The residential transformation of St Kilda Road is set to continue into with more new apartment plans for the sought-after boulevard.

Wing Tai Asia has lodged plans for a major residential tower at 464-466 St Kilda Road, replacing the former VACC House with an 18-storey mixed-use development designed around a retained heritage podium and a sculpted contemporary tower.

The proposal, prepared under Victoria’s Significant Residential Development with Affordable Housing pathway, would deliver 325 apartments and ground-floor retail across the prominent 4,653 sqm boulevard site in Melbourne’s St Kilda Road North Precinct.

The project centres on the adaptive reuse of the site’s heritage-listed VACC Building, an eight-storey office designed by Bernard Evans that has occupied the address for decades. Planning documents state the development would involve “carefully dismantling and conserving off-site the original metal fabric of the podium visible from St Kilda Road,” before reinstating it as the defining frontage of the new scheme.

Above the restored podium, Wing Tai is proposing a curvilinear residential tower. The scheme includes 172 one-bedroom apartments, 63 two-bedroom apartments, 66 three-bedroom apartments, and 24 four-bedroom apartments, alongside two ground-floor food and beverage tenancies fronting St Kilda Road.

The tower has been designed with substantial articulation and variable setbacks to minimise perceived bulk and maintain view corridors along the boulevard. Urbis, which prepared the planning report, said the design “has been significantly articulated through a curvilinear design” with “an interplay with materials, façade expression and depth” to create visual separation and visual interest.

The proposal also includes 254 basement car spaces, landscaped pedestrian links connecting St Kilda Road and Queens Lane, and a biophilic landscape strategy featuring canopy trees, raised planters, cascading greenery and a glass oculus pool overlooking the eastern frontage.

Planning documents confirm the $270.1 million development will contribute 3 per cent of project costs to the Social Housing Growth Fund as part of the application process.

Wing Tai acquired the St Kilda Road property in 2018 alongside Abacus Property Group for $95.38 million, before later consolidating ownership of the site. The property previously served as the Victorian Automobile Chamber of Commerce headquarters for around 60 years.

The transformation of the St Kilda Rd boulevard is already beginning to materialise, with a number of high-profile projects recently completed, launched, or approaching launch as developers continue to back the long-term appeal of the precinct.

Among the most notable recent completions is Louise by Samuel Property Group, just off the strip on Queens Lane, the same pocket Hirsch &amp; Faigen recently launched The Queensbury. Mirvac is too on the same street with The Albertine, which is approaching completion.

Dexus recently secured approval for its slice of St Kilda Road, while Gurner also has approved plans for the precinct.

Joel Robinson

Wing Tai unveils 325-apartment St Kilda Road tower on former VACC House site

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

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

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

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

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

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.
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[smartcode_project_cta:default project_id=112661]

SIERA kicks off construction at Northcliffe tower Exhale

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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The Silverwater industrial park is starting to command some of the highest rental prices in Western Sydney, following a spat of recent leasing deals.
Select Fresh Providores Pty Ltd has committed to a 10-year term on a 1,125 square metre office/warehouse facility, at 7 Rachael Close.
The net rental was negotiated at $145 square metres annually – a $20 per square metre increase from the last time the building was leased four years ago.
In a separate deal, Audio, lighting and video service provider Lots of Watts signed a four-year lease at the industrial park for a 1,677 square metre warehouse/office property, at 18 Fariola Street (pictured below). The net rental was struck at $130 square metres annually.
<img src="/images/stories/2013/09/11/silverwater_sept_1.jpg" width="470" height="353" alt="silverwater_sept_1">
CBRE's Michael O’Neill and Shaun Timbrell negotiated the leases.
The Silverwater industrial estate - owned by APPF Industrial Fund, is said to attract rents of about $10 more per square metre than the average in the area.
CBRE is expecting the strong tenant demand brought on by a multi-million-dollar revamp currently underway to drive up rents even further.
The Silverwater Industrial Estate is about 36,000 square metres in size and comprises of 18 individual tenancies.
The revamp is being undertaken in stages and is expected to be completed by late 2013, "resulting in a substantial invigoration of the general industrial area bound by Fariola Street, Slough Avenue and Rachael Close", said Mr Timbrell.
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kjiminez-eaYKfU7qd2

Silverwater industrial park commanding some of Sydney's highest rental prices

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Today's tweet is one reminding us just how much property development and investment is a business process.
Matthew Lewison, managing director and CEO of <a target="_blank" href="https://www.opencorporation.com.au/">Open Corporation</a> was ruminating on this today.
He tweeted out that it's about adding value to increase your return, and remembering to go into transactions unemotional, remembering your numbers and your goals.
<a target="_blank" href="https://twitter.com/matthewlewison"><img alt="TWEETOFDAY_sept_11" height="185" width="470" src="/images/stories/2013/09/11/TWEETOFDAY_sept_11.png"></a>
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po-LsXgBTHBmX

Property investment is a business

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Since an opinion piece published by Property Observer last week, where one buyer's agent said he'd stay clear of the National Rental Affordability Scheme, another buyer's agent has come out against NRAS properties.
Last week, Todd Hunter, buyer’s agent, director and location researcher for Sydney-based wHeregroup, said that he would "<a href="https://www.propertyobserver.com.au/news/id-rather-stick-a-fork-in-my-eye-than-buy-nras-todd-hunter/2013090464795">rather stick a fork in his eye than buy NRAS</a>."
Now Propertyology's managing director, and Australia's Buyer's Agent of the Year in 2012 and 2013, Simon Pressley,  told Property Observer that he believes that NRAS properties are "terrible investments".
"NRAS is something which has attracted considerable air play and clients often ask me for my opinion on them. NRAS was introduced in July 2008 as part of the Federal Government’s (GFC) building industry stimulus package. It was designed to give the building industry a boost and address the growing shortfall of affordable accommodation. It is a not a property investment scheme," Pressley said.
“There are tax incentives for developers on projects which meet specific NRAS criteria. Similarly, there are tax incentives of up to $9,140pa to property investors who elect to buy one of the NRAS properties," he said.
Pointing out that on the face of the scheme, the rental returns and tax incentives look great, he believes otherwise.
“If they were such good investments why wouldn’t the federal government themselves hold on to them? Or, the state government? Or, the local councils? Instead, the government is trying to lure investors via tax incentives and rental guarantees on properties that are over-priced, mass-produced, and offer very limited capital growth potential," he said.
He warned that marketing companies promoting NRAS on behalf of developers often lead with 'positive geared' and 'rent guaranteed' tags.
“I give NRAS properties a big “Buyer Beware”! Whether it’s a new housing estate or a large apartment block, owners of NRAS properties must have their property managed by NRAS agents and the properties can only be rented to NRAS eligible tenants."
He pointed to property management fees around the 13% mark, compared to 8.5% for standard residential, rents at a 20% discount and "quite involved" lease documents diluting the extra tax incentives.
“A number of banks are not comfortable lending money against NRAS properties. The banks which are comfortable with them require a minimum 20% deposit because mortgage insurers will not accept the properties," he said.
“Now, picture this, you purchased a NRAS property a few years ago and an investor within the same complex or estate as yours now wants to sell. The extra red tape and constraints imposed on owners will result in less interested buyers for the property. They certainly will not be in a position to attract a premium sale price and will probably have to discount the price substantially in order to move on. The minute this sale occurs a benchmark has been set for valuers and potential buyers of your property.  In addition to all of this, the fact that NRAS properties are located within large (mass-produced) complexes and estates places an additional ‘ceiling’ on capital growth.”
<hr>
Do you have a different view on NRAS?
Email: <a target="_blank" href="mailto:%20jduke@propertyobserver.com.au">jduke@propertyobserver.com.au </a>to have your say
Corrections from Simon Pressley:
I am currently purchasing an NRAS property with 10% deposit off from a large financial institution
If you want to sell you can opt out of the NRAS scheme if desired to "attract more buyers".   
You are not locked in for the full ten years in any way
 
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jduke-EHk3XBmHkn

Another expert comes out against NRAS

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A wave of cashed up international investors are on their way to Australia, with an estimated war chest of about $18.5 billion ready to be invested in commercial property assets around the country.
A new report from Cushman and Wakefield - titled “Capital Flows: How heavy is the weight of money?” - showed that more than 50 offshore firms are scouting the Australian commercial property market for assets, with an estimated war chest of US$16.5 (AU$18.5bn) billion in offshore money.
Office transactions
<img style="display: block; margin-left: auto; margin-right: auto;" alt="office_transactions" height="189" width="342" src="/images/stories/2013/09/10/office_transactions.png">
Source: Cushman &amp; Wakefield
And leading that overseas charge, the report said were the Singaporean firms, with an investment allocation totalling an estimated US$4.1 billion, followed the US, Malaysia and China.????
Cushman &amp; Wakefield Associate Director of Research and consultancy, Peter Ainge, said that up until now the major international investors had merely “dipped their toes in the water” when it came to Australian acquisitions.
"A more direct and aggressive move is on the short term cards," said Mr Ainge.
Investment managers, equity funds and open ended funds, the report said, were expected to have the largest allocation for Australian property investments, totalling about US$3.8 billion.
<img style="font-size: 0.8em; display: block; margin-left: auto; margin-right: auto;" alt="capital-inflows-chart-of-the-week-sept-10" height="427" width="477" src="/images/stories/2013/09/10/capital-inflows-chart-of-the-week-sept-10.jpg">
Source: Real Capital Analytics
"The next biggest category was the pension funds, with an estimated US$3.6 billion slated for investment. Among the pension funds identified were the Teachers Insurance and Annuity Association; College Retirement Equities Fund (TIAA-CREF) from America and the National Pension Service from Korea.
“Existing asset owners are approaching a critical stage, as the intense weight of international money coupled with the growing investment capacity of domestic superannuation firms creates a scenario in which it may be attractive not to take their assets to market,” said Cushman &amp; Wakefield director of investment sales, Mr Tony Dixon.
<img style="display: block; margin-left: auto; margin-right: auto;" alt="yield_spread" height="222" width="334" src="/images/stories/2013/09/10/yield_spread.png">
Source: Cushman &amp; Wakefield
The report also highlighted that while offshore investors have been focused on core assets, with many adopting a “trophy hunter” approach, "the lack of investment opportunities is expected to see these investors move up the risk curve towards core plus and value add opportunities."
“Some offshore investors with firm ambitions to invest in Australia may find they need to broaden their investment mandates beyond the prime assets and core markets,” said Mr Ainge.
“While this is yet to materialise into actual purchases at this stage, Cushman &amp; Wakefield can confirm that enquiry levels for secondary assets have increased.
"Hence any cap rate compression in the secondary asset market is likely to be driven by an increased weight of money rather than underlying property fundamentals."
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Cashed up foreign investors scouting Australian commercial property market: Cushman & Wakefield

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<img style="display: block; margin-left: auto; margin-right: auto;" alt="knightfranklogojuly17" height="73" width="200" src="/images/stories/2013/09/10/knightfranklogojuly17.jpg">
Agent: Brooke Railton<img style="float: right;" alt="brooke-railton-profile" height="225" width="150" src="/images/stories/2013/09/10/brooke-railton-profile.jpg">
Position: Manager, industrial
Company: Knight Frank
Office Location: South Sydney
1. How long have you been in the industry?
I’ve been in the industry for about eight years, as I started working in agency throughout university. I spent two years working in London and I’ve been working in the agency in South Sydney for about six years.
 
2. What’s happening in the area you specialise in?
South Sydney continues to go through incredible change which is really exciting to be a part of. Traditional industrial areas are being rezoned to allow for residential and commercial developments. This makes my role more geographical than sector specific having worked on business/office space, warehousing, residential site sales and adaptive reuse.
There are some great character buildings in the Alexandria/Rosebery area ripe for adaptive re-use and the demand from the end user is very strong as tenants move from city fringe locations. Concepts such as Kitchen by Mike, The Grounds of Alexandria and the new Fratelli Fresh in Alexandria bring a fresh dynamic and amenity to the area.
 
3. Describe the most interesting property you have sold
We have recently been marketing an industrial property in the south Sydney suburb of St Peters which has 13 older style buildings and is about 95% leased to a range of creative users. It was really interesting looking at the number of ways the property could be adapted or redeveloped and discussing the different viewpoints with purchasers.
 
4. What are the ingredients to being successful in your job? 
Having a thick skin! Perseverance and attention to detail are key as well as building trusting relationships with clients.
 
5. What aspects of your role do you enjoy the most?
No two properties are the same and I like that each one presents a new challenge and requires a considered strategy. Seeing the potential in a property and working with clients to achieve this is also very rewarding as is finding the right property for a tenant.
I also don’t mind inspecting the fashion headquarters that are in Alexandria!
 
6. Where would you invest a spare $750,000?
I’d buy a residential property.
 
7. Which football team do you support?
I grew up in Brisbane so I’m torn between the Lions and Swannies. 
 
8. What’s your favourite app or techno gadget?
The Knight Frank app is great for ogling the amazing properties for sale around the world - you can search by your interests such as skiing, golfing or vineyards! And the Run Keeper app keeps me motivated.
9. How do you use social media?
Keeping up to date with colleagues, friends and family - I also like to follow a range of blogs from architecture design, health and business leaders.</body></html>

In profile: Knight Frank's manager, industrial South Sydney, Brooke Railton

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The past three years have seen solid 9-10% per annum returns from unlisted commercial property. This has been driven by a recovery from the GFC related slump of 2008 and 2009, moderate economic growth and more recently as the desire for decent income bearing investments from investors has pushed down investment yields pretty much across the board, but in particular, for retail property.
Reflecting the search for yield listed property, or Australian Real Estate Investment Trusts (AREITS), have been even stronger with gains of around 17% over the last year.
Going forward returns are likely slow, but still remain solid reflecting a range of contradictory influences.
The biggest drag in the short term will be the soft economy. While recession is likely to be avoided in the year ahead, growth is likely to be sub-par and unemployment will likely rise. This will mean subdued space demand and softish retail sales growth for a while yet although some improvement should start to become evident in 2014-15 as the benefit of lower interest rates and the fall in the Australian dollar flow through.
Increasing supply, particularly in office space in the major capital cities, will likely combine with subdued space demand to ensure weak rental growth. Average office vacancy rates are already 10% and are likely to remain around this level for the next few years.
Finally, investor demand for decent yield bearing investments will continue to benefit commercial property, particularly with average commercial property yields of just below 7% continuing to offer a decent yield pick up over Australian ten year bond yields of around 4%. However, yield related investor demand may slow a bit as improving global growth combined with a move by the US Federal Reserve to slow its buying of US Treasury Bonds puts upward pressure on government bond yields globally and in Australia.
The end result is that investment returns for unlisted commercial property are likely to slow to around 8% over the year ahead on the back of constrained space demand, increasing supply and solid but slowing investor demand. Within unlisted commercial property the main opportunities are likely to be in industrial property reflecting its relatively attractive yield levels and quality retail property in strong population corridors.
Retail property in low growth areas remains particularly vulnerable and office property is likely to underperform thanks to increasing levels of supply and subdued space demand.
AREITS having outperformed over the last few years are likely to perform in line or even lag unlisted going forward. Distribution yields have fallen to 5.5% as they have benefitted the most from falling bond yields. This leaves them vulnerable as bond yields move higher over time.

<hr>
Shane Oliver is capital head of investment strategy for <a href="https://www.amp.com.au/wps/portal/au" target="_blank">AMP</a>.
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Commercial property returns likely to slow, but will still remain solid: Shane Oliver

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1. Retail lease or general commercial lease?
Every Australian state and territory has specific legislation relating to retail leases. This legislation is designed to provide additional protections to retail tenants, and impose a range of obligations on commercial landlords, when compared to non-retail commercial leases.
As soon as you’ve decided to enter into a commercial lease you should check whether the relevant retail leasing legislation applies.
Your commercial leasing lawyer will of course be able to assist, but this is something you should keep an eye out for yourself.
2. Term of the lease and options
One of the most important clauses to keep an eye out for when entering into a commercial lease is the term of the lease, and any options to renew the lease. It’s generally in the landlord’s best interests to ask for a longer initial lease term (for example five or 10 years), whilst the tenant is likely to be keener on a shorter period (three years is a good standard).
A start-up tenant is likely either to go out of business, or expand rapidly and need to move to larger premises, so is further incentivised to agree to only a short lease period. Obviously the type of property being leased, as well as the location, will have an effect on the term of the lease each party would like best.
Make sure you also take a good look at the options clause. An option allows the tenant to continue leasing the property at the term of the lease for a predetermined amount. It’s generally in both the tenant and the landlord’s interest to include an option clause, giving the landlord potential greater security of income, and the tenant the ability to make longer term plans for their business.
3. Rent and security
 
Obviously the rent clause is one of the most important clauses in a commercial lease agreement. Rent represents the landlord’s return from its ownership of the property and is a significant expense for the tenant in operating its business.
The rent for the initial term is specified in the lease. Any rent review (i.e. change in the rent) will also be specified in the lease.
The three most common review methods are <a target="_blank" rel="nofollow" href="https://www.propertyobserver.com.au/https://www.abs.gov.au/ausstats/abs@.nsf/mf/6401.0">CPI</a>, fixed and market. The relevant review method is generally applied annually throughout the term of the lease. It is common for CPI or fixed reviews during the term of a lease and for a market review to occur at the expiry of the initial term and each option period.
In addition to rent, the landlord may seek security from the tenant to protect the landlord against default of the tenant (e.g. not paying rent). It is common for security to be for an amount equal to three to six months’ rent and to be by way of bank guarantee (if the tenant is an individual) or personal guarantee (if the tenant is a company, in which case the company’s directors provide personal guarantees). Obviously, as a tenant, you will want to avoid giving any form of guarantee.
4. Termination
 
Finally, make sure you review the termination clause in the lease. You need to be clear on what circumstances will lead to the termination of the lease. If you’re worried that the termination clause is overly onerous, take action.
To conclude
 
There are obviously a number of clauses you need to review in detail before signing a commercial lease. It’s critical that you have a <a target="_blank" rel="nofollow" href="https://legalvision.com.au/need-a-commercial-leasing-lawyer/">commercial leasing lawyer</a> review the lease before you sign it.
 
<hr>
 Lachlan McKnight is the CEO and Co-Founder of <a target="_blank" href="https://www.legalvision.com.au/">LegalVision</a>, which provides online legal services to the SME market.
This article first appeared on <a target="_blank" rel="nofollow" href="https://www.startupsmart.com.au/">StartupSmart</a>.
 
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Four things to look out for with commercial lease agreements: Lachlan McKnight

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The promised housing correction has totally gone up in smoke in Sydney with prices moving well above previous peaks.
There have been a raft of articles discussing the auction frenzy at the weekend in Sydney, with <a href="https://www.news.com.au/realestate/a-plain-house-in-an-average-suburb-has-sold-for-2385-million-as-desperate-buyers-keep-blowing-their-budgets/story-fncq3era-1226714027139" target="_blank">some examples</a> of crazy bidding occurring and the usual generic comments blaming Asian buyers for spiralling prices.
Historically, auction clearance rates (although auctions only represent a fraction of the total market) have been seen as a <a href="https://blog.rpdata.com/2010/07/auction-clearance-rates-are-an-important-lead-indicator/" target="_blank">leading indicator</a> of property price action in the two major capital cities Sydney and Melbourne.
Elsewhere in Australia, there are so few auctions held that the trend is of far less significance.
This may go some way to explaining why only four months ago there were all kinds of hare-brained theories being bandied around to explain why Sydney prices were 'falling' in spite of auction clearance rates and activity which were clearly booming.
Some suggested that more properties were being sold into a falling market, which seemed incredibly unlikely given the sales figures that were being reported.
There were other theories as recently as the first week of June this year that a few weeks worth of soft price action was a result of an instant consumer backlash against the federal budget (it is highly unlikely that property prices could respond immediately to a budget given the settlement periods involved).
Of course, since that time prices have reportedly boomed in Sydney and Melbourne.
In truth though, this just goes to show that the shorter the timeframe for considering property price movements, the greater the margin of error for misreading the trend.
All that we can really say is that (a) historically auction clearance rates have been a leading indicator of property price movements, (b) auction clearance rates are close to record heights in Sydney at an outlandish 88%, and (c) therefore, it is likely that property price gains will continue at the least through the remainder of 2013.
I note that the sector of the market I called as being the outperformer (the inner west - and in particular the suburb of Erskineville) is still recording incredible clearance rates with 90% at the weekend.
It was <a href="https://smh.domain.com.au/real-estate-news/a-vote-for-real-estate-20130907-2tc02" target="_blank">reported</a> that that one buyer paid $890,000 for a crumbling hovel in 'Erko', a sure sign of a market entering a period of temporary insanity and sky-high prices.
Prices in Erskineville in the inner west are going berserk as I specifically predicted on this blog.
For this reason, I would suggest that buyers today begin to consider other sectors of the harbour city - in particular a few of those beautifully located suburbs on the dark side (i.e. to the north of the coat-hanger).

<hr>
Pete Wargent is the co-founder of <a rel="nofollow" target="_blank" href="https://allenwargent.com/">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a rel="nofollow" target="_blank" href="https://petewargent.blogspot.com/">blogger</a>.
His new book '<a rel="nofollow" target="_blank" href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx">Four Green Houses and a Red Hotel</a>' was released on 1 September 2013.
 
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Promised Sydney housing correction up in smoke as market remains hot: Pete Wargent

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Property investment and real estate expert, John McGrath, sat down with Property Observer to discuss how the markets are currently performing, where he considers the hotspots to be, and how to get the most from a suburb.
{qtube vid:=pw5iS6-gEx4&amp;feature=youtu.be}
Transcript:
0.03
I often say to people "which market?" because there are multiple markets within Australia, there are multiple markets within each capital city. I'll talk and drill down into the different price ranges, the different geographic locations, the different style of property. But generally speaking, Australia is in a pretty good state. We've been through a few tough years like the rest of the world, property has been knocked around a little bit, but not as much as perhaps some other asset classes. I think we're at the beginning of the next cycle; recovery with growth for three to five years. I think we're at the beginning of that. 
Sydney is probably leading the way slightly for the rest of the country. Sydney is a little bit further progressed with regard to the demand out there, but there are cities like Melbourne where the market is very, very strong. Cities like Brisbane and the Gold Coast I think actually offer outstanding value for people, they have been hit pretty hard and I think are going to bounce back very strongly over the next 12 to 18 months.
0.59
I think there are some basic things there nowadays via the internet; there's really no excuse for not doing all your due diligence and research. As a buyer you should be turning up with better information, perhaps better educated than the agent, because you're focused on a specific type of property, price range and area, while agents often have to handle multiple price ranges and property. You really should be researching very hard to make sure you know what good value looks like.
I also try to give some practical tips. I suggest people don't look for bargains, because bargains are rarely great properties for the future. They're normally things that are cheap because no one wants to buy them. So I think as the market improves, I say to people just look for a fair market value property that has capital growth opportunities written all over it.
I'm a great believer in capital growth as opposed to yield. Yield is relevant and important but at the end of the day whether your investment is yielding you 4% or 5%, it is not going to change your world. If you pick the next growth suburb or one of the next sweet spots around the country, then you can find that your wealth can increase almost over night. Over the next few years you can have a dramatic uplift in your wealth.
2.08
Be prepared to take some calculated risks. We know the obvious ones, it's not hard to know that <a href="/news">Albert Park</a> is a great area to buy in, or in Sydney, Paddington. But what's the next Albert Park for Melbourne? Have a look around at what areas are on the fringe geographically, where are the trendy new cafes, retail outlets, strip shopping starting to move in? What has the feeling, the earmarks of a great capital growth area?
What areas are going to benefit from infrastructure that's about to be put into the city? So have a look at is there going to be a new light rail? Is there a new rail system being put in? Is there a new roadway that's going to make an area better or make an area that's going to be more accessible to the CBD?
Have a look at all of those sorts of things and then be prepared to take a couple of calculated risks as to where you're prepared to invest your money.
2.54
Especially cities like Sydney, Melbourne and Brisbane, as they become bigger, harder to access, to get in and out of. A lot of people want to have themselves right there on the doorstep of the city, and of course that's where a lot of the cultural pursuits, a lot of the activities and the best restaurants are going to be within that 10 kilometre radius. So I always say to people draw a circle around the CBD that you choose, and all those cities are great investments, and have a look for where are the areas that are less fashionable at this point. And what's happening in those areas? Are they industrial but becoming more residential? Or are they heavy industrial and going to remain that way? Is something going to happen that sparks off interest in a suburb that adjoins a really popular trendy area?
Have a look around, get out on the street, drive around, walk around, go to cafes. Speak to different agents, really research the market until you know more than the agent.  
3.48
A lot of people call them 'grungy suburbs'. They're often trendy for renters and they're often near universities and educational pursuits and they sort of haven't quite had the polish put on them yet. But they have got really strong growth opportunities. 
In Sydney it's areas like <a href="/news">Dulwich Hill</a>, <a href="/news">St Peters</a> and <a href="/news">Tempe</a> that are not the <a href="/news">Paddingtons</a> and the <a href="/news">Surry Hills</a>, but they're only about four or five kilometres away and they're about 40% less expensive to buy into those areas. So that's what I'm looking for.
Note: John McGrath was interviewed at the Property Millionaires Tour, held at the Sofitel in Melbourne.
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Exclusive interview with property investment and real estate expert, John McGrath

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Yesterday, we ran a story that <a target="_blank" href="https://www.propertyobserver.com.au/news/housing-market-downturn-next-year-george-fokas/2013090864866">one investment mentor is expecting there to be a downturn</a> in property prices. It received some heated commentry from readers in response.
Today, we ask whether you think there will be a downturn or an upturn, and by how much?
 
<img alt="poll-results-sept-11" height="357" width="470" src="/images/stories/2013/09/11/poll-results-sept-11.jpg">
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