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

Joel Robinson

Parcel delivery is joining the apartment amenity checklist

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

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

Seasoned Victorian apartment developer <a href="https://www.apartments.com.au/developers/central-equity">Central Equity</a> has logged more than $400 million in sales in its luxury apartment project Palmera Residences at Northcliffe on the Gold Coast.&nbsp;

Central Equity Director Karl Kutner said the sales result reflected a combination of location, product quality and delivery certainty with the project already under construction by building powerhouse Multiplex.&nbsp;

"Surpassing $400 million in sales since launch is a significant milestone and an outstanding endorsement of <a href="https://www.apartments.com.au/new-apartments/palmera-residences-gold-coast-18-garfield-terrace-surfers-paradise-qld-4217">Palmera Residences</a>,” he said.&nbsp;

"We believe one of the key reasons for this strong result is the confidence purchasers have in knowing the project is under construction with Multiplex. Buyers are increasingly looking for certainty. They want to know that the project they commit to today will be delivered by an experienced team with a proven track record."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365782]

Kutner said it was clear there was still high demand for luxury projects that offered certainty of delivery.&nbsp;

“We are in a market where many residential developments have faced delays due to rising construction costs, labour shortages and financing challenges,” said Kutner.&nbsp;

"But having construction underway has provided our buyers with resounding confidence backed by more than 40 years of development delivery by Central Equity combined with construction by one of Australia's most respected construction companies."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365785]

Central Equity is one of Australia's most experienced privately-owned property developers. Over more than four decades, the company has delivered in excess of 85 residential developments including 10,000 apartments and many thousands of stand alone homes.&nbsp;

Located on Garfield Terrace at Northcliffe, between Surfers Paradise and Broadbeach, Palmera Residences occupies one of the Gold Coast's most sought after beachside locations. The development has been designed to appeal to owner occupiers seeking premium residences that combine generous living spaces and resort style amenities.&nbsp;

Palmera Residences will feature an exceptional collection of resort style amenities, including two swimming pools: a generously sized family pool with safe shallow zones for relaxed recreation, and a 20 metre lap pool positioned to maximise all day sunlight.&nbsp;

Residents will also enjoy exclusive access to wellness and recreational facilities including a magnesium pool, sauna, yoga studio, expansive fitted gymnasium, resident lounge, outdoor BBQ’s&nbsp;and indoor and outdoor dining areas, together with a dedicated concierge and luxurious hotel inspired entrance foyer.&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365767]

A unique feature at Palmera Residences has been designed to enhance the Gold Coast lifestyle which includes both indoor and outdoor gymnasium facilities, together with thoughtfully designed indoor and outdoor dining and entertaining areas. A corner café has also been incorporated to provide residents with a destination for their everyday needs.&nbsp;

Kutner said buyer demand had been broad based with purchasers attracted from interstate as well as throughout South East Queensland.&nbsp;

"We're seeing strong interest from owner occupiers, lifestyle buyers and people relocating to the Gold Coast. Many purchasers have been searching for a premium beachside residence where quality, design and delivery are equally important."&nbsp;

[smartcode_project:default project_id=108274 project_image_fid=365771]

Kutner said the sales milestone was an important achievement, but the focus remained firmly on delivering an exceptional development.&nbsp;

"While reaching $400 million in sales is an important milestone, our priority remains delivering a project that exceeds purchaser expectations,” he said.&nbsp;

"Palmera Residences has been designed to become one of the Gold Coast's landmark residential addresses, and we look forward to welcoming our purchasers to their new homes."&nbsp;

There are a limited number of residences remaining in selected configurations with pricing from $2,950,000 to $8,950,000. Palmera Residences is also crowned by expansive penthouses with wrap around views.

[smartcode_project_cta:default project_id=108274]

Construction certainty and strong buyer demand drive major sales result for luxury Gold Coast development

Palmera Residences fly out the door as sales pass $400 million

National property developer <a href="https://www.apartments.com.au/developers/goldfields-group">Goldfields</a> has appointed BINAH as its construction partner for Quartet, its new Brisbane apartment development in the undersupplied suburb of <a href="https://www.apartments.com.au/developments/milton-qld-4064">Milton</a>.

Located just two kilometres from the Brisbane CBD and moments from key 2032 Olympic precincts, <a href="https://www.apartments.com.au/new-apartments/quartet-milton-33-manning-street-milton-qld-4064">Quartet</a> will deliver 131 one, two, three, and four-bedroom apartments priced from $1 million to $4.2 million, combining elevated design with a wellness-focused lifestyle offering.&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=368000]

Goldfields’ Chief Executive Officer, Lachlan Thompson, said the appointment of <a href="https://www.apartments.com.au/builders/binah-constructions">BINAH</a> marked an important milestone for the project.&nbsp;

“Bringing BINAH on board as our construction partner will allow us to bring our vision for Quartet forward with a team that has a proven track record of delivering high-quality residential projects,” Thompson said.&nbsp;

“We’ve taken a considered approach to progressing the site because we wanted to deliver the whole package. Buyers ultimately back great developers, great projects and great builders, and with Quartet, we’ve made sure all three line up.

“People want certainty, they want to know the project will be built, that the homes will be delivered as promised, and that the developer stands behind the quality of what they create. That’s something Goldfields has built its reputation on over many years.”&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=367993]

BINAH’s Managing Director, Khalil Hafza, said the company was proud to be partnering with Goldfields to deliver Quartet.&nbsp;

“Quartet is an exciting project to bring to life, particularly given the level of detail in the residences and the extensive rooftop amenity planned for the building,” Mr Hafza said.&nbsp;

“Our focus is on delivering a high-quality build that brings that design vision to life and creates homes residents will enjoy for many years.”&nbsp;

[smartcode_project:default project_id=108736 project_image_fid=367999]

The facilities at Quartet have been feared towards the roof, with a&nbsp;25 metre lap pool, spa, sauna and cold plunge, and a communal barbecue area and alfresco.

Town planning was designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and brought to life by Melbourne-based architecture firm Cera Stribley.

<a href="https://www.apartments.com.au/interior-designers/cera-stribley">Cera Stribley</a> Co-Founder and Managing Principal, Dom Cerantonio, said the project responds to both its riverside setting and Brisbane’s evolving urban character.&nbsp;

“Quartet has been designed to sit comfortably within its riverside context, offering a refined take on urban living through well-planned, generously proportioned residences that will stand the test of time,” Mr Cerantonio said.&nbsp;

“An emphasis on natural light, natural textures and carefully selected finishes from timber and marble to premium appliances, creates calm, considered interiors designed for comfort and long-term liveability.”&nbsp;

Construction of Quartet will commence in July 2026, with completion anticipated in Q4 2028.

[smartcode_project_cta:default project_id=108736]

Construction to commence on 131-residence tower designed around wellness-focused living

Goldfields appoints BINAH for Quartet apartments in Milton

The first partnership between national developer <a href="https://www.apartments.com.au/developers/fortis">Fortis</a> and Adelaide-based developer <a href="https://www.apartments.com.au/developers/otello">Otello</a> has made a strong start, with the pair securing $21 million in unconditional sales at <a href="https://www.apartments.com.au/new-apartments/one-four-four-hutt-adelaide-144-hutt-street-adelaide-sa-5000">One Four Four Hutt</a>&nbsp;on the edge of the Adelaide CBD.

Over a third of apartments have been snapped up in the boutique 44-apartment project on the corner of Hutt Stret and Wakefield Road. Local downsizers and owner-occupiers wanting to remain in Adelaide's tightly-held southeast quarter have been the most prominent purchasers.

The DKO-designed, mixed-use development is one of the few new apartment projects in the precinct, an area where new housing supply has remained limited despite continued demand from buyers wanting to stay close to the CBD, Victoria Park and Adelaide's established east-end amenities.

[smartcode_project:default project_id=151233 project_image_fid=375378]

Fortis Head of Development SA Arthur Dendrinos said the early sales reflected both the strength of the local owner-occupier market and confidence in the Hutt Street location.

"The level of early commitment reflects the confidence local buyers have in the Hutt Street precinct," Dendrinos said.

"Many purchasers are long-term east-end residents who love the area and want to stay connected to the neighbourhood. They recognise the value of a well-designed, well-located development.

"Our partnership with Otello has been central to this success, and the number of unconditional sales at this stage only strengthens our confidence in the South Australian market."

[smartcode_project:default project_id=151233 project_image_fid=375379]

Otello Director Daniel Harris said the sales result also highlighted the lack of new apartment opportunities within the Hutt Street precinct.

"One Four Four Hutt has clearly resonated with buyers, with strong early sales reflecting both the appeal of the Hutt Street corridor and the lifestyle on offer," Harris said.

"The activated ground-floor retail has also been a key drawcard, with purchasers responding to the vision of a more vibrant and connected streetscape, not just the residences themselves."

One Four Four Hutt will deliver 44 one, two and three-bedroom apartments, alongside a collection of penthouses, above a ground-floor retail offering designed to further activate the Hutt Street precinct.

Construction is scheduled to commence in the third quarter of this year, with completion anticipated in 2028.

[smartcode_project_cta:default project_id=151233]

Fortis Head of Development SA Arthur Dendrinos said the early sales reflected both the strength of the local owner-occupier market and confidence in the Hutt Street location.

Fortis makes Adelaide debut with Otello as One Four Four Hutt records strong early sales

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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