One of North Sydney's best-known commercial buildings could become hundreds of new homes, with insurance giant Zurich Australia lodging a State Significant Development Application (SSDA) to transform 5 Blue Street into a mixed-use residential development above North Sydney Station.

Rather than demolishing the existing building and starting again, Zurich is proposing an adaptive reuse project that would convert the landmark office building into a 15-level residential development delivering 62 apartments, 86 affordable co-living dwellings, activated retail and significant upgrades to the Blue Street Plaza.

The proposal reflects a growing trend of commercial property owners repositioning ageing office assets into residential housing as Sydney grapples with housing supply shortages and changing workplace demand.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="0bba7d12-06dc-4375-aad7-238c94b21ac5" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.42.05%E2%80%AFAM.png?VersionId=NJl5oLAEBDGuPmY3RnyliKODjMc8lvRh" />

Located directly above North Sydney Metro and train station, the 3,051 sqm site occupies one of the most strategically positioned parcels of land on Sydney's Lower North Shore.

Designed by fjcstudio, the proposal seeks to retain and adapt much of the existing structure while creating a contemporary residential address that better connects with the public domain surrounding North Sydney Station.

The application proposes two basement levels, ground floor retail, affordable co-living accommodation across the podium levels, and apartments above, while preserving and enhancing the publicly accessible Blue Street Plaza.

Rather than pursuing maximum apartment numbers, Zurich has opted for a housing mix heavily weighted towards larger owner-occupier residences.

The proposal includes 62 build-to-sell apartments comprising 12 one-bedroom, 19 two-bedroom, 29 three-bedroom apartments and two premium penthouses. It also incorporates 86 affordable co-living dwellings, which would be managed in perpetuity by a Community Housing Provider.

That balance between traditional apartments and affordable housing reflects the NSW Government's push to increase housing diversity around major transport infrastructure.

The proposal has been lodged concurrently with a rezoning application, with Zurich arguing the site is ideally positioned to support additional housing given its immediate proximity to public transport, employment and services.

"The proposal aims to respond to the housing challenges facing Sydney through the delivery of diverse housing types in a highly accessible location," the design report by fjcstudio states. It also seeks to improve pedestrian amenity through upgrades to Blue Street Plaza while creating a high-performing residential building that responds to the surrounding context.

<img alt="Zurich" data-entity-type="file" data-entity-uuid="36082e15-c636-4481-bb68-5a5f6443fe39" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%2010.41.36%E2%80%AFAM.png?VersionId=5P6VD.fvmqjQfIG3TWWMRXxQWiQBjeFB" />

Rather than replacing the commercial building, fjcstudio has developed a design that works with the existing structural framework above the rail corridor, an approach that significantly reduces demolition while allowing the site to be repositioned as a mixed-use residential precinct.

The existing structural constraints have informed much of the building's design, including its relationship with Blue Street and surrounding public spaces.

The building has been designed as a slender tower rising above a clearly defined podium, with vertically expressed façades intended to reduce the perceived bulk while reinforcing North Sydney's emerging skyline.

According to fjcstudio, the architectural language responds directly to the surrounding commercial towers while maintaining a finer grain expression more closely aligned with the neighbouring Lavender Bay streetscape.

The tower incorporates articulated façade elements, landscaped podium edges and recessed upper levels to soften its appearance and improve pedestrian amenity below.

A significant component of the proposal is the revitalisation of Blue Street Plaza.

The existing public space has long served as one of the primary pedestrian connections between North Sydney Station, Greenwood Plaza and Blue Street, yet its role is expected to become even more important following the opening of Sydney Metro.

Zurich's proposal seeks to strengthen that role by improving landscaping, introducing new retail frontages, enhancing pedestrian permeability and creating more active edges throughout the day and evening.

Ground floor retail would wrap the plaza, while separate residential and co-living entries have been designed to improve wayfinding without reducing street activation.

Landscape design has been integrated throughout the podium and public realm, softening what is currently one of the most heavily urbanised parts of North Sydney.

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fjcstudio has carefully oriented apartments towards Sydney Harbour and the CBD while using privacy blades and articulated façades to minimise overlooking between neighbouring buildings.

Large framed openings along the western elevation maximise harbour outlooks, while the eastern apartments have been angled towards the south-east to improve privacy from neighbouring development.

The project forms part of the continuing transformation of North Sydney from a predominantly commercial CBD into a genuine mixed-use city centre.

Since the completion of Victoria Cross Metro Station, developers have increasingly shifted their attention towards residential projects capable of leveraging the area's unparalleled transport connectivity.

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FiveX recently lodged plans for a 61-storey, 490-apartment tower that would become one of the tallest residential buildings in North Sydney if approved.

Aqualand continues to expand its Lower North Shore presence following the completion of AURA on Walker Street and its recent St Leonards and Roseville proposals.

Developers are also progressing projects throughout Walker Street, Miller Street and the Victoria Cross precinct as demand for well-located owner-occupier apartments continues to strengthen.

Joel Robinson

First look: Zurich targets North Sydney office conversion with 148-unit proposal above Metro station

Busy developer Aqualand Prestige has formally taken the next step in its expansion across Sydney's Lower North Shore, lodging a State Significant Development Application (SSDA) for its long-held Archer Street site in Chatswood.

The application covers <a href="https://www.apartments.com.au/new-apartments/51-55-archer-street-chatswood-nsw-2067">51-55 Archer Street</a>, a 1,767 sqm amalgamated site on the eastern edge of the Chatswood CBD, where the developer is seeking approval for a 45-level mixed-use tower delivering 114 apartments, including a significant affordable housing component, alongside retail, commercial space and six basement levels of parking.

The SSDA marks the latest milestone for a project Aqualand has been quietly progressing over the past two years. The developer first secured the site for its Aqualand Prestige platform before undertaking an alternative design excellence process with PTW Architects, ultimately avoiding a formal design competition through the Housing Delivery Authority pathway.

The proposal has evolved considerably from Aqualand's original concept. The revised scheme has been designed around larger owner-occupier product, with an unusually high proportion of three and four-bedroom apartments, targeting the more affluent buyer profile, and downsizer, emerging across the North Shore.

<img alt="Archer St" data-entity-type="file" data-entity-uuid="0171204c-5811-41b5-9b09-2335d1b7c3d0" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-22%20at%208.52.48%E2%80%AFAM.png?VersionId=6YTuxfq.puZo7k2wbfgemcO5K3QfXYGQ" />

The 114-apartment mix comprises six studios, 27 one-bedroom apartments, 18 two-bedroom apartments, 50 three-bedroom residences and 13 four-bedroom homes. A quarter of the building will be dedicated to affordable housing, well above the mandated 15 per cent&nbsp;

PTW has structured the building vertically, with affordable housing across levels one to six, premium apartments through levels seven to 31, duplex skyhomes on klevels 32 to 43, a penthouse on level 44, and a rooftop plant level above. Six basement levels will provide resident parking and servicing.

The tower is proposed to reach approximately 154 metres, placing it among a growing collection of residential high-rises transforming Chatswood's skyline.

Rather than competing purely on height, PTW says the design has been driven by creating a slimmer tower capable of delivering significantly larger apartments.

"The primary objective of this project was to create a distinctive building that stands out from the recently approved or built structures in the Chatswood area," the design report states, noting the structural efficiency allows greater investment into apartment quality and resident amenity.

Residents would have access to more than 450 sqm of communal open space including landscaped gardens, swimming pool, rooftop entertaining areas, fitness spaces, community gardens, children's play areas and barbecue facilities.

A major focus of the design has been the public domain.

The ground plane has been opened up through landscaped terraces inspired by Willoughby's sandstone ridges, with native planting, public seating, artwork, retail activation and a series of gathering spaces intended to soften what has traditionally been a hard commercial streetscape.

The landscape strategy references Blue Gum forests once common throughout the area, while incorporating Indigenous storytelling, public art and lighting installations to strengthen the connection to Country.

Chatswood has been one of Sydney's busiest apartment markets over the past 12 months, with a steady pipeline of both new project launches and fresh development applications.

Hyecorp recently launched Celine, a 122-apartment development just along Archer Street, while Changfa and Huirong Group are progressing The Anderson, an 84-apartment project on Anderson Street.

Develotek recently secured approval for a 101-apartment tower on Pacific Highway, while Tian An LFD received the green light for Hammond Greens, its apartment development on the edge of the Chatswood Bowling Club.

Commercial property developer FiveX is also making its move into the residential market. Last month it lodged plans for a 61-storey tower with 490 apartments, which, if approved, would become one of the tallest residential buildings in Chatswood.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-fivex-targets-chatswood-skyline-with-61-storey-tower-after-north-sydney-plans">First look: FiveX targets Chatswood skyline with 61-storey tower after North Sydney plans</a>

Aqualand is also expanding its development pipeline following the launch of its luxury residential brand, Aqualand Prestige. The developer has delivered a string of high-end apartment projects across Sydney's affluent suburbs over the past decade, most recently AURA by Aqualand on Walker Street in North Sydney.

[smartcode_project:default project_id=30959 project_image_fid=292863]

It has since quietly assembled its next wave of projects.

Earlier this year Aqualand launched Boronia in Roseville, a boutique 111-apartment development on Larkin Street. The project is one of the first significant apartment developments to launch in the suburb ahead of what is expected to become one of Sydney's most active new housing precincts under the NSW Government's Low and Mid-Rise Housing reforms, which allow greater density around train stations.

[smartcode_project:default project_id=152095 project_image_fid=373685]

The developer has also lodged plans for a two-tower, 413-apartment development on Herbert Street in nearby St Leonards, further strengthening its presence across the Lower North Shore.

Beyond that, Aqualand remains behind the final stage of Barangaroo, where plans will deliver a five-hectare mixed-use precinct comprising new homes, retail, hospitality and community facilities, alongside a new Metro entrance and more than two hectares of public open space, completing the Barangaroo precinct.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/central-barangaroo-development-takes-big-step-with-concept-proposal-approval">Central Barangaroo development takes big step with concept proposal approval</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-aqualand-joins-st-leonards-apartment-party">First look: Aqualand joins St Leonards apartment party</a> 
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First look: Aqualand pushes ahead with Chatswood apartment tower as SSDA lodged for Archer Street

Mass timber is becoming an increasingly popular construction material in apartment developments, but Adelaide developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> is taking the approach a step further.

At its new <a href="https://www.apartments.com.au/new-apartments/flowe-bowden-18-gibson-street-bowden-sa-5007">Flowe Bowden</a> development, the exposed cross-laminated timber (CLT) structure isn't just about reducing the building's environmental footprint. It also forms the foundation of a broader wellness strategy, influencing everything from indoor air quality and natural materials to the way residents move through and experience the building.

The 115-apartment mixed-use development, designed by Melbourne-based architecture practice Fieldwork, will occupy a prominent island site opposite Bowden Village Reserve, combining one, two and three-bedroom apartments with retail and a dedicated wellness destination.

[smartcode_project:default project_id=152022 project_image_fid=375528]

Wellness isn't confined to a gym or shared resident facility at Flowe. Instead, Fieldwork embedded the concept into the building itself.

The development has been split into two residential wings connected by a naturally ventilated central breezeway, replacing traditional enclosed corridors with open-air walkways that improve natural light, encourage cross ventilation and create more opportunities for neighbourly interaction.

"Rather than treating wellness as something that only happens on the ground floor, our response integrates it throughout the building, which led us to ask what it really means to design a healthy building," Fieldwork Director Quino Holland said.

[smartcode_project:default project_id=152022 project_image_fid=375531]

The building's architecture also reflects Bowden's industrial heritage. The lower podium references the area's historic brick and sandstone buildings, while the upper levels transition to exposed CLT, allowing the timber structure to become a defining feature throughout the apartments and shared spaces.

The use of mass timber sits alongside a range of sustainability initiatives, including a fully electric, gas-free design, rooftop solar and a targeted 5 Star Green Star rating.

[smartcode_project:default project_id=152022 project_image_fid=375524]

Inside the residences, the focus remains on natural, durable materials. Blackbutt engineered timber flooring, exposed CLT ceilings, porcelain surfaces and warm timber joinery create a calming interior palette, while low-VOC finishes and responsibly sourced materials have been selected to improve indoor air quality.

Kitchens have been designed as the centrepiece of each apartment, featuring porcelain island benchtops, timber-look cabinetry and brushed steel tapware, with layouts that maximise natural light and ventilation.

[smartcode_project:default project_id=152022 project_image_fid=375530]

The more traditional interpretation of wellness comes in the form of Level Eleven, a two-storey wellness club spanning the ground floor, mezzanine and first floor.

The facility will include a gym, yoga and reformer Pilates studios, Finnish and infrared saunas, magnesium hot and cold plunge pools, and dedicated recovery spaces. Unlike many residential wellness facilities, Level Eleven will also operate commercially, allowing the broader Bowden community to access the venue while giving residents exclusive membership benefits.

The ground floor has also been designed around everyday living. A café overlooking Bowden Village Reserve will activate the street frontage, while a bike workshop with tool storage, co-working space and dog wash has been incorporated to support daily routines and encourage interaction between residents.

"Flowe brings together my two biggest passions, creating places and creating healthier lives," Otello founder Daniel Harris said.

"We wanted to create something Adelaide hasn't seen before, a genuinely healthy building, where the way you live is lifted without even trying."

Flowe is positioned directly opposite Bowden Village Reserve and within walking distance of Bowden Railway Station and the Adelaide Entertainment Centre, placing future residents just minutes from the Adelaide CBD while remaining connected to one of the city's most established urban renewal precincts.

[smartcode_project_cta:default project_id=152022]

Otello launches wellness-focused Flowe Bowden with Adelaide-first mass timber apartment design

Not all apartment amenities are immediately visible.

Swimming pools, gyms, rooftop terraces and residents' lounges have long featured on buyers' wishlists, but as the way Australians live has changed, so too have the features that make apartment living more convenient.

Increasingly, buyers are placing value on the practical aspects of day-to-day life. Fast internet, EV charging, secure bike storage, flexible workspaces and parcel management are becoming just as relevant as lifestyle amenities, reflecting changing habits and expectations.

Online shopping has been one of the biggest drivers of that shift.

Australians spent a record $82.6 billion shopping online in 2025, with almost one in every four retail dollars now spent digitally, making parcel deliveries a routine part of everyday life rather than an occasional convenience.

For apartment residents, however, receiving those deliveries isn't always straightforward.

Without someone home to accept a parcel, deliveries can be redirected to a nearby Post Office, left in building foyers or common areas, or require building management to temporarily store packages. As apartment living continues to grow across Australia's cities, parcel management has become an increasingly important consideration for both residents and developers.

Australia Post's Parcel Locker network is one response to that shift.

<iframe allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen="" frameborder="0" height="315" referrerpolicy="strict-origin-when-cross-origin" src="https://www.youtube.com/embed/KPZ9j5FRdsQ?si=Qztc1dNP3ZvEIUhb" title="YouTube video player" width="560"></iframe>

Rather than relying on home delivery, eligible parcels can be directed to a nominated Parcel Locker, where they're securely stored until collected. Once a parcel arrives, residents receive a notification through the AusPost app or SMS and can retrieve it using a one-time code or QR code at a time that suits them.

The network has expanded to more than 1,500 locations nationwide, with Parcel Lockers positioned at Post Offices, shopping centres, supermarkets, transport hubs and, increasingly, within or alongside residential developments.

That growing presence reflects a broader change in how apartment buildings are being planned.

Developers are increasingly considering the operational side of apartment living alongside traditional lifestyle amenities. Just as secure mailrooms, bicycle storage and EV charging have become more common inclusions, parcel management is emerging as another feature that supports everyday convenience.

It also helps preserve the arrival experience within a building. Carefully designed lobbies and communal spaces can quickly become cluttered when deliveries accumulate, while secure parcel solutions reduce the likelihood of missed deliveries or parcels being left unattended.

For buyers comparing apartments, these everyday details are becoming part of the decision-making process.

Location, floorplans and finishes remain fundamental, but the features that simplify daily life are carrying greater weight than they once did. As online shopping continues to shape consumer behaviour, secure parcel delivery is increasingly becoming another amenity worth looking for.

Parcel delivery is joining the apartment amenity checklist

Inca Property Group has lodged a State Significant Development Application (SSDA) for Dawn, a 53-apartment oceanfront development overlooking Mona Vale Beach.

The proposal, at 35-39 Darley Street East, would replace an existing 18-apartment strata building with a new owner-occupier-focused development comprising 53 two and three-bedroom apartments, including nine affordable built-to-rent residences delivered under the State's infill affordable housing scheme.

Positioned on a 2,679 sqm elevated site around 280 metres from Mona Vale Beach, the development has been designed to maximise panoramic ocean views while responding to the site's sloping topography.

<a href="https://www.apartments.com.au/developers/inca-property-group">Inca Property Group</a> Managing Director Josh Thompson said the State Significant pathway provided greater certainty for projects of this scale.

"This State Significant pathway gives the team real certainty to progress <a href="https://www.apartments.com.au/new-apartments/dawn-35-39-darley-street-east-mona-vale-nsw-2103">Dawn</a> through to completion," Thompson said.

"It allows us to acquire a one-off site, design it carefully and deliver the right offering for the suburb, assessed by the NSW Government's planning department."

The project is one of the first developments in the area to be assessed under the NSW Government's Low and Mid-Rise Housing policy, with the site sitting on the edge of the policy's designated inner area.

The proposal includes three basement levels providing 124 car spaces, alongside a range of resident amenities including a swimming pool, gym, sauna, wellness facilities and private plunge pools for selected ground-floor and penthouse apartments.

<img alt="Dawn" data-entity-type="file" data-entity-uuid="fc1a1daf-0ce4-4f12-9076-b1fa553c7a91" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-21%20at%208.42.11%E2%80%AFAM.png?VersionId=4GZ9h.gpNkTljbxyAET8Jfhv51XUamDm" />

Thompson said Dawn had been designed specifically for owner-occupiers and downsizers, a buyer profile that has driven demand across Inca's recent Upper North Shore developments.

"The majority of buyers in our recent North Shore projects have been downsizers, and we are learning exactly what this market is looking for. Beyond the location itself, we have included resort-style amenities to deliver a genuine lifestyle offering," Thompson said.

Located within walking distance of Mona Vale Beach, the town centre, Mona Vale Golf Club and the Royal Motor Yacht Club, Dawn represents Inca's first Northern Beaches project following the sell-out of Tara on Park in Waitara and Ellis Residences, currently under construction in St Ives.

Construction will be undertaken by Inca's in-house construction arm, GOP Constructions.

Dawn is the latest major apartment proposal for Mona Vale, with the suburb emerging as one of the key beneficiaries of the NSW Government's new Low and Mid-Rise Housing policy.

New developer One Living, led by industry veteran Joseph Scuderi, recently secured a site on Mona Vale Road, on the border of Mona Vale and Pymble, where it is planning around 140 apartments.

IPM is also planning its third project in Mona Vale, significantly increasing the scale of its previous developments with an 82-apartment proposal at <a href="https://www.apartments.com.au/new-apartments/159-167-darley-street-west-mona-vale-nsw-2103">159-167 Darley Street West</a>, opposite Bayview Golf Course and less than 800 metres from Mona Vale town centre.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/one-living-enters-sydneys-new-apartment-market-with-northern-beaches-site-acquisition">One Living enters Sydney's new apartment market with Northern Beaches site acquisition</a>

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/first-look-ipm-plans-third-mona-vale-project">First look: IPM plans third Mona Vale project</a>

First look: Inca eyes Mona Vale with State Significant DA for Dawn apartments

Office

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Serviced office space provider Servcorp has signed onto a floor of the landmark One World Trade Centre, which is currently under construction in Manhattan.
Servcorp took a 15-year lease on the 85th floor, its fourth Manhattan site. 
Servcorp's three Manhattan locations are in 17 State Street, 1330 Sixth Avenue, and 375 Park Avenue.
The Australian company, which operates serviced and virtual office space across 136 floors in 52 cities in 21 countries, last week reported a rise in net profit for the year.
The group expects to increase net profit by 15% in 2015.
Globally the floors are 79% occupied, just below the 85% figure they view as optimal. 
"We’re 90% occupied in the US,” Servcorp chief operating officer ­Marcus Moufarrige told Fairfax Media.
The 3,230 square metre floor in One World Trade Centre would be the only serviced offices available within the building to be anchored by publisher Condé Nast.
It is reportedly expected to spend $1.8 million fitting out the 85th floor.
The new tenant brings One World Trade Center to almost 57.5% leased, ahead of its expected opening in late 2015.
The building, set to be the tallest in the Western hemisphere, is being developed as a joint venture between The Port Authority of New York and New Jersey and the Durst Organisation.
They were recently forced to cut rents in the middle floors to $69 per square foot.
The upper floors have $75 to $100 per square foot asking prices.
The <a href="https://online.wsj.com/news/articles/SB10001424052702303903304579586270070420060" target="_blank" style="line-height: 1.3em;">Wall Street Journal reported</a> when the middle-floor rents were cut in May that the $3.9 billion project "has little hope of proving to be a good financial investment in the short-term".
 
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Servcorp secures New York One World Trade Center office space

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Capital values for office property in Australia’s major cities will rise as tenant demand increases and investors becoming more willing to accept lower yields, experts have forecast.
Competition for commercial properties in Australia is already strong with institutions such as sovereign wealth funds from Europe and Asia, real estate investment trusts and foreign private investors drawn to the markets by higher yields than available elsewhere.
“That influx [of investors] is really chasing high sustainable yields particularly in the office market,” Australian Unity head of property funds Mark Lumby said.
Office assets in Australia’s capital cities are producing yields of 6.5% to 7.5%, whereas similar assets in cities such as London, England yield only 3.5%, Lumby said at the manager’s quarterly outlook presentation to financial planners last week.
When global property market recover following economic downturns, yields on properties in gateway cities such as New York and London fall, and capital values rise, before that happens with similar properties in Australia and Asia, he said.
“Australian cities are late recovery markets and they will follow the gateway markets ... There’s still a lot of room for Sydney and Melbourne [office property yields] to tighten and as they tighten property prices will increase.”
Factors such as increasing supply and low tenant demand due to the weaker economy over the past few years had limited capital values in Australia’s cities, Lumby said.
However, foreign owners such as <a href="/news/the-ngs-singapores-richest-family-spend-425-million-on-sydney-trophy-property">Singapore-based Far East Organization have been buying office buildings in Sydney and Melbourne</a> and converting them into residential apartments. 
“By converting office space to residential they are effectively taking some stock out of the market and that’s keeping a lid on vacancy rates,” he said.
Vacancy rates nationally for office buildings are 10.7% on average, ranging from 8.4% in Sydney to 14.7% in Brisbane.
“As we see tenant demand come back from office tenants we should see some good growth in capital values from office,” Lumby said.
His views are echoed by forecasts made by Colliers International in its second half Research and Forecast Report for CBD office, released last week.
Colliers International predicts that based on new supply, withdrawals, pre-commitments, backfill and demand, the Sydney CBD office market is experiencing a prolonged recovery in vacancy rates.
Vacancy rates in Melbourne’s CBD office market fell in the first half of 2014, but Colliers believes this is only temporary as 67,000 square metres of new office space will be completed in the second half of the year which will push vacancy rates higher.
Despite the forecast increase in vacancy rates, Colliers International predicts strong rental growth for offices in Melbourne’s CBDs, or around 3.7%.
Sydney's market is expected to have the strongest rental growth with of 7.7%, driven by growing demand from information technology and telecommunication companies.
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Foreign investors chasing high yields set to drive office capital values higher

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No longer are Australia's main capital cities' office markets in sync.
During the last century, the CBD markets seemed to operate within a fairly regular 18-year cycle — in other words, from "peak to peak".
However, all at ceased when the global financial crisis hit in 2008.
In the lead up to that, developers in Sydney and Melbourne had predominantly undertaken projects with significant tenant pre-commitments.
Brisbane and Perth had seen a huge amount of speculative development occur — driven by the hype of the mining boom.
<img src="https://his-best.biz/assets/2014/08/CBD-Offices.jpg" alt="CBD-Offices">
Source: Property Council of Australia, via Fairfax.
The Wash Up?
As the table above confirms, there is now a massive disparity between the various capital city office markets.  
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Sydney and Melbourne were the only cities to improve their vacancy.
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As you can see, the latest PCA survey shows Sydney and Melbourne were the only cities to improve their vacancy for office space, over the past six months.
For Brisbane and Perth, vacancy rates have clearly blown out, while demand is actually falling.
Over the period, you saw the vacancy rate for Sydney decline from 9% to 8.4%. Similarly, the rate for Melbourne dropped from 8.7% to 8.5% and sits at around just 4%, for Docklands.
The Mining States
By contrast, the vacancy rate in Brisbane rose from 14.2% to 14.7%. It will most likely hover around this level for the next few years.
The Perth market is not far behind — with its vacancy rate rising from 9% to 11.8%, over the past 6 months. As with Brisbane, demand for space has declined; and Perth's vacancy rate may creep even higher, over the next few years.
Looking Forward
Since late last year, the Sydney and Melbourne markets have certainly improved. And you are already seeing major investment from overseas buyers — keen to capitalise on the upturn, and rising prices.
Unfortunately, Brisbane and Perth are probably lagging between three to four years behind — because of the huge amount of vacant space needing to be absorbed.
Bottom line: You can expect the Sydney and Melbourne office markets to grow solidly over the next four or five years — and are likely to peak around 2019/20.
That may well be the time for you to switch your investing to Brisbane and Perth — as they will then be enjoying their recovery phase.
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There are now massive disparities between capital city office markets

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Swann House at 22 William Street, Melbourne, has been sold by Kliger Wood Real Estate for $21.6 million.
Chinese interests secured the property after 140 plus enquiries were received from Asian, Middle Eastern and local investors.
Kliger Wood director Eugene Wood says the purchaser was a Chinese group with other recently acquired holdings in the Melbourne CBD.
The 10 level commercial office building on the corner of William Street and Flinders Lane has a gross building area of 7,000 square metre with a net building area of 5,700 square metre.
The building, which is about 90% leased at present to show a net income of $1,328,000, was marketed with potential hotel or residential conversion.
Eugene Wood gave no indication on buyer intention.
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Swann House, Melbourne sold for $21.6 million to Chinese buyers

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Five office buildings have been sold by Golder Associates across three states, securing almost $20 million, in an effort to take advantage of a "hot commercial market" and to sell non-core assets.
The employee-owned company provides independent consulting, design and construction services.
The buildings, in New South Wales, Queensland and South Australia have seen Golder Associates lease back their premises, achieving 9.2% yields.
Colliers International portfolio coordinator, Rob Joyes, said that the Austerra Holdings Portfolio, which was sold on behalf of Golder Associates, was handled by a number of selling agents including Jock Murray, Ian Thomas, Chris Veitch, Jay Beattie and Nick Dowling.
The 212-216 Draper Street, Cairns, two-level office building sold for $1,425,000. It had an NLA of approximately 590 square metres and attained a 9.1% yield.
In MarOochydore, Queensland, 55 Kingsford Smith Parade, a two-level office and laboratory building, sold for $1.75 million. It was on a 9.25% yield, and included NLA of approximately 540 square metres on a 728 square metre site.
Toowoong, Queensland, 611 Coronation Drive included a freestanding two-level office building that sold, with vacant possession, for $5.1 million. It had a total NLA of 1,779 square metres and included 37 car parking bays.
A refurbished three-level office building at 124 Pacific Highway, St Leonards (pictured above) in New South Wales secured $9.6 million and a 9.2% yield. It had an NLA of approximately 2,124 square metres and total land of 1,232 square metres.
Their last offering, a South Australian office, warehouse and laboratory on 199 Franklin Street, Adelaide, sold for $1,825,000 with vacant possession.
“A number of major corporates are selling their real estate to put the money back into their operating business and we think this trend is going to continue,” said Joyes, of what he considers to be a trend of owner-occupier commercial sellers.
“One of the great benefits of a sale and leaseback transaction is the ability for the owner-occupier to increase their financial flexibility,” he said.
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Golder Associates sells five office properties for nearly $20 million in total

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A five year lease of 1,466 square metres of additional space has been agreed to at 20 Windmill Street by Dentsu Aegis Network (Aegis).
Aegis had already been occupying 4,578 square metres over three floors at the site. Savills Leasing's Jonathan Kearins brokered the extension deal.
Rents are understood to be circa $580 to $700 per square metre net at 20 Windmill Street. Next door Barangaroo rents are said to be $900 to $1,100 per square metre net.
Aegis’ current lease was due to expire in March 2015.
“It was an excellent result for both the tenant and the landlord that this additional floor became available for lease,” said Kearins.
The building is called Bond One and is an A grade office building built in late-2008, including 9,150 square metres of space and 175 car spaces.
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Aegis leases additional Walsh Bay office space

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CBD office markets in Australia are still seeing substantial foreign investment interest, with sales to foreign investors recently topping their 10 year record, according to Savills.
Approximately $12.8 billion of office sales, including those outside the CBD, were recorded in the 12 months to June 2014. Foreign buyers were responsible for 39% of the sales - $5 billion, explains Savills national head of research Tony Crabb who compiled the information.
<img src="/images/2014/08/06/savills-aug-6-one.gif" alt="">
During the 12 months, 246 properties were purchased. In the 12 months prior, the total was 199, and the five year average was recorded as 191.
Of $6.8 billion of CBD office transactions nationally, foreign investment totalled 47% of the purchases, or $3.2 billion, with much of the capital coming from Europe and South East Asia, as well as Mainland China.
<img src="/images/2014/08/06/savills-aug-6-two.gif" alt="">
Savills International Investments’ Ben Azar said the results were positive for the market.
“This is a very good sign for the Australian property market and as a result in key markets such as Sydney and Melbourne we anticipate further yield compression particularly in respect to quality long leased landmark assets,” said Azar.
"With such a depth of buying power we expect the off-shore capital to become even more competitive over the balance of 2014," he said.
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Australia’s CBD offices maintain place on foreign investment radar

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A new record land rate for North Melbourne, of $6,358 per square metre, has been set by a Chinese buyer who paid $13.2 million for an office building on the edge of the CBD. This totaled 32% over reserve, according to Savills Australia selling agents Clinton Baxter and Nick Peden.
The property, 13-21 Bedford Street, was owned by Engineers Australia and is currently leased to six tenants totaling 52%.
It is a 2,219 square metre building on 2,079 square metre site. It is zoned mixed use, which has the potential for development of up to 24 metres or approximately eight levels.
It isn’t clear what the buyer intends to do with the site in the long-term, however redevelopment is a clear option. In the short to medium term, the property will be leased.
“The price of $13.2 million reflects a new land value record for North Melbourne of over $6,000 a square metre and is an indication of the immense competition for high quality properties with strong development fundamentals,” said Baxter.
In total, the campaign attracted 125 enquiries and 29 inspections.
There were then 11 expressions of interest, and Peden notes that the top three buyers were off-shore located.
“We have had enormous enquiry from off-shore buyers for similar properties with development potential and so it was no surprise that there was such strong foreign interest in this property,” he said.
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Chinese buyer pays 32% over reserve, a record land rate, for North Melbourne office site

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A B-Grade Sydney CBD office has been leased to Petrofin International as they grow their Australian operations.
CBRE’s Jamie King leased the 495 square metre 14th level office on behalf of lessor AIHL Properties Australia.
It is located at 189 Kent Street, and Petrofin International has committed to a seven-year term for an initial rate of $485 gross per square metre.
The national property representative for the client, Corporate Relocations, handled the negotiation for Petrofin. Their brief was to have all the staff on one level, and being close to Barangaroo was seen as a benefit.
“Petrofin was attracted to the building's central position in the CBD, as well as the building's recent refurbishment, which included upgrades to the lobby and lifts,” King said.
“Flexibility with the incentive structure also contributed to the successful conclusion of negotiations.”
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Petrofin Inernational leases Sydney CBD office

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Raffles Assets Australia, a subsidiary of Singapore’s Raffles Education ­Corporation, has bought in Parramatta.
Their $29 million purchase which will assist the renaissance of the precinct, is a six-storey office building at 1-3 Fitzwilliam Street.
It sold vacant possession opposite Parramatta Train Station and the Westfield shopping centre through Arland Domingo and Peter Hanzis of Knight Frank.
It was last sold in late 2010 by Trinity Property at $28.3 million representing an initial yield of 9.15% when occupied by the NSW Office of Fair Trading on leases until May 2013, returning net income of $2,509,434 per annum.
Enterprise House was bought in 2010 by Action Office Pty Limited, of the Chandru Tolani property investment group, which paid $18 million in late 2012 for nearby 16-18 Wentworth Street property whose tenants included the Australian Vocational Learning Centre Pty Ltd.
Raffles Education Corporation is the largest private education group in Asia Pacific, according to its website.
The property will be redeveloped as a permanent campus for the company’s college in Sydney, the Raffles College of Design and Commerce – which currently operates out of leased premises.
The building with a net lettable area of 9,782 square metres has been occupied by the NSW Department of Fair Trading.
It has a land size of 2,049 square metres.
Photo courtesy of Google. 
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