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

Sydney

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Construction costs in Australia remain stable compared with the rest of the world with Sydney the most expensive place in Australia to build, according to a new survey.
The International Construction Market Survey 2017 analyses input costs – such as labour and materials and charts the average construction cost per sqm for both commercial and residential projects.
Sydney was at number nine, with New York taking the number one spot for the most expensive place to undertake construction in 43 markets covered by real estate consultancy Turner &amp; Townsend’s International Construction Market Survey 2017. Sydney was at number 14 in the last survey.
The survey ranked Melbourne at 20, Perth at 21, and Brisbane at 22.
Turner &amp; Townsend Australia &amp; New Zealand managing director Anooj Oodit said the report showed globally construction costs are reasonably well contained with Australia showing little variation, apart from the Perth market which is a cold market with falling costs (moving from 21st to 18th spot). 
“The improving commodity prices are set to help resources countries like Australia benefit from higher commodity export royalties. This in turn will provide confidence to invest especially in further infrastructure,” said Oodit.
“Low interest rates have encouraged strong growth in domestic apartment construction markets in several regions worldwide, especially Australia. Looking forward, Brexit and the election of President Trump may add some uncertainty to some construction markets, however, the Australian government is committed to its $75 billion infrastructure spend over the next 10 years.”
The recent announcement by the federal government to build Badgerys Creek airport and the Inland Rail project would be a boost to the construction market in Australia, he added.
The report emphasises the need for further improvements in productivity. Twenty-three of the 43 regions, including Australia, indicated that they were experiencing skill shortages as the workforces age and fewer school leavers enter the construction labour force.
The surveys over the past three years (2015 – 2017) highlight there has been a massive upswing in residential apartment construction on the East Coast which is now coming to an end, except in Sydney. This period has seen construction costs rise a little above general inflation. Construction costs on average are up 5.5 per cent over three years, whereas price inflation is up only 3.5 per cent over three years.
Sydney residential construction spend has grown by 54 per cent since the 2015 international report. Over the same period construction costs are showing an average 9 per cent increase, while non-residential construction (hotels, offices and retail) activity increased by only 6 per cent.
The Melbourne residential construction market grew by 34 per cent during the same period, showing an average cost increase of 4 per cent, while the non-residential market activity fell by 1 per cent.
Brisbane’s residential construction market grew by 50 per cent, showing an average cost increase of 8 per cent. The non-residential market activity fell by 2 per cent.
Perth’s residential construction market fell by 13 per cent, construction costs increased by 1 per cent and non-residential construction activity fell by 18 per cent.
“The question is what comes next after the apartment boom? Some of the shortfall will be met by major infrastructure projects including Badgerys Creek, Cross River Rail, Inland Rail and Snowy Mountain Hydro phase 2. The time is now ripe to capitalise on the apartment boom slowdown and use the resources (cash and labour) to boost Australia’s infrastructure projects and keep the economy strong.”
“Global construction costs are set to rise by 3.5 per cent in 2017, reflecting steady growth in the global economy but also increasing labour shortages and low productivity within several key markets. The main exceptions to this rule lie in commodity reliant markets where falling prices for raw materials have contributed to a cooling in construction cost inflation,” Oodit said.
Major investment is needed to address the growing construction skills shortage which is becoming acute in many international markets, increasing labour and project costs, said the report.
“Against a backdrop of rising cost inflation and labour shortages, policymakers, contractors and clients in all markets need to tackle low productivity, embracing innovative technologies, new methods of construction, as well as using data and better programme management to boost input,” Oodit concluded.
Turner &amp; Townsend has 97 offices in 41 countries and over 4,200 employees.
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jonathanchancellor-7SQnKwU6yx

Sydney leads Australia in construction costs, climbs to no. 9 globally: survey

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The latest research from Sydney Units Cityscope shows that apartment sales in Sydney’s CBD have increased both in number and total sales value in the last quarter.
For the three months to April 2017, there were 133 sales at a total value of $164.3 million, compared with 113 sales at a total value of $128.8 million for the previous quarter.
However, the yearly figures have decreased in total sales value and number, with 723 sales at a total value of $969.6 million for the 12 months to April 2017, compared with 821 sales at a total value of $972.9 million for the previous year.
The table below shows sales recorded for the past eight updates of Sydney Units Cityscope:
<a href="https://www.propertyobserver.com.au/images/2017/04/26/Screen%20Shot%202017-04-26%20at%2010.25.12%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/26/Screen%20Shot%202017-04-26%20at%2010.25.12%20am.jpg" alt="">
Notable sales in the April 2017 update of Sydney Units Cityscope include:
    The long term leasehold of Unit 25, Macquarie Apartments, at 155-161 Macquarie Street, Sydney, a three bedroom 189 sqm apartment with balconies on level 13 and four car spaces on basement level four, which was sold for $4.75 million through City Living;
<ul>
<li>Unit 23, Bennelong, at 5 Macquarie Street, Sydney, an 186 sqm apartment including balconies on level two and a 32 sqm car space on basement level five and a five sqm storage space on basement level four, which was sold for $4.15 million through Morton Circular Quay;</li>
<li>The long term leasehold of Lot 2, known as Borrowdale, Reynall Terraces, at 185 Gloucester Street, The Rocks, a split level residential apartment with 98 sqm on level three and 103 sqm on level four and a 32 sqm car space on level one, which was sold for $3.9 million and</li>
<li>The long term leasehold of Lot 4, known as Charlotte, Reynall Terraces, at 185 Gloucester Street, The Rocks, a split level residential apartment with 113 sqm on level three and 112 sqm on level 4 and a 40 sqm car space on level 1, which was sold for $3.85 million;</li>
</ul>
<a href="https://www.propertyobserver.com.au/images/2017/04/26/Screen%20Shot%202017-04-26%20at%2010.25.42%20am.jpg" target="_blank">Click to enlarge</a>
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/26/Screen%20Shot%202017-04-26%20at%2010.25.42%20am.jpg" alt="">
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j.ballantyne1990-6AQqhLzZaK

Sydney apartment sales increase in value and number: Cityscope

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No discussion on office market is complete without taking stock of the Sydney office market.
Since the start of 2017, the Sydney CBD office market has continued its market movement trend of 2016, with a decrease in both vacancy rates and incentives and an increase in average market rental rates, according to valuation firm Herron Todd White’s April office market report. 
Sydney is a rising market on HTW’s office property clock.
<a href="https://www.propertyobserver.com.au/images/2017/05/09/Screen%20Shot%202017-05-09%20at%2012.12.57%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/05/09/Screen%20Shot%202017-05-09%20at%2012.12.57%20PM.png" alt="">
Due to the results of strong employment growth, especially in the office jobs created throughout 2016, which drives the absorption of office space, combined with additional ongoing absorption of office stock, under supply and rising rentals, we expect to see demand for commercial offices remaining strong, yields continuing to trend lower and steady vacancy rates throughout 2017. 
The Sydney metro office market vacancy rate currently stands at 6.2%, remaining the lowest of all capital cities, according to Property Council research paper dated 2 February 2017, thus reflecting the inherent strength in the Sydney market. 
An attributing factor to the compression in vacancy rates and growth in associated market rates is the commencement of the Sydney Metro Project, developing 31 new metro stations linking to Rouse Hill in the north-west through to the CBD and extending to Bankstown in the south-west. Further to this, the acquisition of secondary commercial office buildings by large-scale developers for residential or hotel conversion has further pressured the marketplace. 
“We note these acquisitions have led to the displacement of owner occupiers and tenants alike, now all in the market for available commercial office space, thus further pressuring the secondary office markets of North Sydney, Chatswood, St Leonards, Macquarie Park and Parramatta,” say HTW.
“We consider the Sydney office market to remain relatively stable in the short to mid-term, with the Property Council of Australia forecasting stable vacancy rates over the six months from January 2017.” 
An example of a recent listing was that of the iconic Australian Exchange Centre, home of the ASX, with price expectations of more than $325 million. The expressions of interest campaign closes on April 27.
The listing of the building at 20 Bridge Street in the heart of Sydney’s financial district makes it the first institutional grade Sydney CBD core offering since June 2013.
<img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2017/04/21/SydExchangeCenter.jpg" alt="">
Across the board, Sydney is continuing to experience yield compression in the commercial domain. 
“We note a heated residential market along with an inherently low cost of borrowing have seen yield compression across the office sector over the past 12 to 24 months, with a strong appetite on a micro and macro level for A grade Sydney offices on long-term lease covenants to blue chip tenants. 
“We would consider this trend to continue whilst supply remains relatively low.” 
With limited stock on the market for sale or lease, demand has pushed further out to fringe locations such as North Sydney, South Sydney, Chatswood and areas in the inner west. Notwithstanding this, “we consider rental growth to continue in line with demand and limited supply”. 
With the recent surge in purchases by owner- occupiers throughout the Sydney CBD office market, investors are cautioned that competition from this segment is forcing a tightening of yields. Investors should be wary of this market force when purchasing and avoid paying over market rates to compete with owner-occupiers who tend to be less reliant on yields. 
Further opportunities in emerging office markets may be present as the government focuses on increasing economic activity and development in outer Sydney suburbs. For example, the commercial centre of Liverpool is considered to benefit from the continued residential development in the south-west, proposed construction of the Badgerys Creek Airport and the possible extension of the Sydney Metro with a direct line from Bankstown to Liverpool, all of which will in time increase economic activity, employment viability and demand for commercial office assets. However, caution is drawn to the ability for emerging markets to withstand an economic or market downturn compared to established locales and other significant commercial hubs. 
Further opportunities within the commercial office market may be present in assets which are feasible for further subdivision. The rise of creative office suites, prevalent within the Southern Sydney office markets for example, has been driven by the demand for smaller assets catering to start-up companies with less capital that require lower priced assets or shorter or more flexible leasing terms. The increased focus on smaller companies has seen the rise of small scale business parks, sub-leasing sections of larger offices and the serviced office business model. Although smaller tenancy areas can derive greater returns due to the economies of scale principle, smaller offices tend to have increased risk due to the high turnover of tenants given shorter leasing terms. Caution may be drawn to the ability of an asset manager to derive adequate returns via minimising vacancy in addition to the aptitude to sustain a competitive asset within a market that could be easily saturated. 
While the outlook for Sydney’s office market is positive, as ever, caution as to the sustainability of current and projected office trends is recommended with road blocks to growth possible, including the very real and significant potential for a downturn in the local and wider residential market which will have a major impact on the wider economy, potential stock market volatility after recent record gains and political instability (both national and international). 
 
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Demand to stay strong for Sydney office market, yields to trend lower: HTW

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A major construction milestone has been reached at Investa Office Fund’s new commercial office development, located at 151 Clarence Street in Sydney’s CBD.
The Barrack Place project will see a total of 40,000 cubic metres of concrete used and will generate a total of 2,000 jobs. It is being developed in collaboration with contractor Built, who are conducting the first concrete pour on the 18-level tower.
The concrete pour marks the end of a 12 month excavation process, which saw the existing B-Grade building on-site demolished. The next stages of the construction will see concrete pours for the footings, slabs and lift-cores, followed by floor by floor structures.
“Barrack Place will deliver something new to the Sydney CBD office market and will provide an important connection to Martin Place through to the Western Corridor,” remarked Mark Tait, group executive and head of commercial development, Investa.
“The open courtyard through site-link and retail precinct offering is set to create a new city destination. It will also complete at a time when the CBD market is lacking brand new quality office stock, so we expect tenant demand to continue to be strong,” he said.
Designed by Architectus, Barrack Place will deliver a 22,000 square metre workplace to the Sydney CBD. Its design places flexibility at its core, aiming to cater for open-plan offices and dynamic workspaces, which are complemented with smart building technology.
“Barrack Place has provided us with the opportunity to demonstrate the future of construction showcasing new levels of Building Information Modelling,” added Brett Mason, managing director, Built.
“We have worked closely with the project team to develop a highly detailed virtual model that goes beyond 3D modelling, to 6D modelling that links programme, cost control and facilities management modules,” he said. 
“This allows us to steer the most efficient construction process with one source of truth, removing cost, co-ordination and duplication inefficiencies. The model will also continue to inform the ongoing performance and optimisation of the building long after project completion.”
Engineering group Arup has already pre-committed to 35 per cent of Barrack Place on the podium levels from Level 1 to 6, and discussions continue with prospective tenants in the marketplace.
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Investa commences concrete pour at 151 Clarence Street 

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A fully rented commercial building in Sydney’s Hornsby with the NSW government as one of the tenants is up for sale through Savills.
The <a href="https://commercialpropertysearch.savills.com.au/97e4790e-cf14-e711-80c7-005056813885/Sale/Hornsby/110-George-Street" target="_blank">110 George Street &amp; 2a Linda Street</a> property was completed in 2008 and comes with depreciation benefits. The building can also be made into a residential building in its next life cycle.
It offers a secure income stream with strong revenue growth potential, according to its description. The property earns a net income of $1.78 million. 
Tenants include Officeworks, Midas, Australian Unity and the NSW state government.
Its current net lettable area is 4,118sqm with potential for further growth. 
The building is close to public transport and Westfield Shopping Centre.
The listing agents are Matthew Dunn and Tim Grosmann of Savills.
 
 
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Fully leased commercial building in Sydney's Hornsby up for sale via Savills

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Developments on government-owned land in Sydney will become carbon neutral, water positive and produce zero waste by 2028, under a new sustainability strategy released for public comment today.
UrbanGrowth NSW’s Draft Sustainability Strategy sets a number of goals and 31 targets for sustainable development across the organisation’s urban transformation projects and greenfield developments.
“UrbanGrowth NSW has a legacy through Landcom as a development industry leader in sustainability, and was among the first development agencies to report on sustainability performance,” said UrbanGrowth NSW Acting Chief Executive Michael Brodie.
“Our new targets will be monitored annually to ensure they remain at, or exceed, industry leading standards. We want to create a legacy of sustainable places for future generations in New South Wales.
“UrbanGrowth NSW will be responsible for the targets on land within our delivery control. Our delivery partners, such as developers, will need to meet our targets, which will be clearly established during Expressions of Interest or tender phases, and embedded into our delivery contracts,” said Mr Brodie.
The Draft Sustainability Strategy is aligned with global commitments from the United Nations’ Sustainable Development Goals and New Urban Agenda, the COP21 Paris Agreement, and the 100 Resilient Cities program.
“Our aim is to create innovative and productive urban places with world class liveability, resilience, inclusion, affordability and environmental quality,” said Senior Manager of Sustainability Lauren Kajewski.
“The 31 sustainability targets will lead to greater water and energy efficiency, reduced waste, innovation, less car dependency and higher liveability across Sydney.”
The targets include:
<ul>
<li>reducing the use of potable water (drinking water quality) by 50%</li>
<li>diverting 95% of all construction waste from landfill with a focus on recycling</li>
<li>100% of timber sourced for construction to be Forest Stewardship Council Certified</li>
<li>20% of all new housing designed and built to Liveable Housing Design Silver certification (in addition to any legislative requirement); and</li>
<li>all developments to incorporate high-speed broadband and free wifi in key open spaces.</li>
</ul>
UrbanGrowth NSW is seeking industry and community feedback through an online survey over a 10- week period from 1 March to 7 May 2017.
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UrbanGrowth NSW building a sustainable Sydney

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Engineering firms Arcadis and Mott MacDonald have won the Underground Station Design and Technical Services contract, which will see the two companies work as joint lead designers within the Metron consortium.
The Metron design consortium also includes global architecture house Foster + Partners, local architect Architectus, and engineers Arcadis, Mott MacDonald and Robert Bird Group.
The dual consultancies will hold primary responsibility for the engineering design of six underground metro rail stations for Stage 2 of the Sydney Metro project, as well as a 30 kilometre extension of metro rail under Sydney Harbour and through new CBD stations.
“Sydney Metro will be one of the most transformational projects in NSW since the Sydney Harbour Bridge and we are very excited to bring our combination of global experience and Australian intel to the project,” remarked Anthony Venturini, managing director of building and urban development, Arcadis Australia Pacific.
“This win reinforces the strength of the Arcadis Australia Pacific business and continues our strong growth through winning nation-building projects,” he said.
With a total of 31 stations and 66 km of new metro rail overall to be constructed, Sydney Metro is Australia’s biggest public transport project. 
“We are very proud to be the joint lead designers on a key part of Australia’s largest public transport project and continue to apply our global metro expertise to Australian projects,” added Stephen Giblett, built environment sector leader, Mott MacDonald Australia &amp; New Zealand.
“The Sydney Metro will truly transform this great city and the underground station design services role METRON will perform is critical to this,” he concluded.
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Metron wins Sydney Metro design contract 

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Global contractor Multiplex has topped out M&amp;L Hospitality’s new boutique hotel at 65 Sussex Street in Sydney’s CBD.
Designed by architects Fitzpatrick + Partners with interiors by Wood Bagot, the hotel will feature a geometric façade and comprise 182 guest rooms including four generously-sized suites, a three storey high internal garden and courtyard, meeting space, restaurant and bar.
The construction of 65 Sussex Street has seen over 550 people and 85,000 hours worked on-site to date. Almost 3,000 cubic metres of concrete has been used to build the hotel’s structure, while 333 individual panels of glass will be used to form the geometric façade.
“The hotel is an important part of the revitalisation of the surrounding western corridor and is ideally located close to the Barangaroo and King Street Wharf lifestyle precincts,” commented David Ghannoum, regional managing director NSW at Multiplex.
“We are drawing on our expertise in hotel construction and working within the confined and busy CBD environment to deliver this new hotel,” he said.
With the structure complete, Multiplex will now commence the internal fit-out of the guest rooms with completion on track for the end of 2017.
“We are excited to reach this important milestone and look forward to launching our new boutique hotel later in 2017,” added Neil Maxwell, CEO of M&amp;L Hospitality.
In December, 2016 Multiplex completed the redevelopment of M&amp;L Hospitality’s 161 Sussex Street property at Darling Harbour with the hotel opening as Hyatt Regency, representing the hotel brand’s return to the Sydney market.
The 161 Sussex Street redevelopment project saw the refurbishment of the existing hotel, the construction of a new 3,667 square metre convention centre, and a 25-level tower including 13 new hotel levels and 10 levels of A-grade high rise commercial office space.
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Multiplex tops out new boutique hotel at 65 Sussex Street, Sydney

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National Parks and Wildlife Service (NPWS) is seeking expressions of interest from experienced operators to lease the restaurant and café at the state-heritage listed Fort Denison.
Fort Denison sits in Sydney Harbour adjacent to the Opera House and Sydney Harbour Bridge with views of the city skyline and harbour.
The site is part of Sydney Harbour National Park.
NPWS director Stuart Schramm expects interest in the EOI will be strong due to the island’s location, unique building and the potential to be involved at the very centre of some of Sydney Harbour’s world-renowned events including New Year’s Eve.
“The purpose of the EOI is to find a lessee able to provide an exceptional visitor experience while protecting the heritage and environmental values of this unique site,” Mr Schramm said.
“Café, restaurant and function proposals will be considered, along with alternative ideas or proposals to utilise the other areas on the island.
“The available lease area on Fort Denison is around 470 square metres and consists of one building, the former barracks building which is divided into a number of smaller rooms suitable for dining and other activities.
“Over recent years a restaurant, café and function space has operated on the Island and the site has been used for weddings, corporate events and special event functions such as New Year’s Eve and Vivid Sydney,” said Schramm.
The Fort was constructed between the 1840s and 1860s and retains its built form and highly significant collection of artefacts.
The EOI process closes 7 June 2017. Inspections of the site will be available, commencing in April, and must be pre-booked.
For more information on the tender, <a href="https://tenders.nsw.gov.au/oeh/?event=public.rft.show&amp;RFTUUID=BD1693A7-C361-872B-ACEC90D8BCFC8B23" target="_blank">click here</a>.
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NPWS opens expressions of interest for the lease of Fort Denison

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With vacancy rates at a record low and rising rents, Sydney's office construction cycle is expected to deliver the city's biggest commercial building boom since the 1980s, according to forecaster BIS Oxford Economics.
More than 2 million sqm of new office space is to be built across metropolitan Sydney between 2019 and 2023, with most of this construction occurring in the CBD, Macquarie Park and Parramatta, the Australian Financial Review reported citing BIS data.
This wave of new supply – the equivalent to North Sydney, Macquarie Park and Chatswood's current office stock combined – will come despite 2016 marking an eight-year high in office completions with 370,000 sqm of office towers coming online, including two towers at Barangaroo and Ernst &amp; Young's new headquarters at 200 George Street.
The surge in development will come from low vacancy rates and strong rental growth. BIS expects the metropolitan office vacancy rate to fall from 6.5 percent to just 4 percent by the end of 2018, a 30-year low, with vacancies even lower in the CBD.
"The Sydney office market is heading towards a sustained period of very low vacancies, which will drive strong rises in rents over the remainder of this decade," Lee Walker, senior project manager at BIS, was cited as saying by the AFR.
BIS said this marked the end of a "moderate supply cycle" that, aided by record levels of existing office building withdrawals, had easily been absorbed, with only a small rise in the metro vacancy rate to 6.5 percent from 6 percent.
As a consequence, Walker said Sydney's time to build commercial property was coming "with a big upswing on the cards".
However, there would be a pause between the recent Barangaroo-led boom and the next because of the time take to complete big office projects.
"Whilst some new projects have commenced as a result, focused on the CBD, Parramatta and North Sydney, large office projects typically take two to three years to build and won't be completed until 2019 or 2020 at the earliest," Walker said.
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