Repeat buyers are one of the strongest measures of confidence in any apartment development.

At <a href="https://www.apartments.com.au/new-apartments/era-newcastle-west-124-126-bull-street-newcastle-west-nsw-2302">ERA</a> in Newcastle West, some purchasers are returning to <a href="https://www.apartments.com.au/developers/gwh">GWH</a> after living at the developer's One Apartments. Their decision to purchase again was driven by the quality of life they found after moving into their first GWH home.

Keith Wilton had spent years living in a house in East Maitland before deciding it was time for a change. Apartment living had always been on his radar, but he was selective about what he wanted.

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"I had some boxes I wanted to tick," he says.

Keith points to the open-plan design, generous outdoor areas and considered inclusions as key reasons One Apartments worked for him.

“One of those things was a nice indoor open plan area, but also I wanted a nice outdoor open area that I could entertain on in summer or Christmases or birthdays,” he says.

He also found value in the smaller details, from integrated appliances to shared resident spaces including the pool, cinema and rooftop areas.

[smartcode_project:default project_id=135096 project_image_fid=356818]

After comparing several developments, he chose One Apartments because of GWH's longstanding local reputation and his own experience working with the developer on a commercial project more than a decade earlier.

"I knew that they were local, that the quality of the build was going to be up there. I'd looked at other apartment complexes around and close by, and I just knew that here was a better decision location wise."

Today, Keith says the move has completely changed how he experiences Newcastle.

"I enjoy living in this location because it's more of a lifestyle change. That Newcastle city living where you can walk to restaurants and bars and even beaches and parks and even shopping across the road."

[smartcode_project:default project_id=135096 project_image_fid=356828]

Beyond the location, he says it's the sense of community that has surprised him most.

"Everyone loves living here because they chose to live here, but everyone looks out for each other. It's a real great community feel here."

For Aimee and Lyle Goodman, the journey started almost by chance.

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The couple happened to be having coffee in Newcastle when they noticed the site where One Apartments was about to begin construction.

"We were aware GWH was planning a development," Aimee says. "We made one phone call and things moved pretty quickly after that."

As busy business owners, they initially thought apartment living would simply reduce the maintenance that came with larger homes. Instead, it fundamentally changed how they spent time together.

"We actually catch up more as a family now," Aimee says.

"We've had homes with big yards and lots of space, but everyone ended up in different rooms. Here we'll have dinner together, the kids can play, and we spend far more quality time together."

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Lyle says their confidence came from GWH's reputation within Newcastle's building industry.

"I know people who've worked across different apartment projects, and whenever GWH came up the feedback was always the same. They're rock solid. They're quality."

That confidence only grew throughout the buying process.

"One of the things that really impressed us with GWH was the whole process, was the communication," Lyle says. "It was consistent, it was regular, there was no problem if we had some weird questions, there was no problems in getting answers."

[smartcode_project:default project_id=135096 project_image_fid=351104]

Aimee says one moment stood out.

"The project actually finished on time. We realised we needed to hurry up and sell our house because everything was happening exactly when they said it would."

The positive experience at One Apartments ultimately gave all three buyers the confidence to purchase again with GWH, this time at ERA.

Their confidence reflects what many buyers are seeking in today's apartment market. Location remains important, but so too does certainty around delivery, quality and long-term liveability.

[smartcode_project:default project_id=135096 project_image_fid=356822]

ERA builds on those foundations with 280 one, two and three-bedroom apartments across two landmark towers in <a href="https://www.apartments.com.au/developments/newcastle-west-nsw-2302">Newcastle West</a>.&nbsp;

Designed by <a href="https://www.apartments.com.au/architects/fk-australia">Fender Katsalidis</a>, the project will include more than 2,000 square metres of resident amenities, including a resort-style pool, gym, sauna, private cinema and rooftop entertaining spaces overlooking the harbour and coastline.&nbsp;

The development is also within walking distance of the Newcastle Interchange, Honeysuckle, Darby Street, the harbour foreshore, restaurants, retail and the city’s beaches, continuing the walkable lifestyle that existing GWH buyers say has transformed how they live.

[smartcode_project:default project_id=135096 project_image_fid=356826]

For Keith, the appeal remains straightforward.

"You feel at home even before you've moved into your home."

For Aimee, the change is measured in time.

“I just felt like I had more time,” she says.

[smartcode_project:default project_id=135096 project_image_fid=351102]

Construction at ERA is now underway, with more than half of the residences already sold and limited two and three-bedroom apartments remaining in the East Tower release. Priced from $980,000 for two-bedroom residences and $1.46 million for three-bedroom residences, buyers can secure an apartment with a 10 per cent deposit, with premium homes offering ocean views from Level 8 and harbour views from Level 10.

ERA is also backed by Resilience Insurance's 10-year Latent Defects Insurance policy, providing protection against structural or waterproofing defects for 10 years after completion. The project is anticipated to be completed in early 2028.

[smartcode_project_cta:default project_id=135096]

Joel Robinson

From ONE to ERA: Why buyers are choosing GWH again in Newcastle West

Virgate Property Group is preparing to commence construction of Verdé, its new apartment development in Melbourne's Arts Precinct at Southbank, following a strong run of sales that has seen more than half of the project's 173 apartments secured.

Verdé has attracted a broad mix of first home buyers, owner-occupiers upgrading from nearby inner-city suburbs and investors, with younger owner-occupier couples aged between 28 and 45 accounting for the strongest enquiry. Many are already living in Southbank, South Melbourne, Albert Park, Port Melbourne, South Yarra and the CBD.

"Verdé is located in one of the most desirable pockets of southern Melbourne," Blair Property Group Director Darren Blair, who is managing sales at Verdé, said.

"It's within walking distance of the Arts Centre, Royal Botanic Gardens, Albert Park Lake, and Southbank's restaurants and retail. It's a great lifestyle location with strong amenity and liveability, which made it a very attractive choice for the project."

[smartcode_project:default project_id=4661 project_image_fid=372549]

Virgate was already familiar with the precinct, having previously delivered the successful Domain House development in neighbouring South Melbourne. That experience gave the developer confidence to acquire the Coventry Street site and continue expanding its presence in Melbourne's inner south.

"We had been keeping an eye on the site and the broader precinct for a few months before deciding to move forward with the acquisition," Virgate said.

The project was ultimately secured in 2020 following feasibility studies, planning assessments and due diligence, with the brief centred on delivering "a high-quality, considered design that feels both refined and fit for purpose."

[smartcode_project:default project_id=4661 project_image_fid=314259]

Designed by <a href="https://www.apartments.com.au/architects/bruce-henderson-architects">Bruce Henderson Architects</a>, Verdé comprises 173 one, two and three-bedroom apartments priced from $599,000. The architecture is distinguished by a faceted glass façade that responds to both the site's outlook and Melbourne's changing light conditions.

According to Bruce Henderson Architects, the coloured glazing gives the building a distinctive identity while also providing privacy and solar shading, with residences oriented to capture views across the bay, city skyline and surrounding parklands.

Inside, <a href="https://www.apartments.com.au/interior-designers/designoffice">DesignOffice</a> has created interiors focused on natural light, efficient planning and enduring materials. Apartments feature engineered oak flooring, natural stone benchtops, floor-to-ceiling glazing and SMEG appliances, while a restrained material palette aims to complement the expansive outlooks rather than compete with them.

[smartcode_project:default project_id=4661 project_image_fid=372550]

Resident amenity has also been designed around everyday functionality rather than occasional use. Facilities include a concierge-serviced lobby, residents' lounge with fireplace, library and co-working space, gym, terrace garden with barbecue facilities, ground-floor café, and package delivery management.

The project's location continues to be one of its strongest drawcards. Positioned on Coventry Street, Verdé sits within walking distance of the National Gallery of Victoria, Arts Centre Melbourne, Royal Botanic Gardens and Albert Park Lake, while Southbank's dining precinct, Sturt Street trams and the new ANZAC Station are all nearby. The surrounding education catchment also includes Melbourne Grammar, Melbourne Girls Grammar, Mac.Robertson Girls' High School and several major university campuses.

The sales team says buyers have responded particularly well to the combination of location, design quality and long-term liveability.

"They're responding really positively to the quality of the design, premium resident amenities and the uninterrupted views. Many also appreciate the location and how connected it is to everything they need."

The ability to secure stamp duty savings before completion has also been a key factor for purchasers, alongside the opportunity to personalise finishes ahead of settlement.

With construction set to commence soon and more than half the apartments already sold, Verdé enters its next phase as one of the Arts Precinct's more established apartment developments, offering remaining buyers an opportunity to secure a residence before construction advances further. Expected completion is scheduled for late 2027.

[smartcode_project_cta:default project_id=4661]

Virgate's Verdé Southbank moves toward construction as sales fly past halfway stage

Downsizer-focused apartment development Kooyongkoot in Hawthorn has been recognised at the 2026 Better Future Melbourne Design Awards, taking home Gold and Silver awards in two categories.

<a href="https://www.apartments.com.au/new-apartments/kooyongkoot-hawthorn-1-kooyongkoot-road-hawthorn-vic-3122">Kooyongkoot</a>, currently being delivered by developer PQD and designed by Cera Stribley, received Gold in the Interior Design – Proposed category and Silver in the Architecture – Proposed category.

The dual recognition reflects the design approach behind the boutique development on prestigious Kooyongkoot Road, where the focus has been on creating homes for downsizers seeking the space, quality and functionality of a detached house within a low-rise apartment building.

Rather than maximising apartment numbers, <a href="https://www.apartments.com.au/developers/pqd">PQD</a> and <a href="https://www.apartments.com.au/architects/cera-stribley-architects">Cera Stribley</a> limited the development to just 18 residences, allowing for larger floorplans, greater privacy, generous landscaping and expansive communal spaces.&nbsp;The majority of the apartments also benefit from corner aspects, allowing for dual sources of natural light.

Now around 70 per cent complete and on track for completion in November 2026, Kooyongkoot will comprise a mix of garden residences, ter​race apartments, sub-penthouses, and is crowned by two half-floor penthouses with direct lift access and private rooftop terraces.

[smartcode_project:default project_id=102717 project_image_fid=355297]

The Silver Award for Architecture recognised the way the building responds to its prominent corner position at the ent​rance to Hawthorn's Scotch Hill precinct, one of Melbourne's most established residential neighbourhoods.

Rather than competing with the grand homes that line Kooyongkoot Road, the architectural approach focused on restraint and longevity, using curved brickwork, generous landscaping and carefully considered proportions to integrate with the existing streetscape.

"The form feels fluid and timeless, as though shaped by the landscape itself – architecture that belongs, rather than competes," said Chris Stribley, Co-Founder and Managing Principal of Cera Stribley.

The judging submission also highlighted practical innovations throughout the building, including lift cores servicing only nine homes each, a central landscaped lightcourt designed to bring daylight and ventilation into the building, and fully enclosed private storage rooms with lighting, power and shelving to better accommodate residents transitioning from larger family homes.

[smartcode_project:default project_id=102717 project_image_fid=355293]

The Gold Award for Interior Design recognised the project's focus on long-term liveability rather than display-home aesthetics.

According to the awards submission, the interiors were designed from the inside out, prioritising how homes would function over decades of daily use through generous proportions, practical storage, durable natural materials and flexible layouts.

The specification includes natural stone throughout, upgraded acoustic glazing, V-ZUG appliances and fully enclosed storage rooms, alongside an amenity offering focused on wellness, entertainment and everyday convenience.&nbsp;

Residents will have access to a gym and yoga studio, a wellness centre featuring traditional and infrared saunas, a cold therapy shower and treatment room, as well as a residents' lounge and golf simulator/cinema room for entertainment.&nbsp;Kooyongkoot has also considered the everyday convenience of its residents by offering a private carwash and pet wash facilities on site as well as dedicated parcel lockers and oversized fully enclosed storage rooms.&nbsp;

[smartcode_project:default project_id=102717 project_image_fid=355303]

The project's attention to detail has already resonated with buyers. Earlier this year, Kooyongkoot recorded one of Boroondara's highest apartment sales when an $8 million penthouse was purchased by a Melbourne CEO downsizing from a nearby family home.

"Every detail feels deliberate, from the overall design down to the smallest touches," the purchaser said.

"The level of quality and refinement is exceptional, but what really sold it was how liveable it felt... It felt like a place where everything had been considered, not just a luxury building."

[smartcode_project:default project_id=102717 project_image_fid=355304]

Sustainability also formed a key part of both award submissions. Kooyongkoot is targeting a minimum 7.5-star NatHERS rating across all residences, supported by passive design principles, high-performance glazing, EV charging infrastructure, water reuse systems and a wellness model focused on lower-energy dry facilities rather than pools and large wet areas.

Located within walking distance of Scotch College, Methodist Ladies' College, Koo​yong Lawn Tennis Club, Aubur​n Village and Camberwell Junction, Kooyongkoot continues to target owner-occupiers looking to remain in Melbourne's inner east without compromising on space or quality. A limited selection of two, three and four-bedroom residences remains available, with prices starting from $1.9 million.

[smartcode_project_cta:default project_id=102717]

Kooyongkoot wins Gold and Silver at Better Future Melbourne Design Awards

New apartment supply has become increasingly constrained across <a href="https://www.apartments.com.au/developments/parramatta-nsw-2150">Parramatta</a> in recent years, with fewer projects progressing through to completion as development conditions have become more challenging.

It makes <a href="https://www.apartments.com.au/developers/novm">NOVM</a>'s 2021-completed <a href="https://www.apartments.com.au/buildings/the-lennox-parramatta-12-phillip-street-parramatta-nsw-2150">The Lennox</a> one of the most recently completed residential towers on the Parramatta River, and among the newest apartment developments in Sydney's second CBD.

With the project largely completed before the sharp escalation in construction costs and inflation following the pandemic, The Lennox is now offering pricing that would be difficult to replicate in a comparable new development in Parramatta today, or across much of Western Sydney.

The majority of the 413 apartments at The Lennox sold before and shortly after completion. A limited release of the remaining apartments has recently been brought to market by capital partner <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a>, with entry-level pricing from $700,000 and two-bedroom apartments available from under $1 million.

Rising above the Parramatta River at 12 Phillip Street, The Lennox comprises one, two, three and four-bedroom apartments, appealing to first home buyers, young professionals, families, downsizers and interstate investors seeking a completed apartment in one of Australia's fastest-growing economic centres.

[smartcode_project:default project_id=5743 project_image_fid=372394]

Rather than positioning Parramatta as an alternative to Sydney's CBD, Equitifund believes the city has reached a point where it stands on its own merits.

"Parramatta is no longer simply an alternative to Sydney CBD, it's becoming a destination in its own right," Equitifund Executive Chairman Greg Huxley said.

"The Lennox captures that evolution with a level of quality and amenity that's difficult to match at its price point."

[smartcode_project:default project_id=5743 project_image_fid=953]

Designed by <a href="https://www.apartments.com.au/architects/marchese-partners">Marchese Partners</a>, the tower responds directly to its riverfront setting through expansive glazing and open-plan layouts that maximise views across the Parramatta River and city skyline. Interiors feature engineered timber flooring, stone benchtops, stainless steel appliances and floor-to-ceiling glazing, while generous balconies extend the living spaces outdoors.

Marchese Partners says the project was conceived to balance high-quality apartment living with practical, long-term functionality, pairing larger, efficient floorplans with amenities more commonly associated with five-star hotels.

That emphasis continues through the resident facilities, which include a 20-metre rooftop swimming pool, fully equipped gym and wellness spaces, full-time concierge, a residents' lounge, function room, private lifts, secure basement parking and rooftop communal areas overlooking the Parramatta River. Ground-floor boardwalk retail and dining further activate the riverfront and integrate the building into the surrounding public realm.

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Australian housing and finance group Equitifund has secured the remaining apartments, believing there are few completed apartment opportunities in Parramatta that offer the same combination of location, amenity and pricing.

Equitifund National Sales Director Ben Hamblett says buyers are increasingly recognising that premium apartment living no longer needs to come with Sydney CBD pricing.

"The Lennox is where aspirational living becomes attainable," Hamblett said.

"Wake to river and mountain views, step into Sydney's Second CBD, and arrive home to resort-calibre amenities, all without the harbour price tag."

Hamblett says owner-occupiers are also attracted by the convenience of having Westfield Parramatta, Church Street's dining precinct, Parramatta Park, Riverside Theatres, Western Sydney University and major transport connections all within walking distance.

"At The Lennox, lifestyle is not an afterthought, it is the foundation."

[smartcode_project:default project_id=5743 project_image_fid=5374]

The Lennox places residents within walking distance of Parramatta Square, Westfield Parramatta, Church Street Eat Street, Parramatta Station, the ferry wharf, Light Rail, the future Sydney Metro West, Parramatta Park and CommBank Stadium, reinforcing Parramatta's position as one of Australia's most connected metropolitan centres outside Sydney's CBD.

Equitifund says buyers visiting the display suite consistently comment on the quality of the finishes, generous floorplans, river and skyline views, and the walkability of the location. The project has attracted a broad mix of local professionals, upsizers, downsizers, buyers relocating from Sydney's inner suburbs and interstate investors seeking long-term growth opportunities.

That demand aligns with Parramatta's continued evolution as an economic powerhouse. Equitifund Research and Market Insights specialist John Bekiaris says sustained population growth, infrastructure investment and expanding employment opportunities continue to support long-term housing demand across the city.

"Parramatta has evolved from a satellite city into one of Australia's most important economic centres. Population growth, infrastructure investment and employment are all supporting sustained long-term housing demand."

[smartcode_project_cta:default project_id=5743]

The apartment price gap drawing Sydney buyers west

A luxury beachfront apartment at Rainbow Bay has more than doubled in value since it sold off the plan six years ago, setting a new local apartment record in the process.

The three-bedroom apartment in the Flow development on Petrie Street, the first of four new projects locally by Paul Gedoun's S&amp;S Projects, has sold for $7.4 million, after originally selling for $3.27 million when the project launched in 2020.

The seventh-floor apartment, comprising 187 sqm of internal living space and a 54 sqm balcony overlooking Froggies Beach and Snapper Rocks, was purchased by a local family.

The transaction was negotiated by Pezet Matheson director Kerry Pezet and equates to more than $30,000 per sqm.

Pezet said the sale reflected the limited opportunities to buy into the boutique beachfront development.

"The sale highlights the rarity of opportunities within the boutique beachfront development, where residences seldom become available," Pezet said.

"Flow is one of the Gold Coast's most tightly held buildings. Buyers from our database move quickly when residences become available, and achieving an off-market sale at $7.4 million demonstrates the depth of demand for property of this calibre."

<img alt="Flow" data-entity-type="file" data-entity-uuid="c585b206-2130-4eee-a50c-3f27c51a7c70" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-07-06%20at%208.33.25%E2%80%AFPM.png?VersionId=m3pHRDV62Y3fvN.XQuQHq.52ilTWpRLf" />

Flow was the first of four luxury apartment developments delivered by Paul Gedoun's S&amp;S Projects at Rainbow Bay and was completed in 2023.

Positioned on the beachfront overlooking Snapper Rocks, the residence includes three bedrooms, three bathrooms, a powder room and views stretching north along the coastline towards Surfers Paradise.

Pezet Matheson Residential principal Mitchell Lambert said buyers continued to prioritise quality beachfront apartments in tightly held locations.

"Flow Residences offers a rare combination of elevated beachfront positioning, architectural excellence, comprehensive resident amenity and premium finishes, which is exactly what discerning purchasers are seeking," Lambert said.

"The transaction further reinforces Rainbow Bay's reputation as one of Australia's premier coastal lifestyle destinations, where limited supply and growing demand continue to support strong market performance."

Pezet Matheson originally marketed and sold out Flow off the plan, making the latest transaction a return to one of the project's original buyers.

Paul Gedoun is selling his third project, <a href="https://www.apartments.com.au/new-apartments/radia-rainbow-bay-271-boundary-street-coolangatta-qld-4225">Radia Rainbow Bay</a>, after recently completing, and selling out, <a href="https://www.apartments.com.au/buildings/esprit-217-227-boundary-street-coolangatta-qld-4225">Esprit</a>. He has plans for a <a href="https://www.apartments.com.au/news/qld/first-look-s-s-projects-proposes-88-apartment-wellness-tower-at-coolangattas-boundary-street">fourth building</a>, 88 apartments on <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">Boundary Street</a>.

Rainbow Bay apartment doubles in price since off the plan sale during pandemic

Colliers International

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Some 120 hectares of prime coastal real estate on the spectacular San Remo cliffs has been listed for sale.
Colliers International’s Kim McQueen and Shane McIntyre have been appointed to sell the clifftop property.
The <a href="https://www.realestate.com.au/property-lifestyle-vic-san+remo-7857222" target="_blank">140 Punch Bowl Road</a> holding, some 1.5 hours from Melbourne toward Phillip Island, is suitable for subdivision into two lots, subject to council approval.
Sitting within the designated future town boundary of the San Remo township, the northern 73 hectares of land has potential for residential development.
The southern 47 hectares has been designated for recreation and tourism under the council’s Strategic Framework Plan, with approvals for a golf course resort and associated hotel and villa accommodation in place.
“With incredible 270-degree views of the ocean and bay, this is an exclusive opportunity to build a private luxury residence atop the dramatic San Remo cliffs,” Ms McQueen said. 
Its current house looks down to a private, secluded beach and is adjacent to the scenic George Bass Coastal Walk.
San Remo adjoins Phillip Island, internationally recognised as the site of the Australian Motorcycle Grand Prix circuit.
 
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j.ballantyne1990-6AQqhLzZaK

Clifftop property at San Remo for sale

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The Hobart accommodation market is anticipated to continue to be a strong performing market, although new supply additions under construction may pose some challenges in the year’s ahead, according to Colliers International’s latest report.
The most recent major transaction was the sale of the Sebel Launceston in January 2015 for $9,855,000.
The latest figures for the 2015-16 financial year highlight that the number of visitors (up 2%), spending (just over $2.05 billion up 9%) and length of stay of visitors to Tasmania have all increased.
“International visitation in particular is growing despite there being no direct international flights to Hobart. Coming off a low base, the latest figures from the International Visitor Survey showed a record 224,000 international visitors coming to Tasmania last financial year (up 13%) particularly from Asian markets, the USA and Europe,” the report stated.
<a href="/images/2016/11/04/Hobart%20airport%20arrivals.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/04/Hobart%20airport%20arrivals.jpg" alt="">
The Hobart hotel market is performing strongly with STR figures showing 80.2% occupancy for the year to date to August 2016 (up 3.5%), average room rates of $164.75 (up 3.3%) and revenue per available room (RevPAR) up by almost 7% at $132.06.
Hobart Airport catered for around 2.3 million passengers in 2015-16, representing growth of 5.8% over the past year.
The 2015 masterplan for Hobart Airport outlines the short, medium and longer term plans for the airport site and provides an interesting insight into the future travel expectations and traffic into Hobart Airport.
Hobart Airport has achieved annual average growth of 2.6% over the past five years, even with the withdrawal of Tiger services in 2012. Looking forward, the expectation of increased passenger movement is significant. It is projected that some 4.5 million passengers will travel through Hobart Airport by financial year 2035, as compared to 2.18 million in financial year 2014.
The current runway length at Hobart Airport of 2,251 metres can cater to direct flights from mainland destinations as far as Darwin, Cairns and Perth along with locations within New Zealand but it is not adequate for larger aircraft such as Boeing 787 and 777 capable of flying from South Asia destinations.
However, a runway extension at Hobart airport is to be undertaken which will increase the length of the runway by 500 metres. A further proposal exists to redevelop the passenger terminal. These works are scheduled for completion in 2017.
"We highlight that we are aware of the following three significant hotels currently under construction including the Federal Hotels 114-room hotel in Sullivans Cove, The Fragrance Hotel development on Macquarie Street with 296 rooms, and the Crowne Plaza on Liverpool Street with 187 rooms," the report said.
"In addition to these projects that are under construction we are aware of a further six hotels in the pipeline.
"If all projects proceed the total number of rooms is estimated to increase by 48% by 2020.
"We also note the recent announcement by Singapore’s Fragrance Group that has lodged plans for two new hotels. If the applications are approved this would add a further 895 rooms to the market."
<a href="/images/2016/11/04/Hobart%20room%20supply.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/11/04/Hobart%20room%20supply.jpg" alt="">
For the most recent hotel transaction in Tasmania of note, the Sebel Launceston, was purchased by local Tasmanian family, the Richman family, however the agents reportedly fielded seven offers from Singapore, Victoria, Queensland and New South Wales.
Colliers International is marketing a hotel in Launceston at present.
The three new hotels that are under construction in Hobart, of the size and quality proposed will provide significant new competition for the Hobart market.
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Hobart hotel market records strong occupancy levels and rate growth

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Investor demand for industrial assets remains steady, with strong interest from off shore investors in long WALE, larger scale assets in Sydney’s Western corridor compressing yields sharply, according to Colliers International's latest market report.
Private and owner occupier tenants continue to remain dominant in the city fringe and South Sydney, however their strategies for acquisition differ.
Investment sales in tighter markets tend to be for smaller assets &lt;500sqm, where rental yields tend to be higher, owner occupiers are targeting assets in larger assets 500 to 1,500 sqm with the low cost of debt being a significant driver of activity.
Owner occupancy is becoming a significant driver of investment activity in all sub markets.
Historically, owner occupancy was largely concentrated in the smaller, 1,000sqm strata market, however large scale retailers are now acquiring industrial facilities over 15,000sqm in the western market.
Consequently, land is becoming hotly contested amongst investors and owner occupiers, with serviced land supply across industrial precincts in tight supply.
"We are anticipating further owner occupier activity in the larger industrial markets in the medium term," the report states.
New South Wales Government data indicates that there is less than twenty years of zoned industrial land, at present absorption rates.
Serviced land, which is connected to utilities, is even scarcer, with only three years supply available.
"Further land release, is constrained by the natural geographic barriers surrounding Sydney. Given the tight levels of land supply we anticipate competition for new land releases and land values to rise across all Sydney industrial markets in the medium term.
Looking ahead, rental growth is anticipated to remain steady as demand levels from the logistics sector, a key driver of demand for larger assets stabilises. Construction services are providing positive momentum, thanks to historical highs in residential construction," the report advised.
From an investment perspective, the hunt for higher yields is anticipated to push some investors into secondary assets. Yield spreads between the prime and secondary markets in the lead up to the GFC fell to 50 basis points, presently they are 120 basis points which points to investors overvaluing risk in the secondary markets.
With competition for industrial assets still high amongst investors, secondary assets will be a key part of future strategies, particularly for assets with development upside and proximity to high quality infrastructure links.
Sydney has the largest infrastructure pipeline of any state in Australia. According to the government’s own forecasts, there will be an estimated $39 billion in transport infrastructure spending in NSW over the next four years.
Sydney’s western industrial precinct continues to strong investment conditions with strong interest from off shore investors – Singapore, HK, Japan, Kwap from Malaysia, Mitsui. US investor Blackstone has broken the previous investment record held by Ascendas, after acquiring $1.3 billion of Goodman industrial assets across the East Coast, in two tranches. This sale will provide Goodman with strong financial support to fund future land acquisitions and developments globally.
Domestically, REITs such as Charter Hall and Mirvac, as well as fund management group AMP are actively pursuing industrial opportunities. In June, AMP acquired JP Morgan’s industrial portfolio worth over $250 million, on a portfolio weighted average yield of 6.5 per cent.
"Prime initial yields in the west compressed by a further 15 basis points from June to September on the back of strong investment volumes. With prime yields compressing to 10 year highs, we anticipate that the spread between prime and secondary industrial assets will tighten from its current margin of 120 basis points over the coming twelve months as investors look for higher performing returns, with development or repositioning upside.
Land acquisition opportunities are becoming tightly contested, with owner occupiers actively competing with established developers for opportunities. Landlords are also looking at speculative opportunities with Goodman building a 22,000sqm facility in Oakdale Central, and Mirvac developing 19,000sqm in Wallgrove Road, Eastern Creek. Developers are speculatively developing due to tight vacancy rates in the Western market, and limited opportunities for tenants in the 10,000sqm plus market," the report stated.
Tenant demographics are becoming more diversified in the western market, with 40 per cent of tenants being from storage, transport and logistics businesses, however the strong performance of retail discretionary spending by consumers is driving demand from retailers looking for storage and distribution facilities.
Tenant activity from corporates has been consistently strong, with tenants such as White Wires, Blackmores, Tyre Max and Pet Barn moving into the west. Incentives are bene ting from this strong demand, falling slightly to 15 per cent, however rental pricing is still a signi cant driver of tenant demand, with Blue Star print group moving from Rydalmere due to lower rents.
Rental growth performance is strong, with net effective rents up by 3 per cent year on year, higher than their 10 year average growth rate of 2.3 per cent. We are forecasting industrial effective rents to rise in the next twelve months by between 3-5 per cent, due to asset and land scarcity, and rising demand from tenants with exposure to discretionary retail.
According to the government’s own forecasts, there will be an estimated $39 billion in transport infrastructure spending in NSW over the next four years.
Sharp rises in capital values, over a relatively short term, may encourage some owners to realise gains.
Recent sales evidence in the northern market shows that capital value uplift of 20 to 30 per can occur on the back of strong investor demand, and diminishing supply levels.
An example of this was 20 Whiting Street in Artarmon transacted for $2.2 million in December 2014, was recently sold for $2.8 million, an increase of 21 per cent in eighteen months. The vendors of a 9,000sqm asset at 28 Rodborough Road French’s Forest realised a 25 per cent rise in capital values since acquiring their asset for $15 million in December 2014, and selling it recently $20 million.
This exceptional rise in values is all the more extraordinary given that prior to 2014, capital values in the north had seen little or no growth. Such robust capital growth is attracting private and institutional investment interest from off shore investors.
Owner occupiers, are also prevalent, particularly in the construction, food retail and technology sectors.
Leasing activity in the secondary market is also showing positive signs, a key driver of which has been demolition clauses which are typically more common in prime markets.
Weight of capital, whilst an early driver of improving investment levels, has now been matched by strong rental performance with prime net effective rents growing by 21 per cent in the last twelve months, secondary net effective rents have risen by 10 per cent during the same period.
Prime incentives remain steady at an average of 16 per cent, with secondary incentives lower at 14 per cent. The disparity, which is unique to the northern market, is being driven by demolition clauses in prime assets, due to the new masterplan that is encouraging rezoning industrial zones to residential use.
The shrinking pool of available assets in the South Sydney market is creating opportunities and challenges for investors, tenants and landlords. Since 2012, an estimated 29 per cent of the Southern industrial market has been withdrawn for rezoning to residential development, and the acquisition of land for WestConnex and Sydney Metro.
For tenants, this means that there are fewer available assets leading many of them to look for owner occupancy opportunities, however vacant possession are rarely available. Tighter space availability is leading to buildings using investment style methods such as expressions of interest, to lease their space.
This has significant benefits for landlords, reducing their incentives and increasing their face rents but entering a competitive bid process.
One recent leasing deal saw three parties competitively bid for an industrial facility, with the winning party accepting terms five per cent above the initial face rental o er, with no incentives. We anticipate that tight vacancy will lead to more of these EOI style leasing campaigns in the short to medium term.
For investors, holding assets close to public transport amenity and within the B6 planning overlays, converting their industrial assets to office use is becoming a popular strategy to reposition older assets, and attract higher rents.
Alexandria has been at the epicentre of this redevelopment trend, appealing to tenants from the technology and creative industries, attracted to the industrial feel of the area, and blank canvas creative opportunities large floorplate former industrial assets offer. From a rental perspective, pricing for an industrial facility in this area is typically $150-250 per square meter on a net face basis, however after a simple office conversion these rents escalate to between $350-425/sqm.
In the strata unit market, popular amongst owner occupiers, recent off the plan developments have seen significant increases in their capital value rising by over 30 per cent in the past eighteen months.
Recent investment sales in the South have been scarce, however cap rate compression continues to remain a feature as fewer assets are contested by a still rising number of investors.
"Looking ahead, the rapid pace of change in the South Sydney market will drive changes to the mix of assets, tenants and owners. Vertical industrial facilities such as those seen in other land constrained markets in the UK, and Asia, will become a feature of this market as developers look to cater to goods and service delivery to adjacent growing residential areas and city centres," the report states.
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Investor demand in Sydney for industrial assets remain steady

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Average room rates and occupancy levels largely in line with those reported last year for the Canberra hotel market, according to Colliers International’s latest report.
The ACT hotel market continues to be tightly held with just three significant hotel transactions since late 2015, being the Best Western Tall Trees, Crowne Plaza Canberra and the Clifton Suites.
The sale of the Crowne Plaza Canberra was part of the property sale of Eureka assets to SB &amp;G Hotel Group in late 2015.
There has only been one major transaction for year to date 2016 being the Clifton Suites on Northbourne Canberra, according to the Colliers report.
Facilimate together with Perth-based investment group Ascot Capital acquired the 153-room Clifton Suites hotel for a reported $65 million. This transaction represented one of the largest hotel transactions in Canberra since the global financial crisis.
The Canberra Airport has experienced declines in passenger numbers since 2009-2010, with 2015-16 being the first year that the airport has recorded positive growth (of 0.4 per cent).
“We highlight that historically the Airport has only catered for domestic traffic but Singapore Airlines has commenced direct services operating from Canberra to Singapore and Canberra to Wellington as at late September 2016. These direct flights will undoubtedly assist demand for Canberra hotels.
“For August 2016 YTD, we note that the Canberra hotel market has recorded occupancy levels of 72 per cent for YTD August 2016 (down marginally at 0.6 percentage points), average room rates of $162 (up marginally at 0.1 per cent) and RevPAR over $117 (down marginally at -0.8 per cent),” the report stated.
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Data from Colliers Edge highlights increased tenant activity which has seen a steady decline in the headline vacancy rate from 15.4 per cent in January 2015 to 13 per cent in July 2016 as recorded in the latest Property Council figures.
Vacancy in A and B grade stock is tightening significantly in Canberra with a number of town centres recording 0 per cent vacancy and the CBD with very limited options for potential tenants.
C and D grade conversely have increasing levels of vacancy, however a number of adaptive re-use projects will see this trend begin to reverse in the near future.
“We note that in particular the office vacancy level of A grade office space has been declining over the past three years, and hence it could be expected that corporate demand remains stable for Canberra hotels.
We highlight however that the Canberra hotel market is also heavily dependent on demand from government activity and demand is influenced by parliament sitting weeks and election cycles,” the report stated.
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There have been two new hotel openings in the past year including the 120 room Little National developed and operated by Doma Group which opened in early September 2015 and the new 191 room Vibe Hotel at Canberra Airport.
“We highlight that there is limited additional new supply anticipated for the Canberra hotel market, especially in comparison to other key hotel markets around Australia,” the report states.
In mid-June 2015 an announcement was made that the ACT government had allocated $5.4 million over two years to the refurbishment of the National Convention Centre.
This refurbishment is currently taking place and the final component of the refurbishment program will be completed in January 2017.
Early planning is also being completed for the construction of a new multi-purpose sporting stadium and entertainment centre to cater for between 20,000 to 30,500 seats.
The project is not anticipated to commence until mid-2020 with construction not anticipated to be completed until mid-2024.
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The Canberra market has traditionally been dominated by local players, however the purchase of the Abode in October 2014 by a Melbourne based fund manager, together the with the recent transaction of the Clifton Suites on Northbourne (to Facilimate together with Perth-based investment group Ascot Capital) suggests that there may be greater ownership diversity in the future.
Colliers International is not aware of any open market campaigns for any Canberra hotels at present apart from part interest in a hotel in Braddon.
STR data supports that the Canberra hotel market performed well in 2015, up significantly from the lows of 2014, and has continued to be stable in YTD August 2016, performing well despite the recent supply additions.
With only minor new supply anticipated for the future, Colliers anticipate that the Canberra market should be stable, supported by demand from corporate, government and domestic tourism sources.
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Outlook for the Canberra hotel market is positive: Colliers

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The Brisbane tourism region continues to be challenged by supply additions outstripping demand growth and occupancy levels falling, according to Colliers’ latest hotel report.
The vast majority of transactions have taken place in the leisure destinations of the Gold Coast, Cairns and the Whitsundays.
The largest transactions have been the $80 million sale of the Hotel Grand Chancellor in Surfers Paradise to Challenger on behalf of an offshore investor and the Surfers Paradise Marriott Resort and Spa for $70 million, also to an offshore investor.
According to STR, the resort markets of the Gold Coast and Cairns/Tropical North Queensland continue to benefit from the lower Australian dollar, which is rebounding after the tough trading conditions experienced following the global financial crisis and the high dollar during the mining boom periods.
These destinations are experiencing renewed growth in both domestic and international travellers.
Cairns, in particular, continues to record high occupancies at 83.3% year to date to August 2016, up 5.4% compared with the same period of 2015.
Occupancy on the Gold Coast is similarly up year to date, by 3.7% to 72.2%. Stronger occupancy levels have allowed hotels to lift room rates, with Cairns demonstrating growth of 7.2% and the Gold Coast 5.2% over the year to date period.
These conditions have allowed both markets to achieve the highest RevPAR growth rates over the period in major markets throughout the country at 13.0% for Cairns and 9.1% for the Gold Coast.
Brisbane, in contrast, continues to be challenged by supply growth outstripping demand, with occupancy levels down 1.9% to 70.8% in the year to date.
Room rates continue to come under pressure falling by 6.6% over the period as the new hotels compete aggressively for customers.
As a result RevPAR levels are down 8.4% for the first eight months of the year compared to the same time last year. Source: STR
Many regional markets which had exposure to the mining, gas and the associated infrastructure boom continue to feel the contraction in demand with occupancy and room rates declining.
The Destination Brisbane Consortium (Echo Entertainment Group, Far East Consortium and Chow Tai Fook Enterprises) continue to progress the Queens Wharf Integrated resort development. This project is proposed to include a new casino, retail, residential apartments and approximately 1,100 hotel rooms.
Demolition works on the state government site are anticipated to commence early next year following the relocation of government office on the site to the new 1 William Street tower which is nearing completion.
On the Gold Coast, preparations for the Commonwealth Games in 2018 are progressing, including the construction of sporting facilities and the athlete’s village. Gold Coast Airport has commenced stage one redevelopment works which includes site works, new aircraft parking stands and terminal redevelopment, which is due to be completed in 2017.
The second stage of the Gold Coast Light Rail will connect the existing light rail system at Southport to the heavy rail at Helensvale, construction commenced in July 2016 and is due for completion in early 2018.
"We are aware of 15 further new hotel developments proposed for Brisbane between late 2016 and 2018 (2,760 rooms), and approximately 1,100 additional rooms in 2021 within the Queens Wharf Development," the report stated.
"Over the period from 2013 to 2018 the Brisbane market is forecast to have an addition to supply of over 6,700 rooms, or an increase of over 50%. With new supply continuing to outstrip demand growth, we expect market occupancy levels to continue to come under pressure before bottoming out in 2018-2019. The vast majority of the new room stock is located in the Brisbane CBD and fringe, which is having a greater impact on specific localities," the report stated.
Meriton recently opened a 208 suite serviced apartment operation within a larger mixed use complex at Southport on the Gold Coast. A further two new hotel projects are also under construction (Jewel 300 rooms and the Jupiter’s Casino 80 suite expansion) which are expected to open by 2018.
Jupiter’s has also released a masterplan for its casino precinct to potentially include a further five hotel and/or apartment buildings, including a 700 room hotel and apartment tower.
A number of other hotels are also being proposed for the Gold Coast as either part of larger mixed use developments or as additions to existing complementary facilities, which could lead to additional room stock in the medium term.
The renewed construction of high rise residential apartments on the Gold Coast is also likely to lead to new strata title serviced apartment stock.
There is limited new supply entering the Cairns market apart from the expansion of existing properties given the disparity between current values and replacement cost.
The proposed Aquis Great Barrier Reef Integrated Resort Development has been significantly scaled back and no longer includes a casino component. Timing for the revised proposed hotel, villa and apartment development remains unclear.
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Demand for major assets has primarily come from Asian based investors and operators, including Singapore, Hong Kong, China and Malaysia. Domestic demand also exists for select and smaller properties that are appropriately priced.
"Trading conditions have softened in the Brisbane market and future supply increases are expected to reduce market occupancy levels and moderate average room rate prospects for the next two to three years," the report stated. 
"We anticipate that the new hotels will gain their fair market share, which will in turn put pressure on value levels, particularly for older and lower grade stock, and will be more pronounced in certain localities. Capital markets, however, appear to be taking a medium to longer term view to asset performance for better quality stock."
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Leisure destinations have typically seen an improvement in demand, trading conditions and value levels.
Hotel pricing on the Gold Coast, particularly at the four star level has seen significant growth over the past two years, with purchasers picking up assets at below replacement cost with a view to future revenue and profitability growth.
Supported by a lower Australian dollar and with minimal supply forecast in the short to medium term, value levels in Cairns are expected to continue to show growth, with some evidence of yield tightening emerging.
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Many of the challenged regional markets have experienced a decline in profitability and value levels, with an increasing number of properties being placed on the market under instructions from mortgagees.
This is likely to limit the pricing of property in these markets until the number of distressed assets diminishes or visitor demand improves.
The Brisbane market continues to be reasonably tightly held, with owners taking a wait and see approach to the impact of future supply.
Some owners of lower quality stock, however, may take the opportunity to divest for redevelopment rather than re-invest.
As revenue and profitability continues to be impacted at an individual asset level, some owners may be more motivated to transact if debt servicing becomes an issue.
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Similar to last year, the majority of transactional activity has been within leisure markets.
Colliers expect longer term owners will continue to consider potential exit strategies in these markets as conditions provide potential trading upside and new buyers emerge.
However, given the significant number of transactions over the past two years the number of owners in this position is significantly reduced.
Activity within regional markets is expected to continue to where trading conditions are favourable and demand proves sustainable.
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<img src="/images/2016/11/03/Brisbane%20accomodation.jpg" alt="">
The Property Council Office market report recorded a substantial increase in the total vacancy rate in the Brisbane CBD from 14.6% to 16.9% in the first half of 2016. However, this was primarily due to the significant net increase in supply of 104,000 square metres, or 4.8%, outstripping increased total occupied floor space of 2.3%. Significantly, this is the first increase in occupied floor space in the CBD since the first half of 2013.
The market will continue to be impacted by the completion of the 1 William Street development, to be occupied by various state government departments, and the subsequent demolition of a number of government office buildings on the Queens Wharf site.
It is expected that the vacancy rate will remain stable in the short term until absorption and withdrawals lead to a decline in the medium term. Colliers Edge is expecting the vacancy rate to peak around 17.5% in January of 2017.
The increasing vacancy levels in the office market over recent years provide insight into the softening corporate hotel demand over this period.
The lower Australian dollar and forecast continued increase in inbound business is expected to support leisure market trading conditions, and as a result capital values and transaction activity.
The Brisbane trading market is expected to continue to be challenged over the next two to three years by the amount of new supply and the perceived impact by purchasers on trading levels.
Transactional activity is expected to continue to be light, however, some owner’s may test market appetite over this period as the supply cycle draws to a close, or are forced to, due to cash flow issues.
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Brisbane accommodation market battling through lower occupancy

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Melbourne’s south and outer east have been characterised by a lack of speculative supply in all sectors of the industrial property market coupled with high levels of enquiry, according to Colliers International’s latest report.
Infrastructure developments such as the upgrades to the Monash Freeway and the strong workforce base in this market will continue to reinforce this demand, the agency suggests, to be driven by a healthy mix of localised businesses and national corporate occupiers.
Zoned land supply is extremely limited, particularly for greenfield sites in the outer east, which has seen occupiers and developers alike, seeking sites in core south-eastern locations including Dandenong South and Keysborough.
Zoned englobo land parcels for sale are all but non-existent in the east forcing users to zero in on brownfield sites which in many cases have been held for generations.
“Serviced vacant allotment sales have been strong, indicated by their shorter duration on the market – Frasers Property Australia’s sold 53 allotments within three months of release, from their property located on the north side of Greens Road, where land rates now reach $350 per square metre,” the report stated.
South-east markets have seen institutions seeking out core land banks in key locations which are generally starved of large scale vacant land opportunities. Earlier this year, Frasers Property snapped up a further 15.72 hectare of land in Keysborough, south of its 101 hectare “The Key Industrial Park”, where the success of this development has been largely driven by its proximity to Eastlink.
Local developers have been competing aggressively for serviced land, which has been driving up speculative development below 5,000 square metres where ongoing take up remains strong by localised users.
Larger properties (above 10,000 square metres) are currently in limited supply, with only five A-grade buildings available between 10,000-20,000 square metres and one greater than 20,000 square metres.
Tenants have few available options and coupled with limited land supply for this style of development, effective rents have been firming in this market.
Recent speculative development has been concentrated in the 5,000-8,000 square metres range, where supply has been historically low for new facilities.
This new supply has been met with positive demand, with the majority of these developments expected to be leased either prior to or shortly after practical completion.
Large investment grade industrial assets in the south-east and outer east continue to attract institutional investors, where growth in capital values has continued to outpace all other precincts.
These markets have also seen very limited investment opportunities for well-located assets, which has seen capital values increasing significantly over the year by 9.8% for the south-east and 12.8% in the outer east.
The yield compression has also been substantive during this period, with average prime grade yields compressing by 60 basis points to be at 6.3% for the south-east and 6.6% for the outer east.
Although investment stock remains in high demand at all price levels, there is unprecedented unsatisfied demand in the sub $20 million bracket where both private investors and syndicators have been aggressively pursuing passive leased investments in this proven logistics location.
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Positive demand for new industrial properties in Melbourne's south and east: Colliers

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Infrastructure growth is a key demand driver in the Melbourne industrial property market and as a distribution hub, the West has benefitted from its excellent road infrastructure, according to Colliers International’s latest report.
Freight volumes have continued to expand over the years and so has the need create a more efficient system to move freight in and out of the port.
Intermodal freight terminals have gained traction on the back of this, with Salta’s Nexus Industrial in Altona being one such development.
Industrial assets should also benefit from the Western Distributor project which is currently underway and includes upgrades to the West Gate freeway and Bolte Bridge ramp, in addition to a connecting tunnel to the Port of Melbourne, CityLink and the CBD.
Tenant enquiry has more than doubled over the last 12 months, where the majority of this demand was concentrated on properties above 5,000sqm and smaller lots below 3,000sqm.
Demand has been strong over the year, with a significantly larger proportion of tenants enquiring for purposes of expansion and relocation in comparison to 2015, mainly for immediate tenancy.
While tenant demand has intensified, the in flow of speculative development has continued to wane, with the remaining speculative stock available for lease split between Frasers Property and the Goodman Group.
Prime Grade Net face rents are currently in the $70-80sqm range, while Secondary Grade assets range between $50-60sqm. Based on current levels of tenant enquiry, we expect to see solid growth in rents over the medium term, as renewed tenant interest from strong infrastructure and business expansion tightens vacancy in the market.
The pipeline for land supply has also thinned, with ready to go, subdivided land in limited stock. There are currently only four estates that have titled land and we expect  five more estates to come online in 2017, 60 per cent of which has already been sold.
The lack of available properties in a competitive environment should continue to reinforce growth in land values, which should translate into solid capital growth and further yield compression over the next 12 months.
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Industrial market to benefit from Western Distributor project in West Melbourne

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Warehouse and workshops rents improved slightly during the second half of 2016 in Newcastle, with rental rates ranging from $90 to $110, according to Colliers International's latest report.
Warehouse rents continue to comprise the majority of vacant space within prime industrial locations such as Beresfield, Thornton, Mayfield and industrial suburbs surrounding the Port of Newcastle.
Rental rates are predicted to improve during 2017 due to a recovering economy and the increasing presence of owner occupiers absorbing vacant stock.
Incentives within the Newcastle market are typically associated with the leasing of larger facilities for lease terms greater than three years and range between 8 per cent to 10 per cent of the lease term certain.
The majority of lease deals negotiated during the second half of 2016 in prime industrial areas have featured incentives less than this, with most incentives being experienced for older industrial facilities in secondary and fringe industrial locations.
The current low interest rate environment, a strengthening local economy and stable industrial land values have contributed towards increased enquiry from owner occupiers within the Newcastle industrial market during the second half of 2016 (approximately 15 per cent from Q1 2016).
This increased demand from owner occupiers has resulted in an uplift in values for properties sold with vacant possession.
Colliers International has witnessed properties being listed for lease receiving strong demand from owner occupiers, with circa 60 per cent to 70 per cent of properties listed for lease being sold.
Colliers International expects owner occupiers to continue to dominate enquiry throughout Q4 2016 and Q1 2017.
The higher ratio of owner occupiers to tenant enquiry is highlighted in the following graph.
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<img src="/images/2016/10/25/Perth%20H2.jpg" alt="">
Increased demand from owner occupiers capitalising on the historically low interest rates and improving business confidence, has resulted in uplift in values for properties sold with vacant possession.
The most prevalent has occurred within the sub $1.5m price bracket due to affordability for self managed superannuation funds, seeking opportunities within premium industrial locations such as Beresfield, Cardiff, Thornton, Warabrook and inner city locations.
The demand in the investment market for high quality industrial assets in Newcastle, the surrounding Hunter and Central Coast Regions continue to firm.
Small to medium sized facilities are achieving yields ranging from 6.45 per cent for inner city showroom/warehouse facilities in prime locations to 8.52 per cent for larger industrial facilities with strong lease covenants.
Recent notable industrial sales indicate strong demand exists from high net worth investors and self managed funds.
The main attributes these investors are looking for include location, covenant strength, lease term/Weighted Average Lease Expiry (WALE), lease provisions and building age/capital expenditure requirements.
Recent transactions within the Newcastle region from Q1 2016 to Q3 2016 are listed in the table below.
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<img src="/images/2016/10/25/Investment%20sales.jpg" alt="">
The Newcastle Region industrial land market is showing signs of improvement reflected in increased enquiry level and demand for larger lot sizes.
Demand for industrial land during the second half of 2016 has steadily improved, primarily driven by owner occupiers looking at site specifics and value for money offerings; however access to labour is also a key driver in the Hunter market.
This has been evidenced with developments by Sandvik at Heatherbrae, WesTrac at Tomago and Bradken in the Steel River Estate at Mayfield West, Aurizon at Hexham and Aldi’s proposed NSW Distribution centre in Beresfield.
Serviced industrial land supply is limited to around four key industrial precincts including Beresfield, Rutherford, Steel River Estate in Mayfield and Cardiff. Supply and pricing as at June 2016 is as follows:
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Owner occupiers dominate the Newcastle industrial market

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An offshore Chinese buyer has secured the 19th Hole Shopping Centre in Woodend, acquiring the 18,201sqm site for almost $18 million.
The neighbourhood shopping centre was listed for the first time in 50 years by Colliers International who fielded more than 150 enquiries from local, syndicate, institutional and offshore buyers.
Located in Woodend, about 70km north-west of the Melbourne CBD, 19th Hole Shopping Centre is a Coles-anchored neighbourhood shopping centre with 18 specialty tenants.
Leased at 100% and returning a net income of $1.48 million, the Coles anchor is expected to vacate at the conclusion of its lease in February 2019.
“19th Hole Shopping Centre was a complex transaction due to the imminent departure of the Coles anchor,” agent Tom Noonan said.
“As part of our strategy, we approached a number of supermarket operators prior to campaign launch and discussed the opportunity to backfill the Coles space.
“Integral to the successful sale was identifying the repositioning opportunity to prospective purchasers and providing upfront solutions to any immediate shortfalls, allowing buyers to refocus on price and terms.”
The centre traded on an initial yield of 5.11 percent excluding the Coles income, further underpinning the strong appetite for Victorian retail investments and another example of a first-time retail acquisition by an off-shore buyer.
“The campaign attracted an overwhelming amount of enquiry, with a growing number of local and off-shore privates looking to acquire shopping centre assets,” Mr Noonan said.
“A lack of core stabilised assets coming on market is seeing an increased number of buyers move up the risk-curve, which in turn is seeing extremely strong results for assets such as 19th Hole Shopping Centre.”
Mr Noonan said 2016 had seen very few shopping centres transact in Victoria year-to-date.
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Chinese buyer secures Woodend neighbourhood shopping centre

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Melbourne’s north has seen strong take up of space over the last year on the back of growing tenant demand, particularly from food, logistics and packaging businesses, according to Colliers International's latest report.
Properties within the 5,000-10,000 square metre range have seen the largest take-up in the year to date, with more than 54,000 square metres absorbed - nearly doubling since last year.
Vacancy has declined considerably by approximately 45% over the 12 months to August 2016 to be around 236,706 square metres, with much of this vacant space attributed to lease expiries.
While part of this is due to the lack of speculative development and more focus has been on prelease commitments, much of the absorption was from several deals being made in the 5,000 square metre plus range in the first half of 2016, which includes 141 National Boulevard, Campbellfield being leased to food distributor Bio-Living, and 27 Transport Drive in the Somerton Logistics Centre.
In addition, the latter half of 2015 saw quite a few large deals being made for properties above 10,000 square metres, with the most notable being the 40,000 square metre commitment by Murray Goulburn to the Austrak property.
Businesses continue to be drawn to the north’s robust road infrastructure attributes which include the Hume Highway as a corridor for the transport of freight between Sydney and Melbourne, immediate access to major arterials, close proximity to the Melbourne airport, and transport links to the Port of Melbourne.
Activity in the north’s industrial precinct over the next few years will be driven by rising opportunities for growth, through impending infrastructure development strategies and the strength of key industries such as Food and Fibre, and Transport and Logistics.
Significant transport and road infrastructure projects include the widening of the Tullamarine freeway which is currently underway, the new intermodal freight hub in Somerton (Austrak/DP World Australia) and upgrades to roads (including O’Hearns Road, Yan Yean Road and Bolton Street).
These improvements should provide opportunities for business growth and generate demand in all sectors of the industrial property market.
A low cost business environment and attractive rental rates have continued to spur tenant interest - average net face rents for prime grade assets are currently at $78 per square metre, while secondary grade assets lease for $58 per square metre net.
There has also been a notable increase in tenant enquiry from food groups, particularly within the local government area of Hume which has seen a comparatively higher number of leases within this sector than in 2015.
As Australia’s largest producer and exporter of food and fibre, this sector accounts for more than half of Victoria’s total goods exports. The food and fibre industry should continue to strengthen on the back of growing global interest and increased strategic opportunities as one of the state government’s six priority sectors within the Future Industries Fund, which should drive the demand for industrial space and help absorb impending vacancy from automotive manufacturing facility closures.
Investment activity has also continued to ramp up, evident in major deals being made over the year. One such deal was the sale of the 11,717 square metre Campbellfield property on 36-52 National Boulevard by Property Link, located on 36-52 National Boulevard, which sold to a local owner occupier (also a food group) for $9.6 million, in a Colliers International negotiated deal.
While land values have remained steady in the $240-275 per square metre range for Prime Grade assets over the last six months, the demand for land (from a mix of developers and owner occupiers) in close proximity to the Hume Freeway has continued to grow, predominantly in Epping and bordering areas.
Moreover, current land supply has also been tightening around Epping precinct with limited serviced blocks available at MAB’s Alliance Business Park and McMullin’s Northpoint.
The lack of land supply and fewer opportunities for developments should translate to solid growth in land values over the next 12-24 months.
The underlying demand saw average Prime Grade yields compressing by approximately 40 basis points over the last year to be in the 6.5-7.5% range and we believe there is further scope for compression, particularly for well-located properties, which are in limited supply.
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