Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.

Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;

David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;

“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;

[smartcode_project:default project_id=110291 project_image_fid=302785]

<h2>Affordable product leads, premium demand remains resilient</h2>

Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;

Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;

At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.

Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.

Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;

[smartcode_project:default project_id=148957 project_image_fid=364102]

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.

David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.

“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;

Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.

[smartcode_project:default project_id=108869 project_image_fid=317905]

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;

Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;

However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.

Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;

Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.

The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.

Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.

“Brisbane was the right step for Sammut,” Sammut said.

“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" />

Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.

The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.

“We are DA approved now which is very exciting,” Sammut said.

“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”

<img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" />

Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.

“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.

The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.

“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”

The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.

The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.

Sammut secures approval for debut Brisbane apartment development in Toowong

Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.

Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.

The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.

“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.

“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.

“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”

The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.

“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”

From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.

“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”

The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.

“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.

Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.

“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.

“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”

The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.

“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.

Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.

&nbsp;

Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.

The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.

It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.

With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.

“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.

“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" />

GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.

“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”

Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.

“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.

<img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" />

&nbsp;

One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.

Green praised local policy settings.

“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”

One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.

“The way we will be able to achieve economies of scale is through size,” Green added.

One Living enters Sydney's new apartment market with Northern Beaches site acquisition

It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.

Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.

Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be

"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.

"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."

[smartcode_project:default project_id=134646 project_image_fid=6109]

The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.

The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.

Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.

[smartcode_project:default project_id=134646 project_image_fid=6110]

Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.

The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.

[smartcode_project:default project_id=134646 project_image_fid=6116]

While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.

WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.

With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.

[smartcode_project_cta:default project_id=134646]

WM Residences fills gap in Mordialloc townhouse market

Retail

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Retailer Pepkor’s first Australian Debenhams store in Melbourne, which opens next week, gives a peek into what a department store may look like in the future.
The store is a small in size and stock from a typical Myer or David Jones store, but expects to offer a curated range of brands chosen with the Australian shopper in mind.
Debenhams is a British multinational retailer which operates under a department store format. UK retailer Debenhams has identified Australia as a strategic priority and aims to triple online sales in its first year operating in Australia.
Pepkor south-east Asia's department stores managing director Graham Dean told The Australian Financial Review that the new format was the way forward for the department store sector, which is facing increasing competition from online stores and global bricks-and-mortar retail chains.
The official opening is on October 24.
"We have basically come up with the concept for this market because we believe the future of a department store isn't to trade in a 10,000 square metre space over multi levels," said Dean, a former Myer executive who also runs Pepkor's Harris Scarfe department stores.
He added that the modern fashion and beauty customer is time poor and would like the retailer to do the curating and come up with the “best possible range."
The smaller format will generate higher sales per square metre than a traditional department store but staff ratios will be higher and they will be trained to work across all categories and brands.
The Debenhams store is the anchor tenant in JPMorgan's refurbished St Collins Lane retail centre in Collins Street and occupies the ground and lower ground floors. It will span 3,600 sqm. 
The range of 30,000 SKUs includes international cosmetics brands and exclusive women's, men's and homewares brands from Debenhams, including the Duchess of Cambridge's favourite designer Jenny Packham, Siren by Giles Deacon, Butterfly by Mathew Williamson, Henry Holland, J by Jasper Conran, Hammond and Co and Racing Green.
The four-level mall has struggled to find tenants to occupy shops on upper floors so far, but Dean said the site was selected to take advantage of the "ant track" from Flinders Street to Melbourne Central, which attracts about 17,500 people a day.
“We are not a traditional department store and that is the key,’’ Mr Dean told The Australian.
“We are small format. Myer would be around 10,000sq m in average size; we are 3600sq m and we will never go above 4500sq m in any of the stores we open, so we are not trying to compete in a traditional department store sense.
“Therefore we don’t feel we are subject to the same pressures a Myer or David Jones have. We don’t have kidswear; we aren’t trying to sell toys; we won’t sell LED TVs in a market where you have a JB Hi-Fi better at it, or iPads or any of those items. We are in the beauty business, the fashion business and it is curated to fit the space we occupy.’’
Pepkor has links into the Australian retail market. Global retailer Steinhoff International bought Pepkor three years ago for $6.7 billion, and it owns a large portfolio of retailers in Australia, including Best &amp; Less, Harris Scarfe, bedding chain Snooze and furniture retailers Fantastic, Plush and Freedom Group. Mr Dean said the Australian retail market had always been competitive, but there was a place for an operator like Debenhams, which aims to open 10 stores here.
Meanwhile Myer and David Jones are shrinking stores to improve productivity and opening smaller-format stores.
But with 15 and 20-year leases it will take time to significantly change their networks, observers noted.
In spite of the luxury brands, Debenhams intends to keep prices more in keeping with private labels at Myer, ranging from $99 for women's jackets to $399 for sequinned evening dresses.
"We're elevating the environment and service levels but not the pricing," said Dean. "It's got to be good value for money."
The four-level mall has struggled to find tenants to occupy shops on upper floors, but Mr Dean said the site was carefully chosen to take advantage of the "ant track" from Flinders Street to Melbourne Central, which attracts about 17,500 people a day.
The range of 30,000 SKUs includes premium international cosmetics brands and exclusive and private label women's, men's and homewares brands from Debenhams, including the Duchess of Cambridge's favourite designer Jenny Packham, Siren by Giles Deacon, Butterfly by Mathew Williamson, Henry Holland, J by Jasper Conran, Hammond and Co and Racing Green.
Mr Dean also promises to bring a touch of the British high street to St Collins, stocking youth fashion brands not available in Australia, such as Coast, Oasis, Wallis and Warehouse.
"We're elevating the environment and service levels but not the pricing," said Mr Dean. "It's got to be good value for money."
 
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jonathanchancellor-7SQnKwU6yx

Debenhams' smaller format offers a glimpse into future Australian department stores

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Leading furniture retailer, Steinhoff International Holdings has nearly doubled the size of its warehouse facilities in Frasers Property Australia’s flagship 6 Star Green Star Horsley Drive Business Park, Wetherill Park.
The company has secured a further 8,900 sqm over a seven-year period, taking its total purpose-built warehouse and office space to 18,869 sqm. The asset is worth $34 million.
Royal Comfort Bedding and Select-O-Pedic, owned by Steinhoff, will utilise the new warehouse space. 
The strong growth in the property sector has helped drive demand for additional warehouse space and this is expected to continue.
Listed Steinhoff has 275 retail stores across Australia and eight retail brands, some including Freedom Furniture, Fantastic Furniture, Snooze and Plush.
“Horsley Drive Business Park has become very popular with furniture retailers. We have now secured four in the park including Nick Scali, Vivin Imports, Royal Comfort Bedding and Select-O-Pedic,” said Ian Barter, general manager Commercial &amp; Industrial Northern Region for Frasers Property Australia.
“Horsley Drive Business Park provided the perfect strategic location for Steinhoff to consolidate its expanding operations. It made smart business sense to co-locate two of its distribution operations to one central location.” 
The business park has access to the M7 and other major motorways. Its 6 Star Green Star rating is also attracting companies. Martin Brower, Survitec Group, Nick Scali, and Phoenix Transport are already located in the business park.
The 20.4 hectare site is owned by the Western Sydney Parklands Trust (WSPT) and is located on the corner of Cowpasture Road and Horsley Drive, Wetherill Park. 
Frasers Property Australia entered into a development agreement and long-term ground lease with WSPT to the high-quality industrial estate with a mix of facility types. 
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Furniture retailer Steinhoff doubles space at Fraser Property's Wetherill Park

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JLL’s latest retail survey shows food-based retailing strategies continue to be top of mind for shopping centre managers looking to improve performance of their centres.
Food-based and non-discretionary retailing has been a top performer in shopping centres and centre managers have been devising strategies to encourage the trend to improve overall performance, according to a recent JLL survey. 
Retail vacancy rates in neighbourhood shopping centres, which strongly feature food-based and non-discretionary based retailing, increased in the first six months of 2017 – from 2.6% of vacancy in December 2016 to 3% in June 2017.  
However, vacancy rates remained below the long-term average of 4.5% reported across the 17 Centre Managers conducted to date, according to JLL’s 17th Retail Centre Managers’ Survey.
The survey, undertaken in August across 119 Australian shopping centres under JLL management, also found the performance of anchor tenants was key to maintaining high occupancy levels to combat retail vacancy in centres.
JLL’s head of Property &amp; Asset Management – Australia, Richard Fennell said attracting additional anchor tenants or mini-anchor stores was highlighted as improving the occupancy rates and rental income of some shopping centres.
“This is a strategy that works, along with changing the tenancy mix to include food-based retailing and services such as medical centres, financial services and travel agencies. Shopping centre owners are reconfiguring and refurbishing centres to provide upgraded and expanded services to attract customers,” Fennell said.
“Owners and managers are constantly refining their strategies to address the key concerns identified in the survey that are impacting on trading performance – competition, growth in online retailing, and a challenging economic outlook.” 
<a href="https://www.propertyobserver.com.au/images/2017/10/04/JLLRetail1.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/10/04/JLLRetail1.png" alt="">
<a href="https://www.propertyobserver.com.au/images/2017/10/04/JLLVacancy.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/10/04/JLLVacancy.png" alt="">
The survey also revealed a slight improvement in sales growth expectations, with 53% of respondents expecting some sales growth in the year ahead, up from 47% in February 2017.  But most respondents expected growth to be no more than 3% per annum.
JLL’s director, Strategic Consulting, David Snoswell said consumer sentiment has been weak for an extended period of time across the nation.  
The Westpac-Melbourne Institute Survey of Consumer Sentiment has been below the 100 neutral mark between December 2016 and August 2017, dropping to a low of 95.5 in August.
“20% of respondents to our survey said they expected a decline in sales turnover in the next 12 months and gave a range of reasons for this, including strong competition in the catchment they operate in, the loss of a key tenant and the need for the centre to be refreshed/refurbished,” said Snoswell.
“When we asked shopping centre managers what factors were impacting turnover performance, competition from other centres remained the key area of concern (with a net balance of -38%), followed by online retailing (-25%) and the economic outlook (-23%).
“In contrast, the most positive factor for trading performance continues to be changes to the tenancy profile of centres to improve performance.” 
 
 
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Food-based retailing is the standout retail performer: JLL survey

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Convenience stores could reinvent themselves by selling alcohol, takeaway meals and pharmaceuticals, according to a new report that looks into the Amazon challenge and other technology related disruptors.
The report, commissioned by the Australasian Association of Convenience Stores, says that the while the $8.3 billion convenience sector is facing disruption from the entry of Amazon and driverless and electric cars, it can position itself to cash in on changing consumer trends for "extreme convenience" and instant gratification.
The study was carried out by the Australian Centre for Retail Studies (ACRS) at Monash Business School.
It said convenience stores needed to become destinations for goods and services, rather than relying on impulse purchases when filling up fuel, partnering if needed with suppliers and partners to sell fresh food, take-home meals and provide home deliveries.
They should also aim to improve in-store experiences and use technology such as mobile phone apps, digital payments and beacons to make their locations even more convenient for traditional customers and to attract tech-savvy millennials.
"Previously, convenience stores used to be about desperation rather than destination," AACS chief executive Jeff Rogut told  The Australian Financial Review.
"With so many changes happening around things like driverless vehicles and electric vehicles, the bastion of selling petrol and hoping people will buy something else is a thing of the past," Rogut said.
He added that retailers needed to be agile as it was about “keeping the core and appealing to more, it's not about alienating our current customers”.
For the project, Convenience 2030, the ACRS interviewed convenience retail sector leaders and looked at trends in Australia and overseas, where 7-Eleven, for example, is making home deliveries in Japan for orders as low as 600 yen ($6.70) and selling heat-and-eat meals in the US, according to the AFR.
In Australia, Caltex has already entered into partnerships with fastfood companies such as Sumo Salad, Guzman Y Gomez and Boost Juice while also offering services such as laundry, parcel collection and meal kit deliveries.
Geelong-based Apco Group has opened 24-hour-a-day cafes and drive-through outlets in several locations in Victoria.
Oil giant BP too has plans to sell takeaway food, prepared meals and groceries in partnership with Woolworths, drawing on its alliances with Marks &amp; Spencer in Britain and Rewe in Germany, if its $1.8 billion acquisition of Woolworths fuel business is approved by the competition regulator.
Meanwhile, several convenience chains retailers were seeking alcohol selling licences after a Senate committee recommendation in March that convenience retailers be allowed to sell beer and wine.
Citing Japanese retailer Family Mart, Rogut said convenience retailers could have co-tenancies with pharmacy retailers such as Chemist Warehouse to provide handy locations with longer trading hours.
"Both could very successfully trade off each other's customers – it becomes more of a destination and enables pharmacies to open longer and improves security," he said.
Amazon could be more of an opportunity than a threat for the convenience sector, Rogut added, particularly if it launched its business-to-business service in Australia and enabled retailers to buy goods at cheaper prices than they currently did through wholesalers such a Metcash.
"That may be an opportunity for smaller operators to buy their products more efficiently and sell more competitively.” 
The convenience sector grew 4.5 per cent in 2016, according to the AACS, outperforming the meagre 1.2 per cent growth in the $90 billion grocery sector, and Rogut expects similar rates of growth for the next few years.
"The industry is very optimistic and positive about the future," he said.
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Amazon could be boon in disguise for convenience retail: Study

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US bulk discount retailer Costco will open its newest store in Marsden Park in Sydney’s north-west on August 30.
The store is located within the 256 hectare Sydney Business Park precinct, and will be the bulk goods giant’s third Sydney outlet and ninth store nationwide, it said in a media release.
Spanning 13,575 sqm, the store includes a Costco fuel station, tyre centre, food court, optometrist, hearing aid services and fresh food production.
Property Observer had reported earlier that Costco that the retailer had secured a 59,830 square metre site at the business park.
The site is within the large format retail precinct at Sydney Business Park, in Marsden Park. 
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The business park spans 115,000 sqm in floor space, making it one of Australia’s biggest Large Format Retail Centres. 
Other retailers at the business park include ALDI, Baby &amp; Toddler Town, Beacon Lighting, Bunnings Warehouse, Carpet Call, Coles Express, Costco Wholesale, Forty Winks, Home Consortium Marsden Park, Home Hub Marsden Park, IKEA, JB Hi-Fi Home, Knotts Pine, Lindt Factory Outlet, Reece, Repco, Shell, Snooze, and The Good Guys.
Sydney Business Park project manager Owen Walsh said Costco joins a growing business and retail community in Marsden Park.
Sydney Business Park has secured nearly $600 million in investments to date, said the media release. 
“Costco Wholesale Australia is a welcome addition to Sydney Business Park, which is fast becoming a major shopping and warehouse distribution/ logistics destination for the region,” Walsh said.
It has an ongoing partnership with Marist 180 and Beacon Foundation to train and provide job placement opportunities and supporting local schools with businesses in the project.
“Our work with Marist 180 and the Beacon Foundation is starting to make an impact in the local community. The placement of almost 3,000 jobs, on our way to 30,000 jobs is really fast tracking the economic growth for the region,” Walsh added. 
“New retail has created new jobs and that has attracted people to relocate here to be closer to where they work or to find work. The next five years will see even more dramatic transformation with major commercial towers to be built as well as a major town centre. By 2025, the surrounding North West Growth Centre is expected to support 177,000 new residents and 61,900 new homes,” he said.
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Costco Wholesale Australia managing director Patrick Noone added that the Marsden Park store opening indicates the retailer’s growth in the Australian market.
“Since we launched in Australia a decade ago, the Costco brand continues to be a standout success thanks to consumers who love the products we stock as well as our unique business model, which provides outstanding value to our membership base.”
 
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Costco launches store in Sydney Business Park

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Auto accessories and parts firm Autobarn is on the lookout for sites with high visibility as it seeks to grow its network of stores across Australia.
The company has 121 stores across the country and has set a growth target of 200 stores in five years, it said in a media release.
The Australian company said it was seeking high-profile roadside locations at existing retail locations or greenfield sites, and is open to specific terms for each lease with every Autobarn franchise or a company-owned store. 
The company recently launched new stores in Canberra and Sydney.
Earlier this year, Autobarn also secured a showroom at the Millers Junction precinct in Altona North for $2.36 million.
Autobarn says its stores range from 500 sqm to 1,500 sqm, and size flexibility is a key point property owners and retail site developers can play on.
The company differentiates from competitors in that motorists can also have selected “parts and accessories fitted quickly and easily at each location, without the need for a full automotive workshop”.
In its pitch, the automotive retailer said property owners would only benefit from leasing out their premises to a brand like Autobarn.
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Auto parts retailer Autobarn shopping for stores

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Australia’s major shopping centre landlords are recognising the need for a mall to also play the role of a community centre as the sweeping pace of changes in technology and society makes a big impact on retail.
In fact, the retailing environment is the most challenging it has ever been, driven by both structural and cyclical headwinds, writes Adrian Harrington, head of funds management at Folkestone in Cuffelinks.
The arrival of global names in recent years has reshaped the retail landscape – Zara, H&amp;M and Uniqlo to name a few. Amazon’s imminent arrival is already creating flutters in the market, he says.
At the same time, local retailers such as Dick Smith, Payless Shoes and Rhodes &amp; Beckett have disappeared from the scene. The latest ABS retail sales numbers reveal anaemic retail spending, while online retail spending continues to gain momentum.
In spite of the buzz around Amazon’s entry some in the retail community say it won’t be easy for the online retailing giant.  Harvey Norman founder Gerry Harvey recently said in news.com.au that “Amazon in Australia, it is not going to be as easy as the US … most of the retailers there rolled over but they won’t here.”
In fact, a report from Colliers International says that Amazon’s value proposition combined with its need for immense space may make it difficult to find a suitable base within Sydney.
Figures 1 and 2 highlight the relative underperformance of retailers and the listed retail A-REITs in the past 12 months, as investors become increasingly concerned about how both components of the retail marketplace respond to the significant headwinds.
<a href="https://www.propertyobserver.com.au/images/2017/06/09/Retail1.jpg" target="_blank">Click to enlarge</a>
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<a href="https://www.propertyobserver.com.au/images/2017/06/09/Retail2.jpg" target="_blank">Click to enlarge</a>
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Given retail assets comprise more than 55% of the listed A-REIT sector, it is not surprising that the relative performance of the A-REIT sector has been impacted. Westfield, Vicinity and Scentre, the three largest retail A-REITs, have all significantly underperformed the Index in the past year.
Harrington cites Victor Gruen — the designer of the first US shopping mall in 1956, saying, “The merchant has always been and will always be most successful where his activity is integrated with the widest possible palette of human experiences and urban expressions.”
Gruen envisaged that shopping centres need not be just a place of selling, but a place where the retail space is complemented by entertainment, cultural and community services. 
Harrington says shopping centres need to be recast as they recognise that people don’t just come there for a transaction. 
“They need to create a unique customer experience, one that engages with consumers, embraces technology to enhance the experience and inspires people to visit not because they have to, but because they want to. 
“In effect, they need to become a community gathering-place where people shop, play, work and live.”
Australia’s major shopping centre landlords are recognising Gruen’s vision almost 60 years ago. 
Harrington says retailers are revisiting their retail strategy, with the longstanding model of rolling stores out in every shopping centre changing to fewer but more innovative retail stores located in the larger, more productive ‘destination’ centres that offer consumers more than just a retail experience.
Southdale incorporated many of the features that have become synonymous with today’s modern shopping centre, he says. Southdale incorporated enclosed and climate controlled, anchor stores at either end of the mall, escalators connecting different levels and a public area in the middle.
Some of the best shopping centres in the country are becoming mixed-use spaces comprising hotels, residential and community facilities. 
Chadstone Centre, Australia’s largest shopping centre, has introduced the first Legoland Discovery Centre, and is adding a hotel and a 17,000 sqm office tower. Scentre, owner of the Westfield centres in Australia, is looking at residential and other entertainment options to complement their retail space.
However, the biggest impact of retail disruption will be on sub-regional and lower quality centres. These centres tend to have a higher exposure to discount department stores, limited space to incorporate non-retail drawcards, and lower productivity of their retail space.
He says investors looking at the retail sector are at a cross-road. With Amazon’s entry, the market will get more competitive and the gap between the winners and losers will widen and picking winners will be lot more difficult.
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Shopping malls as community centres

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A retail property in Melbourne’s Brighton has sold for $1.45 million in an off-market transaction, on a record yield of 1.6% yield.
The <a href="https://www.domain.com.au/property-profile/165-martin-street-brighton-vic-3186" target="_blank">165 Martin Street</a> property was formerly the home of the iconic Gardenvale Collectables, which specialised in historic VFL/AFL and sports memorabilia, and is now occupied by Laser &amp; Lashes. 
The selling agent was Fitzroys’ Mark Talbot, who recently sold the property next door as well. 
The property at 167 Martin Street sold for $1.55 million on a yield of 2.2%.
The 165 Martin Street property is located in the strip’s popular retail and hospitality precinct between Nepean Highway and Gardenvale train station.
“Martin Street is a thriving retail village surrounded by specialty retail and hospitality options, situated in one of the Melbourne’s most prestigious suburbs, and has significant potential for investors and owner occupiers,” Talbot said, adding the buyer didn’t want to pass up on the opportunity to secure a site in one of Melbourne’s most tightly held retail strips. 
“The precinct is surrounded by an established residential community that is slated for further population growth, and has a number of top-class education facilities nearby.” 
He said the large volume of enquiry for 167 Martin Street was able to be successfully converted into another record-breaking sale that satisfied both the vendor and purchaser. 
This marks Talbot’s third sale in the suburb over the past two months.
He also recently sold the two-storey café and dwelling building at 305 Bay Street, adjacent to North Brighton Station, at auction on a 3.3% yield for $2.255 million, setting a new benchmark price for a single-front retail property on Bay Street. 
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Brighton retail property sells on record yield of 1.6 percent

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<img src="https://counter.theconversation.edu.au/content/78184/count.gif?distributor=republish-lightbox-advanced" alt="The Conversation" width="1" height="1">
GUEST OBSERVER
Research shows consumers value speed when it comes to shopping. Australian retailers need to react or they will lose.
A recent survey shows that Australians are feeling more time-poor than ever, with 45 percent of women and 36 percent of men feeling “always” or “often” rushed, or “pressed for time”. Meanwhile, research has identified that almost one in four shoppers (23 percent) are willing to pay a premium for “same day” delivery.
In other words, consumers’ expectations are changing. Speed is becoming a point of difference, a new front of competition, between retailers. And many Australian retailers are lagging behind.
When a quarter of your customers are willing to pay a bit extra to have their online purchases delivered that afternoon, it is surprising more retailers are not investing in the “last-mile” – from the warehouse to the customer.
<h2>The threat</h2>
The advantage physical stores always had over online was immediacy. Walk in, grab it and go. While online retail had an endless range of choice and often lower prices, shoppers had to wait.
But “same day” delivery undermines that, combining the convenience of online shopping with the immediacy of bricks n’ mortar.
New retailers and logistics companies are selling us time and convenience just as much as they are selling products or services. Take Ur-bit, a delivery provider operating in Sweden, Paris and London; shop online and get them to pick up and deliver to your home, office, and even your car.
Many in the US and UK have teamed up with third party providers like Lyft and Uber to achieve a same-day delivery. British supermarket Sainsbury’s has more recently begun trailing an app allowing shoppers to order up to 20 products and have them delivered in an hour.
Meanwhile, Australian supermarkets are still only offering next day delivery, with up to 3 hour delivery windows. Although admittedly, Coles has started trialling same-day delivery in some Melbourne stores.
<h2>The opportunity</h2>
While Australian retailers are threatened by speed, it is also an incredible opportunity. Australian retailers may not be able to complete against the likes of Amazon on product range and price, but speed may level the playing field.
Australian retailers have struggled with this since they started selling through multiple channels – stores, online and catalogues. In most cases today, Australian retailers are still pushing products to stores from warehouses, unpacking them, only to have those same products re-packaged and forwarded to a customer’s home.
This isn’t very cost effective, and it also doesn’t work in a context where stores are shipping smaller, individual orders directly to customers’ homes.
What Australian retailers should be focusing on is building fulfilment centres, such as The Iconics’ new facility. These are facilities that are located close to customers, making it very quick and easy to deliver to homes and offices. No repacking required.
The construction of such fulfilment centres has become something of an arms race among online retailers, led by Amazon. It’s time for Australian retailers to join in.
But its not just speed that can give an advantage. In the past, delivery was dominated by a few companies, but today there are myriad new players who offer more than speed. They can arrange not only when a product is delivered, but how it arrives in a customer’s hands - with flexible locations and timing.
Customers’ expectations for flexible, fast and cheap same-day delivery is both a threat and an opportunity for Australia’s major retailers. It is currently unclear who will win this race, but retailers must wake up to the demands of customers. Their competitors already have.
 
Gary Mortimer is an Associate Professor, Queensland University of Technology and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/gary-mortimer-1322" target="_blank">here</a>.
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Aussie retailers need to adapt to a world built on speed: Gary Mortimer

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Rugby League legend Steve Mortimer, or 'Turvey', has sold his Rushcutters Bay commercial investment property for $870,000.
Home to McLachlan Cafe, the <a href="https://bradfieldcleary.com.au/5916729/shop-2-84-90-mclachlan-avenue-rushcutters-bay" target="_blank">McLachlan Avenue property</a> was expected to fetch about $900,000 at its October auction, however, it was passed in.
Mortimer had paid $760,000 for the property in 2010.
The 36 square metre ground floor space was bought by an investor who will continue to run the cafe with a net income of $56,600 per annum. It's leased for a number of years.
BradfieldCleary’s Mark Daley and co-agent Grant Whiteman of Ray White Double Bay secured the sale.
Mortimer, who represented the Canterbury-Bankstown Bulldogs for 12 years and 272 games, as well as New South Wales and Australia, runs Steve Mortimer's Australian Shuffleboard which brings shuffleboard to seniors across Australia.
 
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