<section data-scroll-anchor="false" data-testid="conversation-turn-48" data-turn="assistant" data-turn-id="request-WEB:55d7c6ac-8e6d-4881-ad49-0ed9bf66d1cc-23" dir="auto">
Melbourne’s apartment market entered 2026 with renewed momentum, but the recovery is uneven, policy-driven, and increasingly shaped by constrained supply.

According to the RPM Apartments &amp; Townhomes Market Report (April 2026), apartments have begun to outperform detached housing on key metrics,yet that performance is occurring against a backdrop of falling approvals and a tightening development pipeline.

At the end of 2025, Melbourne unit values reached a three-year high of $656,500, recording quarterly growth of two per cent. That figure edged ahead of the 1.8 per cent growth recorded in the house market over the same period, marking a notable shift in relative performance. While modest in absolute terms, the outperformance is significant given the sustained dominance of houses through much of the previous cycle.

This shift has been driven in large part by policy. The federal government’s expanded five per cent Deposit Scheme has had a disproportionate impact on apartment demand, particularly in Melbourne where the $950,000 price cap captures a large share of medium- and high-density stock.

As RPM notes, the scheme “heavily favours medium and high-density dwellings,” effectively accelerating demand in the apartment sector.

The impact is most visible in buyer activity. Victoria recorded more than 43,000 new housing loans in Q4 2025, the highest quarterly volume since mid-2022 and one of the strongest results in over a decade. This lift was broad-based across all buyer types, with first home buyers, owner-occupiers and investors all returning to the market with greater confidence.

This surge in demand has flowed directly into apartment pricing, particularly in Melbourne’s middle and outer rings. Middle-ring unit values reached approximately $757,500, a four-year high, while outer-ring units climbed to a record $650,000. Quarterly growth of 2.9 per cent and 2.5 per cent respectively significantly outpaced both the inner ring (0.8 per cent) and the broader house market.

&nbsp;

<img alt="RPM" data-entity-type="file" data-entity-uuid="4628dde5-ad63-4b03-b18e-77d0f750e2aa" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.23.32%E2%80%AFAM.png?VersionId=ig6mqc7Oz7UaszRuzULrGtLPUxGf4NJC" />

&nbsp;

The divergence between apartments and houses is also being shaped by affordability. Detached housing remains out of reach for many buyers, pushing demand toward apartments as a more accessible entry point into well-located suburbs. This is particularly evident among first home buyers and downsizers, both of whom are increasingly prioritising location, amenity and lifestyle over land size.

At the same time, population growth continues to underpin demand. Victoria added more than 122,000 residents in the year to Q3 2025, with Melbourne attracting both overseas migrants and interstate movers, partly due to its relative affordability compared to other capitals.

&nbsp;

<img alt="Population" data-entity-type="file" data-entity-uuid="49e10567-a8b3-47c3-afbd-290f0bb62c49" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.22.25%E2%80%AFAM.png?VersionId=.2Drmko4TPh02X55JdF3mIC1EcG0ZfGl" />

However, the most critical factor shaping the apartment market is not demand, it is supply.

Apartment approvals across Greater Melbourne have fallen sharply, signalling a constrained pipeline of future stock. In Q4 2025, just 2,339 apartments were approved, down 20 per cent on the previous quarter and 47 per cent lower than the same period a year earlier. On an annual basis, 11,066 apartment approvals were recorded, an improvement on the previous year, but still well below medium- and long-term averages.

&nbsp;

<img alt="Apartment approvals" data-entity-type="file" data-entity-uuid="12f2e7bc-fe01-40c0-80b5-9e829b279d98" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-04-24%20at%209.21.56%E2%80%AFAM.png?VersionId=5mnIXkXGoDgIJdAFhA0alm0cSKzEytqZ" />

This decline reflects a broader contraction cycle that has been underway since 2020. As RPM notes, “apartment approvals appear to be sliding back into a downward trend,” with developers increasingly focused on launching and completing existing projects rather than initiating new ones.

The reasons are well understood. Construction costs have risen more than 20 per cent since 2021, driven largely by labour shortages and material price escalation. At the same time, financing conditions have tightened, with lenders requiring higher contingencies and taking a more cautious approach to risk. Combined with recent interest rate rises, these factors have made feasibility more challenging, particularly for higher-density projects.

This dynamic is creating a disconnect in the market. Demand for apartments—particularly at the more affordable end—is strengthening, while the pipeline of new supply is weakening. In the short term, this may limit the number of new projects coming to market. Over the medium term, however, it is likely to support price resilience and potentially further outperformance relative to houses.

There are some signs of policy-driven supply response. The introduction of Victoria’s Mid-Rise Code, which streamlines approvals for four- to six-storey developments, is expected to improve delivery in well-serviced middle-ring locations. However, this is unlikely to materially offset the broader decline in apartment approvals in the near term.

Despite the positive momentum at the end of 2025, the outlook for 2026 has become more complex. Two interest rate rises early in the year have already impacted consumer confidence, while broader cost pressures, particularly energy and fuel, are feeding through to construction and development costs.

“Victoria’s built form market ended 2025 on a high, but early 2026 rate rises quickly reversed the momentum,” RPM notes.

The implication is that while apartments are currently outperforming houses, the trajectory of that outperformance will depend on how these competing forces evolve. Policy support and affordability are clearly working in favour of apartments, but constrained supply and rising costs are likely to shape the pace and nature of future growth.

What is increasingly clear is that apartments are playing a more central role in Melbourne’s housing market. As population growth continues and affordability pressures intensify, higher-density housing is becoming not just an alternative to detached homes, but a primary solution to the city’s housing needs.
</section>

Joel Robinson

Units lead Melbourne price growth as apartments outperform houses: RPM

Brunswick is set for some of its largest apartments ever delivered with the upcoming new development Frith &amp; Howarth, where the apartments are around 20 per cent larger than what has come before it in the sought-after suburb.

Developer Young Group focused its design on Frith &amp; Howarth around size and scale, but within a boutique building, to create a mini neighbourhood within the mid-rise development. There are just 24 apartments in the mid-rise building on Victoria Street, a short walk to Brunswick Station and the cafe and dining strip along Sydney Road.

“We spent hours comparing what’s currently on the market so we could offer genuine points of difference,” Young Group says, pointing to room sizing, storage, and functional planning as key drivers behind the design.

All of the two-bedroom apartments in the building have been snapped up, with just the large three- and four-bedroom apartments, with the biggest floorplans and best outlooks, remaining.

[smartcode_project:default project_id=134317 project_image_fid=354139]

Apartments open directly into open-plan living zones where full-height glazing draws light deep into the apartment. Sliding doors extend the space outward to terraces, many oriented toward the adjacent park or back toward the city skyline.

Kitchens sit within this central space, anchored by sculptural island benches that reference the building’s faceted exterior language. Storage is integrated across multiple layers, overhead cabinetry, concealed joinery, and, in larger configurations, dedicated sculleries or butler’s pantries.

[smartcode_project:default project_id=134317 project_image_fid=354137]

The penthouse is the largest ever offered in Brunswick. The penthouse measures nearly 400 sqm all-up, with 242 sqm of internal space complimented by a further 149 sqm of terraces.

It spans the whole top floor and has four bedrooms, four bathrooms, and parking for four cars.

[smartcode_project:default project_id=134317 project_image_fid=354133]

Low maintenance resident amenity has been created in the form of a landscaped rooftop, complete with&nbsp;vegetable plots, outdoor cooking areas, and aflresco dining spaces, designed as a place for neighbours to gather outside of their homes.

“To enable connection with neighbours, generous rooftop gardens with communal spaces and outdoor cooking areas offer a chance to develop a sense of community,” says John Patrick, Principal of <a href="https://www.apartments.com.au/landscape-architect/john-patrick-landscape-architects">John Patrick Landscape Architects</a>.&nbsp;

“Private open spaces with a selection of native and exotic plantings and gorgeous city views on the rooftop create a high-end aesthetic, with a low maintenance lifestyle. The perfect balance, so that residents can enjoy a serene living space.”

[smartcode_project:default project_id=134317 project_image_fid=354134]

Sustainability is embedded at both the building and apartment level. <a href="https://www.apartments.com.au/new-apartments/frith-howarth-288-290-victoria-street-brunswick-vic-3056">Frith &amp; Howarth</a> is one of only a small number of all-electric residential developments in Brunswick, supported by solar infrastructure, EV-ready parking, and high-performance glazing. These measures sit alongside less visible systems such as rainwater reuse and high-grade insulation, reducing long-term operational costs while maintaining consistent internal conditions.

Positioned within walking distance of Brunswick Station, Route 96 trams, and established retail along Sydney Road and Barkly Square, the development balances access to transport with proximity to open space, a combination that has become increasingly difficult to secure in inner-city sites.

“These exquisite homes are nestled in a culturally diverse neighbourhood, with parklands and nature right on your doorstep,” says Young Group.

[smartcode_project_cta:default project_id=134317]

Frith & Howarth to deliver Brunswick’s largest apartments

<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> in Brunswick is entering its final stages of construction, with the removal of the project’s last tower crane and the unveiling of the building’s full façade marking a significant milestone ahead of completion this coming spring.

The Park Street development, designed by <a href="https://www.apartments.com.au/architects/bates-smart">Bates Smart</a>&nbsp;and Mirvac Design with landscaping by <a href="https://www.apartments.com.au/landscape-architect/jack-merlo">Jack Merlo</a>, is now largely structurally complete, with internal works progressing across the 169-apartment project opposite Princes Park.

<a href="https://www.apartments.com.au/builders/mirvac-construction">Mirvac Construction</a> Project Manager Sam Payne said the latest update reflects a transition from structure to refinement.

“Since our last update, all façade panels have been installed and the scaffolding and gantry has come down, unveiling the building in its full form for the very first time,” Payne said.

“A significant milestone was reached this month with the removal of our final tower crane, signalling the completion of major structural works and a pivotal step forward in the building’s transformation.”

[smartcode_project:default project_id=4802 project_image_fid=366856]

Apartments are now well advanced internally, with joinery completed to level eight and tiling to level six, alongside the delivery of a prototype apartment used to set the benchmark for the remaining residences.

This next phase coincides with the release of a completed furnished residence, styled by MCM House, and the introduction of private buyer tours, giving purchasers a clearer understanding of the finished product ahead of settlement.

<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> will comprise 169 one to four-bedroom apartments, with completion targeted for early spring. Interiors focus on natural materials and muted tones with two design schemes, while kitchens and bathrooms adopt a restrained palette anchored by stone, timber and textured finishes.

Bates Smart Director Jeffery Copolov said the project reflects a shared design direction centred on liveability and sustainability.

“Blending Mirvac and Bates Smart’s focus on wellness and sustainability, <a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> offers a new kind of conscious, elevated living in Melbourne’s inner north,” Copolov said.

<a href="https://www.urban.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> presents Mirvac's third parkside collaboration with&nbsp;<a href="https://www.urban.com.au/architects/bates-smart">Bates Smart</a>&nbsp;in Victoria.&nbsp;Their previous collaborations delivered two of the city’s landmark apartment buildings: The Melburnian opposite Kings Domain and The Eastbourne on Fitzroy Gardens.

[smartcode_project:default project_id=4802 project_image_fid=366857]

A key focus of the development is its landscape-led amenity offering. The central courtyard, spanning around 600 sqm, will feature established trees and planting grown off-site, alongside communal lawns and seating areas designed for everyday use.

Development Manager James Gardner said the outdoor spaces are central to the project’s lifestyle positioning.

“<a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> isn’t just a home, it’s a complete lifestyle offering, and the resident amenity is just one example of the elevated living experience the soon-to-be-complete building will be known for,” Gardner said.

The courtyard connects to a series of shared indoor and outdoor spaces, including a residents’ lounge, dining room, library and secondary west-facing garden area, designed as extensions of the apartments themselves.

Located directly opposite Princes Park and around four kilometres from the CBD, the development places residents within one of Melbourne’s most established inner-north precincts, with access to open space, transport and the retail and hospitality offerings of Brunswick and Carlton.

With façade works complete and landscaping and final finishes now underway, <a href="https://www.apartments.com.au/new-apartments/prince-parade-by-mirvac-brunswick-701-park-street-brunswick-vic-3056">Prince &amp; Parade</a> is moving into its most active construction phase, with permanent services and external works to be finalised in the coming months ahead of completion in spring.

[smartcode_project_cta:default project_id=4802]

Mirvac’s latest landmark, Prince & Parade Brunswick, enters final construction phase

Boutique Perth developer ADC has unveiled its latest project.

The developer, which focuses on bringing apartments to some of Perth's most premium inner-city and riverside suburbs, has launched <a href="https://www.apartments.com.au/new-apartments/mos-lane-mosman-park-46-manning-street-mosman-park-wa-6012">Mos Lane</a>, 68 luxury apartments and townhouses in the heart of <a href="https://www.apartments.com.au/developments/mosman-park-wa-6012">Mosman Park</a>.

<section data-scroll-anchor="true" data-testid="conversation-turn-124" data-turn="assistant" data-turn-id="request-69e027bc-1530-839b-a316-e9dad2cbd4d9-34" dir="auto">
Alongside the one-, two-, three- and four-bedroom apartments, the development will also include five two-level townhomes and two luxe penthouses. ADC is also introducing a significant retail offering for residents through Mos Lane Village, which will feature a wellness studio, fish and chips shop, barber, and florist, adding a layer of amenity not typically found in the predominantly residential Mosman Park area.

Construction has already commenced on the project, which sits just a short walk from the Swan River, Mosman Park Bowls Club, and Mosman Park Golf Course.

House Agency Directors Tom House and Lachlan McDonald say they are fielding the majority of buyer interest from local downsizers, as well as buyers with a long-standing affinity for Mosman Park.
</section>

[smartcode_project:default project_id=148957 project_image_fid=364591]

Mos Lane will comprise two buildings; Samson House and Manning House, which have been designed by&nbsp;<a href="https://www.apartments.com.au/architects/nelson-koo">Nelson + Koo</a>, an emerging design consultancy specialising in the masterplanning and design of mixed use places and spaces.

The two buildings adopt distinct architectural responses to their surroundings. Manning House references the strong roof forms of nearby homes, with floorplates oriented to maximise light and long-range views, while Samson House is organised around a central atrium designed to bring daylight deep into the building and create a greater sense of openness.

At ground level, the inclusion of five townhomes introduces a typology more commonly associated with Mosman Park’s established streets, each with private courtyards and direct frontage, offering a transition between traditional housing and apartment living.

[smartcode_project:default project_id=148957 project_image_fid=364103]

Interiors have been led by Melbourne-based Hecker Guthrie, with an emphasis on practical, long-term liveability. Residences incorporate sculpted joinery, generous storage and flexible multi-purpose rooms that can adapt to changing household needs, whether for working from home, guest accommodation or additional living space.

Material selections draw on a restrained palette of textured stone, timber and neutral tones, with options for lighter or darker schemes. Detailing such as fluted glass, full-height joinery and integrated appliances is intended to balance functionality with a more refined residential finish.

Outdoor spaces are a consistent feature across the development, with balconies and terraces designed for dining and entertaining, and larger apartments incorporating outdoor kitchens. Orientation has been considered to allow residents to choose between morning or afternoon sun, while mature street trees and landscaped communal areas contribute to a softer streetscape.

[smartcode_project:default project_id=148957 project_image_fid=364107]

Shared amenities are positioned to support both day-to-day convenience and occasional use. These include a private dining room with a caterer’s kitchen, alfresco entertaining areas, and a bookable guest suite for visiting friends and family. Additional practical features such as a resident workshop, storage facilities, car and pet wash areas, and concierge-style services for cleaning and dry-cleaning collection reflect a focus on usability.

Positioned between the Swan River and Cottesloe Beach, and within reach of schools such as Iona Presentation College and St Hilda’s Anglican School, the development is aimed at a broad buyer group, from downsizers seeking a lower-maintenance alternative to larger homes, through to local residents looking to remain in the area in a different housing format.

Mos Lane represents one of the more significant additions to Mosman Park’s limited pipeline, combining new housing supply with a village-style retail centre in a suburb where opportunities for large-scale redevelopment are relatively constrained.

[smartcode_project_cta:default project_id=148957]

Living village precinct set for Mosman Park as ADC launches Mos Lane

An entity linked to I&amp;D Group Founder Ivan Filipović has filed plans for a new residential development at 188–202 Swan Street in Cremorne, targeting a prominent site within the tightly held Swan Street activity corridor.

The proposal seeks to redevelop the consolidated Swan Street landholding into a <a href="https://www.apartments.com.au/new-apartments/188-202-swan-street-cremorne-vic-3121">high-density mixed-use project</a>, replacing a series of existing commercial buildings with a significantly scaled residential outcome. The planning submission positions the development as a response to increasing demand for housing in well-connected inner-urban locations, particularly within established activity centres.

Plans outline the construction of a 14-storey building delivering 165 apartments above a four-level basement, alongside a ground-floor retail and commercial offering designed to activate the streetscape. A key feature of the scheme is a new north–south pedestrian link connecting Swan Street to Railway Place, intended to “enhance permeability and provide an active, publicly accessible connection through the site.”

<img alt="First Look: Plans lodged for Ivan Filipović-linked Cremorne apartment project on Swan Street" data-entity-type="file" data-entity-uuid="7332a8f8-dd2b-483d-b86e-320658838c84" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/cremorne.png?VersionId=cXm8vAaRdHh.LpYVbecrRkjckgu9mtAF" />

The development will retain part of the existing built form at 198–200 Swan Street, while the remainder of the site will be cleared to accommodate the new structure. Basement levels will provide 196 car spaces and 113 bicycle spaces, with vehicle access from Railway Place. Communal amenity is distributed across the building, including a shared outdoor area on Level 1 and a rooftop terrace for residents.

Ground level uses include retail tenancies fronting Swan Street and the pedestrian link, a residential lobby, and a flexible commercial space positioned to support community-oriented uses. The planning report notes this space “could be offered as a flexible space within the development for community groups,” supporting short-term or longer-term occupancy arrangements.

<img alt="First Look: Plans lodged for Ivan Filipović-linked Cremorne apartment project on Swan Street" data-entity-type="file" data-entity-uuid="8208bf7b-cc67-485d-ad0f-1d73a74c907f" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/cremorne%20lane.png?VersionId=69ctjC0txXv0zCHy7qQUpJyGwvPAT7gw" />

The site sits within the Swan Street Major Activity Centre, surrounded by a mix of retail, hospitality, and emerging residential development, and directly opposite tram services along Swan Street. East Richmond Station is located to the south, providing strong rail connectivity, while the broader Cremorne precinct continues to evolve as a mixed-use hub.

I&amp;D Group, founded by Ivan Filipović, is regarded as one of Victoria’s largest formwork contractors, partnering with major construction firms across large-scale public and private developments. The Swan Street proposal signals a move into development-backed opportunities tied to strategic inner-city sites.

First Look: Plans lodged for Cremorne apartment project on Swan Street

David Jones

<html><body>
A joint venture between Cbus Property and Scentre Group could see David Jones former men's clothing department become Sydney's next luxury destination. Plans have been lodged for an exciting $300 million transformation of the existing department store into a 49-storey multi-use tower which will also house Sydney's Flagship Westfield department store, and link to its neighbouring Westfield store via a pre-existing bridge and tunnel. 

<blockquote>
“At the heart of these plans is the unequalled opportunity to transform an iconic site from Sydney’s past into a contemporary precinct offering experiences and ambience that reflect the lifestyle and aspirations of our global city.”

- Greg Miles, Scentre Group Chief Operating Officer
</blockquote>

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/screen_shot_2019-04-26_at_3.31.21_pm.png" rel="gallery-all" title="77 Market Street, design by FJMT. Credit: David Jones"><img alt="" class="image-article-full-width-580px" height="326" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/screen_shot_2019-04-26_at_3.31.21_pm.png?itok=J5e12rh9" title="77 Market Street, design by FJMT. Credit: David Jones" width="580"></a>

<figcaption>77 Market Street, design by FJMT. Credit: FJMT</figcaption></figure>A design competition was held with award-winning architects selected to submit their vision for the new development including FJMT, Bates Smart, John Wardle Architects, Make Architects, Woods Bagot with AL_A, and Sydney Architecture Studio with OMA.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/screen_shot_2019-04-26_at_3.31.11_pm.png" rel="gallery-all" title="Selected design by FJMT. Credit David Jones"><img alt="" class="image-article-full-width-580px" height="323" src="https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/styles/article_full_width_580px/public/pictures/article-images/screen_shot_2019-04-26_at_3.31.11_pm.png?itok=9El6O3pH" title="Selected design by FJMT. Credit David Jones" width="580"></a>

<figcaption>Selected design by FJMT. Credit: FJMT</figcaption></figure>The selected design by FJMT has seamlessly interwoven the historical context of the existing building with a brand new 22-level modern tower set to sit atop the iconic building. Lower levels will house the new Westfield outlet and premium office space, while the new tower will feature 100 highly coveted boutique apartments. The apartments are positioned to boast spectacular views spanning the CBD, Sydney Harbour and Hyde Park. Strong market interest for collection of luxury apartments is to be expected due to the buildings unparalleled location, views and design. 

<blockquote>
"The addition of the residential tower to the existing building has been designed to have a striking presence on the Sydney CBD skyline.”

- Adrian Pozzo, Cbus Property Chief Executive
</blockquote>

After noticing a significant increase in demand for luxury goods by Westfield customers, the additional space will allow Westfield to increase its luxury collection to approximately 10,000 square metres over three levels.

<blockquote>
“Combined with the existing Westfield Sydney and David Jones’ $200 million investment into its Elizabeth Street store, the development of the David Jones Men’s store site will cement the precinct as Sydney’s pre-eminent luxury retail destination.”
</blockquote>

- Greg Miles, Scentre Group Chief Operating Officer

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/77-market-pic-1024x433.jpg" rel="gallery-all" title="The original historic building. Credit: David Jones"><img alt="" class="image-article-full-width-580px" height="245" src="/s3/files/styles/article_full_width_580px/public/pictures/article-images/77-market-pic-1024x433.jpg?itok=glodixII" title="The original historic building. Credit: David Jones" width="580"></a>

<figcaption>The original historic building. Credit: David Jones
</figcaption></figure>
</body></html>

Olivia Round

The $300 million overhaul: A luxurious future for Sydney’s David Jones menswear store

<html><body>
David Jones is pressing ahead with its first stand-alone gourmet food store under its new owner, South African retailer Woolworths Holdings.
It has plans to open in the up-market Capitol Grand retail arcade development on the Chapel Street and Torook Road, South Yarra corner.
Its scheduled opening is in 2019.
The Capitol Grand store will be about 500 square metres. Larry Kestelman, with financial backing from the US investment bank Goldman Sachs, is currently constructing the $700 million Capitol Grand luxury high-rise tower. Over 75 per cent of the 500 apartments across the two towers have been sold with about 80 per cent of purchasers owner-occupiers. One-bedroom apartments in the LK Property Group development start at $700,000.
David Jones will also open a food hall in its suburban Malvern store in Melbourne in March.
It plans to spend at least $100 million over three years building a retail food business, restoring its reputation for gourmet food, differentiating the department store from rival Myer and also protecting sales from new competitors such as Amazon.
The strategy includes building a new food hall in the flagship Elizabeth Street store to replace its Market Street store in Sydney.
Most of the products, including 90% of the store's fresh food offering, will carry the new David Jones Food brand, which was launched last year.
David Jones chief executive David Thomas hopes the new proposition will resonate strongly with the local customer.
The Insider Retail website reported David Jones said that the new store format store was designed with an emphasis on fresh premium produce including pre-packed meat and seafood, and a comprehensive convenience selection comprised of pre-prepared vegetables, salads and fruit as well as innovative, restaurant-quality ready meals.
Most of the fresh produce and ready-made meals will be supplied by In2Food, a South African-based company which is the largest food supplier to Woolworths Holdings.
Last week Woolworths cut the value of David Jones by $712 million - around 34% - citing poor execution of its previously announced turnaround plans along with emerging structural changes in retailing.
</body></html>

j.ballantyne1990-6AQqhLzZaK

David Jones plans Capitol Grand, South Yarra food store

<html><body>
Scentre Group, jointly with Cbus Property, has purchased the David Jones Market Street building in Sydney’s CBD for $360 million.
David Jones owner, South Africa’s Woolworths Holdings had the property offered through real-estate agents Simon Fenn of Savills, inconjunction with CBRE, with the Lowy-family backed Scentre always keen to expand its retail prescence.
Property tycoon Frank Lowy, ahead of resigning from Scentre in May, is understood to have played a major role.
David Jones will use the sale proceeds to help back the redevelopment of its adjacent flagship Elizabeth Street store.
The Scentre group’s share of the purchase price is $182.5 million with Cbus Property paying the balance of $177.5 million.
David Jones will continue to occupy the site until late 2019 under a lease agreement providing a 4.5% per annum rental return on the acquisition price.
During the leaseback period, the co-owners will obtain the necessary approvals to redevelop the site when David Jones vacates the building. 
On completion, the redeveloped 77 Market Street site will comprise approximately 10,000 square metres  of luxury retail space integrated with Westfield Sydney.
In addition Cbus Property will convert the balance of the existing building to provide quality office space and develop a luxury residential tower above, overlooking Hyde Park.
Scentre Group will own, develop, design and build the retail elements of the site.
Scentre Group CEO Peter Allen said the transaction was a rare opportunity to significantly expand our flagship Westfield Sydney centre. 
The 77 Market Street site will provide the opportunity for further luxury retail and high-quality food, which combined with our existing Westfield Sydney and David Jones’ planned $200 million investment into the adjacent Elizabeth Street store, will reinforce the precinct as Sydney’s pre-eminent luxury retail destination.” 
Adrian Pozzo, Cbus Property CEO said 77 Market Street provided another excellent opportunity for Cbus Property to demonstrate its core capabilities in residential and commercial development in what will be a vibrant mixed use building in an exciting location with unrivalled amenity.
</body></html>

jchancellor-FAypfDUnLy

CBUS and Scentre team up to secure David Jones Sydney store

<html><body>
GUEST OBSERVER
Australian department store retailers David Jones and Myer have both recently moved to rationalise the number of clothing brands they offer in their stores.
This strategy brings two common retail sayings to mind. First “to win in retail, you can’t be everything to everyone”, and second, “if you’re not growing, you’re going backwards”.
<h2>In retail, you can’t be everything to everyone</h2>
“It is high time we retailers realised that we cannot be all things to all people. When we try to do that, we end up with no particular appeal for anybody.”– Martineau, Pierre “The personality of the retail store” (1958).
These sentiments have never been more pertinent than in today’s retail environment where competition is fierce to secure market share and squeeze what little growth is left out of mature fashion apparel markets.
Maturity is forcing retailers to take one of two routes to compete for share of customers’ wallets: competing on price, or competing on superior benefits that are highly attractive to specific customers. While price is still an important part of the retail mix for upmarket department stores such as DJs, for the most part these retailers have left this price war to the discount end of the market – Kmart and Big W. Taking the second route to compete – provision of unique benefit to customers – requires retailers to make choices after defining their target customer.
Taking a walk through either a DJs or Myer store just five years ago would have given one the sense that these were “upmarket” retailers with a premium image and expensive brands to boot. Defining exactly who they were targeting, however, would have proved more difficult. With store floors cluttered with an eclectic range of brands and own label clothing, it would seem that they were targeting anyone who could shop in their stores and were prepared to pay the prices.
The entrance of savvy global retailers into the Australian apparel market, such as H&amp;M and Woolworths SA, combined with shifting expectations of customers has changed the clothing retailing game. Searching for growth in a crowded market is forcing retailers like DJs and Myer to carve up the market into different consumer segments, and target a few specific segments with their offers. As Daniel Bracken, Myer’s chief merchandising and marketing officer, says<a href="https://m.theage.com.au/business/retail/myer-clears-out-private-labels-as-part-of-brand-cull-20150729-gimzin">:</a>
“We have a very clear focus on who the most valuable customer is to our business and that’s what is driving us to put these new brands in our business.”
Identifying and targeting attractive customer segments in the market requires a deep understanding of who they are, where and why they shop; and strategic shifts in the retail offer.
The recent reductions in the ranges offered at Myer and DJs – around 100 and 180 brands from their respective brand portfolios, shows they are in the midst of significant transformation. This means shifting from a store for everyone (my store, Myer) to a focus on specific customer segments. Undoubtedly these retail transformations are focused on growth.
<h2>In retail, if you’re not growing, you’re going backwards</h2>
A key metric that clothing retailers live and die by is gross margin return on investment – GMROI. That is, how many gross margin dollars are earned on every dollar of inventory investment.
There are two ways to grow GMROI in retail: (1) increase sales to the customer; and (2) decrease internal/inventory costs. In reducing their ranges and moving to increase the floor space dedicated to targeted branded and own label ranges, retailers DJs and Myer are seeking to improve ROI from both directions.
If implemented well, these range reductions will also benefit shoppers. For instance, fewer brands on the shop floor reduces clutter and increases the visibility of the brands that are ranged, making it easier to shop. Fewer brands on the shop floor should also lead to reduced out-of-stocks – which is a top source of dissatisfaction for customers and a key reason to take their wallet to another retailer, permanently.
So what does this mean for small, local apparel brands? Undoubtedly the range rationalisations in DJs and Myer will impact wholesalers and small local labels that relied on these retailers stock and sell their offers. Increasingly, however, we are seeing branded manufacturers bypassing the big-box retailers and forging their own retail channels direct to their target customer through online stores, funky pop-ups and concept stores – such as the Bendigo-based family owned boutique furniture manufacturer Jimmy Possum. Unlike the grocery scenario in Australia, customers have power in this market and are prepared to shop in alternative channels for their clothing.
<h2>The vanilla-fication of clothing retail?</h2>
Is the brand rationalisation being played out on the store floors of Myer and DJs just the start of the “vanilla-fication” of clothing retail in the Australian market? Are we seeing a homogenisation and shift towards “blandsville” in the name of corporate profit growth and margin? Not likely.
What is more likely is that we are going to see smarter, tighter, and more targeted ranges of own label and supplier brands that reinforce the image of the retailer and resonate with their ideal customer.
Rather than banking the profit gains from these tighter ranges, expect to see DJs and Myer reinvesting these gains into tailoring the store environment to the target customer and delivering genuine, seamless omni-channel experiences across all retail channels – online, mobile, in store – to build a competitive edge.
The range reductions on the shop floor in DJs and Myer may herald a shakeup in the local market to a more exciting and innovative space, with local brands moving out from the shadows of the big-box department stores and establishing their own innovative routes to the customer – such as digital and pop-up, using their size and agility to carve out their own space.
Michal Carrington is lecturer in marketing at University of Melbourne and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michal-carrington-181837" target="_blank">here.</a>
 
 
</body></html>

po-LsXgBTHBmX

Welcome to blandsville? Myer and David Jones embrace grocery-style streamlining

<html><body>
David Jones, Australia's only upmarket department store, has fallen into the hands of South African retail giant Woolworths, in a deal worth $2.15 billion. 
Woolworths, which already has a majority shareholding in Country Road, has out muscled Myer, which had proposed a merger deal between the two departments. Myer withdrew its offer this morning.  
In an announcement to the ASX, the board of David Jones said it unanimously recommended the offer to its shareholder, which will see Woolworths acquire all of DJ's shares via scheme of arrangement. 
The proposed scheme offer is for $4 cash per share - reflecting a 25.4% premium to its closing price on 8 April. 
Woolworths chief Ian Moir said the combination of the two would create a "leading southern hemisphere retailer with meaningful scale, able to leverage common fashion seasonality with enhanced sourcing capability". 
"Woolworths will bring extra capability, financial strength and significant scale to accelerate these strategies and offer a greatly enhanced value proposition, delivering on-trend product within the most exciting and innovative shopping experience in the market".  
David Jones chairman Gordon Cairns described the proposal as "compelling", which represented a "significant premium to not only our intrinsic value but also to broker valuations and to recent share prices". 
"It represents a substantial earnings multiple". 
In reaching its conclusion, he also said the board considered a number of alternatives. 
Among them were "standalone value creation opportunities, realising the value of the freehold properties owned by David Jones or pursuing a merger with Myer. 
As at noon, the upmarket retailer's share price was up 23% or 73c to $3.923. 
Shareholders will have an opportunity to vote on the scheme proposal in late June.   
</body></html>

David Jones

Editor's Picks

Have something to contribute?

Developments

New apartments

New townhouses

News

David Jones

Editor's Picks

Receive the latest news stories to your inbox

Have something to contribute?

Developments

New apartments

New townhouses

News