<a href="https://www.apartments.com.au/developers/sunland-group">Sunland Group</a> has officially lodged plans for its first Gold Coast apartment project since the departure of the Abedian family from the company three years ago, unveiling a new high-rise proposal for a prominent Broadbeach corner site on Old Burleigh Road.

The application was submitted by an entity directed by Tom Jamieson, stepson of longtime Sunland leader Soheil Abedian, and Riaz Rezvanipour, brother-in-law of Sahba Abedian, Soheil’s son.

Sunland acquired the 1,283 sqm site on the corner of Old Burleigh Road and Armrick Avenue for $9.5 million late last year and is now seeking approval for a <a href="https://www.apartments.com.au/new-apartments/99-101-old-burleigh-road-broadbeach-qld-4218">42-storey tower with 81 apartments</a>.

<img alt="First look: Sunland Group returns to Broadbeach with new Old Burleigh Road tower plans" data-entity-type="file" data-entity-uuid="fea2946d-90ee-4cfc-babe-2a8ad5db2cb6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers.png?VersionId=BV0fihJw31nDIQ8ozY_h3GbS8mxDyhnm" />

Designed by <a href="https://www.apartments.com.au/architects/contreras-earl-architecture">Contreras Earl Architecture</a>, the proposed tower at 99-101 Old Burleigh Road would deliver a predominantly larger-format apartment mix aimed at the owner-occupier market. Plans include 17 two-bedroom apartments, 55 three-bedroom apartments, and nine four-bedroom residences across 35 residential levels.

The development also incorporates three basement levels, four podium parking levels, two levels of communal recreation facilities, and rooftop plant and equipment. A total of 189 car spaces are proposed, significantly exceeding the 90 spaces required under the planning scheme.

The architecture adopts a sculpted, curvilinear form, with deep wraparound balconies and integrated landscaping intended to soften the tower’s vertical expression. The planning report states the building’s “slender footprint/form provides a complimentary yet varied built form within the local streetscape” and contributes to “a varied, yet ordered skyline.”

Contreras Earl noted in its Architectural Statement that from the early stages, the project addressed a fundamental challenge: how to accommodate the required residential yield while avoiding the conventional model of a tower sitting on a rigid, fully resolved parking podium.

“The most direct response would have been to consolidate parking into a singular, flat podium and extrude a repetitive tower above,” the statement said. “While efficient, this approach would result in a consolidated built form with limited engagement with the surrounding landscape and public realm.”

Instead, the conventional podium model was “deliberately rejected”. The architects described the base of the building as “a landscaped architectural condition where structure, planting and circulation are integrated”.

“Rather than presenting a continuous built mass, the base of the building is articulated through a series of concrete planter elements that organise the podium into a fragmented system,” the statement said. “This approach reduces the perceived bulk of the lower levels while establishing a more permeable interface with the streetscape and adjacent open space.”

<img alt="Sunland" data-entity-type="file" data-entity-uuid="923fad8d-c960-4527-8fbe-975cf1ddf88d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%2010.32.03%E2%80%AFAM.png?VersionId=pngwb0hYOIUpq9vDw6F2EsOiVuHF3DiX" />

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The site sits within the High Density Residential Zone and inside the City of Gold Coast’s unrestricted “HX” building height area, where the planning framework anticipates intensified residential development tied to the expanding light rail corridor. The planning report notes the area is undergoing “transition toward more intense development forms” given its proximity to Broadbeach, Surfers Paradise, and high-frequency public transport infrastructure.

Positioned directly opposite Broadbeach Park and within walking distance of Florida Gardens light rail station, the development would sit among a rapidly evolving stretch of Old Burleigh Road that has become one of the Gold Coast’s most active apartment development corridors.

The application joins a growing pipeline of luxury residential projects reshaping Broadbeach, including nearby developments by 5Point Projects, Polycell, and Graya.

The planning report argues the project contributes toward the Gold Coast’s long-term housing targets under the South East Queensland Regional Plan, which forecasts the need for more than 100,000 additional high-rise dwellings across the city by 2046.

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The Abedian family departed Sunland Group in late 2023, ending a four-decade association with the company, and subsequently established the private development firm Abedian &amp; Co. The group is currently delivering <a href="https://www.apartments.com.au/new-apartments/greenmount-residences-cnr-hill-street-and-marine-parade-coolangatta-qld-4225">Greenmount Residences</a> at Rainbow Bay and recently launched <a href="https://www.apartments.com.au/new-apartments/18-mary-avenue-14-18-mary-avenue-broadbeach-qld-4218">18 Mary Avenue</a> in Broadbeach.
</section>

Joel Robinson

First look: Sunland Group returns to Broadbeach new apartment market with new Old Burleigh Road tower plans

The Minns Labor Government has established the new Bays West Delivery Authority to lead the development&nbsp;of the Bays West Precinct and Blackwattle Bay Precinct.&nbsp;

The Authority is charged with creating Sydney’s newest precinct, a thriving, connected, sustainable hub with White Bay Power Station as its cultural heart. Its vision is to build on the area’s natural, cultural and industrial history to shape a vibrant new neighbourhood.

The precinct will deliver up to 8,500 well-located homes, including a minimum of 10 per cent affordable and essential worker homes. Combine new housing with public open space, opening public access to the waterfront for the first time in more than 100 years, while retaining important deep-water facilities to support Sydney’s working harbour.

Located just minutes from the Sydney CBD and connected to a world-class metro, ferry, walking and cycling links, the Bays West precinct will rebalance housing growth towards well-serviced inner-city locations and help tackle the state’s housing crisis.

The Bays West Delivery Authority,&nbsp;an agency of the Department of Planning, Housing and Infrastructure, will report to the NSW Minister for Lands and Property who already has oversight of major precinct renewal projects including at Blackwattle Bay and Barangaroo.

As part of the broader Bays West transformation, the Minns Government recently announced that a proposal from Lendlease to redevelop part of the Bays West Precinct has progressed to Stage 2 of the NSW Government’s unsolicited proposals process.

<img alt="Sydney" data-entity-type="file" data-entity-uuid="2ed71eb9-d8e8-4fa7-b9d1-de4531dcf2f3" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-25%20at%209.42.31%E2%80%AFAM.png?VersionId=IDryFIbped9SNDg72LEN_EecvhUsOPvp" />

The Minns Labor Government has also confirmed the Bays West precinct will have a new suburb name. This will be the first major suburb built in close proximity to Sydney’s CBD in decades and will encompass the area currently being referred to as Bays West, including Glebe Island and the White Bay Power Station. Served by a new Metro station just five minutes from the CBD, it will become one of the most populous suburbs in the Inner West and one of Sydney’s premier cultural destinations.

An early works program is taking shape, which&nbsp;includes the first stages of an international design competition.&nbsp;

The aim of the Bays West&nbsp;International&nbsp;Design Competition is to&nbsp;ensure design excellence is embedded in the project from the start. The competition will deliver an&nbsp;urban framework that defines the character, ambition and long-term identity of&nbsp;this&nbsp;former industrial precinct as it transitions to a vibrant, inclusive and sustainable residential&nbsp;neighbourhood.

The competition will be led by the Bays West Delivery Authority in partnership with Government Architect NSW.&nbsp;

It will launch with an invitation for a global Expressions of Interest, before moving to an invitation-only stage that will be assessed by a panel that&nbsp;will provide advice to Cabinet who will select a winner.

Premier of NSW, Chris Minns said the establishment of the new Authority is the first step in transforming the Bays West precinct into a vibrant, livable suburb minutes from the Sydney CBD and two stops from Hunter St Station on the Metro West line.

“The Authority will deliver well-located homes close to the heart of the city and integrate the new precinct with Blackwattle Bay and the new Sydney Fish Market.

“This is a generational opportunity to build a new suburb on the city’s edge and open the harbour foreshore to the public for the first time in a century.”&nbsp;

Minister for Lands and Property Steve Kamper said the new Bays West Delivery Authority established by the Minns Government will turbocharge the development of Sydney’s newest suburb.

“The Authority is working at a record pace to deliver an international design competition, planning pathways and a financial model so that this development benefits Sydney with well-designed homes in a central location, close to public transport, jobs, entertainment and essential services.

“If we want Sydney to stay liveable and affordable, we need to be bold about using underutilised government-owned land to deliver homes for the future while making sure essential working harbour functions can be accommodated.”

Bays West Delivery Authority established to "turbocharge" Sydney’s newest suburb

Around 400 additional homes could be built at Southwark Grounds on Port Road, lifting total site capacity from 1300 to around 1700 dwellings.

A recently approved code amendment would allow apartment towers of up to 14 storeys in some areas of Renewal SA’s redevelopment of the former West End Brewery.

Renewal SA Acting Chief Executive Shane Wingard said he welcomed the code amendment, with the increase in heights and homes making a positive impact on the supply of high-quality, well-connected housing close to the city.

“By going higher across some parts of Southwark Grounds, we are adding a substantial number of very well-located homes with little impact on project delivery time or planned open space,” Mr Wingard said.

Since the project officially launched in 2025, Mr Wingard said more than 12,000 enquiries had been received about living at Southwark Grounds.

“The very strong early interest we’ve seen since homes were first released in the precinct reinforces our plans to create more housing opportunities,” he said.

The Southwark Grounds code amendment was launched in December last year, with community engagement undertaken over five weeks from January.

It proposed increasing maximum building heights from eight to 14 storeys on the eastern section of Southwark Grounds, and to 12 storeys across the remainder of the site, with minimum building heights ranging from two to four storeys.

The code amendment was implemented through an Early Commencement policy in late January, allowing developers to quickly explore the viability of increased height and housing yield while other planning processes continue.

One of the first developers delivering apartment sites have already finalised redesigns to increase the number of apartments following the code amendment.

Samaras’ development adjacent to the future Colonel Light Park is now planning to deliver 125 apartments across 11 storeys, significantly greater than original plans of around 50 apartments across four storeys.

The developer is also exploring the potential for additional affordable housing outcomes.

Most of the apartments at Southwark Grounds will be delivered within a master-planned precinct on a large parcel of land on the eastern portion of the site, covering around two-thirds of its 8.4 hectares.

Wingard said detailed precinct planning over the coming months may identify further opportunities to increase yield further that could see total apartment numbers at Southwark Grounds, exceed this number.

Affordable homes at Southwark Grounds will also see a net increase, with Renewal SA maintaining its commitment to a minimum of 20 per cent affordable housing across the development.

&nbsp;

&nbsp;

Civil works have begun across the site, with construction under way on the first new roads surrounding a townhouse precinct in the south‑west corner of Southwark Grounds. This includes Renewal SA’s 17 Founder’s Row homes, which are on track for completion by Christmas.

“We expect to have people living at Southwark Grounds by the end of the year, so delivering roads and public spaces for those residents is among our highest priorities.”

Construction of 40 townhouses off Anderson Street, known as West Village and being delivered by Contour, is forecast to begin in mid‑2026. Kolabb’s Anderson Lane development will follow shortly after, delivering a further 26 townhouses.

Southwark Grounds is a state government‑led urban renewal project now set to deliver around 1,700 homes over the next decade.

Homes will be supported by a supermarket, a range of retail and hospitality offerings anchored by a revitalised Walkerville Brew Tower, a childcare centre, car parking and well‑connected public spaces.

400 new homes planned for Adelaide's former West End Brewery site

Brisbane developer&nbsp;<a href="https://www.apartments.com.au/developers/cavcorp">Cavcorp</a> has lodged plans for a new mixed-use residential development at <a href="https://www.apartments.com.au/new-apartments/55-wyandra-street-teneriffe-qld-4005">55 Wyandra Street</a>, Teneriffe, anchored by an 85-metre public laneway designed to reconnect the suburb’s riverfront with the Gasworks precinct.

The buildings, known as Teneriffe House and Teneriffe Lane, would replace the existing Queensland Cotton head office site with a 15-storey residential tower transitioning to eight storeys toward Helen Street. The project has been designed by Plazibat Architects and lodged as a code assessable development application for 93 apartments across a 3,401 sqm mixed-use site within the Newstead and Teneriffe Waterfront neighbourhood plan.

Central to the scheme is the transformation of an existing service easement into a publicly accessible cross-block connection linking Wyandra and Helen Streets. Cavcorp says the new laneway will act as both a pedestrian shortcut and a landscaped civic space between the Teneriffe Riverwalk, ferry terminal, and Gasworks precinct.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="26e7f058-b065-4de8-b13d-a2b8cb64dfcc" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/bldg.png?VersionId=sELS0ZKYi361oYipUa1BIKfe_.DLZoFV" />

“The revised proposal delivers a legacy public-realm cross-block link, permanently secured for community use, transforming an existing private easement into a safe, high-quality pedestrian connection between the Teneriffe heritage riverwalk and the Gasworks–Long Island precinct,” the planning report states.

The laneway will sit beneath a large subtropical loggia integrated into the podium levels of the development. The design incorporates deep landscaping, water gardens, lobby spaces, business lounges, and ground-floor apartments to create what Cavcorp describes as a climate-responsive “urban verandah.”

The tower itself has been designed as a slender form with recessed floorplates and curved translucent corners inspired by contemporary Japanese architecture. The building height aligns with the Commercial Road precinct controls, which permit towers up to 15 storeys within proximity to Longland Street.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="a8a17d40-43b6-4718-b3fd-67676fcbb485" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/pers%202_1.png?VersionId=i3VwDtp5AmL_8InW7w4qRbDFEpb744Jt" />

The project will comprise a mix of larger-format apartments aimed at owner-occupiers, downsizers, and families. The proposed apartment mix includes 11 loggia apartments across the lower levels, 50 four-bedroom Sky-Terrace apartments from levels three to seven, and 32 Sky-Pool Homes occupying the upper tower levels. The Sky-Pool Homes will feature private thermal plunge pools integrated into oversized balconies.

According to the application, the apartments are intended to reinterpret the scale and character of Teneriffe’s woolstore conversions and Queensland homes within a vertical residential format.

“The sky-pool homes build on Cavcorp’s previous projects and introduce a distinct apartment typology to Teneriffe, informed by both local and international precedent and responding to an identified market demand for enhanced safety, space and amenity,” the planning submission notes.

A major focus of the proposal is its five-level wellness and lifestyle offering, extending from the basement through to the rooftop.

Amenities proposed include a rooftop Swim &amp; Racquet Club with a 25-metre Olympic lap pool and tennis court, coworking spaces and libraries, golf simulators, wine storage, concierge facilities, business lounges, pet wash areas, and rooftop longevity-focused wellness spaces with spas, outdoor fitness zones, and landscaped terraces.

<img alt="First Look: Cavcorp unveils Teneriffe House and Teneriffe Lane plans for landmark wellness tower in Teneriffe" data-entity-type="file" data-entity-uuid="944b352c-49b9-4247-a4c6-5967b4b69fda" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/amenity.png?VersionId=Ed_qKjAtMwFT.5gfl3jiA9QwdWxSMsaX" />

All parking will be concealed within basement levels accessed from Wyandra and Helen Streets. Cavcorp says the deep-basement engineering approach allows the entire ground plane to prioritise landscaping, pedestrian movement, and active frontage rather than vehicle infrastructure.

The development continues Cavcorp’s concentration in Newstead and Teneriffe, where the Brisbane developer has delivered a number of apartment projects including Lucent, Le Bain, and Luminare, as well as the Long Island Wellness Precinct nearby. Several of those projects have received national design and architecture awards, including recognition under Brisbane’s “Buildings that Breathe” program.

Cavcorp unveils wellness-focused Teneriffe House and Teneriffe Lane apartment buildings

Focus Group Investments has lodged plans for a new apartment development at <a href="https://www.apartments.com.au/new-apartments/64-70-hanover-street-fitzroy-vic-3065">64–70 Hanover Street</a> in Fitzroy, seeking to utilise the Victorian Government’s recently introduced Great Design Fast Track pathway to accelerate approvals for the project.

The proposal is among the latest developments to emerge through the state-led initiative, which was established to fast-track well-designed residential projects in activity centres and transport-connected inner-city locations. The pathway allows qualifying developments that meet elevated design and housing benchmarks to bypass traditional council planning timeframes and instead be assessed directly by the Department of Transport and Planning.

Designed by SJB, the development will comprise a mix of apartments above activated lower levels, with a strong focus on architectural articulation, landscaping, and communal amenity. The design response seeks to balance the industrial character of Richmond’s former warehouse precincts with a more contemporary residential form.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="abea51cc-d85b-479e-9aef-a589f3b37ca7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ground.png?VersionId=e1Kf8EyPWwyiVumtqQ4rM5S4GpOR3CCz" />

Proposed are 63 new dwellings, a wide ranging mix of studio, one-, two-, and three-bedroom apartments, and townhouses and duplexes. They will be spread across a part-three, part-eight storey building.

The Planning and Urban Context Report by Tract says the development is of an "exemplary architectural standard" and has been carefully crafted by SJB Architects.

"Dwellings&nbsp;will benefit from excellent access to natural light, cross-ventilation opportunities and extensive communal space," the report noted.

The architectural material highlights the project’s integration of landscaped elements and communal spaces throughout the building. The proposal also incorporates sustainability initiatives aligned with the Victorian Government’s push for higher-performing apartment developments under the fast-track program.

The Great Design Fast Track was unveiled by the Victorian Government in 2024 as part of a broader housing supply strategy aimed at accelerating the delivery of new homes. Projects assessed through the pathway must demonstrate high-quality architecture, sustainability outcomes, and housing diversity while being located close to public transport and existing infrastructure.

<img alt="First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Richmond apartments" data-entity-type="file" data-entity-uuid="afdbe834-8dc4-4a77-a943-ba07bc927348" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/site_11.png?VersionId=0J657j.TaChAZfp93wqJYBTqSsnREJx2" />

Focus Group, founder and led by Paul De Lutiis, is increasingly active across Melbourne’s inner suburbs, targeting well-connected urban renewal locations suited to medium and higher-density residential development. The Fitzroy proposal continues that strategy, leveraging the area’s strong transport links, established retail amenity, and proximity to the CBD.

Fitzroy has been one of the most popular spots for developers and buyers in recent years. The likes of PACE Development Group, SMA Projects, Crema Group and Chapter Group, currently selling projects in the suburb.

First look: Focus Group Investments taps Victoria’s Great Design Fast Track for Fitzroy apartments

CBRE

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Performance in 2017 will differ markedly across the major cities throughout Australia as further divergence will occur in the hotel sector, according to CBRE’s latest report.
Some markets struggling to cope with unfavourable trading conditions and increases in supply.
However, the star performers of 2016 – Cairns, the Gold Coast, Hobart – will continue their rise off the back of renewed interest in their locale by both foreign and domestic tourists.
Figure 14 illustrates Sydney’s continued strong revenue per available room (RevPAR) growth off the back of favourable trading conditions in 2015.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/Figure%2014.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/17/Figure%2014.jpg" alt="">
In particular attracting a good mix of corporate and leisure tourists that enabled operators to increase room rates.
With the International Convention Centre opening in early 2017 Sydney room rates are expected to continue to climb off the back of increased corporate travel, albeit at a more moderate pace due to increases in supply.
Despite Melbourne’s strong start to the year there are signs that the market is struggling to cope with the increases in supply entering the market.
Melbourne’s strong performance historically has been largely driven by occupancy rather than room rate growth so any sign of occupancy pressure will see rates decline somewhat in 2017 before stabilising in 2018.
The resource markets of Brisbane and Perth continue to lag the rest of the nation; both saw revenue per available room (RevPAR) declines in the double digits.
The downturn in mining coincided with significant increases in supply in Brisbane which exacerbated the decline in performance.
A problem that Perth will have to contend with in the coming years as it nears the peak of the development cycle in 2018-19.
The more leisure-based destinations of Cairns, the Gold Coast and Hobart have been the star performers in the market as they continue to attract large volumes of both domestic and international visitors.
Admittedly these three markets are coming off a low base as a result of tough trading conditions pre and post GFC.
However 2016’s performance has still been impressive and is set to continue in the coming years as all three benefit from limited supply pipelines coupled with renewed tourist interest.
The year ahead will see increases in supply for the majority of key markets including Melbourne, Sydney, Brisbane and Perth.
However, they will all cope in different ways with Perth and Brisbane forecast to see further declines in hotel performance.
Whilst Sydney is expected to cope well with this increased supply, Melbourne will likely see small falls in room rates and occupancy levels.
Cairns and the Gold Coast have limited pipeline with no major new supply coming into the market in 2017.
“However, such is the interest in these regions we can expect to see developers announcing plans to enter the market, particularly the Gold Coast,” the report stated.
What will be of interest is the style of hotels that are announced in 2017 as recent trends reflect a shift towards greater tailoring of guest experiences such as Accor’s Mama Shelter or IHG’s EVEN Hotels.
In order to stand out from the crowd operators are offering unique experiences to pique interest and capture market share, particularly from the millennial generation, so we will see further announcements regarding these lifestyle brands coming to Australia.
The investment market has been dominated by overseas capital in the last three years and 2017 will likely be no different.
The current capital flight from China should continue to unfold and be the dominant source of capital in 2017 as investors seek safe-havens and long-term income generating assets.
Due to the tightly held nature of CBD markets investors will continue to look at fringe-CBD hotels as well as those in more regional locations such as Cairns and the Gold Coast.
Investors keen to move further up the risk curve will start to look at assets in Brisbane and Perth for potential counter-cyclical investment opportunities.
These markets have seen limited transaction activity over the last few years but such is the dearth of quality stock available in Sydney and Melbourne CBDs that investors may start to turn their attention back to these resource states.
<div>
Office to residential conversions have been popular with investors and developers alike over the last few years, particularly in Melbourne and Sydney.
But with the residential market showing signs of cooling, the potential for conversions earmarked for residential to change to hotels is increasing.
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j.ballantyne1990-6AQqhLzZaK

Hotel market reporting struggles with supply increase and unfavourable conditions: CBRE

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After a sustained period of growth in residential construction activity over the past five years, 2016 represented a shift in the development cycle with historical undersupply being addressed in most markets, according to CBRE’s latest report.
Sydney remains the exception; low vacancy rates (sub 2 percent) and a nation-leading level of price growth make it likely that the construction cycle with extend for longer in Sydney than in other Australian markets.
Price and rent growth eased across all capital city unit markets in 2016.
Total dwelling approvals in 2016 were 4% lower than in 2015, but as a signpost for 2017 approvals for Q416 were 14% lower than the previous corresponding period.
Approvals are losing momentum.
In light of weaker price and rent growth comes the prospect that developers may delay commencement of projects.
This is especially in markets where demand conditions are less favourable (Brisbane, Perth) or with significant supply (Melbourne), although there was little evidence of this occurring during 2016.
“We expect that less-favourable conditions in mortgage markets (higher interest rates and stricter lending requirements for some types of mortgages) and lower levels of unit rent growth will likely soften buyer demand and reduce the amount of new supply being planned in 2017,” the report stated.
Dwelling approvals are expected to slow in 2017, but unit completions are expected to reach record levels (figure 19).
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Figure%2019.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/16/Figure%2019.jpg" alt="">
With apartments representing 50% of expected completions (up from a historical norm of -30%), inner-city markets, where most new apartments are being built, appear most likely to experience downward pressure on rent growth as a high proportion of the new stock becomes available for rent.
Pricing already shows a narrowing gap in median values between inner-city apartments and outer suburb houses as new supply slows price growth in areas of high building activity.
This is particularly in Brisbane and Melbourne due to the concetration of apartments in the inner-city area.
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Weaker price and rent growth will result in residential project delays: CBRE

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One of the main determining factors of the overall strong hotel performance is the recent surge in the number of international and domestic tourists, according to CBRE’s latest report.
Australia has seen a steady increase in international visitors over the last decade, but in the last few years there has been rapid expansion, particularly from Asia.
Since 2009 the number of international visitors has increased by 44 percent, recently surpassing seven million annually and is forecast by Tourism Research Australia (TRA) to surpass ten million in 2020.
New Zealand remains the largest source of international visitors at over one million annually, but 2017 will see this group replaced by China as the number one source.
Chinese visitors already account for the largest share of international visitor nights at over 17%.
The domestic market has seen strong growth since 2013 – particularly in the leisure category – as a result of a weakened Australian dollar, but with recent gains against some major currencies, 2017 will likely see this rate of growth slow.
However, a mitigating factor will be corporate travel, particularly in states with strong growth in business activity and the broader economy.
Figure 15 illustrates the historical growth of a selection of major international sources of visitors over the last decade, and the shaded area is how TRA expects these countries to grow over the next decade.
China is by far-and-away the strongest growing market, with an average growth rate of 13% until 2025 when it is expected that over three million Chinese will visit Australia per year.
<a href="https://www.propertyobserver.com.au/images/2017/02/17/Figure%2015.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/02/17/Figure%2015.png" alt="">
Driving this growth of Chinese tourists will be the continued establishing of new airline routes which will be the key to harnessing the massive tourist potential of China.
This would be such as China Southern’s new route to Adelaide which is expected to bring in an over $20 million to the state economy annually.
The Chinese and Australian governments declared 2017 to be the “China-Australia Year of Tourism” with the objective to increase tourism between the two nations and also bilateral relations.
All Chinese airlines that currently fly directly to Australia have pledged support to the scheme and are opening up more routes outside of the major hubs of Beijing and Shanghai.
This will give Australians greater choice when visiting China, but more importantly for the hotel industry within Australia it will open up new resources of Chinese visitors.
Currently less than 2 percent of Chinese tourists visit Australia, and already we have seen how big an impact they have had on the hotel industry.
So if this number does double in the next 5-10 years then the hotel market will continue to see strong growth for the foreseeable future.
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Tourism the main determining factor of hotel industry performance: CBRE

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Australia’s retail sales performance was weaker in 2016, averaging 3.2% growth compared to 4.3% in 2015, according to CBRE’s latest report.
Most retail categories are underperforming their long-term averages.
<a href="https://www.propertyobserver.com.au/images/2017/02/16/Figure%207.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/02/16/Figure%207.jpg" alt="">
A two-tier market is evident with international retailers expanding while some incumbent, domestic retailers are under pressure.
“Conditions in 2017 are expected to be slightly more challenging than in 2016; we expect only moderate rent growth of between 1%-2% across most retail property categories,” the report stated.
"Australian retailers have faced various challenges in the post-GFC period. First the GFC and then weak trading conditions from 2010 to 2013 caused many retailers to reduce operating costs and undertake consolidation.
"Then as these challenges were beginning to fade, the last three years saw new competition aggressively emerging from international brand entrants, who continue to gain market share, resulting in profit margin pressures for domestic retailers."
Competition has seen closure of over 10,000 retail businesses since 2010. The success of some international brands has been their ability to offer diversity of products at competitive pricing.
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The entry of fast fashion international retailers has coincided with weaker sales performance of incumbent department stores and discount department stores over the past three years.
In the face of tougher conditions, some domestic retailers have responded by altering their offering to remain competitive.
For example, Myer and David Jones have closed underperforming stores and have adopted new store formats (downsized stores, fewer products and better quality) for existing and new stores.
Other retailers including some discount department stores have been slower to adapt and are reportedly facing less certain futures.
"A combination of factors are acting as headwinds for retail," the report says.
Over the past decade spending per capita grew a mere 0.6% per annum, and households aren’t funding consumption with debt to the extent they were prior to the GFC."
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Population growth slowed to 1.4% annually over the last two years compared to 2% between 2004-2013.
"The combination of these factors will contribute to slower retail sales growth in 2017, and with an expected increase in international brands, domestic retailer profit margins are likely to incur further pressure,” the report stated.
"We have already seen profit margins fall for discount department stores (except for Kmart which has reset its strategy), apparel retailers and supermarkets during the past five years."
According to company reports of most listed retail companies, the sectors with the most negative outlooks are supermarkets and homewares and department stores.
Health and beauty and sporting retailers have a more positive outlook. Although retail trade growth was lower overall in 2016, there was positive news in the increase in spending in cafes, restaurants and takeaway food.
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This suggests a preference shift to eating out, and this category has also benefitted from higher volumes of international tourists.
Lifestyle preferences such as convenience and shopping experience (especially amongst younger demographics) are driving upgrades in food courts and higher quality food offerings.
As a result, eating out is on average costing more but is being supported by consumer preference.
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International brands putting local retailers under the pump: CBRE

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The office market in 2016 witnessed more divergence between the southeast markets and the resource-based states with the trend likely to continue in 2017, according to commercial real estate firm CBRE’s latest report.
Strong economic growth in New South Wales and Victoria led to increased demand in the office sector.
Queensland and Western Australia continued to lag, although Brisbane has stabilised and will be on the road to gradual recovery in 2017, while Perth is expected to bottom.
Office markets in Sydney and Melbourne performed well in 2016. Sydney CBD, in particular, outperformed with its strongest level of net effective rental growth in over 20 years.
Net effective rents (NER) grew 25 percent in the prime grade sector.
The Sydney CBD secondary grade office market set new records in 2016: vacancy fell to record lows, NERs grew 32 percent and indicative secondary rents topped $600/sqm for the first time ever.
Stock withdrawals affected the secondary market more significantly, helping deliver these results.
The prospect of limited supply over the next three years, strengthened by high withdrawal activity, in conjunction with steady growth in the services sector will continue to keep vacancy constrained.
The Melbourne CBD office market set new records in 2016 in terms of investment metrics.
Prime and secondary yields reached new lows at 5.5 percent and 6.2 percent respectively, and the spread between the two grades narrowed to a record level.
Further, albeit minor, compression is expected in H117 before yields bottom.
VIC’s strong economic growth drove white collar employment (WCE) and thus demand for office space.
Melbourne CBD achieved the highest level of positive net absorption of all states over 2016 with 117,253 sqm.
Most of this strength was captured in the last half of 2016 and resulted in vacancy declining to 6.4 percent at year end.
This helped the Melbourne CBD market achieve NER growth after four years of declines due to rising incentives.
A combination of above-average face rental growth and slight easing of incentives saw prime and secondary NERs grow 7.2 percent and 6.3 percent respectively in 2016.
"With limited supply in 2017 and demand expected to remain healthy, we forecast further NER growth in 2017 (Figure 2),” the report said.
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The QLD economy has overcome the drag of the LNG CAPEX unwind and returned to growth in 2016.
“We expect further gradual improvements in 2017,” the report stated.
The advancement towards a possible 2017 construction start for the $21.7 billion Carmichael mine project by Adani has provided some confidence to the medium-term outlook, although the project represents only a fraction of activity sparked by the three recent LNG projects.
Brisbane CBD vacancy peaked in 2016 but then tightened to 15.3 percent by year-end due to its strongest annual absorption ever recorded (94,601sqm).
The latest supply cycle has completed and 2017-18 is expected to see low levels of supply in the CBD and Near City markets.
“We forecast a gradual fall in vacancy despite the strong absorption outcome in 2016, partly due to at least two further major tenant relocations to the Near City market,” the report said.
The Perth CBD office market appears to be approaching the bottom of the cycle: vacancy has probably peaked at 22.5 percent, leasing activity has picked up, and the rate of rental decline slowed substantially over 2016, with Q416 net face and effective rents remaining static.
The market is starting to benefit from tenant migration from fringe and suburban locations as businesses take advantage of lower rents and higher incentives by upgrading accommodation in a flight-to-quality.
This has led to an increase in the number of CBD leasing transactions.
The SA economy in 2016 was bolstered by public investment and also surprising growth in private consumption and retail trade.
These impacts will pass in 2017 and economic growth will moderate. The Adelaide office market remains steady with vacancy hovering at around 16%.
“Net absorption was weak in 2016 and we don’t expect much improvement in 2017,” concluded the report.
Limited supply (in the form of refurbishments) will help the vacancy rate tick slightly lower.
The ACT recorded the highest growth in State Final Demand of all the state and territories in the year to Q316, which supported Canberra CBD white collar employment growth of 3.4 percent over the same period, more than any other CBD market in Australia.
Limited new supply has resulted in vacancy trending downward since 2015 – a trend expected to continue over the medium term, posing a favourable outlook for the Canberra market.
Although softer tenant demand is expected in major office markets in 2017, the outlook for Australia’s office sector is favourably impacted by the lowest level of net supply additions in 20 years.
National CBD vacancy will begin to trend down and we forecast it to reach 9.8 percent by year-end 2017.
CBRE Research’s near-term view of office market return expectations (annualised 3-year NER growth plus yield as at December 2016) for each market is illustrated in Figure 3.
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“This return calculation assumes static yields so paints a clear picture of our NER growth expectations.  "We forecast that the best performing markets in Australia will be: Melbourne CBD, Macquarie Park, Parramatta, Canberra CBD and Sydney CBD,” the report concluded.
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New South Wales and Victoria economic growth leads to increased office demand: CBRE

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Demand from office occupiers is evolving, as revealed in CBRE’s 2016 Australia Occupier Survey, and CBRE expects to see further evidence of this demonstrated in leasing activity in 2017, according to CBRE’s latest report.
The survey targeted 100 large commercial occupiers throughout Australia across a broad range of industries to find out which factors are driving occupiers future real estate strategies.
People, technology and the new economic order are changing our approach to work and thus the concept of how, when and were we work.
This structural shift will increasingly impact on leasing decisions when considering location, building selection, workplace format, quality of building services and amenities, and the customer experience offering.
Occupiers identified consolidation, change of workplace format and growth as the top three real estate strategies they plan to implement in the next three years in order to drive their overall business strategy.
Cost continues to outpace other considerations as the most important factor in the real estate location/building selection decision.
Cost reductions are important to occupiers and rationalising space in a way to achieve this, with a focus on reviewing requirements beyond their current lease.
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Occupiers cited as key objectives for their future real estate strategy:
. Implementing more-flexible work practices through a new workplace format
. Reducing corporate footprint
. Increasing utilisation rates
From the survey, 57 percent of occupiers expected to increase their staff headcount by 2018 but only 22 percent plan to increase their net lettable area.
This will ultimately translate into more people in less space. The average workspace ratio is predicted to decrease by 5.5 percent as a result.
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As businesses look to consolidate and change their workplace formats to achieve greater space utilisation rates, an efficient floorplate will be key in supporting these goals.
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Occupier demand is evolving as workplace strategies change: CBRE

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Foreign investment played a key role in underpinning demand for new housing stock in 2016, according to CBRE’s latest report.
That said, overall levels of offshore capital for residential investment eased in 2016 from the very high levels experienced in 2015, the agency noted.
Higher stamp duties applicable to source local debt, tighter enforcement of monetary caps on Chinese capital outflows and general concerns about apartment oversupply contributed to softer foreign investment in 2016.
Foreign investment sales turnover for the Sydney development site market declined by 50% in the 12 months to June 2016.
Despite the slowdown, Australia remains an attractive long-term proposition for foreign investment.
Foreign buyers, although motivated by rental returns, value other factors such as political stability, personal safety, education and low air pollution when assessing investment locations and Australia ranks very highly on these measures.
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Although 2016 saw a combination of factors that could impede demand from foreign investors, we are not forecasting a material jump in settlement defaults for off-the-plan apartments.
Settlement default has traditionally been low in Australia (sub-2 percent).
A tougher lending environment makes it likely that settlement periods will be extended and some increase in default will occur.
But the emergence of new lenders absorbing foreign buyer debt demand and the substantial cost of default (i.e. forgoing deposits) will limit the number of buyers defaulting in settlement.
Furthermore, conditions in domestic labour markets are unlikely to deteriorate to the extent that settlement defaults will increase markedly amongst domestic buyers.
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Settlement defaults to increase from low occurance in OTP housing market: CBRE

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Housing affordability has become a key concern in Australia, according to CBRE’s latest report.
Housing price growth over the past few years in markets such as Sydney and Melbourne have been well in excess of rent growth and household income growth.
Historically low interest rates have facilitated this strong price growth and consideration should be lent to the potential impact on pricing when interest rates rise again.
"Our modelling indicates that Sydney households would experience an 8ppt increase in mortgage repayments (as a proportion of median household income) if interest rates increase by 1ppt," the report advised.
The impact is less in other markets (figure 21) but considerable nonetheless.
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"We expect that when interest rates do begin to rise (unlikely before 2018) that price growth in Sydney and Melbourne is likely to slow the most, partly closing the price gap that has expanded over other markets in recent years," the report stated.
Sydney building approvals are expected to decline in 2017 as more supply enters the market.
However, the housing construction boom should last longer than in other states because dwelling approvals are holding up better and the market isn’t oversupplied.
The outlook for Melbourne and Brisbane inner city markets is similar: soft rental markets due to new supply will result in sharper reductions in building approvals than nationally and prices for apartments will soften in response to high supply.
Perth remains constrained by softening population growth and weak statewide economic performance.
Oversupply will remain a feature of the Perth rental market during 2017 but price declines are expected to be less than 2016 levels.
Adelaide building approvals are likely to decline as a soft employment outlook limits the potential for population growth.
Canberra building approvals are expected to ease in 2017 as tougher lending conditions impact investor demand.
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Housing affordability still a key concern for Australia: CBRE

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The Coles supermarket in the NSW Southern Highlands town of Moss Vale has been sold to MPG Funds Management for $9.45 million.
Located at 13-19 Kirkham Street, the property comprises a 2,500 square metre freestanding Coles supermarket – the only full line supermarket servicing the catchment.
The property, which is situated on a 7,199 square metre strata title site, is currently leased to Coles until 2025, generating an estimated income of $561,547 per annum.
CBRE’s Justin Dowers and Nick Willis, who negotiated the sale on behalf of a private Victorian investor, said the sale reflected one of the strongest freestanding supermarket transactions in New South Wales this year translating to a yield of 5.9%.
MPG Funds Management’s Brett Gorman said the property’s strong tenancy profile presented an attractive addition to the MPG Retail Brands Property Trust, which targets well-known tenants on long term leases.
The sale follows the recent transaction of Dan Murphy’s in Wagga Wagga through CBRE on a 5.3% yield to a private Sydney based investor.
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Coles in Moss Vale sells for $9.45 million

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Three healthcare and retirement living professionals have joined CBRE to form a new Capital Markets division.
Philip Smith, Shane Nicholson and George Koumoukelis have been recruited from Colliers International to launch the Capital Markets Healthcare &amp; Retirement Living team in CBR.
The specialist team will be led by Mr Smith in a National Director role, based in Brisbane, with Mr Nicholson taking on a Director role based in Sydney.
George Koumoukelis will take the role of Senior Negotiator, based in Sydney.
CBRE’s Pacific president, Ray Pittman, (pictured above) said the new team will work in tandem with the existing Valuation &amp; Advisory Services professionals focused on the Healthcare &amp; Retirement sector. 
“We envisage significant opportunities ahead, in line with the growth that has occurred in the U.S., where Healthcare &amp; Retirement Living is one of our biggest businesses,” he said.
Bruce Baker, CBRE executive managing director, Capital Markets,  aid the formation of this team was also particularly timely in light of the unprecedented changes forecast for the Australian aged care sector as a result of recently announced Federal Government expenditure cuts. 
“These changes are expected to provide the catalyst for industry consolidation and higher transaction volumes in the coming years,” he said. 
“Appointing Philip, Shane and George positions us to be at the forefront of these changes.
"Healthcare specific property is globally recognised as a very attractive investment grade asset class and we are seeing significant interest in this sector from the major Pacific REIT’s and wholesale funds."
Several senior directors of CBRE quit the estate agency late November.
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