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<p>Parramatta may be growing at a rapid pace but it is still the poorer cousin to the NSW capital’s premier CBD.</p><p>Missing the money, arts and infrastructure required, western Sydney must attract more investment to create the bustling and well-connected CBD it aspires to be, promoters say.</p><p>“Western Sydney’s voice has never been strong enough,” Trevor Oldfield, former president of the Chamber Alliance of Western Sydney, says.</p><p>“The fact is the rapid growth of western Sydney as a preferred destination to live has resulted in poor infrastructure. Moving around western Sydney is a nightmare.”</p><p>The alliance is represented by 14 chambers across western Sydney.</p><p>Its aim is to be a united voice for issues pertaining to western Sydney, particularly those that affect small to medium enterprises, to address the need for further education and to ensure western Sydney—as the largest growth area in NSW—receives the support from all levels of government.</p><p>“Outside Blacktown there isn’t much happening as far as art and sport are concerned,” Oldfield says.</p><div id="ups7yUAsrphYXYmJjMteT"><div><div id="gkgzjsFspbK999TEHF5xX"><picture><img src="//images.ctfassets.net/8pr762qjocl3/QEHXQhw9YdKsYFMkCIdew/c4b4069eb661809245d678ad7dfa8f28/3.jpg" alt="The connectivity between greater Sydney and the west must improve." data-mce-src="//images.ctfassets.net/8pr762qjocl3/QEHXQhw9YdKsYFMkCIdew/c4b4069eb661809245d678ad7dfa8f28/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Prominent western Sydney residents say their part of the state is too often overlooked or ignored.<br><br></span></div></div></div></div><p>“The inter-connectivity within greater western Sydney needs to be vastly improved.”</p><p>A leaked $2-billion proposal to redevelop the Sydney CBD and eastern suburbs into a cultural and arts precinct, with a 24/7 hospitality sector, commercial office towers and affordable housing has put a cat among the pigeons. Prominent western Sydney locals claim that they are last when it comes to NSW government spending priorities.</p><p>Business Western Sydney executive director David Borger says more investment is needed to create more central workplace hubs to allow people to work in the area that they live, not travel to the CBD or beyond.&nbsp;</p><p>“In the west we have high levels of tertiary-educated graduates,” Borger says.</p><p>“We have the brain power living in our postcodes, yet for too many of them they must travel to the other side of Sydney for work. It makes sense for businesses to have a presence in the places where their workforce lives.&nbsp;</p><p>“As the new airport and the aerotropolis comes to fruition, we need to see a clear plan to get public transport access from across western Sydney to the airport.”</p><p>But Urban Taskforce chief executive Tom Forrest says they are putting the horse before the cart.&nbsp;</p><div id="ups7yUAsrphYXYmJjMteT"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6yOvlbFQFiFBSFmvojjjfD/d3be900dba3e6c59f5034ef41cc35419/4.jpg" alt="A render of the Parramatta Powerhouse museum designed by Japanese-French practice Moreau Kusunoki and local architect Genton." data-mce-src="//images.ctfassets.net/8pr762qjocl3/6yOvlbFQFiFBSFmvojjjfD/d3be900dba3e6c59f5034ef41cc35419/4.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of the Parramatta Powerhouse museum designed by Japanese-French practice Moreau Kusunoki and local architect Genton.<br><br></span></div></div><p>“Sometimes there is a desire from well-meaning public servants to deliver the full suite of infrastructure services, including public art and cultural institutions, up front,” Forrest says.</p><p>“This is simply not practical or affordable.</p><p>“It is important not to confuse infrastructure investment in long-established built-up urban areas with that required for greenfield areas in outer Sydney. The base infrastructure needed in greenfield areas include water supply, storm-water drainage and sewerage, key classified roads, public transport and electricity.&nbsp;</p><p>“Social infrastructure includes schools, hospitals, police facilities— typically paid for by the state government with the support of infrastructure contributions from the developers. Local infrastructure, provided by councils, is funded through developer levies and is maintained using council rates from the landowners.”</p><p>The development of <a data-mce-href="https://www.theurbandeveloper.com/articles/lendlease-to-build-parramattas-first-6-star-400m-building" href="https://www.theurbandeveloper.com/articles/lendlease-to-build-parramattas-first-6-star-400m-building" target="_blank" rel="noopener">Powerhouse Parramatta</a> is being touted as a game-changer for the area, which will be the largest cultural infrastructure project in NSW since the Sydney Opera House.&nbsp;</p><p>“The investment in Powerhouse Parramatta is a game-changing public investment in arts and investment within the region and is set to be complemented by a new Parramatta Riverside Theatre,” Property Council Western Sydney regional director Ross Grove says.</p><p>“These investments are in the order of $2 billion and represent a rapid transformation in state arts and culture funding in the region.”</p><div id="3piibYqzqKkvo8a25iIabW"><picture><img src="//images.ctfassets.net/8pr762qjocl3/BQC29veGcAy6OsFGnEqHo/feaf00f4576d8233dbf9e42211a1facc/2.jpg" alt="A render of the proposed Parkland City." data-mce-src="//images.ctfassets.net/8pr762qjocl3/BQC29veGcAy6OsFGnEqHo/feaf00f4576d8233dbf9e42211a1facc/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of the proposed Parkland City.<br><br></span></div></div><p>There is also the Western Parkland City Authority, which is a commitment within the Western Sydney City Deal, setting the foundation for the Parkland City to become a fully realised 21st century city.</p><p>The $150-million commitment and 20-year partnership between the Commonwealth, NSW government and the eight local councils in the Western Parkland City will deliver transformative change to shape the region to become an epicentre for liveability in Sydney.&nbsp;</p><p>The new Federal government’s first Budget allocated $1.4 billion for vital land transport infrastructure projects in NSW to improve safety and reduce travel times.</p><p>There is $400 million for the new Richmond Bridge and traffic improvements between North Richmond and Richmond with an additional $100 million thrown in from the NSW government; $220 million (split 50:50 between the Commonwealth and NSW governments) allocated to upgrading Epping Bridge; $127 million in funding for the Dunheved Road upgrade in Penrith and $75 million committed to improving and expanding the Northwest growth corridor among other projects.</p><p>“In order to meet the future housing and employment needs of the region, the state government needs to invest in targeted transport and utilities packages that unlock the capacity of our key growth areas,” Grove says.</p><p>“These are generally mid-sized, nine-figure projects that are critical to unlocking large parts of the region’s growth. The federal government’s recent $300-million western Sydney roads package is a great start for unlocking key parts of our residential growth areas, and we encourage both state and federal government to commit to a timetable toward the delivery of a state roads package for the western Sydney Aerotropolis.”</p><p>Grove believes that the <a data-mce-href="https://www.theurbandeveloper.com/articles/first-university-alliance-making-history-aerotropolis" href="https://www.theurbandeveloper.com/articles/first-university-alliance-making-history-aerotropolis" target="_blank" rel="noopener">western Sydney Aerotropolis </a>has been the focus of significant infrastructure investment already and it’s the intermediate roads that are required to start delivering the industrial land that is in such critical short supply.</p><div id="1vaP2XpXadF0uFgaSVcosU"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12aXK2OAvRomVezQy7RvzR/c630705ecf4305cb48888407b6d1fcf9/Mid_article_resizes.jpg" alt="A render of a street in the western Sydney Aerotropolis." data-mce-src="//images.ctfassets.net/8pr762qjocl3/12aXK2OAvRomVezQy7RvzR/c630705ecf4305cb48888407b6d1fcf9/Mid_article_resizes.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of a street in the western Sydney aerotropolis.<br><br></span></div></div><p>“Our national supply chain is struggling to cope with the current shortage of industrial land, with vacancy rates in Sydney at 0.3 per cent or below,” he says.&nbsp;</p><p>“Our industrial members are already missing out on opportunities to host interested tenants because there isn’t enough properly serviced industrial land able to be cater to the demand—if we don’t address this soon the city will suffer from weaker productivity and gaps in our regional employment offering.”</p><p>With infrastructure at the forefront of planning and construction for the NSW and Commonwealth governments, it is only a matter of time before other main towns in the western Sydney take on more prominence in terms of business development and central offices for government departments and SMEs.</p><p>“As cities develop, grow and mature, the population grows, and the amenity for those centres follows,” Forrest says.&nbsp;</p><p>“In the mid-1980s, you would not have thought of Parramatta as the centre for government administration with its own justice precinct and the home of the arts, with museums, theatres and a thriving food scene.&nbsp;</p><p>“Similar transitions are taking place in Liverpool, Penrith and Campbelltown. With population growth comes improved public transport, improved education and health services.</p><p>“Solid up-front strategic planning ensures that public open space is preserved to accommodate the growth.&nbsp;</p><p>“But it is important to adjust expectations of infrastructure delivery to match the maturity of the development area.”<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Despite a slew of significant developments under way and in the pipeline, western Sydney says the bias in government towards the NSW capital’s CBD is throttling future growth…


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<p>From racetracks to hotels and hospitals—you name it, it’s on the table as part of the Melbourne Airport’s precinct expansion plans.</p><p>The Victorian government recently greenlit the airport’s 2022 masterplan, which includes plans for a third runway in a north-south direction and safeguarding a fourth runway to complete the ‘hashtag configuration’.</p><p>“Our ultimate vision for the next 20 years is to strengthen our position as Victoria’s principal 24/7 international and domestic air-transport gateway,” Melbourne Airport head of masterplanning Laura Brannigan says.</p><p>A $170-million, 464-key hotel across 10 stories, is being built at Melbourne Airport, which will be completed in 2024, and the Victorian government has plans for a new hospital.</p><p>Racing Victoria bought the 396ha North West Land—as it is known—at Oaklands Junction for $25.3 million in October this year. The North West Land is three times the size of Flemington Racecourse and is less than a 10-minute drive from Tullamarine Airport and 30 minutes from the Melbourne CBD.</p><p>The future use of the North West Land is yet to be determined with extensive industry consultation to beunder taken in the next 12 months. It is within five minutes of the Living Legends and the Inglis Sales Complex, which are also on Oaklands Road.</p><h2>The significance</h2><p><br>“The third runway is critical infrastructure to cope with future demand, as we estimate annual passenger numbers to grow to more than 76 million by 2042,” Branningan says.</p><div id="2IgLaroAkPfz3Z9F20Jy0l"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1qPuDuOqMswVIiDaTNHbcI/b53ead29858eb495a332e19318206e82/Mid_article_resizes__4_.jpg" alt="Melbourne airport: The third runway has been labelled as critical to the city." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1qPuDuOqMswVIiDaTNHbcI/b53ead29858eb495a332e19318206e82/Mid_article_resizes__4_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Melbourne airport: The third runway has been labelled as critical to the city.<br><br></span></div></div><p>“The third runway will deliver significant economic benefits to the state by enabling more interstate and overseas travellers to visit Victoria, while securing our position as one of the largest cargo hubs in Australia.”</p><p>If the third runway is approved, it’s estimated its construction and operation will create 37,000 jobs throughout Victoria and contribute an additional $4.6 billion a year to gross state product by 2046.&nbsp;</p><p>While the 2022 Masterplan has been approved by the Federal Minister for Infrastructure, Transport, Regional Development and Local Government, the third runway Major Development Plan has not yet been approved. It will be submitted to the federal government early in 2023.</p><h2>Rejuvenation needed</h2><p><br>“Melbourne Airport is just over 50 years old,” The Demographics Group executive director Bernard Salt says.</p><p>“It needs to be reimagined to keep up with the population we have now, how they travel and the economics of the city.</p><p>“Really, an airport is a major drawcard for a city so when planning to expand you need to take into account the accessibility of it from residents wanting to get to the airport and travellers wanting to get in, which is why a direct rail link will only be a boon.”</p><p>Salt says many people now take Instagram photos at airports to highlight to friends and family that they are travelling, meaning it is now an activity destination highlight.</p><p>He also points out that most roads leading into an airport start becoming congested as early as 6 o’clock in the morning.</p><div id="3NH7BtMhM3kHtVPetJc2qD"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4krQ2vxqs1u2fxPry1iw67/ce0b6fe073db6042e99ca68f6d99d561/NEW_221024_MRB_9343884.png" alt="An aerial render view of the planned Melbourne airport elevated loop train track." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4krQ2vxqs1u2fxPry1iw67/ce0b6fe073db6042e99ca68f6d99d561/NEW_221024_MRB_9343884.png"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ An elevated loop network will cut traffic congestion.<br><br></span></div></div><p>“Melbourne, like most big cities, now has crawling traffic to and from the airport, meaning alternative forms of transport, such as rail, are required,” Salt says.</p><div id="3NH7BtMhM3kHtVPetJc2qD"></div><h2>Congestion-busting projects</h2><p><br>The former Commonwealth government in January 2022 approved an elevated loop network for Melbourne Airport that will take an estimated 40,000 cars off Terminal Drive each day</p><p>The two-stage project will reduce traffic congestion and provide a more reliable journey o the airport by creating a separate elevated network for public traffic and commercial transport operators.</p><p>The project is expected to cost around $350 million for both stages and create about 500 construction jobs.</p><p>“When it comes to developing Melbourne Airport and the surrounding lands you need to look at where the population is currently, where it will be in the future, and how will they be able to commute to work,” Salt says.</p><p>“With our demographic shift, employers at Melbourne Airport will need to ascertain as to whether there is enough Millennials in the area who will want to work there.</p><p>“We are currently experiencing skill shortages in a number of areas and that may continue.”</p><p><span class="mce-preview-object mce-object-iframe" contenteditable="false" data-mce-object="iframe" data-mce-p-allowfullscreen="allowfullscreen" data-mce-p-src="https://www.youtube.com/embed/aZoQJn0Phi4"><iframe src="https://www.youtube.com/embed/aZoQJn0Phi4" width="560" height="314" frameborder="0" allowfullscreen="allowfullscreen" data-mce-src="https://www.youtube.com/embed/aZoQJn0Phi4"></iframe><span class="mce-shim"></span></span></p><h2>Linking infrastructure boosts potential</h2><p><br>The expansion of Melbourne Airport coupled with Melbourne’s airport rail link project, which would result in Victoria’s first direct train line to Melbourne Airport at an estimated cost of $13 billion, would provide a boon for the state in many forms of economic activity.</p><p>“SRL Airport is a transformational project that will connect Victorians to the city, the suburbs and the world for the first time,” Ben Ryan, project director, Melbourne Airport Rail at Rail Projects Victoria, says.</p><p>“The rail line will run on dedicated tracks from a new premium station at Melbourne Airport to a new train station in Keilor East, then through to Sunshine Station and into the Metro Tunnel.</p><p>“Services will run every 10 minutes, with a trip from Melbourne Airport into the CBD taking around 30 minutes.”</p><h2>Ripple effect</h2><p><br>A thriving airport with increased landings and departures will only whet the appetite for potential visitors. Increasing the number of shops, activities and options at the airport and nearby will broaden the income of the Victorian economy.</p><p>“Melbourne Airport makes a significant contribution to the Victorian economy as a key driver of tourism and trade-based industries that support jobs and generate growth,” Brannigan says.</p><p>“It is estimated that a typical daily international flight contributes more than $109 million to the Victorian economy and supports more than 1000 jobs per annum.</p><p>“Before the pandemic, there were 20,600 full-time equivalent jobs supported on the precinct, and that workforce is rebuilding as the Covid-19 recovery continues.”</p><div id="6hmKcbP7QIqH3qCb0ddL6Q"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4TrZzFGN2OaUMbFPcZT9LC/e18f5252d01c4878c4e82e83856e6469/NEW_Albion_Precinct_Platform_Render_-_CC1-CO2_9343796.png" alt="A render of how a platform for Suburban Rail Loop for Melbourne Airport will look." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4TrZzFGN2OaUMbFPcZT9LC/e18f5252d01c4878c4e82e83856e6469/NEW_Albion_Precinct_Platform_Render_-_CC1-CO2_9343796.png"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The Melbourne Airport rail link will be able to ferry 6600 passengers to the Melbourne Airport every hour.<br><br></span></div></div><p>The Melbourne Airport rail link will support up to 8000 jobs during construction—from engineers and planners to construction workers and local suppliers.</p><p>“It will set targets for priority jobseekers such as Indigenous employment, prioritise local materials and service providers, and promote the use of recycled materials. Sunshine Station will become a transport superhub for transfers between airport, metropolitan and regional services,” Ryan says.</p><p>“Once opened, the rail line will be able to carry 6600 passengers to the airport every hour, providing a significantly increased capacity and time savings for passengers.”<br><br></p><hr><p><br><strong>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a>&nbsp;</p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture><div><br></div></div><p><br></p>

Big infrastructure, hospitals, hotels and a racetrack have all been pitched for Melbourne's airport precinct expansion plans...

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<p>NABERS ratings have helped to transform the commercial sector towards a greener future—and it has now shifted its focus to education facilities, which could boost the values of assets and spur private sector investment in the asset class.&nbsp;</p><p>The built environment generates nearly 50 per cent of annual global carbon emissions. Of those total emissions, building operations are responsible for 27 per cent, while building materials and construction (typically referred to as embodied carbon) are responsible for an additional 20 per cent each year.</p><p>JLL head of strategic consulting David Brown says while the NABERS schools scheme will be voluntary it could add cost. But it also presents an opportunity.&nbsp;</p><p>“Private schools are more informed regarding leasing schools sites/buildings. The development industry will want to be more involved – this may present an opportunity for more third party ownership,” Brown says.&nbsp;</p><p>Cushman and Wakefield’s head of sustainability in Australia Gehan Palipana says the move could generate higher valuations of assets and reduce running costs.&nbsp;</p><p>“There are a range of studies that have demonstrated that buildings with high green building ratings tend to command a premium in valuations and rental yield,” Palipana says.</p><p>“Schools obviously differ from commercial buildings in that they are sold less frequently, but the school rating tool should assist with benchmarking the energy performance and associated costs of running the facilities and benefit those schools with higher ratings.”</p><h2>The NABERS challenge</h2><p><br>NABERS for schools will be voluntary.</p><p>A pilot phase will test the final NABERS for schools rating tool in mid-2023, followed by a full release for all schools according to NABERS director Carlos Flores.&nbsp;</p><p>“We are in the early phases of engaging with public and private schools, and collecting energy, emissions and water use data across the sector,” Flores says.</p><p>“Once data has been collected: benchmarks, certification rules and the NABERS star rating will allow schools to measure their environmental impact, to compare their footprint against other schools, and to set targets for improvement.”</p><div id="5IrDyDeeV06E296letP9gu"><picture><img src="//images.ctfassets.net/8pr762qjocl3/PqwEWe6fHlYtTEqeR4m85/9dfbeeed5fe0affc0a034b5680224149/1.jpg" alt="A render of a space inside the Green Square Public School, designed by BVN." data-mce-src="//images.ctfassets.net/8pr762qjocl3/PqwEWe6fHlYtTEqeR4m85/9dfbeeed5fe0affc0a034b5680224149/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of a space inside the Green Square Public School, designed by BVN.<br><br> </span></div></div><p>NABERS ratings are conducted by accredited assessors. A school-specific program will be used to train school assessors for education facilities across the country. </p><p>“Getting data from across all geographies, school sizes and characteristics is a top priority in the phase of the project we are at right now,” Flores said.<br>&nbsp;<br>“This will allow us to provide results that are more relevant to all schools, which recognises that schools in metropolitan areas can be quite different to those in regional areas. </p><p>“We are working to create a great rating tool that works for all schools, no matter where they are located.”</p><p>Cushman and Wakefield’s Gehan Palipana believes NABERS ratings will pave the way for net zero schools.</p><p>“We do believe that it could play a big role in net zero ratings, as it does for offices,” Palipana says.</p><p>“NABERS for schools could be used as a pathway to climate active carbon neutral certifications, and energy efficiencies and electrification projects could more easily be justified and rewarded through higher ratings outcomes.</p><p>“Overall, most schools have significant room for improvement … electrification opportunities for things like generators and gas boilers [would] help reduce scope 1 emissions and position the schools for net zero or decarbonisation targets.”</p><h2>Designing a greener future</h2><p><br>BVN architect Phil Rowden says each facility will require a unique solution to lift environmental performance due to the varied nature of built forms and typologies.</p><p>“Currently, minimum standards are largely dictated by the expertise of the services professional working on individual projects. &nbsp;With the integration of elevated environmental standards, more schools buildings will be to a higher minimum standard,” Rowden says.</p><p>“Each building is unique within education typologies, with learning spaces being accompanied by specialist learning areas such as labs, arts, sports and library spaces amongst other different types of buildings.</p><div id="bAjFdnlBPHcmJS24vuuX9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1jDRSBHFE5yH9tf1njYFdm/5318498605e5719370ffdae197373306/2.jpg" alt="The Brisbane State Secondary School, designed by BVN." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1jDRSBHFE5yH9tf1njYFdm/5318498605e5719370ffdae197373306/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The Brisbane State Secondary School, designed by BVN.<br><br> </span></div></div><p>“Within Australia, fully naturally ventilated buildings are challenging, however, mixed mode systems can be successful to enable a building to have the capacity for using natural ventilation when possible, but ensuring a mechanical system is assessable when required to ensure thermal comfort is of primary importance.”</p><p>Schools and education facilities require a flexible approach to population changes, heating and cooling, and uses, with operational energy demands providing the biggest pinch point in the shift to greener learning institutions.</p><p>Rowden says close collaboration in design and engineering will be key to education assets achieving net zero performance outcomes.&nbsp;</p><p>“The more successful outcomes occur with close collaboration with services engineers to ensure high standards in the performance of mechanical systems. Aside from services, the specification and detailing of the thermal envelope is critical to improve energy performance,” Rowden says.&nbsp;</p><p>“NABERS ratings will enable a consistent minimum requirement for environmental performance applied to the education sector. &nbsp;This will ensure that the procurement of all school projects will enforce elevated environmental standards for energy, water, waste and indoor environmental quality.”</p><p>NABERS director Carlos Flores says the aim of the program is to encourage schools to tackle their “sustainability journey”.</p><p>“We can help them set targets to reduce energy use, water use and emissions every year, and to help them be recognised by their communities for their environmental achievements,” Flores says</p><p>“We can provide a mechanism for schools to easily tap into the financial incentives for energy efficiency that are already available in states like South Australia, Victoria and New South Wales.”</p><p>With increasing focus on a net zero built environment, education facilities are the next frontier for sustainable building practices.&nbsp;<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a><strong><a href="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" target="_blank" rel="noopener" data-mce-href="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></a></strong></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

As Australia's built environment moves towards net zero, our educational facilities are the next frontier for NABERS ratings, which industry experts say could help to unlock private sector investment in the asset class...

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<p>The New Zealand residential property market is in free fall with residential house prices expected to tumble another 10 per cent this year.</p><p>Meanwhile, the overall commercial market is also struggling as inflation soars above 7 per cent.</p><p>Things are far from rosy for the Land of the Long White Cloud—and it’s unlikely 2023 will hold a miracle turnaround.</p><p>Long considered a bellwether for the Australian property market, what is happening now to our neighbours across the ditch will likely become this nation’s reality before much longer.</p><p>With that in mind, <em>The Urban Developer</em> has dug deep into the state of play in Aortearoa.<br><br></p><hr><p><br>The Real Estate Institute of New Zealand December 2022 figures reveal that housing sales are at a 12-year low, with inventory soaring and house prices down 13.7 per cent year-on-year.&nbsp;</p><p>The number of residential property sales across New Zealand decreased annually by 36.1 per cent between November 2021 and November 2022.&nbsp;</p><p>“The supply of properties is low at present but increasing as retail interests hike and we can expect this to continue through to the middle of 2024,” Cushman and Wakefield managing director New Zealand Paul Huggins says.</p><p>“The cost of housing repayments will force some to sell and the market will stay flat or reduce the house prices by up to 10 per cent in the next 12 months and that should be the bottom of the movement.&nbsp;</p><p>“Then a gradual recovery should take place.”</p><p>The New Zealand inflation rate currently stands at 7.2 per cent, its highest level since 1990.&nbsp;</p><p>The official cash rate is 4.25 per cent—some analysts are predicting it will reach as high as 5.75 per cent, putting stress on mortgage repayments coupled with falling house valuations, meaning New Zealand homeowners are seeing their equity reduce dramatically.&nbsp;</p><div id="7sUtryE9CvzWv5OCtAQDAc"><picture><img src="//images.ctfassets.net/8pr762qjocl3/grUxgA3M6nf1t9e4oIuND/b959106f724e00c4dcf7b2f4127f6744/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/grUxgA3M6nf1t9e4oIuND/b959106f724e00c4dcf7b2f4127f6744/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Homes in Wellington NZ: supply is a growing issue.<br><br></span></div></div><p>“The significant drop in sales is largely due to vendor expectations versus what a purchaser is willing to pay—or can afford to pay,” MaxCap New Zealand chief investment officer Nick Bullick says.</p><p>“New Zealand was the first country in the world to begin lifting rates in October 2021 and in the space of 13 months the official cash rate (OCR) went from 0.25 per cent to 4.25 per cent with more rises expected.&nbsp;</p><p>“These are unprecedented times for mortgage holders and potential sellers holding off going to market and buyers generally looking for bargains.&nbsp;</p><p>“I expect the residential market to continue to decline in 2023, as the majority of fixed rates roll off and households adjust to the higher cost.</p><p>“There should be some reprieve in 2024 as we should see things start to turn with rates stabilising and the potential for rate cuts.”</p><h2>Commercial property</h2><p><br>Commercial property has been a mixed bag for New Zealand investors. The industrial market has been the standout, while retail has performed admirably, while the office market, like Australia, has been indifferent.&nbsp;</p><p>“Reflecting the general profile of economic activity, the current strong occupier market momentum in the industrial market, retail sales and office occupier activity for good quality and well-located space will continue into 2023 but will lose steam into the second half of the year,” CBRE head of research, New Zealand Zoltan Moricz says.&nbsp;</p><p>“As absorption dissipates and vacancy builds, especially in sectors exposed to higher relative volumes of new supply, the net result will be lower rental outcomes.&nbsp;&nbsp;</p><p>“The investment market has continued to see wide bid-ask spreads and very little trading.&nbsp;&nbsp;</p><p>“We expect that sales volumes will increase in 2023 with more motivated sellers coming to the market driven by the need for greater liquidity in light of debt financing pressures as higher interest rates flow on to lower interest cover ratios.”</p><div id="1O1STvoN7jqziKeD7gyEMM"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6jasv7yVeuAp0dGS9bIqa3/aa9b8c87dc2a87ad3fb24b49a67b5cac/4.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6jasv7yVeuAp0dGS9bIqa3/aa9b8c87dc2a87ad3fb24b49a67b5cac/4.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Visitor numbers to New Zealand have lifted significantly and will continue to do so.<br><br></span></div></div><p>The labour market softening is forecast to be mild in the context of previous cycles with unemployment expected to stay below 5 per cent.&nbsp;&nbsp;</p><p>“The post-pandemic recovery in tourism is continuing apace. International tourist numbers have climbed rapidly since the border reopened with 161,000 visitor arrivals in October, 57 per cent of the pre-pandemic norm for the month.&nbsp;&nbsp;</p><p>“The resulting lift in services exports will be an important boost to demand, helping to fill the void left by the pullback in consumer spending. Migration is also starting to turn positive.”&nbsp;</p><h2>Office, retail and industrial market&nbsp;</h2><p><br>“The office market here is following the trends seen in Australia in particular,” Huggins says.&nbsp;</p><p>“The volume of office transactions is focused on the good quality stock and revolve around new ways of working to suit the work-life balance trend.&nbsp;</p><p>“Companies are resizing and looking for efficiencies, utilising shared spaces and tenancy movement continues at a reasonable pace.</p><p>“However, investments in offices are beginning to slow with the level of business confidence being estimated as the lowest in 50 years having an impact.&nbsp;</p><p>“The outlook is variable and probably too uncertain for us to estimate yields as we navigate through the inflationary pressures and reserve bank reaction.”</p><div id="557EPTd3hC7aVgbFRYOMs8"><picture><img src="//images.ctfassets.net/8pr762qjocl3/10OeH7eGZlXXGkMWT1s1u0/4c98affdf4165de3e161abb9ad316d57/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/10OeH7eGZlXXGkMWT1s1u0/4c98affdf4165de3e161abb9ad316d57/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Office blocks in Wellington: the office sector has mirrored the Australian experience of the past few years.<br><br></span></div></div><p>The industrial market has been performing strongly with stock now at a premium.</p><p>“There is a low supply of new high-quality industrial developments,” Huggins says.&nbsp;</p><p>“The main challenge has been finding suitable options to offer at reasonable terms, especially in leasing.&nbsp;</p><p>“Leasing yields are increasing due to shortages and high demands, and as a reaction to the pending inflationary costs.&nbsp;</p><p>“Furthermore, some landlords have provided concessions through Covid to tenants and now are making adjustments to pricing.&nbsp;</p><p>“We probably expect that investment in industrial will continue with steady yields as demand is there.&nbsp;</p><p>“Joint office/industrial space is very attractive and development areas are still an option here as you are likely to be able to get the right returns.”</p><p>The retail sector, which has been a relatively strong performer, is bound to be hit by the continued rise in inflation and interest rates.&nbsp;</p><p>The pressure on retailers to continue to sell at high volumes as consumer spending reclines will come to a head in 2023.&nbsp;</p><div id="3DVCBrtpVppX7TgbeauqGK"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7lfMUQjeptzkAcUmBXYmJw/62bfa077ee7d3ee20a402cfb2d330514/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7lfMUQjeptzkAcUmBXYmJw/62bfa077ee7d3ee20a402cfb2d330514/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Negative sentiment in the housing sector will flow through into retail.<br><br></span></div></div><p>“The retail market generally performed well over the past couple of years but 2023 will be a big test for the sector,” Bullick says.&nbsp;</p><p>“Negative sentiment caused by declining house prices and less discretionary income availability will have a big impact on retail sales and in turn, non-discretionary retail centres.&nbsp;</p><p>“Active asset managers will be ahead of this curve either repositioning or repurposing vacant space.&nbsp;</p><p>“I still believe convenience retail—supermarket anchored—will perform well; however leases terms will dictate how well.”</p><h2>Looking ahead</h2><p><br>Most property analysts are predicting a better 2024 than 2023 as the government prioritises stifling inflation combined with interest rates peaking this year.&nbsp;</p><p>It will be a difficult year to manage monetary policy, especially given the nation is due to go to the polls in October, with current prime minister Jacinta Adern last week indicating she will stand down next month, but there is light at the end of the tunnel.</p><p>“While household budgets are under pressure and consumption is forecast to moderate in 2023, corporate balance sheets remain strong,” Moricz says.</p><p>“Firms have generally built-up cash reserves during the past two years and many larger corporations also took advantage of low rates and the quantitative easing during the pandemic to refinance their debt and lengthen its maturity.</p><p>“This will delay the speed at which higher market interest rates are reflected in debt service burdens.”<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Soaring inflation, a residential market in free fall, an indifferent office sector—things are far from rosy for New Zealand’s property industry. Long considered a bellwether for Australia, we look at what's ahead for Aortearoa…

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<p>Money talks. And in a housing downturn it is the high net-worth individuals and private equity that will keep the market afloat in 2023.&nbsp;</p><p>Investor home loan commitments dipped 28.3 per cent in 2022, but economists are predicting their resurgence in the year ahead as market fundamentals ripen.</p><p>Speaking at <em>The Urban Developer’s</em> Sydney Economic and Property Outlook event, KPMG chief economist Dr Brendan Rynne said investors would rise again in housing as interest rates bite.</p><p>“A third of the population own a home and have a mortgage, a third of the population own a home and don’t have a mortgage, and a third of the population rent privately or through the government,” Rynne says.</p><p>“Who feels it first is those with a mortgage and then it’s renters, but that’s delayed because it’s only when a new lease is struck that rent goes up.&nbsp;</p><p>“And then arguably those that own a home are the safest. They are on the opposite side of the coin and probably benefit from higher interest rates because they’ve probably got savings.”</p><p>There are some 80,000 fixed-rate mortgages worth about $370 billion that are due to be unwound this year and it signals a rocky time ahead for Australia’s economy, according to Rynne.&nbsp;</p><p>“The average mortgage rate of outstanding three-year loans that are current as at the end of January, the differential between that and the new variable mortgage rates is 2.75 per cent,” he said.&nbsp;</p><div id="4qDFaFOLBmAKcZyuc4OcFg"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6N6xMhyuIRqzyOqwdRtLTw/bd74f3bbecd019bf1be757c5bb4ed009/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6N6xMhyuIRqzyOqwdRtLTw/bd74f3bbecd019bf1be757c5bb4ed009/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ KPMG chief economist Dr Brendan Rynne speaking at <em>The Urban Developer’s</em> Sydney Economic and Property Outlook event.<br><br></span></div></div><p>“Household interest payments are going to rise to be 11 per cent of the household income. That’s going to push households hard.&nbsp;</p><p>“While technically it’s not going to be a recession … it’s going to feel like one. We have the highest level of inflation for at least 30 years.&nbsp;</p><p>“Interest rates is the primary weapon we’ve got, we’ve seen nine consecutive cash-rate increases. It’s the highest rate we’ve had since about 2012. Arguably we’ve kept it down for too long, we have stimulated the economy too much.”</p><p>The private rental market is continuing to grow as investors see plenty of upside across Australia in property upswings, with investors focusing on Sydney, Melbourne and Brisbane.</p><p>Property Council of Australia’s newly annointed chief executive, Mike Zorbas, says supply and housing choice are key to putting downward pressure on house price growth and rent prices.&nbsp;</p><p>“The fundamentals of the Australian economy are continuing to hold up in the first few months of the year and skilled migration is rising but interest rates will dominate most people’s short-term approach to the housing market,” Zorbas says.</p><p>“The balance for the RBA will be managing inflation down without over cooling the market and making future housing supply harder to smoothly plan for.</p><div id="45YNAtMbWZyz5zSmTsugS4"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1uD0ELWNWPgRZSrDV0c0Cv/2b0f2e793ce16496924881bfdc060013/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1uD0ELWNWPgRZSrDV0c0Cv/2b0f2e793ce16496924881bfdc060013/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Property Council of Australia chief executive Mike Zorbas. <br><br></span></div></div><p>“I can’t say this enough—supply and choice are essential to meet the needs of our growing population. Every extra house or apartment built puts downward pressure on the cost of buying or renting a home in that market.”</p><p>About 80 per cent of Australia’s residential rental properties are owned by private landlords, a trend that REIA president Hayden Groves says is not likely to shift.&nbsp;</p><p>“Secure income remains a key component of attracting investment and residential real estate traditionally enjoys prolonged periods of sustained income and low vacancies,” Groves says.&nbsp;</p><p>“As populations grow, demand for housing comes with it, ensuring investors with a long-term view a strong prospect of capital gain in a favourable tax environment. Having said that, real estate is not exclusive to one group. We encourage investment in Australia’s houses and buildings unequivocally be it mum-and-dad investors, foreign investors, and institutional investors.&nbsp;<br>&nbsp;<br>“However, private investors make up the absolute lion’s share of the market, something not likely to change anytime soon. Through our membership we manage a combined $3 trillion in property assets that are part of Australia’s residential rental pool.”</p><p>Nearly 3 million Australian households, about 31 per cent, are renters—26 per cent are renting from private landlords and 3 per cent are renting from state or territory housing authorities, according to the National Housing Finance and Investment Corporation December 2022 figures.</p><p>Rent rates are increasing after being affected by the global pandemic. Across Australia the increases have hit double figure percentages and there are no signs of that abating.</p><div id="7MdS4A69TxxcPhObaaY69F"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3SPy021jFLZVy26umS1SBD/a60e81aabac1160c7669e6b44b0bb11e/4.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/3SPy021jFLZVy26umS1SBD/a60e81aabac1160c7669e6b44b0bb11e/4.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Corelogic head of research Eliza Owen: lockdowns led to renters spreading out across the housing market.<br><br></span></div></div><p>“For the combined capital cities, rent values are up 10.9 per cent across all home types,” CoreLogic head of research Eliza Owen says.&nbsp;</p><p>“This includes a 9.5 per cent lift across house rents and a more acute rise of 14.2 per cent across capital city unit rents.</p><p>“In Melbourne and Brisbane, annual rent growth is just passing through record highs, while annual rent growth in the Sydney home market is currently at a record high of 11.5 per cent.</p><p>“In the Sydney market this has more recently been driven by unit rents, while growth in house rents has started to ease. The unit rental market experienced the highest uplift in Sydney, where rents have increased 15.9 per cent in the past year. Brisbane had the highest uplift in house rents of the capital city markets at 12.5 per cent.”</p><p>Owen says it seems lockdowns led to the breakup of a lot of share-house arrangements and renters in particular ‘spread out’ across the housing market.</p><p>“The RBA estimated that through lockdown periods, this led to higher absorption of housing stock, and added to housing demand to the volume of about 140,000 dwellings. The phenomenon tightened the rental market and reduced the available rental stock on the market,” she says</p><p>While economists predict a further three cash rate rises this year, there is no denying it’s a landlord’s paradise in 2023.<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Money talks. And in a housing downturn it is the high net-worth individuals and private equity that will keep the market afloat in 2023. 

Investor home loan commitments dipped 28.3 per cent in 2022, but economists are predicting their resurgence in the year ahead as market fundamentals ripen.

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<p>Rents are rising and the bums are on seats as coworking spaces become the favourite in the back-to-office stakes.</p><p>While the national office vacancy rate is increasing slightly in the main markets of Sydney and Melbourne, the popularity of coworking is bounding ahead.</p><p>The Australian Flexible Office Space Report released by Rubberdesk in March revealed requests hit a peak in March from businesses in the sub-150 staff category.</p><p>Furthermore, prices for desks in Melbourne, Brisbane, Adelaide, and Canberra all experienced quarter-by-quarter increases of 5 per cent or higher, while Sydney remained steady.</p><p>The addition of a coworking space in CBD office towers is a winning move, according to tenant advisory director at Collier’s Justin Lam.</p><p>“The importance of flexibility and added amenity in buildings is critical for tenant requirements, as the workforce is looking for better quality workspaces than their home offices,” Lam says.</p><p>“By having a third space operator in the building, landlords, owners and prospective buyers of office assets in turn are able to capture a wider tenant pool, as their asset offers meeting rooms, event spaces and offices on demand to cater for tenant needs.</p><p>“Coworking spaces/third spaces are an important piece to the makeup of a building stack.<span style="opacity: 0.8;" data-mce-style="opacity: 0.8;"><br></span></p><div id="6kYoHRB3CazPFTJrvAxX4k"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2cgrGgiKhZm1y8mEhaFwPv/a9fb2adcaa34c748f4b062d0fe3a00b3/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2cgrGgiKhZm1y8mEhaFwPv/a9fb2adcaa34c748f4b062d0fe3a00b3/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Inside The Commons coworking space at 388 George Street, Sydney (<em>also pictured top</em>).<br><br></span></div></div><p>“Tenants are demanding more flexibility and amenity in offices as the ‘flight to experience’ (amenity plus quality) trend continues.”</p><p>Lam says the long-heralded flight to quality for office space was the reality of today, and that includes coworking spaces.</p><p>“Despite the Melbourne CBD vacancy rate being 13.8 per cent, there has been a split in the market, with prime grade options leasing well and B-grade options falling behind,” he says.</p><p>“Similarly, in the coworking sector, higher-grade, quality, well-located offerings continue to lease well, whereas secondary coworking spaces are not performing to the same level.</p><p>“Most operators with newer and high-quality spaces are experiencing high occupancy levels which demonstrates the strength of the market.”</p><p>Rents, however, are increasing with the report saying that larger offices for teams of 50 or more staff had a 23 per cent rate increase across the second half of 2022.</p><p>Sydney CBD costs now sit at $958 a desk, however, in North Sydney this price drops dramatically to a price range between $550 to $600 a desk, though there are some offering as low as $400 a desk.</p><p>The amount of flexible office spaced in Sydney increased by 15.5 per cent quarter on quarter.</p><div id="3KsOYKzM1RAI0J4UuWF1hb"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4tqwPZDInSMxCs1BjFyAwT/1fda2e58dde532f861f699b842b5636f/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4tqwPZDInSMxCs1BjFyAwT/1fda2e58dde532f861f699b842b5636f/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The Commons George Street in the Sydney CBD.<br><br> </span></div></div><p>“Sydney has the strongest demand for coworking spaces, which has been partly driven by the demand from large enterprise clients seeking to relocate and downsize post-pandemic, as well as a quick recovery for their CBD,” co-director and founder of The Commons, a coworking space provider, Cliff Ho says.</p><p>“Melbourne coworking spaces are also performing well and are fully occupied.</p><p>“Coworking is becoming more popular in Brisbane, Adelaide, and Perth, but the demand is not yet as high as in Sydney and Melbourne.</p><p>“Throughout the peak of Covid, we remained very confident in the future of coworking in Australia.</p><p>“We signed four new deals during the pandemic because we had complete faith in the post-pandemic growth of the sector.</p><p>“Our confidence has paid off as we are currently experiencing waitlists for offices in most of our locations and have had a significant increase in membership enquiries this year.</p><p>“Across the sector, strong demand for flexibility has resulted in higher overall occupancy rates.”</p><p>The Commons’ new sites include a $13-million flagship Sydney CBD location at 388 George Street, which offers 50-person office suites complete with private kitchenettes and meeting rooms.<a href="//images.ctfassets.net/8pr762qjocl3/5GimMQfLl0ZVqJNOxjSb5W/6867df1ccd1d90428104e631ac49062b/1.jpg" target="_blank" rel="noopener" data-mce-href="//images.ctfassets.net/8pr762qjocl3/5GimMQfLl0ZVqJNOxjSb5W/6867df1ccd1d90428104e631ac49062b/1.jpg"></a></p><div id="3UqwKpOawiMxBDyD1zTexi"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5GimMQfLl0ZVqJNOxjSb5W/6867df1ccd1d90428104e631ac49062b/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5GimMQfLl0ZVqJNOxjSb5W/6867df1ccd1d90428104e631ac49062b/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The cafe in The Commons Surry Hills.<br><br> </span></div></div><p>An additional floor opened at George Street in March, taking The Commons’ footprint in the building to 5100sq m and adding capacity for 262 new members.</p><p>The Commons had more than 500 membership and event space inquiries in January this year, a 71 per cent increase year on year.</p><p>And Australia is in a better space than the US market, Ho says.</p><p>“Our work-life balance is better, and Australians value coming into the office and collaborating, which has helped to boost the demand for coworking spaces,” Ho says.</p><p>“Australia also offers a greater range of smaller coworking spaces that are tailored to their local community, which helps draw staff back into the office with spaces that truly suit their individual needs.”</p><p>Coworking spaces are also expected to start specialising into specific segments such as coworking for parents and creative coworking, allowing greater marketing potential, while expanding target reach.</p><p>“The future of coworking is like that of hotels—there will be different brands and styles, and not one brand will fit all businesses,” Ho says.</p><p>“I expect we’ll see continued strong demand from larger companies seeking to downsize.</p><p>“One of the many benefits of coworking spaces is their ability to quickly adapt to market demands, and they will continue to be flexible to meet the changing needs of businesses of all sizes.”<br><br></p><hr><p><br><strong>You are currently experiencing <em>The Urban Developer </em>Plus (TUD+), our premium membership for property professionals. <a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans">Click here to learn more.</a></strong></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture><div><br></div></div><p><br></p><p><br></p>

Rents are rising and the bums are on seats as coworking spaces become the favourite in the back-to-office stakes…

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<p>While housing markets around the country head into negative territory, Toowoomba’s continues to rise on the back of an ‘infrastructure boom’ that has pushed its population up by 20 per cent over the past decade and a half.</p><p>This confidence is borne out by CoreLogic’s latest Regional Market Update, released in August, which shows that houses in the inland city, about 130km west of Brisbane, have increased in value by more than 20 per cent in the past year and are selling quicker than anywhere else in regional Australia, at 12 days on the market.</p><p>“Toowoomba has been in the midst of an infrastructure boom over the past decade with the second range crossing, the Wellcamp Airport, business park and the inland rail all being built or in progress,” LJ Hooker Toowoomba principal Mike Stewart says.</p><p>“Subsequently, there’s been heightened demand for property and that’s underpinned growth in property prices. Toowoomba’s real estate market is significantly undersupplied. Over the next three years we’ll see around 2000 homesites added to the market across the region.”</p><p>It is a combination of the affordable housing, quality schools, first-class medical facilities and amenable weather that is attracting Australians to the region.</p><p>The past two years have provided favourable conditions for the farming sector too. Small crop production still faces challenges but cattle and grain production have been healthy.</p><p>“Toowoomba is a milder climate and offers a lifestyle that’s comparatively affordable—entry-level four-bedroom, two-bathroom homes begin at around $550,000—while still having quality schools, the well-resourced University of Southern Queensland, and shopping centres including Grand Central, which houses Myer and many national retailers,” Stewart says.</p><p>“In the rental market, the vacancy rate is circa 0.1 per cent. Rents for investors have been going up an average of 10 per cent and as high as 15 to 18 per cent over a 12-month period for highly sought-after properties.”</p><h2>Competitive housing market</h2><p><br>The rental housing market is only going to get more competitive.</p><p>“With the lack of rentals, more first home-owners have entered the market, who had to compete with the local and non-local investors,” CBRE senior valuer Joseph Kelly says.&nbsp;</p><div id="5ymxWNFU3HFIU404XNzMjj"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5cHwpO9zT5mgbniKWKD7ZU/ca0b26b0a8f4bb2bb06ef101ad662db7/1.jpg" alt="Toowoomba’s iconic Empire Theatre. A theatre has been on the site since 1911—it underwent a rebuilt in the 1930s and was reopened after renovations in 1997." data-mce-src="//images.ctfassets.net/8pr762qjocl3/5cHwpO9zT5mgbniKWKD7ZU/ca0b26b0a8f4bb2bb06ef101ad662db7/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Toowoomba’s iconic Empire Theatre. A theatre has been on the site since 1911—it underwent a rebuild in the 1930s and was reopened after renovations in 1997.<br><br></span></div></div><p>Entry level properties can still be found for less than $400,000, Kelly says, although this is expected to rise as non-local investors enter the market. He says the rental shortage has also seen a significant rise in rents, which has increased yields.</p><p>“With the lack of land, the council is intending on increasing medium-density housing for the city, which may be positive if done correctly in the right location, where services are available such as schools, shops and transport.”</p><h2>The impact of Inland Rail</h2><p><br>The <a data-mce-href="https://www.theurbandeveloper.com/articles/webuild-infrastructure-project-upsurge-drives-growth" href="https://www.theurbandeveloper.com/articles/webuild-infrastructure-project-upsurge-drives-growth" target="_blank" rel="noopener">Inland Rail development </a>will have a big impact upon Toowoomba. The 28km Gowrie-to-Helidon section includes constructing a new track through the Toowoomba and Lockyer Valley region and building a vast freight tunnel.</p><p>The new dual gauge track will include several significant viaducts and cuttings designed to create an efficient route through the steep terrain.</p><p>A 6.2km tunnel will be built through the Toowoomba Range, making it the largest-diameter diesel freight tunnel in the southern hemisphere.</p><p>“The Inland Rail will circle around the city’s north, near the airport, and will employ 1200 people locally during construction,” Stewart says.</p><p>“Industrial land in Toowoomba is a third of the price of what you’d get in Brisbane. Here, you’re looking at $120 to $130 per square metre for 2ha sites.”</p><p>He says another major infrastructure project is the $1.3-billion Toowoomba Public Hospital, which will be located at Baillie Henderson campus in the city’s north. The existing hospital will be repurposed as a major health hub for day surgery, education, training and other affiliated uses.</p><div id="54lyN55QIPWhbDe4wP48NM"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6KpvyMpUwU4MocJ6w4gwZ4/154fdbdc05beac558ff78e37e628b322/3.jpg" alt="The Wagner-Corporation-owned Wellcamp airport near Toowoomba." data-mce-src="//images.ctfassets.net/8pr762qjocl3/6KpvyMpUwU4MocJ6w4gwZ4/154fdbdc05beac558ff78e37e628b322/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The Wagner-Corporation-owned Wellcamp airport near Toowoomba.<br><br></span></div></div><p>Toowoomba is also set to have one of the world’s largest medicinal cannabis facilities. Now under construction on a 75ha site in Wellcamp, it includes a 40ha glasshouse facility.</p><p>Stewart says that after a prolonged drought, the past two years have provided favourable conditions for the farming sector.&nbsp;</p><p>“Small-crop production still faces challenges but cattle and grain production has been healthy,” he says.</p><p>The construction of the <a data-mce-href="https://www.theurbandeveloper.com/articles/boeing-aerospace-precinct-wellcamp-wagner" href="https://www.theurbandeveloper.com/articles/boeing-aerospace-precinct-wellcamp-wagner" target="_blank" rel="noopener">privately owned Toowoomba Wellcamp Airport</a> by the Wagner family in 2014 has certainly helped business and contributed to population growth. It now has international weekly flights being operated by Singapore Airlines and Cathay Pacific.</p><p>It also has daily passenger flights to Sydney, Melbourne, North Queensland and also takes produce from the Lockyer Valley, Southern and Western Downs and Moree Plains to Asian markets.</p><p>“Boeing has set up an assembly facility here, which is the first ‘final assembly’ facility for it outside of North America; Schlumberger established themselves out of the Wellcamp Business Park, adjacent to the airport; Russell Mineral Equipment is also based out at Glenvale,” Stewart says.</p><h2>Growing from within</h2><p><br>Newlands is one local company that has benefited enormously from the state and federal government investment in the region.</p><p>Established in 2001, the privately owned Australian company specialises in design and construction services for civil, essential services (water and sewer), mining and commercial sectors.</p><div id="1sUyOGZ4Er8pxKZYxoEhaU"><picture><img src="//images.ctfassets.net/8pr762qjocl3/GIZHa2V9qMESXtCYGaN23/bab550fa74bf900c60f715d22c448d49/inland_rail_toowoomba.jpg" alt="The 28km Gowrie-to-Helidon section of the Inland Rail development includes constructing a new track through the Toowoomba and Lockyer Valley region." data-mce-src="//images.ctfassets.net/8pr762qjocl3/GIZHa2V9qMESXtCYGaN23/bab550fa74bf900c60f715d22c448d49/inland_rail_toowoomba.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The 28km Gowrie-to-Helidon section of the Inland Rail development includes constructing a new track through the Toowoomba and Lockyer Valley region.<br><br></span></div></div><p>“We are currently working on the Inland Rail project and we have a pretty full book for the next 12 months,” Newlands design manager Ashley Milner says.</p><p>“We have seen unprecedented growth in the past few years with no signs of that abating. There is so much infrastructure development going on here across a range of sectors such as agriculture, medical and transport and that, combined with the local airport, means people are confident to invest and live in Toowoomba.”</p><p>The Australian Bureau of Statistics puts the official population at 175,316 as of June 30, 2021, a steady increase of 20 per cent from the 145,992 recorded at June 30, 2006.</p><p>“The Queensland Government Statistician Office medium series projections identify population growth to 2051 to be in the order of 57,000 additional residents and 30,000 jobs,” Toowoomba Regional Council mayor Paul Antonio says.</p><p>“While this is substantial growth for the region, council has laid the platform to cater for this growth.”</p><p>He says few regional centres in Australia can point to more than $800 million in private and public investment in their city centre over the past decade.</p><p>“The combination of these major projects, the booming agricultural sector mixed with our growing health and education industries, makes Toowoomba one of the nation’s most diverse economies which is the envy of communities throughout Australia.</p><p>“Toowoomba has a promising and sustainable development pipeline which is consistent with long-term sustainable growth.”<br><br></p><hr><h2><br>Council investments</h2><div id="55WDWey45FSdILcvBsfGoD"><br><picture><img src="//images.ctfassets.net/8pr762qjocl3/56SIMxZA7GNW5qcmX1q1o5/52663a654b60c8c20b056d4c54f007ab/soldiersmem_hall_toowoo.jpeg" alt="Soldiers Memorial Hall Toowoomba" data-mce-src="//images.ctfassets.net/8pr762qjocl3/56SIMxZA7GNW5qcmX1q1o5/52663a654b60c8c20b056d4c54f007ab/soldiersmem_hall_toowoo.jpeg"></picture><div><br></div></div><p>The Toowoomba Regional Council has a number of&nbsp; projects in the pipeline including:</p><p><strong>Railway Parklands:</strong> with a $25-million funding pledge through the City Deal (three levels of government).</p><p><strong>Charlton Sports Precinct:</strong> Council has endorsed a business case and master plan for seven stages of precinct development over 20 years. The total cost of the project is estimated at $197 million.</p><p><strong>Highfields Library:</strong> The new library, customer service centre and community meeting facility at O’Brien Road is on track to open in September. The current facility supports 52,600 visitors annually.</p><p><strong>Central Highfields:</strong> a masterplan is developing appropriate retail, commercial and industrial uses for the future town centre and private-sector investment opportunities.</p><p><strong>Toowoomba CBD:</strong> Russell Street refresh stage 1 completion; stage 2 under construction and expected completion in November.</p><p><strong>Water projects:</strong> Mt Kynoch Water Treatment Plant upgrade is progressing. Other water main upgrades; trunk sewer upgrades; wastewater treatment plant upgrades; the commissioning of the new water treatment plant at Clifton and waste facility upgrades across the region.</p><p><strong>RSL Soldiers’ Memorial Hall, Toowoomba:</strong> the $4.4-million upgrade jointly funded by the federal government and council is scheduled to open soon.&nbsp;<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.&nbsp;</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Few regional centres can boast the level of investment that’s been pouring in during the past decade, but there’s more to Toowoomba’s growth than just that…

After a 40-year career in hotels, none of the fire has gone out of Geoff York as he leads the Crystalbrook Collection’s expansion in Australia and beyond.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>At his 21st birthday, Crystalbrook chief executive Geoff York was doing something unusual—he was serving other people food and drinks.</p><p>But that wasn’t the unusual part of his landmark birthday—York was living and working in South Africa, earning a whopping 30 rand (about A$3) a month to gain invaluable work experience for his catering and hotel management degree back in Victoria.</p><p>“I was keen to see the world. I had read a lot of Wilbur Smith books and thought Africa looked interesting.” York said. </p><p>“So, I wrote to the Southern Suns Hotel group in South Africa seeking an opportunity. They wrote back and away I went.</p><p>“It was probably the best experience of my life. They were a big hotel group and I moved all around, working in Johannesburg, Eastern Transvaal (Mpumalanga) and Durban among other cities. </p><p>“They were a progressive hotel group and I learnt a lot. More importantly, it confirmed to me that I wanted to be in the hospitality sector.”</p><p>It was the late 1970s when York made his decision to travel to South Africa, a time before the internet, and the 24-7 TV and radio news cycle, so York made his decision based on what we would consider today to be limited information. </p><p>“I think life is all about gaining new experiences and that certainly gave me the impetus to work in an industry where that option was always going to be available,” York said. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/7a1e3e57-c206-4659-8733-a0679028e25c.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ A hotel guy: Crystalbrook chief executive Geoff York.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>When York returned to Australia, he finished his degree at the then Victoria University and then set about working his way up through the hotel management chain with groups such as Sofitel and Accor.</p><p>He is  now the chief executive officer of Crystalbrook Collection Hotels and Resorts, a boutique hotel ownership group, backed by Syrian billionaire <a href="https://www.theurbandeveloper.com/articles/ghassan-aboud-byron-bay-resort-spa">Ghassan Aboud</a>, that has been rapidly expanding its portfolio.</p><p>“I am a hotel guy,” York said. “I have worked around the world and have now moved on from day-to-day management to growing hotel brands.</p><p>“I spent four years building the Atura and Eventhouse hotel brands and now have created the Crystalbrook Collection Hotels and Resorts group name from scratch, with seven hotels and more to be purchased in the near future.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/01d60458-e586-4a49-b8a1-2f0ab00579f4.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ The Riley in Cairns—Crystalbrook began in Cairns and has since spread along Australia’s east coast.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The UAE-based Aboud has ambitions to spread the group’s influence into the mainstream hotel market in the lucrative Sydney and Melbourne CBD markets.</p><p>Aboud has unlimited funds to invest and is keen on a new model of ownership in the hotel game. He doesn’t want to just be a tenant, he wants to own the land, the building, the name and everything associated with every hotel that the Crystalbrook Collection group buys.</p><p>“Aboud initially wanted to buy existing hotels and give them to other people to run,” York said.</p><p>“But upon reflection he didn’t want people telling him how to run his hotels. So, he decided to own everything and to initially focus on upmarket boutique hotels on the Australian east coast before expanding into more mainstream CBD locations.”</p><p>The Crystalbrook Collection group currently owns hotels in Cairns, <a href="https://www.theurbandeveloper.com/articles/newcastle-gets-its-first-five-star-hotel">Newcastle</a>, Port Douglas, <a href="https://www.theurbandeveloper.com/articles/ghassan-aboud-byron-bay-resort-spa">Byron Bay</a>, <a href="https://www.theurbandeveloper.com/articles/fantauzzo-sale-solidifies-brisbanes-hotel-position">Brisbane</a> and Sydney.</p><p>“I joined around the time when decisions were made to build three hotels in Cairns,” York said. </p><p>“We have always said we were starting in Cairns but not finishing there.</p><p>“I was in a position to influence this change. My motivation was to build something. I have had a 40-year stint in hotels and I would like to think that I haven’t had 40 one-year stints repeated.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/10e4d580-347d-4f78-88bb-882d716bb097.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ Crystalbrook Albion is the company’s first Sydney property.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>York says that Aboud hadn’t been to Australia for almost three years but is planning a visit in 2022 and that the pair talk regularly.</p><p>“We keep him proactively informed on what is happening. Back in 2017 we had nothing and now we have an $800-million investment of 1300 rooms a night to fill. We are small but substantial,” he said.</p><p>“We have a heavy proportion of our portfolio in Cairns but now we are balancing out with capital city locations. We are keen to purchase assets in the key markets of Sydney and Melbourne—they are where the big-demand hotels are.</p><p>“We bought the 35-room Albion Hotel a few years ago with to give us a foothold in the Sydney market.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Sustainability a focus</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The Crystalbrook point of difference extends to design, technology and focus on sustainability. </p><p>All of its hotels embrace a mantra of “responsible luxury” with an emphasis on environmental change to enhance guest experiences, York said.</p><p>“Sustainability is important to me,” he said. </p><p>“We are leading conversations—ours is an industry that has to consider its environmental footprint. </p><p>“For example, we have removed single-use plastics from our properties. Our room keys are discs made of recycled timber with a microchip embedded in them. </p><p>“We don’t have plastic bottled water, we use recycled cardboard. We don’t have those small bottles of shampoo and conditioner, we use pump packs—we led the charge in doing that. </p><p>“Our coat hangers are recycled cardboard and there is no paper in the guest rooms. We have iPads and other electronics everywhere. We have solar in the hotels. We are truly environmentally friendly.</p><p>“I would love to see other hotels doing what we do because it would have a more meaningful impact.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/a1dc32a0-b2c8-4c6e-a8f1-5db7fb20f689.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ The Vincent, Crystalbrooks’ hotel in Brisbane, was opened last year.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Of the future, York said he was keen to buy more hotels in Sydney and Melbourne to give the group a more prominent presence in Australia, as well as establishing itself as the premier boutique hotel group in the country.</p><p>“Our expansion plan is to acquire hotels in Sydney, Melbourne Auckland and Queenstown,” York said.</p><p>“This will either be via direct acquisition or hotel management acquisition.</p><p>“We don’t mind either but we will only buy when the price is right and it makes commercial sense to do so.</p><p>“We are in this for the long run so we are prepared to wait and negotiate until we have agreed on a price that is palatable.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

After a 40-year career in hotels, none of the fire has gone out of Geoff York as he leads the Crystalbrook Collection’s expansion...

A reduction of less than 5 per cent to the overall area of a lot may entitle a buyer to rescind an off-the-plan contract. What will this mean for off-the-plan contracts and development financing risk going forward? 

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A recent Victorian Supreme Court decision ruling in favour of purchasers of an off-the-plan residential development has caused unrest among developers.</p><p>The decision found that a variation in the size of a lot, less than the 5 per cent tolerance rule, materially affected the lot in question—entitling the buyer to rescind an off-the-plan contract.</p><p>“I think the 5 per cent tolerance rule is fundamentally misunderstood,” SLF Lawyers property partner Brendan Hoogenbosch says. </p><p>“Firstly, it isn’t a rule. The purported rule is distilled from the courts comments in Buckley v Drk, which favoured 5 per cent as opposed to 2 per cent or 10 per cent, but the court ultimately determined the matter on an objective basis.”</p><p>SLF Lawyers represented the plaintiffs Sylvain Jean-Marie Taupenas and Edwin Alvarez Velasquez against the defendants, Longboat Holdings.</p><p>“In our matter, the defendants relied on Birch v Robek &amp; Anor, which referred to Buckley and its application in respect of a suburban allotment of approximately 700sq m—but in the very next paragraph of Birch, the court noted that in smaller apartments, any difference in size could be expected to have a much larger impact.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Buyers rescind after 4.4pc amendment</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The case involved two similar off-the-plan contracts for residential apartments in West Footscray, Victoria. The purchasers sought to rescind the contract upon receiving an amended plan from the developer.</p><p>There were five changes reducing the lots by 4m, down to 91m from 95m, or 4.4 per cent.  The main issue from the plaintiffs was that the master bedrooms were reduced in size. </p><p>The other material issues raised by the plaintiffs, which the judge viewed in their favour, were the size of the light court (reduced from original plan), the creation of a council reserve (previously common property) and exclusion from common property.</p><p>On a material change to the size and location of one of the assigned car park spaces, the judge ruled in favour of the developer. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>The practicality of the 5pc rule</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“I think there is very little utility in the purported 5 per cent rule,” Hoogenbosch says. </p><p>“First, it appears to be void under section 14 of the <em>Sale of Land Act</em> 1962; second, the purported rule to the extent it can be relied upon does not apply to multi-storey apartment buildings—at best it applies to a regular suburban lot and even that is doubtful.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/c4fdd3e2-4f5b-478d-b01b-5730b794c266.jpeg" width="1322"/></picture><div><span style="align-content:center;opacity:0.8">▲ Longboat Holdings’ Eternity development at West Footscray: Two purchasers sought to rescind their contract upon receiving an amended plan from the developer.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“Third, these matters are always determined on an objective basis; and fourth, amendments to owners’ corporation common property, as in this case, and lot liability and entitlement, also in this case, have been held to materially affect the lot sold, even though those changes did not alter the boundaries or size of the lots in question—in these cases it is difficult to see how the 5 per cent rule could possibly apply.”</p><p>Purchasers have rights to rescind an off-the-plan contract under the <em>Sale of Land Act</em> 1962. This right comes into play where a change to the proposed plan of subdivision will materially affect the lot to be purchased.</p><p>The act requires vendors to notify purchasers in writing of amendments to the plan within 14 days of the amendments being made. A purchaser then has 14 days to rescind the contract if the amendments will materially affect the lot to be purchased.</p><p>“The issue is that amendments to the plans are often required—and all too often notification is not given,” Hoogenbosch says. </p><p>“This is because there is no penalty for failing to comply with the notification requirements, but there are risks that a developer will lose its sale if it does. In this case, notification of the amendments to the plan were known by our clients early on and we wrote to the developer about them, but formal notification of the amendment to the plan was not given until just before registration.</p><p>“The right to rescind is only enlivened after the notification of the amendment is given and as such the purchasers had to wait in order to exercise their rights to terminate. </p><p>“Had our clients been formally notified earlier, the vendor could have set about marketing the property prior to its completion and might have even been able to secure a further sale with settlement to occur on or about the same time as the rest of them.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Court decision ‘won’t change anything’</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>As for agents, they will continue to be the middle party in all the discussions.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/a3fa524c-2a0b-46d1-afb2-300d88144757.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Longboat Holdings’ Eternity development at West Footscray: Legal experts say the decision to end two buyers&#x27; contracts is only a positive for buyers.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“The court decision is good because purchasers know that the 5 per cent tolerance is not being taken advantage of,” Castran Gilbert director Michael Lang says. </p><p>“They know now they can get protection from the court system.</p><p>“But it also works for the developer in that it forces them to have a deeper consideration rather than carte blanche to work within 0 to 5 per cent tolerance rate.</p><p>“The reality is that it hasn’t changed anything. It is a case-by-case basis.”</p><p>Lang said the biggest issue was the lack of communication between the two parties and if they had initiated dialogue earlier then court action could probably have been avoided.</p><p>“It is better to say to the purchaser at the time that the plans may change, which may or may not have an effect on whether the sale goes ahead,” Lang said.</p><p>“It is how you prepare and how you frame it. You should never wait until the building is complete.</p><p>“If there is an issue there may be some way we can work it out.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Should developers be worried?</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>For developers, professional and clear communication with off-the-plan purchasers is essential, so there is no misinterpretation when it comes to the final plan.</p><p>Written communication clearly stating any changes is a must</p><p>“From a developer’s perspective my main view is that an issue you need to talk to the purchaser before it goes to court,” Oz Property Group director Raghav Goel says.</p><p>“The ruling is a wake-up call. The <em>Sale of Land Act</em> is continuously amended. I think the main change I can see is that developers and solicitors working together to ensure formal communication goes out.</p><p>“Plans change so it is about how that change is handled. Developers need to ask themselves what have they promised the purchaser? It is one thing to settle, another issue to make sure that they are happy.</p><p>“If the purchaser is not happy, it is not a good outcome.</p><p>“Dreams can change if plans change.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/62e11181-57af-4cb1-a2e5-e3f4b2d3dfcd.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Longboat Holdings’ Eternity: Oz Property Group director Raghav Goel says the ruling is a wake-up call.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><br><strong>The final word</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Developers need to be circumspect about making changes to plans and informing purchasers at the last minute. Early and clear communication will, hopefully, avoid court cases.</p><p>Hoogenbosch believes that the outcome is only a positive for buyers.</p><p>“I think that this is a positive move for off-the-pan sales and can only have a positive impact on confidence for buyers to enter into these type of contracts,” he says. </p><p>“As this matter showed, the inclusion of special conditions aimed at curtailing the rights of a purchaser to terminate the contract where a material change to the plan has been made are not enforceable at law.</p><p>“I don’t think you will see a removal of these types of conditions from contracts, as they can have a deterrent effect on a purchaser exercising their rights—but ultimately these conditions will not stand up should a purchaser pursue the matter.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a><strong></strong></p><p><strong></strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

A recent legal decision allowing buyers to rescind their contracts upon receiving an amendment plan has developers worried...

[+] Developers Eye Car Yards as Sector Shifts Gear

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>It comes as no surprise that two-thirds of Australians are buying their cars online due to convenience, perceived price benefits and ease of purchase.</p><p>Which leaves the question: what is the future of car yard real estate?</p><p>Australia is littered with car yards throughout its fringe CBDs and into the suburbs with popular streets such as Parramatta Road in Sydney “over-exhausted” with dealerships taking up valuable commercial property that have been almost vacant with foot traffic due to ongoing lockdowns during the past 18 months.</p><p>In Victoria, the situation has been even worse prompting numerous “off-market” inquiries into car yard sales with expression of interest campaigns launching with regular frequency.</p><p>“In the next 10 years most of the car yards in metropolitan Sydney and Melbourne will be redeveloped for commercial and residential use,” Charter Keck Cramer chairman Scott Keck says.</p><p>“This will be more appropriate development in alignment with the growing population of the states. Councils will come under pressure to rezone the land. Some car yards will move out of the city and inner city suburbs into regional Australia, where there will be more space.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cell-sm-3 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/27a03fd7-7d94-4dbb-bba9-e38cb6bbb884.jpg" width="1280"/></picture><div></div></div></div></div><div class="cell cell-sm-9 cx12"><div class="ci cl"><p><br><a href="https://www.theurbandeveloper.com/articles/carparks-asset-class-development-future"><strong>Future of Carpark Real Estate in Limbo</strong></a><br>What is the future of carparks in major cities globally? <em>The Urban Developer </em>investigates... </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“Car yards are quietly being displaced. I believe there are going to be more selling of vehicles through the internet, boutique presentation of vehicles such as shopping centres, as Tesla have done, and overall, I think there will be different marketing strategies to attract existing and new buyers of cars.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>New car sales slump</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>What is not aiding car yards is the drop in new car sales. There were 916,968 new vehicles sold in Australia 2020—a fall of nearly 14 per cent from 2019, making 2020 the softest year for new car sales since 2003. </p><p>Statistics from the Federal Chamber of Automotive Industries reveal that from 2017 new car sales in Australia have been declining. In April 2021, new car sales had plummeted 48.5 per cent year-on-year, the biggest decline in 30 years and the 25th consecutive month of plunging new car sales.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/ef7a476f-4d64-43e4-9846-b2611fc8223f.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ New car sales have slumped on the back of pandemic lockdowns and as consumers explore new ways to buy a vehicle.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>At the same time, used car sales rose significantly with record prices for second-hand cars. Consumers don’t feel the need to go to a car yard to buy a used car. </p><p>A poll conducted in unison by Bingle and Newspoll found that 64 per cent of Australians found buying a car online was a lot easier than dealing with a salesperson. Almost, 80 per cent of consumers believed they had saved money by purchasing online.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>An outdated model</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“The retailing of cars by traditional means of large showrooms and open air car yards is outdated, and on the verge of major disruption,” Savills CBD and metropolitan sales state director Clinton Baxter says.</p><p>“The notion of occupying a huge area of land in prime highway positions, millions of unused stock on site sitting for weeks or months in the elements, for just a few sales per week, is fast becoming an absurd business model.</p><p>“With pressure on land use in our major cities leading to rising land values, and hence rising occupancy costs such as land tax, car yard operators are now looking to other methods of selling cars and are vacating or selling sites and freeing them for redevelopment for alternate and better uses.”</p><p>New car companies such as Tesla have also taken a different approach to selling their vehicles, ignoring its competitors by not leasing or paying for vast sums of land but by marketing their vehicles cleverly online or in established areas of heavy foot traffic.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/26995770-f402-4483-b7f6-6007dc9263b8.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The steady rise of Tesla in Australia has shown consumers are not wedded to buying new cars from a dealer.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“Telsa has demonstrated that it can sell thousands of cars in the Australian market without a single traditional dealership,” Baxter says. </p><p>“Tesla uses regular-sized shops in major suburban shopping centres to introduce its product to the market. The rest of the purchase is done 100 per cent online, with delivery and service in non-prime industrial locations—not main highways.</p><p>“Even Eagers Automotive set up Carzoos in Brisbane, which was a little village, where customers could return a car within seven days if they didn’t like it—no questions asked.”</p><p>All cars in the Carzoos village came with a discounted no-haggle price, a 175,000 km warranty and 12-months free comprehensive motor vehicle insurance.</p><p>However, Eagers Automotive has now abandoned that concept and replaced it with Easyauto123—aiming to have 11 used car outlets by the end of the year.</p><p>Most car yard owners don’t want to admit publicly that their business model is in trouble. Many are quietly working behind the scenes to foster deals to sell land and hold less stock. After all, if the pandemic has emphasised to the general public one simple fact, it is that almost anything can be bought online and either delivered to your door or picked up.</p><p>The days of open-air car yards along our main roads are fast-becoming a thing of the past.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/a1e76fbb-9a69-4809-bffd-fe66f5e4d3d1.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ The days of the mega car yard seem numbered as consumers&#x27; habits change and the opportunity these prime sites present for redevelopment become too good to ignore.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“We are sticking true to our ‘hub and spoke’ dealership model, but that is not to say there is no change in the sector, with some manufacturers re-evaluating their distribution strategies,” Peter Warren Automotive Holdings chief executive Mark Weaver says.</p><p>“We firmly believe that this evolving strategy will rely on consumer experience centres, delivery centres and service hubs and hence lend themselves to multi-branded, highly cost effective locations such as our existing auto-mall concepts, which allow for the growth and contraction of individual brands from a single location or in close proximity.</p><p>“The pandemic has obviously touched every corner of the world and car manufacturing and supply chain distribution is certainly among them. This has driven some, in our opinion, fundamental changes to the way the automotive supply chain will manage inventory going forwards which will in turn lead to more customisation of cars.</p><p>“We’re in an online world now and consumers can customise their cars more than ever before.”</p><p>Not only that, but consumers can buy from wherever they want, changing the dynamic back in their favour.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Car yard sales in 2021:</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Sunbury Ford</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/f6dbbbcb-999f-4442-aaa2-ea9fa67e4a45.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Address: </strong>101-107 Horne Street, Sunbury<br><strong>Land:</strong> 4700sq m<br><strong>Lease:</strong> New 15-year lease at $500,000 per annum rental<br><strong>Price:</strong> $9.6 million<br><strong>Sale: </strong>Sold to Sydney-based investor</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Former Honda showroom and car display yard</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/36e02e68-8985-4ff2-9699-afa654404c0e.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Address:</strong> 1022-1028 Burwood Highway, Ferntree Gully<br><strong>Land:</strong> 3930sq m <br><strong>Lease:</strong> Vacant<br><strong>Price:</strong> $2.88 million ($734 per square metre)<br><strong>Zoning:</strong> Commercial 2 zoning<br><strong>Sale:</strong> Sold to a developer</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Former Honda showroom</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/c3858cd6-ece3-4c8a-8f81-073496dabdf2.jpg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Address:</strong> 85 Maroondah Highway, Ringwood<br><strong>Land:</strong> 2616sq m<br><strong>Lease:</strong> Vacant<br><strong>Zoning:</strong> Commercial 1 zone<br><strong>Price:</strong> $6.6 million ($2500 per square metre)<br><strong>Sale: </strong>Sold to a developer  </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Burwood Nissan</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/62ef18c4-ebc3-46c3-999a-7d70958bd7b3.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br><strong>Address: </strong>101 Burwood Highway, Burwood<br><strong>Land: </strong>3928sq m<br><strong>Lease: </strong>Leased at $552,000 p.a. to Autopact Group on a 3-year lease <br><strong>Zoning:</strong> Mixed-use <br><strong>Price:</strong> $10.9 million<br><strong>Sale: </strong>Bought by an investor</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

Card yards in metropolitan areas are already being sold off for redevelopment, with commercial and residential projects springing up...