For most new apartment buildings, the Owners Corporation starts life with little more than a bank account and the first quarterly strata levies.

At <a href="https://www.apartments.com.au/buildings/9-gay-street-castle-hill-9-gay-street-castle-hill-nsw-2154">9 Gay Street</a> in <a href="https://www.apartments.com.au/developments/castle-hill-nsw-2154">Castle Hill</a>, it starts with around $7 million in reserve.

It's an unusual legacy of what was once one of Sydney's highest-profile apartment remediation projects. When the development, originally known as Skyview and built by disgraced developer Top Place, came under scrutiny by then NSW Building Commissioner David Chandler, an $11 million remediation bond was negotiated to ensure any building defects could be fully rectified.

The building underwent an 18-month remediation program, during which around $4 million of that bond was spent bringing the building up to the standard it should have been in from the outset.

After extensive inspections, all active rectification orders have been lifted. What's more, around $7.2 million remains secured for the Owners Corporation for the next 15 years.

In a twist few would have predicted, what began as a significant concern for purchasers has left the building with something almost unheard of in the apartment market: a multi-million-dollar financial reserve from day one.

[smartcode_project:default project_id=147685 project_image_fid=359136]

<a href="https://www.apartments.com.au/project-marketer/equitifund-group">Equitifund</a> Executive Chairman Greg Huxley said the structure offers buyers a level of certainty that is difficult to replicate.

"The $11 million bond established for the Skyview Castle Hill development represents exceptional value, providing genuine financial security for purchasers," Huxley said.

"Unlike a standard insurance policy, this bond consists of real funds held in trust for the Owners Corporation, offering a tangible layer of protection and added peace of mind."

The apartments themselves have been designed with a focus on practical, contemporary living. Interiors feature Smeg appliances, stone benchtops, tiled living areas, carpeted bedrooms, 2.7-metre ceilings, floor-to-ceiling glazing, and ducted heating and cooling throughout.

Residents also have access to a range of shared amenities, including two rooftop barbecue areas, a swimming pool, children's playgrounds, secure building access, storage cages, and visitor parking.

The location continues to be one of the project's strongest drawcards. Castle Hill Metro Station sits virtually on the doorstep, providing direct connections across Sydney's expanding Metro network, while Castle Towers offers extensive retail, dining, entertainment, and service amenities within walking distance.

[smartcode_project:default project_id=147685 project_image_fid=359127]

The building, now named after its location at 9 Gay Street, comprises a diverse mix of one-, two-, and three-bedroom apartments starting from just under $600,000.

Equitifund National Sales Director Ben Hamblett said demand in the Hills District continues to be driven by buyers seeking convenience and connectivity.

"Interest from both owner-occupiers and investors in Castle Hill remains exceptionally strong, with buyers consistently prioritising developments in close proximity to the Metro station and Castle Towers Shopping Centre," Hamblett said.

"There is a clear trend in the market, with purchasers seeking convenient access to transport and lifestyle amenities that support a seamless, low-maintenance way of living."

On top of the long-term protection afforded by the remaining $7.2 million bond, Equitifund is offering a limited-time stamp duty rebate on selected apartments.

Eligible purchasers can also secure finance options, including a 3.99 per cent two-year variable rate, loan-to-value ratios of up to 90 per cent, and interest-only lending options through EquitiCredit.

[smartcode_project_cta:default project_id=147685]

Joel Robinson

Why this Castle Hill apartment building starts with a $7 million advantage

For much of the past few years, conversations about Australia's property market have centred on the rapid growth seen in Sydney, Brisbane, Gold Coast, and Perth. <a href="https://www.apartments.com.au/developments/melbourne-vic-3004">Melbourne</a> has followed a different trajectory.

That relative underperformance is now encouraging some buyers to reassess the city, particularly those willing to look beyond short-term market movements and focus on quality property in established locations, along with the long-term growth prospects of a city expected to overtake Sydney as Australia’s most populous.

John Bekiaris, Research &amp; Market Insights at <a href="https://www.apartments.com.au/project-marketer/equitifund-group">Projects by Equitifund</a>, said Melbourne's current position is attracting increasingly sophisticated purchasers.

"Melbourne continues to present one of Australia's strongest long-term investment stories," Bekiaris says.

"While other capital cities have experienced stronger recent growth, that relative underperformance is exactly what's attracting sophisticated counter-cyclical investors."

[smartcode_project:default project_id=1979 project_image_fid=363268]

Equitifund isn't just commenting on Melbourne's property market, it's investing in it.

The Sydney-headquartered capital partner has taken over the remaining apartments at <a href="https://www.apartments.com.au/buildings/victoriana-melbourne-20-queens-road-melbourne-vic-3004">Victoriana</a>, the recently completed glass-encased development opposite Albert Park Lake in Melbourne's tightly held St Kilda Road precinct.

Designed by <a href="https://www.apartments.com.au/architects/rothelowman">Rothelowman</a> and built by <a href="https://www.apartments.com.au/builders/hickory">Hickory</a>, Victoriana places residents between one of Melbourne's most recognised parklands and the CBD, offering oversized two and three-bedroom apartments aimed at owner-occupiers seeking a genuine alternative to a traditional family home.

The development comprises 232 completed residences alongside a suite of resident amenities, including a 25-metre indoor swimming pool, gymnasium, landscaped entertaining areas, resident lounges, EV charging, secure basement parking and a concierge-style arrival experience.

[smartcode_project:default project_id=1979 project_image_fid=363229]

The apartments have been designed with owner-occupiers firmly in mind.&nbsp;Open-plan living and dining areas flow onto generous balconies framing views across Albert Park Lake, Fawkner Park, the Royal Botanic Gardens and the Melbourne skyline.

Kitchens feature Gaggenau appliances, stone benchtops and generous preparation space. Bedrooms include built-in robes, while bathrooms feature full-height textured tiling. Hardwood flooring and ducted air conditioning complete residences designed for long-term living.

Rothelowman's architecture takes its cues from the landscape opposite the site. Sweeping horizontal glazing references the movement of Albert Park Lake, while generous balconies and expansive glazing strengthen the connection between the apartments and the surrounding parklands. The result is a building designed to deliver the scale and amenity expected of luxury apartment living, while offering the larger floorplans increasingly sought by owner-occupiers.

[smartcode_project:default project_id=1979 project_image_fid=363284]

The location is one of Victoriana's defining characteristics. Positioned on Queens Road, residents are directly opposite Albert Park Lake and within easy reach of Fawkner Park, the Royal Botanic Gardens, South Melbourne, St Kilda Road and the CBD. With few comparable development opportunities remaining in the precinct, buyers are increasingly placing value on outlooks that are unlikely to be interrupted by future construction.

Greg Huxley, Founder of Equitifund, believes those qualities become even more valuable over time.

"Premium real estate has always rewarded buyers who take a long-term view," Huxley said.

"Victoriana represents the kind of asset that's increasingly difficult to recreate today, particularly in an established location like Queens Road."

He said rising construction costs are also changing the way buyers assess completed developments.

"When you combine an irreplaceable location with thoughtful architecture and premium finishes, you create something that becomes increasingly difficult to reproduce as construction costs continue to rise."

[smartcode_project:default project_id=1979 project_image_fid=363228]

According to National Sales Director Ben Hamblett, enquiry has been driven largely by Melbourne downsizers and buyers upgrading from smaller apartments.

"Interest in Victoriana continues to build, with strong buyer focus on the larger owner-occupier residences within the development," Hamblett says.

"Enquiry is increasingly driven by local buyers who recognise the rarity of what's on offer: park-facing apartments in an established neighbourhood where new development opportunities are becoming increasingly scarce. At Victoriana, the view is not just a feature; it's an appreciating asset in its own right."

He said interstate enquiry has also strengthened as buyers reassess Melbourne's position within the national property cycle.

"Melbourne currently stands as the most compelling entry point of any major Australian capital, and discerning buyers are beginning to recognise what those who move early always understand: the best opportunities are taken before the price rise confirms them."

[smartcode_project_cta:default project_id=1979]

Why now is the time to buy in Melbourne's premium apartment market

Developers and apartment buyers have a narrowing window of opportunity before Brisbane's Olympic infrastructure pipeline begins competing directly with residential construction, pushing up costs, tightening labour supply and making new projects increasingly difficult to deliver.

While Brisbane's apartment market continues to benefit from strong population growth and limited housing supply, industry research suggests the years leading up to 2027 could prove to be the most important period for developers looking to secure builders and buyers hoping to purchase before the next wave of price increases.

A new Colliers report, Brisbane 2032 Olympic and Paralympic Games: Creating Solutions, highlights the scale of the challenge. While thousands of new homes are planned across South East Queensland, the Brisbane Olympic Athletes Village alone will deliver more than 10,500 beds during the Games before being converted into around 1,750 to 2,000 apartments. Equivalent to almost two years of typical inner-city apartment supply, the project will also absorb a significant share of the construction workforce and building materials.

The broader construction pipeline paints an even clearer picture.

Construction Skills Queensland's Horizon 2032 report forecasts Queensland's annual construction pipeline will average $69 billion over the coming years before peaking at $75 billion in 2027-28. Demand for construction workers is expected to increase by 17 per cent to almost 150,000 people, with the industry facing an annual shortfall of around 19,000 workers that could blow out to as many as 35,000 during the peak construction period.

The Olympic venues, athletes village and supporting infrastructure will account for billions of dollars worth of work across South East Queensland through to 2032, creating intense competition for labour at a time when Australia's residential construction sector is already under pressure.

[smartcode_project:default project_id=150489 project_image_fid=373834]

Colliers Queensland Residential Director Andrew Scriven said the convergence of these projects is creating a clear window of opportunity for both developers and buyers.

"From 2027 onwards, the market will shift dramatically," Scriven said.

"Labour will increasingly be locked into government-led infrastructure and Olympic projects, which means private residential developments will face higher costs and tighter margins. The developers who move now are the ones most likely to get projects off the ground."

Scriven said the same dynamic would also affect buyers, with fewer apartment projects expected to launch once construction capacity tightens.

"If you're looking to change your lifestyle over the next five years, now is your window of opportunity to buy."

[smartcode_project:default project_id=150713 project_image_fid=373827]

Developers are already positioning themselves ahead of that window.

Following the success of Monarch at Toowong, Consolidated Properties is preparing to launch two new Brisbane apartment projects in the second half of 2026. They include <a href="https://www.apartments.com.au/new-apartments/gloriette-30-bedivere-street-yeerongpilly-qld-4105">Gloriette</a> at Yeerongpilly Green, a 25-storey tower within one of Brisbane's key Olympic precincts, and <a href="https://www.apartments.com.au/new-apartments/castile-47-skyring-terrace-newstead-qld-4006">Castile</a>, a recently approved 25-storey riverfront development at 47 Skyring Terrace in Newstead.

Hutchinson Builders will deliver both projects, with early works already underway at Yeerongpilly and Newstead expected to commence later this year.

The timing comes as Brisbane's fundamentals continue to strengthen, with strong interstate migration, population growth and vacancy rates remaining below 1.5 per cent.

Colliers Queensland researcher Pragya Sharma said Greater Brisbane is forecast to require around 40,000 new apartments between 2021 and 2031.

"There's a real mismatch emerging between when housing is needed and when it will be feasible to build," Sharma said.

"As a result, the period leading up to 2027 presents a key window of opportunity for developers to secure approvals, funding and construction capacity, while buyers will have greater choice before supply constraints intensify."

Colliers research outlines a critical pre-2027 window to start residential projects before labour squeeze: now is the time to buy

Developers, buyers on watch in South East Queensland ahead of construction crunch: Colliers

It's taken less than nine months for developer Sherpa Property Group to sell out all 51 apartments in its <a href="https://www.apartments.com.au/new-apartments/flourish-oasis-palm-beach-7-9-sixth-avenue-palm-beach-qld-4221">Flourish Oasis</a> development in <a href="https://www.apartments.com.au/developments/palm-beach-qld-4221">Palm Beach</a>, over a year before its anticipated completion.

&nbsp;

Located at 7-9 Sixth Avenue, the $67 million development has resonated strongly with both local owner-occupiers and downsizers seeking high-quality apartments within walking distance of the beach, dining precincts and everyday amenities.

[smartcode_project:default project_id=151449 project_image_fid=357458]

Christie Leet, Founder of <a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Group</a>, said the sell-out reflected both the strength of the Palm Beach market and the success of Sherpa's community-first approach to development.

"The sell-out of Oasis is a fantastic outcome and reinforces the strong demand we're seeing for thoughtfully designed apartments in lifestyle locations," Leet said.

"From the outset, our vision was to create a development that genuinely enhanced the Palm Beach community while providing residents with exceptional homes and wellness-focused amenities.

"We've been incredibly encouraged by the level of local support throughout the campaign, 72.5 per cent of buyers are locals, with a significant proportion of purchasers choosing Oasis as their future home rather than an investment."

[smartcode_project:default project_id=151449 project_image_fid=357463]

Construction is now progressing following development approval, with trusted builder LPS Group delivering the project and completion anticipated in Q3 2027.

Oasis forms part of Sherpa Group's successful Flourish collection, which has become recognised for its focus on wellness, community and elevated coastal living.

[smartcode_project:default project_id=151449 project_image_fid=357469]

Residents will have private access to a rooftop amenity space featuring a pool, gym, sauna, steam room, hot and cold plunge pools, spa and barbecue facilities.

"The success of Oasis demonstrates that buyers continue to prioritise quality, location and lifestyle," Leet said.

"We are proud to have delivered a project that has resonated so strongly with the market and look forward to bringing Oasis to life for our future residents."

Sherpa recently launched <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a>, its third instalment of the Flourish brand in Palm Beach following Flourish Oasis and <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>.

[smartcode_project_cta:default project_id=151449]

Sherpa sells out Flourish Oasis in booming Palm Beach

Urban Property Group's <a href="https://www.apartments.com.au/new-apartments/la-vera-macquarie-park-94-talavera-road-macquarie-park-nsw-2113">La Vera</a> is leading the next phase of Macquarie Park's residential evolution, with the new apartment development set to become the first of several new apartment projects in the precinct to complete.

The 169-apartment building has now topped out ahead of its scheduled completion in the third quarter of 2026, as new residential investment continues to reshape one of Sydney's largest employment hubs into a true mixed-use precinct.

[smartcode_project:default project_id=134951 project_image_fid=368645]

Cox Architecture has designed La Vera to capture the best of its unique positioning on Talavera Road, orienting the building towards Lane Cove National Park.&nbsp;The building features a sculpted northern façade with flowing curves inspired by the surrounding landscape, while its city-facing elevation adopts a more structured architectural expression to maximise skyline views.

"The vision for the project was to conceive a building that adopted an organic and curvilinear form to the northern portion that faces the Lane Cove National Park," <a href="https://www.apartments.com.au/architects/cox-architecture">Cox Architecture</a> Director Felipe Miranda said.

"The residents that reside in the northern portion of the building benefit by having beautifully crafted curved balconies that speak to the natural context and heighten the relationship of their internal living spaces to the external balconies."

[smartcode_project:default project_id=134951 project_image_fid=358802]

La Vera offers a diverse mix of one, two, three, and four-bedroom configurations, with prices currently starting from $740,000. Buyers so far have been a mix of Sydney-based investors,&nbsp;metro commuters, owner-occupiers and downsizers from surrounding North Shore suburbs.

Both investors and owner-occupiers have been drawn to La Vera's proximity to Macquarie University, Macquarie University Hospital, Macquarie Centre and the Sydney Metro, infrastructure that supports both strong rental demand and a convenient lifestyle for residents.

The apartments feature full-height glazing, timber flooring throughout living areas, stone kitchen benchtops, SMEG appliances, floor-to-ceiling bathroom tiling and ducted air conditioning.

Residents will have access to a rooftop recreation level featuring a swimming pool, sauna, barbecue facilities and landscaped relaxation areas, complemented by additional communal space at ground level. Many apartments enjoy uninterrupted views across Lane Cove National Park, reinforcing the project's connection to its natural setting.

[smartcode_project:default project_id=134951 project_image_fid=364551]

<a href="https://www.apartments.com.au/developers/urban-property-group">Urban Property Group</a>, a family-owned developer and builder with nearly four decades of experience, holds a 4.5-star iCIRT rating and was Australia's first developer to introduce 10-Year Latent Defects Insurance (LDI). La Vera is the first apartment development in <a href="https://www.apartments.com.au/developments/macquarie-park-nsw-2113">Macquarie Park</a> approved to offer the additional insurance protection, alongside a five-year warranty on SMEG appliances.

Urban Property Group CEO Patrick Elias said the additional protection reflects changing buyer expectations in the off the plan market.

"Consumers are a lot more weary and a lot more concerned in buying off the plan than they ever have been. Having LDI is a tool to portray the confidence that we have in our product, and a confidence we want buyers to share," Elias said.

Following completion of the building later this year, buyers will move into their apartments well before Christmas.

[smartcode_project_cta:default project_id=134951]

La Vera closes in on completion as Macquarie Park continues residential transformation

Office Market

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Capital values in Sydney's CBD office strata market have increased nearly 30 percent in the first half of 2016 with vacancies predicted to fall below five percent, according to new research released by Ray White Commercial.
Vanessa Rader, Ray White Commercial head of research, said despite a limited pool of sales transactions in the first six months of 2016 ($31.823 million), the overall capital value for strata premises has grown 29.33 percent on 2015 results.
“The average is now $8,067 per sqm across the Sydney CBD and this value growth has not been restricted to any one region,” Ms Rader said.
“The Core is up 24.67 percent to $8,223 per sqm and Midtown also had a 27.24 percent increase to $8,179 per sqm. Western Corridor only recorded around $3 million in sales which resulted in a smaller value increase of 3.13 percent to $6,597 per sqm while the Southern precinct, which is tightly held, recorded no transactions so far this year.
“Looking ahead, despite the supply pipeline of the CBD, early indications show that vacancy is likely to hit sub 5 per cent in the next round of vacancy statistics available in August which will put further pressure on rents,” she said.
“Similarly, despite this high growth in values, yields still remain attractive for investors and with occupation levels high, reducing risk, low interest rates continue to keep this investor activity from both domestic and international buyers high.
Anthony Harris from Ray White Commercial said the strong demand for Sydney CBD strata offices from investors and owner-occupiers was evident when two offices in a building at 33 York Street sold recently for $8.35 million – one of the first day it was on the market.
"There is now strong demand from tenants looking to buy as they are being forced to move due to the Sydney Metro Project, which will require compulsory acquisition of 19 commercial buildings," he said.
“I think we will see some occupiers having to get out of the CBD to locate their business due to the shortage of supply.
“On the leasing side we are seeing multiple tenants compete for space and in some cases tenant advocates offering to pay higher than the advertised rental in an effort to secure properties for their clients.”
<a href="/images/2016/07/19/Screen%20Shot%202016-07-19%20at%2011.02.57%20AM.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/07/19/Screen%20Shot%202016-07-19%20at%2011.02.57%20AM.png" alt=""> 
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Sydney CBD strata market capital values up nearly 30 percent: Ray White

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All but one of the units at a 2+ plus business park at Kirkham Road in Melbourne’s Keysborough have sold ahead of completion of the 8,350 square metre development later this month.
The project was a joint venture between commercial developer Elite Property Group and Bayport Group.
Thirty-four units were on offer at the 2+ business park and sold for on average $1,800 per square metre to local businesses and investors, said a media release.
This follows Elite Group’s recent construction of the $25 million Port Melbourne Industry Park – a joint venture with the Spigelman family. The development has attracted occupiers such as Lorbek luxury cars and Reece, with selling rates topping $3,000 per square metre.
Elite’s managing director Leo Iazzolino said the group looks for locations with access to arterial roads and freeways.
“There’s no doubt the proximity to good transport links is an important factor for would-be purchasers,” says Iazzolino. “Extra kilometres means extra dollars for businesses.”
The 2+ business park is adjacent to EastLink and Port Melbourne Industry Park next to West Gate Freeway.
The leading agent for the 2+ Business Park is Renato Daniele from Collins Commercial &amp; Industrial.
Established in 1994, Elite has designed and built a number of commercial buildings in Melbourne’s south-east where the construction of EastLink has helped drive investment.
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Most units sold as Melbourne's $15 million Keysborough business park nears completion

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An award-winning penthouse office in one of Melbourne’s top retail hubs is about to hit the market with price expectations of more than $6.5 million.
The <a href="https://www.realcommercial.com.au/property-offices-vic-south+yarra-501998198" target="_blank">529 Chapel Street office in South Yarra</a> has an area of 675 sqm and is on two levels. 
It has won several awards, including one of New York’s most prestigious design awards in 2015, taking out Interior Design Magazine’s Best Interior Design Award. It was also named a finalist in the Workplace Design and Workplace Less Than 1,000 sqm categories at the 2015 Interior Design Excellence Awards in Australia. 
It is being sold through Colliers International’s Daniel Wolman, Oliver Hay, Ben Baines and Chris Ling on behalf of local developer Bill McNee. 
“This is a truly unique offering – there is no other office in Melbourne that compares to this one,” Wolman said. 
The office is expected to attract strong competition from office users, hospitality operators and luxury residential buyers.
“On offer is the world’s best office in the heart of one of Melbourne’s trendiest and most sought after suburbs,” added Wolman.
The office has communal and private workspaces, innovative entrances, steam rooms and luxury finishes with multiple rooftop terraces. Luxury features include a Sonos sound system throughout, automated bi-fold doors, a teppanyaki grill and beer taps on the external terrace. 
“The building would be well suited to a family office or small-to-medium business looking to take advantage of the immediate access to extensive surrounding amenity,” said Hay.
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Trophy penthouse office in Melbourne's Chapel Street up for grabs 

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Melbourne’s office market is seeing much activity from offshore buyers, according to recent sale deals by Colliers International.
To illustrate the point, a 450 sqm freestanding office and retail building at 318 King Street was bought by a private investor from China for circa $5 million within two weeks of its listing. 
The deal was brokered by Colliers International’s team of Oliver Hay, Daniel Wolman and David Sia. 
The property is a two-level building on a 231 sqm site with King Street frontage and rear access via Eagle Alley. 
Hay said the buyer intends to lease out the property in the short term before occupying it. The same buyer earlier bought a development site in the nearby area.
Another recent sale was that of Level 2, 21 Victoria Street for $1.395 million to an offshore developer looking to establish themselves in the Melbourne CBD.
“A big theme in this sector of the market at the moment is that these purchasers are not just buying development sites, they’re buying offices as well, as they are keen to set up a physical presence,” said Hay.
“Of five strata office floors sold by our team in the last two weeks in the Melbourne CBD, half have been sold to offshore groups looking to establish a physical presence for themselves in Melbourne.
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Offshore buyers setting up presence in Melbourne's office market

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The downturn in Perth’s office market could last for at least two more years, with the CBD vacancy rate yet to peak, according to a grim forecast by research firm BIS Shrapnel. 
Prime net stated rents are forecast to fall by a further 19% and net effective rents by a further 23 percent. Rents will stay depressed for the remainder of this decade. 
Average stated rents are not expected to regain current levels over the next 10 years, according to some of the key findings of BIS Shrapnel’s research. 
The research contrasts with some commentators’ views that the Perth CBD office market is close to the bottom of the cycle. The CBD vacancy rate has already blown out to around 22 percent from just 4 percent in 2012, prime net stated rents have fallen by more than 20 percent, and effective rents have fallen by 60%. With the volume of new completions slowing down, the argument is that the market will start to recover. 
Not so, says BIS Shrapnel. The next two years will be rocky for the Perth office market. 
Demand for office space in Perth is closely tied to investment and in particular, resources investment — both in terms of the resources companies themselves and those who service them. The problem is that the downturn in resources-related investment is not over yet. 
BIS Shrapnel estimates that Western Australia is less than 40 percent through a near 70 percent decline in engineering construction. Whilst investment in iron ore has been falling for a number of years, the decline in oil and gas investment is just beginning. As mega projects (such as Gorgon 1st to 3rd train and Wheatstone) are completed and not replaced by projects of similar value, this will contribute directly and indirectly into further falls in employment and demand for office space. 
“Falls in resources investment will swamp the positives for office employment coming from increased mining production” says Lee Walker, senior project manager at BIS Shrapnel. 
The completion of Woodside’s new 55,000 square metre headquarters at 98 Mounts Bay Road in 2018 is expected to push the office vacancy rate even higher to an estimated 24 percent by June of that year. 
“Rising vacancies and increasing competition to secure tenants will put further downward pressure on market rents” says Walker. 
Average prime net stated rents are expected to fall by close to 20 percent over the next two years, with effective rents forecast to fall by 23 percent—putting the peak to trough fall in effective rents at nearly 70 percent. 
“It’s too early to call the bottom of the cycle. There’s more pain to come for building owners. The balance of power in leasing negotiations will clearly favour tenants over the next few years” concludes Walker.
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Downturn in Perth office market far from over: BIS Shrapnel

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A private investor from Queensland has snapped up Aviation House in Canberra for $68.1 million.
The sale by Colliers International director Tim Mutton represents the largest office building deal in Canberra this year.
Located in Woden, Aviation House was sold via an EOI process in conjunction with JLL.
The property is an A-Grade office building comprising 14,812 sqm of high quality office accomodation over nine levels.
It is a fully leased commercial asset underpinned by three Commonwealth Government tenants.
It received interest from international and local buyers seeking to invest in metropolitan markets across the eastern seaboard.
Tim said that Canberra is attracting maiden investors who are finding that supply is becoming increasingly scarce in the Sydney and Melbourne major office markets.
“Major office buildings with Commonwealth leases located in our town centres are seen as attractive investments as the Australian Government considers local impacts before moving tenants out of town centre locations, which we’ve recently seen with Customs and Border Protection staying in Belconnen.
Mutton said that Aviation House represented another strong sale in a Canberra town centre and is great news for businesses in the Woden area, being one of Canberra’s major community and commercial hubs servicing a retail trade area of about 432,000 people and with some 130,000sq m of office space occupied by Government tenants.
Woden has seen an increase in infrastructure projects undertaken by the ACT Government, including the investment of more than $10 million in improving the Bus Interchange and street scapes.
The nearby Westfield Woden Shopping Centre is also to be extended and redesigned.
According to Colliers International research, four major office buildings have sold in 2016 totalling $152.325 million. Tim Mutton expects four more major office buildings to transact before the end of the year.
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Aviation House in Canberra sells for 2016 record

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Sales in Sydney CBD strata offices are being drive by record low interest rates, limited supply and strong demand for investors and owner-occupiers.
Ray White Commercial agent Anthony Harris said that there is now strong demand from tenants looking to buy as they are being forced to move due to the Sydney Metro Project, which will require compulsory acquisition of 19 commercial buildings.
“I think we will see some occupiers having to get out of the CBD to locate their business due to the shortage of supply,” he said. 
“On the leasing side we are seeing multiple tenants compete for space and in some cases tenant advocates offering to pay higher than the advertised rental in an effort to secure properties for their clients.”
Anthony completed two sales in a York Street building for $8.35 million, and one of them was on the first day of market.
The whole 541 sqm office space at level 2/33 York Street sold for $4.25 million on behalf of a private syndicate to an owner occupier who will use it as a medical business.
“The office comes with four car spaces and the sale price represents a rate of just over $7,100 per sqm, assuming a value of $100,000 per car space,” Harris said.
The other 545 sqm office on level six of the same building sold for $4.1 million to the Egyptian Consulate on behalf of Century 21 Australia chairman Charles Tarbey.
“This office comes with three car spaces, representing a rate of around $7,000 per sqm and $100,000 per car space,” Harris said.
 
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Sydney metro project causing Sydney CBD office strata sales surge

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Australian Volunteers International is the latest not-for-profit group to offer its substantial innercity Fitzroy, Melbourne premises for sale.
More than $6 million is tipped for 71-75 Argyle Street, set on the northeast corner of Fitzroy Street.
There's potential for an 11-level structure on AVI’s 1049-square-metre block, which includes a historic double storey building.
It is being marketed by Savills’ Nick Peden, Clinton Baxter and James Lockwood.
The Collingwood-based Smith Family sold its 1139-square-metre site to local builder Pace Development Group for $8.8 million some two years ago.
The a few weeks ago, the Salvation Army secured around $7 million selling its historic estate, Cloyne, at 12 Chapel Street, St Kilda, to another charity-related owner occupier.
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Savills lists AVI development site in Fitzroy

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Sydney office rents will surge between now and the end of 2018 as market power shifts back to landlords, according to BIS Shrapnel.
The forecasters expect net face rents to rise by about 30 per cent over the next three years
Agents are starting to see face rents rise and incentives contract.
BIS Shrapnel expects prime net face rents to increase from an average of $890 per square metre to $1200 per sq m by December 2018.
On an effective basis, with incentives forecast to fall from 28 per cent to 10 per cent, rents will almost double from $570 to $1100 per sq m.
"Tenants have become used to receiving large leasing incentives in the Sydney CBD over the last six to seven years. But the ground is starting to shift." said Lee Walker, Senior Project Manager at BIS Shrapnel.
The key driver will be the vacancy rate as BIS Shrapnel forecasts this to fall from a current seven-year low of 6.3 per cent to just 3 per cent by 2018.
"After years of delaying leasing decisions, businesses are looking to expand in Sydney, buoyed by the strength of the NSW economy," he said.
Last year, CBD office net absorption reached a 10 year high of over 150,000 square metres. 
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Sydney office rents to rise: BIS Shrapnel

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The workplace is in a state of evolution, with the rise of co-working space redefining the parameters of office markets across the country as shifts in demand create new opportunities for commercial property owners.
A new CBRE Viewpoint highlights the rapid transformation of global office markets over the past five years, with businesses and individuals adopting co-working space models such as serviced offices and flexible desk leasing arrangements.
Since 2010, there has been exponential growth in the number of co-working sites across Australia, with advances in technology underpinning a rise in mobile and freelance working.
Across Australia, there are currently more than 120 co-working sites, with the majority located in New South Wales (30%) and Victoria (25%).
CBRE Research Analyst Anne Flaherty said technological advances were creating new business opportunities, which was spawning a rise in the number of start-ups.
“For these businesses, serviced offices present an attractive option, offering flexibility, affordability and the opportunity to meet and work amongst other entrepreneurs,” Ms Flaherty said.
“For many small businesses and start-ups that may not be in a position to commit to the requirements of a formal lease agreement, co-working spaces offer significantly greater flexibility.”
CBRE Director, Workplace Strategy, Matt Strudwick said technology had liberated organisations from the traditional view of the office being the place to work.
“Organisations are using a mix of spaces to provide an attractive proposition to their employees, service their clients more effectively and drive out some of the fixed costs of traditional office space,” Strudwick explained.
“Employees have been empowered to work from client locations and from home in the past, but co-working spaces offer something more. Co-working spaces are conducive to fostering and enhancing an entrepreneurial culture and a sense of team.”
“While the co-working office offers an attractive work space for start-ups and small businesses, it is not just these companies that we are seeing demand from,” Strudwick explained.
“There is a growing trend whereby big corporates are leasing desk space in co-working hubs, so as to expose their employees to new ideas and innovative working environments.”
Evidencing the trend, a number of major corporations, including NAB, have taken to co-working to drive their business outcomes with the objective being to engage with the small business community and find opportunities to partner with, or buy their ideas.
“There has been a sharp increase in the number of financial institutions partnering with existing co-working hubs, as well as launching shared office spaces across most of Australia’s capital cities,” Flaherty said.
“Co-working spaces are also being set aside at the existing office premises of some banks, for the exclusive use of their business banking customers.”
Strudwick said in addition to the benefits of flexibility, affordability and networking, co-working style office arrangements also offered businesses the advantage of agility.
“Agility is one of the biggest drawcards associated with co-working space, with it giving businesses the ability to adjust their space as they grow, shrink, move and reconfigure, while not being locked into a restrictive lease,” Mr Strudwick explained.
CBRE Executive Managing Director, Capital Markets, Mark Granter said the growing trend also presented opportunities for office owners and landlords looking to reposition assets for higher and better use.
“As demand continues to strengthen for flexible office space, assets that have been converted to capture this budding market will be positioned for capital growth,” Granter said.
“Unlike traditional office space, income flow for a co-working space is less dependent on a few, or single, tenants. With demand for serviced offices growing, owners of currently underused commercial assets may look to unlock value by considering the potential viability of conversion to a shared office space.”
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