<p data-end="1587" data-start="1236">The Victorian Government has secured the passage of the Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026, introducing a suite of reforms aimed at improving consumer protection and confidence in the apartment market.</p>

<p data-end="1587" data-start="1236">Resilience Insurance, Australia’s leading Latent Defects Insurance (LDI) provider, has welcomed the move.</p>

<p>The LDI elements of the Bill passed with bipartisan support and now moves to the Legislative Council where debate and passage are expected later this month. It represents a significant milestone in the national shift toward stronger, longer-term protection for apartment buyers.&nbsp;</p>

<p>The reform would deliver practical benefits across the housing system. Apartment owners will have stronger protection if major defects emerge, developers and builders will have a clearer quality framework to work within, and the State will reduce the risk of serious building failures becoming a long-term financial and social burden for households, communities and government.&nbsp;</p>

<p>LDI helps support apartment delivery while providing stronger protection for buyers and encouraging better construction outcomes.&nbsp;</p>

<p>Resilience LDI provides apartment owners with 10 years of insurance-backed cover for major structural defects from completion, with direct claim access to the insurer. This means owners are not required to first pursue developers or builders through costly legal action before accessing protection.&nbsp;</p>

<p>Resilience Insurance has been operating in Australia since 2022 and has already insured hundreds of development projects covering many thousands of apartments across Australia.&nbsp;</p>

<p>At approximately 1.8 per cent of build cost, it is a cost-competitive alternative to the traditional two per cent Strata Bond, bond while delivering significantly broader and longer protection.&nbsp;</p>

<p>“The Victorian Lower House vote shows that reforms like this succeed when they are practical, evidence-based and supported by industry," says Corey Nugent, CEO of Resilience Insurance.</p>

<p>"Victoria is moving quickly on a reform that will make a real difference for apartment buyers, while supporting better building outcomes and greater confidence in apartment delivery.</p>

<p>“This is step one. We look forward to the Bill completing its passage through the Legislative Council and to working with government and industry to implement the framework effectively.”&nbsp;</p>

<p>Fast Facts: What is Resilience LDI?&nbsp;</p>

<ul>
	<li>Resilience Latent Defects Insurance (LDI): Covers major structural defects for 10 years from completion.&nbsp;</li>
	<li>Consumer-first: Direct claim access, no need for lengthy legal action.&nbsp;</li>
	<li>Cost advantage: At approximately 1.8% of build cost, LDI is typically priced below the traditional 2% Strata Bond while offering broader protection.&nbsp;</li>
	<li>Market leader: Resilience Insurance is the first approved LDI provider in NSW.</li>
</ul>


The Building Legislation and Treasury Legislation (Tax Relief) Amendment Bill 2026 has passed the Victorian Lower House, putting Victoria on track to become the first state to legislate an industry workable LDI framework as a formal alternative to the Strata Building bond. 

Joel Robinson

10-year Latent Defects Insurance for new apartment buyers set to land in Victoria

<p>Just a few months after acquiring a prime Broadbeach site on the corner of First Avenue and Surf Parade, family-run developer <a href="https://www.apartments.com.au/developers/raptis">Raptis</a> has filed fresh plans for a new apartment development.</p>

<p>Raptis is seeking to deliver a <a href="https://www.apartments.com.au/new-apartments/17-19-first-avenue-broadbeach-qld-4217">29-storey tower with 73 apartments</a> on the 818 sqm site. It will be the developer's seventh project in the suburb, as they are approaching completion of The Sterling on George Avenue.</p>

<p>There will be a pool, barbecue and outdoor dining area, residents lounge and dining, sauna and steam room, gym, and a Yoga and Pilates studio.</p>

<p><img alt="Raptis" data-entity-type="file" data-entity-uuid="b554da3f-7344-49aa-b1c9-44cf459af0d7" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%2010.41.45%E2%80%AFAM.png?VersionId=zzjWu1iO1wnuYv4EV4fyOyf5nSXjGYut" /></p>

<p>Raptis Joint Managing Director, Evan Raptis, says they remain&nbsp;committed to developing quality infill sites across the Gold Coast in the lead-up to the 2032 Brisbane Olympics.</p>

<p>"This project continues our long track record of delivery in Broadbeach, and we look forward to bringing another premium development to this thriving precinct."</p>

<p>The announcement follows strong delivery momentum for Raptis, with The Sterling Broadbeach nearing completion and construction well underway on the final stage of the Waterpoint community adjacent to Harbour Town. The developer's continued investment in the Gold Coast reflects confidence in the region's apartment market fundamentals, underpinned by sustained Southeast Queensland population growth.&nbsp;</p>

<p>The outlook for the region is further bolstered by infrastructure investment tied to the Brisbane 2032 Olympic Games, which is expected to drive continued economic and population growth across the SEQ corridor.&nbsp;</p>

<p>Subject to a favourable response from Gold Coast City Council, construction on the new First Avenue tower is targeted to commence before the end of 2026.&nbsp;</p>

<p><em>Read more:&nbsp;<a href="https://www.apartments.com.au/news/qld/it-s-all-in-the-family-four-decades-later-raptis-continues-to-shape-the-gold-coast-skyline">It’s all in the family: Four decades later, Raptis continues to shape the Gold Coast skyline</a></em></p>

<p><em>Read more: <a href="https://www.apartments.com.au/news/qld/raptis-secures-prime-surf-parade-site-for-next-broadbeach-apartment-development">Raptis secures prime Surf Parade site for next Broadbeach apartment development</a></em><br />
&nbsp;</p>


Gold Coast developer brings seventh Broadbeach project to market, targeting construction commencement before year end

First look: Raptis lodges plans for new 29-storey Broadbeach tower 

<p>Brisbane development veteran Kevin Seymour's Seymour Group is set to deepen its presence on one of Brisbane's most tightly held riverfront addresses, lodging revised plans for a luxury apartment development on Oxlade, just a few doors down from The Oxlade, which it completed in 2024.</p>

<p>The <a href="https://www.apartments.com.au/new-apartments/70-72-oxlade-drive-new-farm-qld-4005">new project at 70-72 Oxlade Drive</a>, directly north of The Oxlade, will have 27 apartments across a seven-storey building&nbsp;overlooking the Brisbane River and Merthyr Park. It's a revision from a 2021-approved design.</p>

<p>Designed by bureau^proberts, the project has evolved from the previously approved 26-apartment scheme, introducing an additional penthouse level while maintaining a low-density, boutique character. The development will comprise 26 three-bedroom apartments and a single four-bedroom penthouse, supported by two basement levels with 86 car spaces and 34 bicycle spaces.</p>

<p>The architectural response is centred around two distinct building forms separated by a landscaped open-air atrium.&nbsp;"This dual composition captures and embraces Brisbane’s subtropical environment whilst breaking down built form and scale," the submission to the Brisbane City Council noted.</p>

<p><img alt="First look: Seymour Group returns to Oxlade Drive with revised riverfront apartment plans in New Farm" data-entity-type="file" data-entity-uuid="c12d84d0-bc11-4067-b46f-5bd2d786a34d" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/new%20farm%20landscape.png?VersionId=YEPc2k5CAdh6aAPlu4uVpgZadh4MEfRd" /></p>

<p>A defining feature of the design is a deep landscaped void running through the centre of the building, creating what bureau^proberts describes as a "natural ravine" that enhances airflow, daylight penetration and resident amenity. The design report notes that the separation of the two building volumes is intended to maximise natural light, cross-ventilation and outlook while strengthening connections to the surrounding riverfront setting.</p>

<p>Curved balcony edges, integrated planting and extensive landscaping throughout the façade reinforce the subtropical design approach. The building's façade is softened by elevated gardens and planter beds, creating a green edge that complements the established landscape character of Oxlade Drive and neighbouring Merthyr Park.</p>

<p>New Farm has become one of Brisbane's most sought-after suburbs for developers delivering premium downsizer-focused apartments.</p>

<p>GRAYA has been particularly active in the precinct, completing both Chalk and York in recent years, while construction of Moray House, being delivered for Spyre, is now nearing completion. Architect-turned-developer Joe Adsett recently launched <a href="https://www.apartments.com.au/new-apartments/arcilla-new-farm-by-joe-adsett-28-maxwell-street-new-farm-qld-4005">Arcilla on Maxwell Street</a>, an exclusive collection of just nine apartments.</p>


First look: Seymour Group returns to New Farm's Oxlade Drive with riverfront apartment plans

<p>A new residential tower will be the first piece of a broader mixed-use precinct set to reshape a prominent Newcastle West site, with local developer <a href="https://www.apartments.com.au/developers/gwh">GWH</a> bringing its <a href="https://www.apartments.com.au/new-apartments/cambridge-quarter-newcastle-west-12-denison-street-newcastle-west-nsw-2302">Cambridge Quarter</a> vision to market.</p>

<p>The first release, Tempo, will introduce 87 apartments across a 24-storey tower, marking Stage 1 of the residential component of a larger urban regeneration project planned for the western end of Newcastle's city centre, encompassing the former Cambridge Hotel site.</p>

<p>Positioned on Denison Street, Tempo has been designed as the inaugural building within Cambridge Quarter, a precinct that will ultimately combine apartments, retail activation and revitalised public spaces including the revamping of the Cambridge Hotel.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368853]</p>

<p>The tower will comprise a mix of one, two and three-bedroom apartments, including layouts with multipurpose rooms, catering to a broad cross-section of owner-occupiers. Apartment sizes range from around 60 sqm to 192 sqm, with a number of residences oriented to capture views across Newcastle Harbour, the city skyline and coastline.</p>

<p>GWH has emphasised liveability in the design, with open-plan layouts extending to generous balconies and terraces. Residents will have a choice of two interior palettes, while specifications include engineered stone benchtops, SMEG appliances, full-height bathroom tiling and secure building access. Premium upgrade packages will also be available.</p>

<p>Multiple rooftop resident retreats will provide communal outdoor space overlooking the harbour and city, offering an elevated amenity layer above the activity of the precinct below.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368851]</p>

<p>The broader Cambridge Quarter vision extends beyond the residential tower itself. Ground-level retail activation and landscaped public areas are planned throughout the precinct, creating a walkable neighbourhood environment connected to the surrounding renewal of Newcastle West. The Cambridge Hotel is also earmarked for future redevelopment into a family-friendly hospitality venue integrated with the new precinct.</p>

<p>The project is strategically positioned within walking distance of Newcastle Interchange, providing access to light rail, regional rail services and direct connections to Sydney. Residents will also be close to Honeysuckle, Newcastle Harbour and the city's beaches and coastal walkways.</p>

<p>[smartcode_project:default project_id=135876 project_image_fid=368852]</p>

<p>For GWH, Cambridge Quarter represents one of its most significant Newcastle developments to date. The locally based developer, which has operated in the Hunter region since 1995, describes the project as a new chapter in the ongoing transformation of Newcastle West.</p>

<p>GWH Executive Director Jonathan Craig said the project had been shaped by a focus on creating lasting community connections.</p>

<p>"We take pride in creating places that last. Spaces where people feel connected, comfortable and a genuine sense of belonging," Craig said.</p>

<p>"Cambridge Quarter is something we are truly proud of, a place shaped by local knowledge, built with care and designed to be part of Newcastle's next chapter."</p>

<p>[smartcode_project_cta:default project_id=135876]</p>


GWH unveils first release at landmark Cambridge Quarter precinct in Newcastle West

<p><a href="https://www.apartments.com.au/developers/ss-projects">S&amp;S Projects</a>,&nbsp;Rainbow Bay's busiest developer,&nbsp;has officially lodged plans for the largest development in its booming local portfolio, seeking approval for a further 88 apartments on Boundary Street.</p>

<p>The proposal&nbsp;at <a href="https://www.apartments.com.au/new-apartments/209-213-boundary-street-coolangatta-qld-4225">209–213 Boundary Street, Coolangatta</a>,&nbsp;marks the next chapter in the developer's transformation of the southern Gold Coast beachside precinct. It will be its fifth in the area, having already delivered Flow, Awaken and Esprit, while construction continues on the 38-apartment Radia. The new project would rise 57 metres above a consolidated 1,518 sqm site, on the same street as Radia and Esprit.</p>

<p>&nbsp;</p>

<p>Designed by <a href="https://www.apartments.com.au/architects/cottee-parker-architects">Cottee Parker</a>, the proposed development comprises 88 two and three-bedroom apartments across a contemporary podium-and-tower form that integrates extensive landscaping from street level through to the rooftop.</p>

<p>The tower would be delivered above a basement and multi-level podium accommodating resident and visitor parking, with the residential component commencing from level three. The design incorporates cascading planting throughout the façade, landscaped podium edges, and deep planting zones along the Boundary Street frontage.</p>

<p><img alt="First look: S&amp;S Projects lodges plans for 88-apartment wellness tower at Coolangatta's Boundary Street" data-entity-type="file" data-entity-uuid="677e6615-b5c0-4b6c-b4f9-efb14fcde1a6" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/ss%20da%20pers.png?VersionId=YOnPKQm7IFXv0M5H326djEpxk80500Hi" /></p>

<p>A key feature of the development is its expansive rooftop wellness and recreation precinct. Plans reveal a resort-style pool deck, gymnasium, sauna, steam room, hot and cold plunge pools, rooftop terraces, barbecue areas and landscaped relaxation spaces positioned to capture views across the southern Gold Coast coastline.</p>

<p>The rooftop wellness focus builds on the vision S&amp;S Projects first outlined when it acquired the site for $20.25 million last year.</p>

<p>"We are taking every advantage to create a truly unique rooftop wellness experience with a natural feel for residents, offering stone features throughout and an underlying theme that emulates a botanical garden," S&amp;S Projects founder and director Paul Gedoun said at the time.</p>

<p>The proposal seeks a 57-metre building height, representing a 50 per cent uplift on the site's mapped 38-metre height limit. Planning documents argue the additional height is consistent with recently approved and emerging towers in the immediate Boundary Street and Rainbow Bay precinct.</p>

<p>Urbis, acting as planning consultant, said the development would provide "88 dwellings, comprising a mix of two and three-bedroom apartments, contributing to housing choice and supply within an established medium to high-rise coastal urban neighbourhood."</p>

<p>The scheme has undergone extensive pre-lodgement consultation with the City of Gold Coast, with the design refined following feedback relating to architectural expression, landscaping, traffic access and podium treatment.</p>

<p><img alt="S&amp;S" data-entity-type="file" data-entity-uuid="0a2d70fd-62ac-4b83-97c6-b798fc1243dd" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-06-05%20at%209.16.31%E2%80%AFAM.png?VersionId=yHmghUwKM3IVGpBktQU1mE.0Lpf3WimG" /></p>

<p>The architectural team is led by Brisbane-based Cottee Parker, one of Australia's most active residential design studios, with landscape architecture by Dunn + Moran. The consultant team also includes ADG Engineers, Windtech and Acoustic Works.</p>

<p>S&amp;S Projects has become one of the most influential private developers operating on the southern Gold Coast. Since entering Rainbow Bay in 2022, the company has assembled a portfolio exceeding $1 billion in end value, establishing itself as a key player in the area's evolution into a premium apartment destination. Pezet Matheson will again handle the sales for S&amp;S.</p>

<p>Coolangatta is entering another wave of apartment development, following the delivery of several prominent residential projects in recent years.</p>

<p>John Kearney's Immerse Projects will launch&nbsp;<a href="https://www.apartments.com.au/new-apartments/kaiya-kirra-beach-5-haig-street-coolangatta-qld-4225">Kaiya on Haig Street</a>&nbsp;soon, meanwhile, Palm Beach-based Sherpa Property Group is preparing to bring its debut Coolangatta development, <a href="https://www.apartments.com.au/new-apartments/flourish-viver-87-griffith-street-coolangatta-qld-4225">Flourish Viveré</a>, to market later this year, subject to approvals.</p>


First look: S&S Projects proposes 88-apartment wellness tower at Coolangatta's Boundary Street

Logistics

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<p>Charter Hall has acquired a 43,000 square metre facility in Western Sydney for $115,000,000.</p>
<p>It was bought from Melbourne based private investment firm Kador Group.</p>
<p>Located in Erskine Park, 40-66 Lockwood Road is leased to workplace solutions supplier Winc Australia for 12 years from August 2020 on a net rent of $5.175 million per annum, with 3.25 per cent annual increases.  </p>
<p>With a gross lettable area of 43,085 square metres on an 8.273 hectare site, the property is zoned IN1 General Industrial and offers 40,000 square metres of warehouse accommodation and 3,000 square metres of office space, split across two floors.</p>
<p>The property also benefits from two truck access driveways and all-weather super awnings located along both the eastern and western elevations.</p>
<p>The transaction was handled by Savills Industrial and Logistics Investments team of Michael Fenton, Michael Wall, and Alison Spiteri.</p>
<p>The property is approximately 47kms west of the Sydney CBD. Surrounding occupiers include TNT Express, Strandbags, Bevchain, Coles, Bluescope, DHL and Linfox.</p>
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Charter Hall acquires Western Sydney facility for $115,000,000

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<p><span>Global supply chain solutions provider, CHEP, has been announced as the latest tenant to join Perth's Roe Highway Logistics Park.</span></p>
<p><span>The 56-hectare industrial park launched in February is located adjacent to the State Government’s Kenwick Rail Freight Facility, offering Category RAV 7 Network accessibility from both Roe and Tonkin Highways.</span></p>
<p><span>CHEP will occupy a four-hectare lot, with a custom-designed 9,000 square metre facility, set for completion mid-next year. </span></p>
<p><span>Linc Property’s Judd Dyer said securing CHEP, a subsidiary of ASX listed Brambles (BXB), as a major tenant reflected the growing demand for new premium industrial estates in central locations.</span></p>
<p><span>Phil Darbyshire, Regional Operations Manager at CHEP Australia, said that relocating to the Roe Highway Logistics Park will allow CHEP to centralise its Western Australian operations. </span></p>
<p><span>In addition to amenity, Roe Highway Logistics Park offers a range of sustainability initiatives including storm water management, solar energy and on-site treatment and recycling of waste water.</span></p>
<p><span>Over 50% of the site is already committed, the final stage of civil and landscaping works for Roe Highway Logistics Park anticipated to be complete by the end of the year.</span></p>
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<p><span>Other confirmed tenants and businesses include Northline, Brady, K Trans WA, Expro, BP, Silk Contract Logistics, JOEST, Dynapumps and Fuwa K Hitch.</span></p>
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CHEP is the latest tenant at Perth's Roe Highway Logistics Park

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<p><span>Warehousing and logistics business Silk Contract Logistics (Silk) has become the latest tenant at the Roe Highway Logistics Park.</span></p>
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<p><span>Located in Perth’s eastern industrial core, Roe Highway Logistics Park is a 56-hectare development strategically located adjacent to the State Government’s Kenwick Rail Freight Facility.</span></p>
<p><span>The logistics park was launched in late February and over 50% of the site is already committed or under negotiation. </span></p>
<p><span>In addition to Silk, major tenants and businesses include Northline, BP, Brady Corporation, Expro, K-Trans WA, Joest, FUWA K-Hitch and Ideal Sales.</span></p>
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<p><span>Signing a long-term lease, Silk has taken up a 4-hectare lot at the industrial park with a custom-built 21,000 square metre warehouse to be constructed. </span></p>
<p><span>Occupancy is scheduled for early 2020.</span></p>
<p><span>Linc Property’s Judd Dyer said, </span>“in addition to the best access of any industrial site in Perth, we are able to offer tenants and buyers flexible lot sizes with custom-designed warehouses to suit their individual needs."</p>
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<p>The first phase of earthworks has commenced for the adjacent Kenwick Rail Freight Facility, which is targeted for completion in late 2020.</p>
<p>Roe Highway Logistics Park has been developed by a consortium comprising WA’s largest private industrial land developer Linc Property, warehouse leasing specialist Gibb Group and Minderoo Group.</p>
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Silk secure lease in Perth Roe Highway Logistics Park

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<p>Agri-logistics is emerging as a growth sector of the Australian real estate market, with more than $1.5 billion worth of assets changing hands over the past two years. </p>
<p>CBRE Director of Agri-Logistics, Stephen Caffery, said the sector was attracting greater institutional investment, underpinned by the strength of Australia’s industrial, logistics and agricultural markets.  </p>
<p>“On the back of a buoyant industrial &amp; logistics sector, recent free trade agreements, Asia’s investment appetite and capacity for Australia’s agriculture industry to produce high value food and fibre products, there has been a sharp upturn in investment in the sector,” Caffery said.</p>
<p>“Agri-logistics has all the ingredients to become the standout investment class in Australia over the next decade. The sector is the backbone that supports Australia’s $60 billion farm gate production industry each year.</p>
<p>“All of Australia’s agricultural products, at some point, will need to be processed, value-added, stored and transported for either domestic consumption or export markets.</p>
<p>“Investing in these supply chains represents an enormous opportunity for investors looking for long term secure cashflows in assets that are defensive in economic downturns.” </p>
<p>Highlighting the increased investment in the sector, CBRE is marketing two high quality food manufacturing facilities located in one of Melbourne’s premium South Eastern locations, Braeside.  </p>
<p>The properties located at 91-97 Woodlands Drive (pictured above) and 223-225 Governor Road (pictured below) provide a lettable area of 15,450 square metres.</p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2019/6/18/Flavour%20Makers%20_%20223-225%20Governor%20Road.jpg" alt=""></p>
<p>They are leased to leading food developer and manufacturer Flavour Makers for 12 years, generating a triple net income of $1,830,000 per annum (with fixed annual increases of 3.0%).  </p>
<p>CBRE’s Ben Hegerty said the Flavour Makers facilities offered a complete end-to-end food development and manufacturing solution with state-of-the-art dry blending facility, liquid processing plant and a meals plant capable of processing both liquid and solid ingredients.</p>
<p>“These facilities are regulatory approved and extensively audited by both domestic and international customers,” Hegerty said. </p>
<p>“Flavour Makers is experiencing a period of sustained growth and is investing both in increasing existing capability and capacity, as well as investing in new food technologies.</p>
<p>“As a result, they provide a high degree of underlying security for long term, passive investments outside core industrial locations.”</p>
<p>This follows several major transactions in the sector over the past two years including Charter Hall’s $207 million acquisition of the Ingham’s portfolio, comprising 27 poultry supply chain assets in December 2019, and Qualitas’ $388 million sale and leaseback of Allied Pinnacle’s portfolio of 10 grain handling and food processing facilities in March 2018. </p>
<p>Caffery said agri-logistics assets located outside of traditional industrial heartlands would continue to present attractive opportunities for investors. </p>
<p>“Agri-logistics assets that are strategically located to maximise supply chain efficiencies represent an outstanding opportunity for investors.</p>
<p>“Taking beef feedlots for example, to operate an efficient supply chain, it makes economical sense to construct feedlots close to reliable grain growing regions, rather than processing facilities to reduce transport costs.”</p>
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Agri-logistics emerging as Australia’s next property growth sector

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<p>GUEST OBSERVER</p>
<p>Australian companies can greatly boost their profitability by making industrial property decisions in strong consultation with supply chain and logistics directors.</p>
<p>There is a growing trend – and it seems to be happening with more urgency – that industrial property companies who’ve traditionally only done deals within their industry need to be made more aware of the growing influence and control of supply chain directors in making property-related decisions.</p>
<p>Within that space, a lot of automation and trends coming down from North America and Europe have the fundamental ability to disrupt how people go about planning their warehouses and distribution centres in Australia today.</p>
<p>By both driving costs and service, supply chains are also being used to add value to the customer experience. Automation allows companies to reduce warehouse footprints, lower head count and improve overall performance. </p>
<p>Property is an enabler; it’s not a primary decision. So, we basically look at what the company wants to achieve in terms of the customer-service requirements and the competitive landscape. We then provide them with fact-based recommendations to assist their decision on the best infrastructure to support the company’s customer promise – at least cost.</p>
<p>In addition, Siecap regularly conducts studies for the property sector on site logistics implications. Key supply chain cost drivers which need to be taken into account include: site occupancy encompassing real estate, facilities and overheads; labour and handling; inbound freight; inventory and outbound freight and potential surrounding infrastructure changes which could influence these elements.</p>
<p>Companies which have factored logistics into their property decisions have enjoyed network operating cost reductions in the range of 10 to 16 per cent, as well as infrastructure cost reductions and logistics cost and service improvements.</p>
<p><em>David Irvine is chief executive officer of Brisbane project management and advisory firm Siecap and can be contacted <a href="https://www.siecap.com.au" target="_blank">here</a>.</em></p>
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Property supply chains key to success: David Irvine

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<p><span>Transport and logistic tenants dominate the plus 5,000 sqm industrial leasing market in Brisbane, making up nearly 40 percent of all leasing requirements, according to Ray White Commercial.</span></p>
<p><span>Leasing volumes in the more than 5,000 sqm market in Brisbane has reached approximately 500,000 sqm in the past two years, Ray White Commercial (Qld) associate director - Industrial Transactions, Dan Costello.</span></p>
<p><span>“Transport and logistic tenants dominate the need for large and modern spaces and this segment of the market is particularly active in the pre-lease market,” Costello said. “These tenants are looking to new, purpose built facilities on long lease terms.”</span></p>
<p><span>However, manufacturing is a falling segment of the market and now only represents seven per cent of all tenant take-up, and dominates the secondary sector of the market.</span></p>
<p><span>“Other consumer uses including automotive, construction and telecommunications collectively represent half of all of the leases with a mix towards prime and secondary assets,” he said.</span></p>
<p><span>In her Between the Lines Plus 5,000 sqm Brisbane Industrial Leasing Market report for March 2016 Ray White Commercial's head of Research, Vanessa Rader says the market has gone through a period of uncertainty over the last two years.</span></p>
<p><span>“While little speculative supply has been added to the market, the move from existing to new has resulted in an increased vacancy particularly in the secondary asset class,” she said.</span></p>
<p><span>“This has resulted in some compression in net face rents across all quality grades, while many larger owners have become more aggressive offering incentives and discounted face rents to secure longer lease terms. Incentives remain a growing concern in the Brisbane industrial market as they are now averaging between 10 to 15 percent.”</span></p>
<p><span>Rader said there have been small declines in face rents across most Brisbane regions with the south-east having the lowest average net rent of $99 per sqm.</span></p>
<p><span>“The south-west, north and south have reduced by 6.2 percent, 6.3 percent and 6.3 percent respectively with an average rent in the range between $100 per sqm and $102 per sqm,” she said.</span></p>
<p><span>“The Trade Coast continues to achieve the highest rent across the Brisbane metropolitan area due to access and quality of stock. This market has attracted a lesser reduction in rents, falling by 5.1 per cent over the last two years to currently average $107 per sqm.”</span></p>
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Transport and logistics dominate Brisbane industrial leasing: Ray White 

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<p>GUEST OBSERVER</p>
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<p><span>Changing occupier requirements are the main driver behind the growing sophistication of industrial property. Warehousing has historically been one of the more passive property types however growth in eCommerce and the globalisation of logistics have driven innovative changes to internal fit out requirements. This is leading to greater complexities for occupiers and developers. </span></p>
<p><span>Distribution centres are now far more dynamic – goods are moving faster, higher clearances are required and there is greater demand for natural light and better performing slabs. Occupiers are changing with third party logistics (3PL) experiencing enormous growth and supermarket groups becoming more sophisticated in how they move goods through their distribution channels. Ecommerce providers frequently require specialist internal design and fit out of their warehouses. </span></p>
<p><span>While change is occurring, there is still a wide variation in how occupiers are utilising their space. From highly automated picking systems requiring very little human interaction to boxes on the floor with paper based systems tracking stock levels, the evolution depends on the rate of change in the industry in which the occupier operates. </span></p>
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<p><span>Change 1: eCommerce </span></p>
<p><span>Growth in eCommerce </span></p>
<p><span>More retail trade is moving to eCommerce, although it still remains relatively small compared to traditional bricks and mortar retailing. Although in recent months the weakening of the Australian dollar and the implementation of Goods and Services Tax (GST) on goods bought online from overseas has led to a slowing of eCommerce, it is forecast that for some product types, there will continue to be erosion of spending in traditional bricks and mortar retailing. </span></p>
<p><span>The biggest challenge for eCommerce in Australia is the cost of getting goods from the warehouse to consumers. The vast distances that need to be covered and the insatiable demand from consumers to get goods quickly can make delivering goods particularly expensive. For many operators, rent on a warehouse is a secondary consideration compared to the cost of logistics. </span></p>
<p><span>For traditional retailers with an eCommerce presence, the majority of purchases are still filled out of store. There are generally no specialist online warehouses or special systems developed within existing warehouses to fulfil orders. An exception to this is for particularly large items (e.g. fridges) that are delivered directly from a warehouse to customer rather than from a store when an online order is made. </span></p>
<p><span>This is starting to change for larger retailers. Major supermarket chains previously filled online orders from a store hub but are now starting to use “dark supermarkets”; basically a supermarket in a warehouse, inaccessible to consumers, where staff fulfil online orders. The perishable nature of grocery items means that it is likely that these dark supermarkets will need to be located in each capital city, as opposed to just one location. </span></p>
<p><span>For pure eCommerce groups, the way that they warehouse their goods and handle delivery depends on the type of product they sell, the size of the business and where they source their goods. For most groups, a 3PL service is utilised. The extent to which they use 3PL differs with some using them for delivery only, with others using them for the full end to end service. At its most complete level, 3PL can be used for an </span><span style="line-height: 1.3em;">eCommerce provider to provide a service from when a consumer presses “buy” on an online site to delivery or even return if the item.</span></p>
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<p><span>For large groups selling non-perishable goods that can be delivered in a small parcel, having only one warehouse in Australia makes the most sense. The cost of delivering goods in Australia is generally not dependent on distance and the nature of eCommerce means that it is difficult to predict where the next order will come from. Most products are produced offshore and hence close proximity to a major port is also generally a requirement for occupiers. </span></p>
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<p><span>Change 2: Globalisation of logistics </span></p>
<p><span>Logistics has gone global and is becoming more complex and sophisticated in how it operates. There have been some major changes to ownership in the logistics industry. Toll Group has now become part of Japan Post, Australia Post is now the sole shareholder in Startrack and has been rapidly reinventing itself as a logistics service provider, while global giant Brookfield has made a takeover bid for Australian freight logistics company Asciano. </span></p>
<p><span>These changes to ownership structure, as well as increased usage of 3PL services in Australia has meant enormous growth in the amount of industrial floor space these groups occupy, as well as significant investment in more sophisticated and automated warehousing facilities. The forecast growth these groups expect<br> is also aggressive. Many of them are now looking to partner with developers of industrial facilities, particularly those with significant land holdings, to ensure that they are able to access a pipeline<br> of development. </span></p>
<p><span>A new term for very large warehouses has also emerged. Campus Style Distribution Centres are now a requirement for major groups such as DHL and CEVA, both of which are looking </span><span style="line-height: 1.3em;">at distribution centres now in excess of 75,000sqm. This trend </span><span style="line-height: 1.3em;">to larger facilities, able to handle greater quantities, is expected to continue to be a trend in global warehousing. In Asia, most cutting edge facilities are now at least 150,000sqm with the Interlink in Hong Kong comprising 213,000sqm and Logistic Republic – </span><span style="line-height: 1.3em;">Taipei Park in Taipei expected to comprise 264,000sqm </span><span style="line-height: 1.3em;">on completion. </span></p>
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<p><span>Change 3: Design </span></p>
<p><span>Who are the leaders in warehousing design? </span></p>
<p><span>Historically warehouses have been relatively simple buildings<br> and there was very little focus put on the internal fit out. This has changed and the most sophisticated warehouses now have slabs that can handle greater loads, larger cubic capacity and high bays. To enable the best use of this space, greater use of robotics and high-tech picking systems are being implemented. </span></p>
<p><span>There is however still significant divergence from these highly advanced warehouses with more simplistic designs still commonly in use. At a broad level, it is primarily the large 3PL groups, as well as large supermarkets and fast moving consumer goods (FMCG) groups that are the most advanced. The scale required by these groups, as well as the speed required to move goods, makes significant investment in fit out worthwhile. They are looking to create improved efficiencies in better designed buildings. </span></p>
<p><span>Another driver of greater cubic capacity, as well as high bays, is the location of the warehouse. In a market such as Melbourne where land availability remains abundant, it is unlikely there will be as much demand. This contrasts to Sydney where land costs are significantly higher. </span></p>
<p><span>There is a greater focus on the indoor working environment of warehouses. This is to allow better working conditions for staff, but also better conditions for storing goods. Better ventilation, constant temperature and high security are a greater focus. The ability to operate the warehouse 24 hours a day is also frequently a<br> greater consideration. </span></p>
<p><span>Sustainability continues to play a role and more facilities are moving to a 6 Star Green Star rating. The focus is however less on committing to minimum targets but looking to achieve demonstrable cost efficiencies. Developers are looking to add value to occupiers and this can include offering such inclusions as power off facilities, advanced monitoring and geothermal generation. </span></p>
<p><span>High tech retrieval systems start to make a mark </span></p>
<p><span>There are still only a few occupiers that are using high tech retrieval systems. The capital costs are so high and hence this restricts investment for many occupiers. Spending on research and development of these systems is however continuing to increase and costs are expected to come down significantly over the next decade, to the extent that there will continue to be less people required to operate a warehouse. </span></p>
<p><span>There is a range of how sophisticated occupiers are being in the use if retrieval systems. At the most advanced level, automated robotics have the ability to completely do away with forklifts however these are too expensive for most occupiers. Mobile automation appears to be having quicker take up. An example of this is </span><span style="line-height: 1.3em;">mini forklifts that are able to operate on any surface. These forklifts are highly mobile, allow for higher stacking and provide the ability to pick one item, instead of taking a whole pallet. </span></p>
<p><span style="line-height: 1.3em;"><em>Nerida Conisbee is national director of research for Colliers International and can be contacted <a href="https://www.colliers.com/nerida.conisbee" target="_blank">here</a>.</em></span></p>
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