450 double spaces. Prices for a single lot are $57,500 and $104,500 for a double.
The terms of the lease are five years with three times five year lease extension options.
An initial 6.5% per annum net return is offered in addition to 3% rent increases each year, except on the exercise of the option, when the increase will be 4%.
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kjiminez-eaYKfU7qd2

"Unprecedented demand" for car park strata near Sydney airport

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Strong growth from Asia, the Middle East and Africa saw the world's biggest hotelier, the InterContinental Hotels Group deliver another spike in global room revenue in the September quarter, albeit at a slower pace than the previous year.
Revenue per available room, a key industry measure referred to as RevPAR, rose 3.3% in the three months to September 30. That compared to 3.9% growth achieved in the third quarter of last year.
InterContinental Hotels Group (IHG) chief executive Richard Solomons described the result as a “solid third quarter performance"
In Australia, IHG currently has 30 hotels including the InterContinental, Crowne Plaza and Holiday Inn branded hotels. It recently signed the first Holiday Inn Express in Australia, which is expected to open in 2015. RevPAR in Australasia was up 3.9%, led by solid trading in Australia
Despite the ongoing challenges in some of our markets, current trading trends give us confidence for the rest of the year and our strategy for high quality growth positions us well for continuing success into the future," said Mr Solomons on the outlook.
 
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InterContinental Hotels delivers another spike in global room revenue

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Some of the world's biggest retailers chains are heading to Australia, with speculation emerging that Japan's boutique department store Isetan, the UK's Marks &amp; Spencer and US beauty and cosmetic house Sephora are planning to open stores in 2015. 
It is understood that in recent weeks representatives from Marks and Spencer (M&amp;S) have been out in Australia.  M&amp;S, through Asian marketer and distributor or global retail brands, Royal Sporting House, is believed to interested in opening up their profitable " small format" stores of about 2,500 square metres. It will include their top fashion and homeward brands. 
A source told Property Observer that they were looking at opening "multiple" stores in the major regional shopping centres.
Property Observer also understands that Sephora, Isetan and UK toy store Hamleys are all looking to get a presence in Australia. 
A source said Isetan were in "preliminary discussions at the moment" and looking for a presence in the CBDs, as well as regional shopping centres. 
Meanwhile, it is understood that representative from Hamleys were out here last week". Sources said "They have got a whole swag of potential joint venture partners."  He said Hamleys was not coming to Australia to secure 100 square metre sites, "they need 750-1000 square metres".
 
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Some of the world's biggest retailers heading to Australia

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First home buyers are struggling to buy property because of a lack of savings, not because of competition from property investors, according to a survey by mortgage broker Loan Market. 

 
In an online survey, its 450 brokers were asked: ‘What is the No.1 issue keeping first home buyers out of the market. 68% of brokers blamed low deposits and savings and 21% blamed a lack of government incentives. 

 
Loan Market director Mark De Martino said that with the property market running hot, first home buyers were competing with other buyers armed with equity and savings. However, with the right preparation and guidance, first home buyers could level the playing field, he said. 

 
“The biggest disadvantage most first home buyers have is they’re often younger and haven’t had the same amount of time to build up equity and savings as those purchasing their second or third homes,” De Martino said. 

 
“What first home buyers need to do early is save for a deposit. A larger deposit doesn't necessarily mean you can borrow more and buy a bigger property, it means you can have equity in your home from day one and also avoid loan costs like lenders mortgage insurance,” he said.  

 
De Martino said most first home buyers at Loan Market were meeting with a mortgage broker before they started inspecting properties. This means they can understand how certain loan products work and the savings they can make if they have a bigger deposit. 

 
“A variety of loan products benefit first home buyers, however, they aren’t all equal and depend on your savings level. The product you initially thought was for you, may not be as competitive if your deposit size changes,” De Martino said. 

 
De Martino stressed the importance of first home buyers getting pre-approval for a home loan before they start their property search. 

 
“Pre-approval gives a first home buyer the confidence to attend an auction and bid on it with the peace of mind that they can afford the property and the repayments,” he said. 

 
Only 6% of the brokers surveyed said property investors were the main reason first home buyers were being kept out of the market. 

 
“Property Investors certainly have the benefit of existing equity in their home and certain tax advantages. First home buyers can best compete with them by building up their savings and deposit sizes,” De Martino said.  
 
 
 
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Savings holding back first home buyers

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The most interesting chart in today's RBA chart pack relates to first home buyers.
<a target="_blank" href="https://www.rba.gov.au/chart-pack/household-sector">The chart</a> suggests first home buyers are actually hovering around long term levels after the 2009 spike.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="rba_graph_two" height="322" width="400" src="/images/stories/2013/11/06/rba_graph_two.gif">
Source: ABS
That surge in FHB numbers came after Wayne Swan's GST-triggered First Home Owner Grant Boost.
Naturally that boost brought forward plenty of demand, so it's to be expected numbers would fall after the boost went back to the lower grant levels.
It also followed the re-targeting of the originating FHB grants and/or stamp duty exemptions across the states which are aimed at now encouraging FHBs to buy new homes not estabished homes.
Perhaps FHBs aren't being priced out by property investors?
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jchancellor-FAypfDUnLy

First home buyers volumes actually hovering close to long-term levels after 2009 spike: RBA chart

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The Melbourne Cup may stop the nation, but the economic impact of the event races ahead for many industries.
Consumer spending on fashion, gambling, food and entertainment is forecast to be up this year, <a target="_blank" href="https://www.smartcompany.com.au/growth/economy/34104-fashion--food--gambling-and-beauty-set-for-spring-racing-win--but-tourism-could-fall-behind">according to industry analysts IBISWorld.</a>
IBISWorld predicted in October that positive post-election consumer confidence will see Melbourne Cup Carnival spending increase by 3.5% this year to $455.5 million.
It expects fashion to be the fastest growing expenditure segment, increasing 13.9% on 2012 spending to $53.2 million.
The other key industry set to benefit is betting, with punters attending the Melbourne Cup Carnival expected to boost gambling spend by 12.4% to $68.1 million this year. Overall betting on the event is forecast to reach $806 million, an increase of 7.4% on 2012 figures.
Trackside food and beverage spending is predicted to lift by 3.3% to $167.9 million.
The Carnival reaches its peak today, with the Melbourne Cup horse race. Other key days include Derby Day (last Saturday), Oaks Day on Thursday November 7 and Stakes Day on Saturday November 9.
The Victorian Racing Club, organisers of the Melbourne Cup Carnival, released a statement with their analysis of the economic impact of the 2012 event related to tourism.
It reported that the Flemington-based event generated a value-added contribution to Victoria’s gross state product of more than $176.58 million.
This figure quantifies the money spent through Victorian businesses by out-of-state visitors specifically on purchases for the four race days.
The VRC said the Victorian economy benefited from $366.15 million in financial stimulus (gross economic benefit) generated by the Melbourne Cup Carnival, an increase of 4.9% from 2011.
It said that nationally, the event generated an economic benefit of more than $751 million in 2012, an increase of 0.7 per cent compared to 2011.
However, while some industries, particularly in Victoria, are set to profit, others may suffer due to low workplace productivity as people stop to watch the race.
AMP Capital Investors head of investment strategy and chief economist Shane Oliver did an on-the-spot calculation for SmartCompany. He suggested that if employees around the nation cease to work for half a day after watching the race, it could lead to a 0.2% drop in GDP.
“The losers are in the other states [not Victoria] where it is not a public holiday, but people may not do any work after lunch time,” he says. “Chunks of people leave work after the race.”
He speculated that office workers may be the prime culprits, as the nature of factory and services industries mean it is harder to step away from tasks.
“They may have bosses more likely to encourage them to get back to work,” he says.
Oliver says the counter argument is that the race brings a boost to consumer spending, is a great benefit to the horse racing industry and related services.
Another “offsetting positive” is the boost to the national psyche.
“You can do the maths… but a day like this can boost the national psyche and feelings of wellbeing,” he says, referring to other national sporting events that unite people.
Pitcher Partners partner Adrian Clerici agrees that the impact of the event on productivity can be countered by the chance for people to take a break, or if at work, to stop and socialise with co-workers for the afternoon.
“I think the idea of the impact of people slacking off is overplayed,” he says.
“With the digital world people are doing work at all times at home.”
And what will the economists will be up to?
“We will be watching the RBA (Reserve Bank of Australia) this afternoon – first Tuesday of the month is rate day,” says Oliver.
However, Clerici will be enjoying the race, not the rates.
“We don’t expect any rate change today…there hasn’t been one on Melbourne Cup Day for around five years,” he says.

<hr>
This article first appeared on <a target="_blank" href="https://www.smartcompany.com.au">SmartCompany</a>.
 
 
 
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