A landmark former orphanage site in Surrey Hills could be transformed into a new residential community under plans lodged by <a href="https://www.apartments.com.au/developers/antipodean-land-developments">Antipodean Land Developments</a> that would deliver 76 apartments and townhouses while restoring some of the suburb's most significant heritage buildings.

The burgeoninng Melbourne-based developer has submitted plans for the 9,158 sqm site at 1 Kent Road and 24 Durham Road, home to the former St Joseph's Home for Destitute Children, a historic institutional complex dating back to the late 19th century. The proposal seeks to adaptively reuse several heritage buildings while introducing two new four-storey residential buildings set within extensive landscaped grounds.

Designed by <a href="https://www.apartments.com.au/architects/woods-bagot">Woods Bagot</a> and Kerstin Thompson Architects, the project has been conceived as a contemporary residential village embedded within a restored heritage precinct. The development team describes the design approach as "The Village in the Garden," with new buildings positioned among mature landscaping by OCULUS and significant heritage structures.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="44ec8c1b-c0b6-44ae-859e-5811b3e6a023" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%281%29.png?VersionId=p.p1_KFh4iQoV4nisdnPfQBAsWNi7m79" />

The proposal would deliver 76 dwellings comprising a mix of apartments and duplex-style residences, significantly increasing housing supply on one of the largest privately held residential landholdings in Surrey Hills. The development includes 127 car spaces, 24 bicycle spaces and more than 1,000 sqm of communal amenity, with the existing chapel building earmarked for conversion into resident facilities.

According to the planning submission, the project centres on the restoration and adaptive reuse of the site's most significant heritage assets, including the original c.1889 St Joseph's building, the chapel designed by architect Augustus Andrew Fritsch, and the historic brick perimeter walls and entry gates. The proposal also incorporates the retention of other contributory buildings including the former infirmary and school building.

Tract Consultants, in the planning report accompanying the application, said the scheme had been shaped through extensive heritage analysis and design development.

"The shared vision for the Site by the project team has culminated in a scheme which successfully breathes life back into a historic site while delivering upon the objectives of Victoria's Housing Statement in a carefully curated and contextually responsive manner."

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="7263b7d8-95ea-400f-9531-6ca7d22c3c33" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design%20%282%29.png?VersionId=4cR1tiWOsDpgxEOwZi5vVFcyvvOsYkIE" />

The proposal is being assessed under Victoria's Significant Residential Development with Affordable Housing pathway. As part of the application, three per cent of the project's residential development cost would be contributed to the Social Housing Growth Fund. The development would also provide a diverse mix of one, two and three-bedroom residences targeting a broader range of buyers than typically found in Surrey Hills' detached housing market.

Sustainability initiatives include an anticipated 66 per cent BESS score, natural cross-ventilation to 80 per cent of apartments, 28 per cent deep soil landscaping and a canopy cover outcome exceeding local planning requirements. The proposal also sets aside more than 1,083 sqm for communal indoor and outdoor resident amenity spaces.

<img alt="First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills" data-entity-type="file" data-entity-uuid="33fad46f-fe26-4d0a-acfd-6b776e1c6a3d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Untitled%20design.png?VersionId=D9F6WVSyYCtGvSUmith35LRp6R7PQkw_" />

Planning documents describe the property as one of the largest underutilised residential sites in Surrey Hills, arguing it presents a rare opportunity to introduce "missing middle" housing in an established inner-eastern suburb while preserving and revitalising a significant heritage precinct.

Antipodean Land Developments has built a reputation for design-focused residential projects across Melbourne, particularly in the medium-density sector. Previous developments include Neighbourhood in Brunswick East, delivered with Breathe Architecture, and Balfe Park Lane, designed by Kerstin Thompson Architects.

They've been very active in site acquisition as they build out their future development pipeline. They recently launched Thornubury House, 45 apartments above a mix of commercial, retail, and food and beverage tenancies, and have plans for a boutique project in Fitzroy and another <a href="https://www.apartments.com.au/news/vic/antipodean-plan-apartments-for-deepdenes-missing-middle-on-whitehorse-road">"missing middle" project</a> on Deepdene's Whitehorse Road.

Joel Robinson

First look: Antipodean Land Developments plans heritage-led apartment community in Surrey Hills

Developer <a href="https://www.apartments.com.au/developers/auyin-property-development">Auyin</a> is the latest to turn to the Victorian Government's Development Facilitation Program in an effort to secure approval for its long-planned, mixed-use project in Elsternwick.

In 2018, Auyin lodged plans with Glen Eira City Council for a 14-storey building, however Council approved a reduced eight-storey scheme. A subsequent VCAT appeal in 2019 upheld the eight-storey height limit.

The project was later amended to nine storeys, but Auyin is now seeking to revive something closer to its original vision. The developer argues that the planning context has evolved significantly over the past decade, particularly within the Elsternwick Activity Centre, where higher-density development has increasingly been encouraged along Glen Huntly Road.

The proposal would transform the 1,239 sqm site at <a href="https://www.apartments.com.au/new-apartments/7-12-horne-street-elsternwick-vic-3185">7-15 Horne Street</a>, opposite Elsternwick Railway Station, into a 13-storey residential and retail development designed by CBG Architects, with 40 apartments

The site currently comprises three commercial properties.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="5f465dd4-509b-4082-a669-0253b313914b" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20podium.png?VersionId=72frWi0SmQ5AVJ3ARRhX5ILUYObhTm7x" />

The proposed apartment mix comprises 25 two-bedroom and 15 three-bedroom residences above 200 sqm of retail space at ground level. Residents would have access to a 90 sqm wellness facility, a 351 sqm communal indoor and outdoor terrace on the third level, and extensive landscaped areas throughout the development. A publicly accessible 135 sqm plaza would be created on the north-east corner of the site, providing seating, landscaping, and a new gathering space adjoining Horne Street.

The design adopts a four-storey podium that references the finer-grain character of the surrounding streetscape, with the upper tower recessed behind generous setbacks on all boundaries.

<img alt="First look: 13-storey mixed-use tower planned for Elsternwick activity centre" data-entity-type="file" data-entity-uuid="e637e763-2abc-4c34-a0aa-5c7ad36fae18" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/elsternwick%20open.png?VersionId=J1AoOpZgTyaF.KeeFSX6lMjEScX8KKRi" />

A key element of the proposal is the reconfiguration and widening of the surrounding laneways. Vehicle access would be retained from Lois Lane, with upgraded pedestrian connections linking Ross Street and Horne Street. The development would provide 58 residential car spaces, two retail car spaces, and 52 bicycle spaces across two basement levels and ground-floor facilities.

Architecturally, the building draws inspiration from the established character of Elsternwick Village. The façade combines dark charcoal brickwork, textured concrete, bronze-toned metal detailing, and extensive planting integrated into podium and tower levels. The design also incorporates a chamfered corner treatment and publicly accessible plaza intended to strengthen pedestrian activity around the station precinct.

Elsternwick's last new development completion was&nbsp;EVA Elsternwick by Pitard late last year. <a href="https://www.apartments.com.au/developers/milieu-property">Milieu</a> is working away on its nature-led neighbourhood, <a href="https://www.apartments.com.au/new-apartments/elsternwick-gardens-by-milieu-8-gordon-street-elsternwick-vic-3185">Elsternwick Gardens</a>, on Gordon Street, with its first stage expected to complete next year.

First look: Auyin seeks mixed-use apartment project in growing Elsternwick Activity Centre

<a href="https://www.apartments.com.au/new-apartments/otium-parkdale-123-125-como-parade-east-parkdale-vic-3195">Otium Parkdale</a>, the 13-residence boutique development by&nbsp;<a href="https://www.apartments.com.au/developers/huxtable-property">Huxtable Property</a>, has entered its final stages of delivery, with completion expected within the coming month and more than half of the residences sold.

The Como Parade East project is nearing the finish line at a time when opportunities to purchase new apartments in <a href="https://www.apartments.com.au/developments/parkdale-vic-3195">Parkdale</a> remain exceptionally limited. Fewer than 10 per cent of dwellings in the bayside suburb are apartments, making developments like Otium a relatively rare addition to a market traditionally dominated by detached housing.

[smartcode_project:default project_id=134974 project_image_fid=5427]

The three-level development comprises 13 residences, including ten two-bedroom apartments and three larger three-bedroom homes, all positioned above a secure basement car park.

Designed by <a href="https://www.apartments.com.au/architects/almeida-architects">Almeida Architects</a> with a strong connection to its coastal surroundings, Otium combines red brick, exposed concrete and dark metal detailing with integrated landscaping and greenery. Expansive glazing, generous balconies and terraces have been incorporated throughout the design to maximise natural light and reinforce indoor-outdoor living.

Inside, the residences feature engineered European oak flooring, natural and reconstituted stone benchtops, Bosch kitchen appliances, ducted heating and cooling, lift access and secure entry systems. The larger three-bedroom residences on the upper level have been designed with house-like proportions, while the two-bedroom apartments prioritise functionality, flexibility and low-maintenance living.

[smartcode_project:default project_id=134974 project_image_fid=5421]

The project is now in its final stages, with <a href="https://www.apartments.com.au/builders/labco">Labco</a> completing the remaining landscaping and external finishing works following the completion of the residences' interiors.

Otium's location within the heart of Parkdale continues to underpin its appeal. Residents will be just steps from local cafés, restaurants, shops and the newly elevated Parkdale Station, while the beach is less than a kilometre away.

With the project tracking ahead of schedule, buyers can currently secure a residence with a five per cent deposit and benefit from settlement terms of up to eight months. The advanced stage of construction also provides buyers with the opportunity to walk through the near-complete residences and experience the quality and finishes firsthand ahead of completion.

[smartcode_project_cta:default project_id=134974]

Otium Parkdale enters final month before completion as rare apartment opportunity nears sellout

A new boutique apartment development is entering the market in <a href="https://www.apartments.com.au/developments/chermside-qld-4032">Chermside</a>, with Brisbane-based developer <a href="https://www.apartments.com.au/developers/ausdev">Ausdev</a> bringing 33 residences to a well-connected pocket of Brisbane's north.

<a href="https://www.apartments.com.au/new-apartments/parkdrive-apartments-chermside-25-sammells-drive-chermside-qld-4032">Parkdrive Apartments</a>, at 25 Sammells Drive, will comprise a mix of one- and two-bedroom residences positioned within walking distance of Westfield Chermside, The Prince Charles Hospital, and Bradbury Park.

Established in 1989, Ausdev has a long-standing presence across both development and construction, with Parkdrive Apartments representing its latest residential project in Brisbane's northern suburbs.

[smartcode_project:default project_id=152125 project_image_fid=363778]

The development has been designed around open-plan living and natural light, with residences featuring stone benchtops, timber cabinetry, BOSCH appliances, and private balconies that extend the living areas outdoors.

Kitchens are positioned as the centrepiece of the homes, incorporating natural material palettes and integrated appliances, while bathrooms have been designed with a focus on functionality and understated finishes.

Residents will have access to a communal barbecue and entertaining area on Level 3, providing shared outdoor space within the development. Secure parking and lift access are also incorporated into the building.

The project will deliver a limited collection of 33 apartments, with one-bedroom residences priced from $749,000.

[smartcode_project:default project_id=152125 project_image_fid=363782]

Beyond the building itself, the location places residents within easy reach of several of Chermside's key amenities. Bradbury Park is around 350 metres away, while Westfield Chermside is approximately 1.3 kilometres from the site. The Prince Charles Hospital is located within 750 metres, and the Chermside Bus Interchange is around 1.5 kilometres away, providing connections across Brisbane.

Parkdrive Apartments adds to the growing residential pipeline in Chermside, a suburb that continues to evolve as a major retail, healthcare, and transport hub for Brisbane's north.

[smartcode_project_cta:default project_id=152125]

Ausdev introduces boutique Parkdrive Apartments to Chermside's growing centre

<a href="https://www.apartments.com.au/developers/skymark-group">Skymark</a>'s boutique Cronulla development Solis has secured a 10-year Latent Defects Insurance policy through Resilience Insurance, providing buyers of the 16-residence building on Ewos Parade with structural and waterproofing protection that extends a decade beyond the building's completion.

Currently under construction and due for completion in late 2027, <a href="https://www.apartments.com.au/new-apartments/solis-cronulla-8-ewos-parade-cronulla-nsw-2230">Solis</a> is one of a small number of new developments in the Sutherland Shire to carry Resilience LDI coverage, a distinction that carries increasing weight as buyer confidence in the off-the-plan sector continues to be shaped by how developers stand behind their product.

Latent Defects Insurance, which entered the Australian market in 2022 when Resilience Insurance was approved to offer the cover, protects buyers against major structural or waterproofing defects for ten years post-completion. Unlike traditional statutory warranties, it operates as a first-resort policy, if a covered defect arises, the insurer responds directly, without the buyer needing to pursue the builder or developer through a lengthy claims process.

Resilience Insurance CEO Corey Nugent has noted that the product addresses something fundamental to the new apartment market.

"The overarching feedback from prospective buyers in the new development space is that they want more confidence and assurances around the quality of the build," Nugent says.

"Resilience Insurance Latent Defects Insurance not only gives them complete peace of mind for 10 years, but it shows the developer they are buying from is standing by their product."

[smartcode_project:default project_id=150499 project_image_fid=370898]

For Solis, the Resilience LDI policy adds a meaningful layer of accountability to an already considered project. The development comprises nine two-bedroom and seven three-bedroom residences, including one dual-level three-bedroom apartment, across a five-storey building on Ewos Parade, positioned between Shelly Beach and South Cronulla.

Garden apartments connect directly to private landscaped courtyards, while upper-level homes capture beach views to the east from level four and above.&nbsp;

All 16 residences include at least one balcony or courtyard, and select apartments on the upper floors feature bar areas and secondary flexible living spaces.

Hiba Sander, Managing Director of Skymark, says Solis offers a rare balance, nestled between the quiet beauty of secluded beaches and the lively charm of South Cronulla's esplanade.

"It's a place to choose your pace and live gracefully, seaside'," Sander says.

[smartcode_project:default project_id=150499 project_image_fid=370900]

The architecture, designed by <a href="https://www.apartments.com.au/architects/ida-design-group">IDA Design Group</a>'s Michael Trinh, draws from the natural erosion patterns of <a href="https://www.apartments.com.au/developments/cronulla-nsw-2230">Cronulla</a>'s sandstone headlands, translating the organic forms of the coastline into soft curves, pavilion-style massing, and a material palette chosen for longevity in a salt-tinged environment.&nbsp;

Textured natural stone, soft renders, and timber-look battens reference the tones of the surrounding cliffs, while the building has been oriented to maximise natural light and passive ventilation, with primary living spaces facing north and east to capture morning sun and sea breezes.

"At Solis, our aim was to create architecture that feels quietly confident, grounded in natural materials like stone and timber, and elevated by light and landscape," Trinh says.&nbsp;

"The buildings are designed to sit gently within their coastal surrounds, with expansive glazing and abundant greenery creating a seamless dialogue between inside and out."

[smartcode_project:default project_id=150499 project_image_fid=370897]

Interiors by <a href="https://www.apartments.com.au/architects/hot-black">Hot Black</a> carry the same material language through to every room. Kitchens feature integrated Gaggenau appliances, sculpted stone benchtops, and Lo &amp; Co joinery, while bathrooms feature natural stone, timber, and brushed metal finishes.&nbsp;

Hot Black Founder and Design Director Sophie Safrin describes the intent as one of considered restraint: "At Solis, every detail has been thoughtfully considered to create a timeless coastal retreat, calm, refined, and effortlessly liveable. From natural finishes to seamless indoor-outdoor flow, Solis offers a quiet elegance that's deeply connected to its surroundings.

The landscape, designed by Julian Brady of <a href="https://www.apartments.com.au/landscape-architect/sitedesignstudios">Site Design Studios</a>, treats green space as an integral part of the resident experience rather than an afterthought.&nbsp;

"Gentle curves and layered native plantings mirror the ebb and flow of the ocean," Julian Brady says, "creating a serene connection between architecture and place."&nbsp;

Coco Republic has provided bespoke furniture packages tailored to the project's coastal palette.

[smartcode_project:default project_id=150499 project_image_fid=370899]

Skymark has an established track record in the Sutherland Shire, with a portfolio spanning Cronulla, Woolooware and Burraneer that includes Isla, Sylva, Bask, Shells, Sula and Mist. Securing LDI on Solis reflects a broader shift in how the developer is positioning its buildings to buyers, at a time when Resilience Insurance expects the policy to become mandatory in New South Wales by 2028.

Sales at Solis are launching soon through Ray White Projects, with an official event scheduled for 11 June. Enquire for more information.

[smartcode_project_cta:default project_id=150499]

Skymark takes out 10-year Resilience Insurance LDI at Solis Cronulla

Investment Trust

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Clarence Property is seeking to raise $20 million capital for its Westlawn Property Trust (WPT).
Its previous offering returned 22.1% last financial year and closed oversubscribed at $22 million.
Clarence is forecasting a gross distribution of 8.8% per annum for new investors, backed by the Trust's average annual return of 14.5% over the past three years and 13.8% since its inception in 1994.
WPT recently acquired a 136-lot Yamba Quays development for $70 million.
It is the last canal-front community in New South Wales, following the 1996 State Government legislation to ban further canal development.
WPT portfolio now exceeds $300 million with assets from Yamba to Brisbane.
These include master-planned communities, shopping centres and industrial and commercial buildings.
Clarence Property Managing Director Peter Fahey says the new capital raising will allow WPT to maintain its low loan to value ratio (LVR).
"This past year has been one of our most active yet, with the acquisition of a total $60 million of new assets for WPT, and the continued development of existing projects including our 500-lot Epiq Lennox masterplanned community, which is now home to dozens of families," he said.
"Part of our strategy with WPT is to maintain close to a 50% LVR, so we don't over-borrow to acquire new assets.
"We have just commenced a $5 million renovation program to improve yields and WALE at a number of our regional shopping centres, which have become the backbone of WPT.
"Looking ahead, 2019 should be a fruitful year for WPT as we build on our 1,000-strong investor base and our excellent track record of delivering returns above our forecast distribution."
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Clarence Property raising more capital for Westlawn Property Trust

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<div>Moody's Investors Service says that its outlook for the Australian real estate investment trust (A-REIT) industry is stable, except for the retail segment, which faces a challenging operating environment.</div>
<div> </div>
<div>The growth in operating income will remain strong, and they expect aggregate comparable net operating income growth of 3% to 4% for their 16 rated A-REITs during the next 12-18 months</div>
<div> </div>
<div>Moody's Investors Service expect the office segment will see the strongest income growth, followed by industrial and retail.</div>
<div> </div>
<div>Low office vacancy rates in Sydney and Melbourne make these cities "a landlord's market."</div>
<div> </div>
<div>Moody's forecast for operating income growth of 3%-4% will be driven by low vacancy rates and strong demand on the back of favourable economic conditions.</div>
<div> </div>
<div>GPT Group, Mirvac Group and Dexus have the highest exposure in this segment and will likely record the highest growth over the next 12-18 months.</div>
<div> </div>
<div>Strong demand underpins solid growth in the industrial segment, and Moody's expects operating income growth of about 3%, with Sydney being the strongest market.</div>
<div> </div>
<div>Dexus, Goodman Group, Mirvac, Goodman Australia Industrial Partnership and Stockland Group will be the main beneficiaries according to Moody's analysis.</div>
<div> </div>
<div>Moody's Investors Service stated the retail segment is facing structural challenges on sluggish consumption and online sales growth.</div>
<div> </div>
<div>"Nevertheless, higher quality retail space remains resilient, and Moody's expects operating income growth of 2.0%-2.5%," it noted.</div>
<div> </div>
<div><img src="https://www.urban.com.au/images/2018/9/26/Moodys%20chart.JPG" alt=""></div>
<div> </div>
<div>"Well-located shopping centers that attract a deep pool of potential tenants and are underpinned by non-discretionary spending, or that are destination hubs, will continue to perform well," they added.</div>
<div> </div>
<div>Scentre Group, GPT, Mirvac and Vicinity Centres will benefit from these factors, while other centers, with a high level of discretionary spending exposure, will underperform, based on their latest data.</div>
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Moody's suggest outlook for A-REITs is stable, but retail face challenges

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Treasurer Scott Morrison has slammed critics of the government’s recent move to restrict managed investment trusts to buying affordable residential property.
Reacting to Labor’s criticism and the property industry’s negative reactions,  Morrison said they are effectively demanding for developers a tax concession that is out of reach for most other Australian investors.
"You cannot currently put residential properties in a MIT," Morrison told The Australian Financial Review.
"The sector is asking for a tax concession not available for Australian investors,” he added, while speaking from China.
Morrison's decision was announced on September 14 with immediate effect.
It triggered a strong reaction from the property industry which sees opportunity in the build-to-rent sector.
According to them, the federal government’s recent move risks killing off build-to-rent development before it even starts, and will affect the industry's ability to deliver more low-cost rental accommodation.
Managed investment trusts are defined by the Australian Tax Office as a type of unit trust that invests in passive income assets such as shares, property or fixed-interest. Tax on the income from the trusts is paid directly by individual beneficiaries at their top marginal tax rates.
Property Council of Australia chief executive Ken Morrison said until the government’s  announcement, property companies have been able to lodge applications to the ATO for tax rulings that build-to-rent would satisfy MIT arrangements as they are primarily about income and not capital gains.
"We have seen the ATO issue individual rulings" to that effect, he added.
"We look forward to working with the government on this issue as we believe build-to-rent offers enormous possibilities for Australia.
Earlier, Shadow treasury spokesman Chris Bowen slammed the move to restrict MITs, saying the Treasurer's announcement had ambushed the property and construction sector over a potential billion dollar addition to the real estate market.
The treasurer hit back over the weekend, criticising Labor's approach to housing affordability, which he said amounted to increasing taxes "on mum and dads investing in real estate while giving foreign investors a new 50 per cent tax cut."
The government said last week the MIT restriction was an "integrity measure" that would prevent trusts from investing in houses, units and apartments to hold for long-term rent.
"This change provides legislative clarification of the long-standing convention that the primary purpose of the MIT concessional tax treatment is to apply to passive investment income," the Treasurer said in a statement on Thursday.
"This change is crucial to maintaining the integrity of the tax base and will help direct foreign investment to where it's needed most."
Meanwhile, developers such as Mirvac are already planning big build-to-rent projects.
Earlier this year, Mirvac appointed investment bank UBS to seek off-market expressions of interest from institutional groups to form a club to develop and own build-to-rent housing in Australia.
The model has been successful in the US. 
While the model promises to help address one of the greatest complaints of renters – the lack of stable long-term professional landlords and too many "cottage-industry" players – the build-to-rent model is uncertain due to the collapse in rental yields in cities around the nation, especially Sydney.
But declining commercial property yields has made the prospect of build-to-rent more attractive. 
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Morrison hits back at critics of move to restrict managed investment trusts

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Following on its budget promises to tackle the housing affordability issue, the Turnbull government plans further steps which are directed towards investors and managed investment trusts. 
Last week, the federal government released draft legislation to implement its plan, which includes:
<ul>
<li>enabling investors to obtain a 60 per cent capital gains discount in affordable rental housing;</li>
<li>enabling managed investment trusts (MITs) to invest in affordable housing; and</li>
<li>MITs cannot acquire residential property, other than affordable housing.</li>
</ul>
The media release by Treasurer Scott Morrison’s office said from January 1, 2018, there could be a capital gains discount of up to 60 per cent if investors hold their eligible affordable housing property for at least three years, rather than the standard 50 per cent discount.
“From 1 July 2017, MITs can hold affordable housing for the purpose of deriving long-term rent. The same MIT will also be permitted to derive other eligible investment business income from investments including shares or commercial property,” it added.
MITs will be able to construct or develop the affordable housing property within the MIT which is expected to act as an incentive for MITs to invest in affordable housing projects, according to the draft legislation.
“Consistent with current MIT withholding tax rules, eligible foreign residents will generally be able to take advantage of a reduced withholding tax of 15 per cent on investment returns, including income from capital gains,” said the media release.
“This concessional rate will not apply to capital gains income derived from selling affordable housing held for less than 10 years.”
To be eligible for the higher CGT discount and MIT concessions, the affordable housing tenancy will need to be managed by a registered Community Housing Provider, it says. As part of this, housing providers will determine the tenant eligibility criteria, including the rent charged, consistent with state and territory affordable housing policies.
The draft legislation also includes an integrity measure which said that “MITs cannot acquire investments in residential property, except where it is affordable housing. This will prevent MITs from investing in houses, units and apartments to hold for long term rent (other than affordable housing)”.
“This change provides legislative clarification of the long-standing convention that the primary purpose of the MIT concessional tax treatment is to apply to passive investment income. This change is crucial to maintaining the integrity of the tax base and will help direct foreign investment to where it’s needed most.”
Trusts that currently hold residential property have been given a transitional period until October 1, 2027, for their existing property assets.
The federal government has invited submissions on the draft legislation.
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Scott Morrison announces limits on managed investment trusts

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Rating agency Moody's Investors Service says earnings reported by 13 Australian real estate investment trusts (A-REITs) rated by it suggest their credit quality will remain strong throughout FY2017.
It also expects the rated A-REITs' liquidity to remain strong because of their moderate level of debt maturities over the next 12 months.
Eleven trusts reported results for the first halves of their 2017 fiscal years, while the other two reported for all of calendar 2016.
<a href="https://www.propertyobserver.com.au/images/2017/03/08/Screen%20Shot%202017-03-08%20at%201.29.13%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/08/Screen%20Shot%202017-03-08%20at%201.29.13%20PM.png" alt="">
"We expect the A-REITs' financial leverage -- as measured by adjusted net debt/EBITDA -- to increase slightly during their respective fiscal years as the trusts take on modest amounts of debt to fund developments and acquisitions," said Kirsten Lee, analyst at Moody's Investor Service.
"Nonetheless, modest net operating income (NOI) and funds from operations (FFO) growth of around 2.0%-3.0% will partially offset the increase in debt, while the NOI and FFO growth will be driven by a continued high level of contracted rental income from relatively long-weighted lease expiries," adds Lee.
Moody's conclusions were contained in its latest report, "Financial Results Indicate Credit Quality Will Remain Strong Through Fiscal 2017". 
<a href="https://www.propertyobserver.com.au/images/2017/03/08/Screen%20Shot%202017-03-08%20at%201.31.37%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/08/Screen%20Shot%202017-03-08%20at%201.31.37%20PM.png" alt="">
The report said that because of a lack of immediate suitable investment opportunities, with assets seen as being priced at the peak of the cycle, the majority of the A-REITs are likely to continue operating at the lower end of their internal target gearing ranges to retain balance-sheet flexibility. 
They will also operate with sufficient cushions within their rating tolerance levels to manage a potential turn in the property cycle.
In contrast to the larger A-REITS, Moody's expects the smaller A-REITs to remain acquisitive, as they seek to expand their asset bases.
The rating agency expects that retail trusts will continue to see solid comparable NOI growth, owing to broadly steady vacancy rates and fixed rent increases, and despite slowing sales growth.
The underlying operating environment for super regional and regional malls is likely to remain supportive, with a strong pipeline of demand from international retailers keeping occupancies at high levels.
However, Moody's expects re-leasing spreads and comparable NOI growth will be negatively affected if significant retailer bankruptcies continue because rental rates on new leases are typically lower than those on renewed leases.
<a href="https://www.propertyobserver.com.au/images/2017/03/08/Screen%20Shot%202017-03-08%20at%201.33.23%20PM.png" target="_blank">Click to enlarge</a>
<img src="https://www.urban.com.au/images/2017/03/08/Screen%20Shot%202017-03-08%20at%201.33.23%20PM.png" alt="">
The comparable NOI growth of sub-regional malls will be the most negatively affected, should this occur, due to weaker International retailer demand.
Moody's said it expects the rated office and industrial A-REITs with high exposure to Sydney will continue to see moderate NOI growth, driven by fixed rent increases, higher occupancies and lower incentives.
It also expects the rated A-REITs' liquidity to remain strong because they have a moderate level of debt maturities over the next 12 months.
Of the 13 A-REITs that have reported, six demonstrated credit neutral results, while four were credit positive and three negative, it said.
The results reflect a modest reduction in average financial leverage as most A-REITs have paid down debt from the proceeds of their non-core asset sales. This, coupled with a modest development pipeline -- will see the rated A-REITs maintaining strong balance sheets and good headroom within their ratings over the next 12 to 18 months, concludes the report. 
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