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Childcare centres are proving to be hot property as growing government subsidies bolster elevating occupancy levels across the country.Transaction data reveals that 20 Australian childcare centres were sold between May and July this year.Prices ranged from $1.2 million for a facility in Perth to $14.9 million for a Sydney centre.Cushman &amp; Wakefield predicts that more centres will hit the market in the coming months.Research by the global commercial real estate services firm found that in 2022, $520 million in centres were traded, which was 30 per cent above pre-Covid averages of about $400 million.&nbsp;The research also reveals competition for quality locations has led to rents rising 47 per cent on average nationally during the past decade.&nbsp;“We’ve seen investment settle well above long-term averages after a bumper year in 2021,” Cushman &amp; Wakefield head of national investment sales Daniel Cullinane says.<div id="3Esz30xbtvJje9RGHFZjjX"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7p4z0CAaWAdE1vMa6N0iKy/ed4139a278b58a2d6ec5f93fb9f6293a/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7p4z0CAaWAdE1vMa6N0iKy/ed4139a278b58a2d6ec5f93fb9f6293a/2.jpg"></picture><div>▲ This centre, the Montessori Academy in Forest Hill, Melbourne, sold for $6.9 million, showing a yield of 5.1 per cent by Burgess Rawson. </div></div>“However, the drivers are shifting with investors targeting these asset’s recession-proof qualities that include stable long-term leases, rather than the hunt for yield that dominated the past few years.”Renewed government subsidies for operators and consumers, solid population growth, robust demand for childcare services nationally and the unemployment rate falling to 3.5 per cent amid rising cost of living pressures is fuelling strong interest in the sector from the market.&nbsp;<h2>Investor demand intensifies</h2> Burgess Rawson sold $43.5 million in early education centres in May as investor demand for this asset class continues to intensify.Meanwhile, Stonebridge listed $13 million in childcare assets in NSW, Victoria and Queensland in July, noting a heightened level of enquiry in long-term leased assets from Asian buyers.&nbsp;“Early education properties are predominantly sought after by high-net-worth investors seeking secure, long-term bricks and mortar assets,” Burgess Rawson director Michael Vanstone says.&nbsp;“The Federal government’s confirmation of additional childcare support only strengthens demand for this asset class”In Sydney, five childcare development-approved sites in the city’s west sold in 30 days by Ray White Commercial Western Sydney.Located at Rooty Hill, Bankstown, Guildford, Auburn and Toonagabbie, the sites sold for a combined $14.2 million.&nbsp;<div id="3TYoPgJEvXfEo9WYuxNQR0"><picture><img src="//images.ctfassets.net/8pr762qjocl3/68fOcGIoMVVBXT2sRCFioO/5d9bb0f90beba5db219c8ea985f4b13c/5.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/68fOcGIoMVVBXT2sRCFioO/5d9bb0f90beba5db219c8ea985f4b13c/5.jpg"></picture><div>▲ A render of the childcare centre approved for a site in Rooty Hill, NSW, one of five sold in a 30 days. </div></div>The sites were acquired by various childcare owner operators and represented a combined 421 approved places. The sites offered from 58 to 120 places.&nbsp;As well, a childcare centre in the inner city suburb of Rosebury sold after aggressive bidding for around $5 million.&nbsp;“Owner operators are keen to cut out the development approval and pay a premium for already approved sites that can start straight away,” Ray White Commercial Western Sydney director Joseph Assaf says.&nbsp;He confirmed that Ray White Commercial Western Sydney has transacted more than $74 million worth of property within the childcare sector to date.“Demand has been very strong, and that led to competitive bidding in the case of the Auburn and Toongabbie sites, which were sold at auction, while multiple offers were received for Rooty Hill, Guildford and Bankstown. including short settlement terms to secure the sites,” Assaf says.&nbsp;“Driven by the government’s strong support for the childcare sector and the coming increase in subsidies up to 90 per cent from July 2023, childcare operators are aggressively expanding their businesses to capitalise on the sustained demand.”<h2>Strong occupancies provide certainty&nbsp;</h2> Market analysts note that strong occupancy levels provide some certainty in returns over the longer term, despite difficult economic headwinds.&nbsp;“These assets are typically held in high regard by investors seeking well-maintained facilities, which can hedge against possible changes to the cost of finance, Ray White head of commercial research Vanessa Radar says.&nbsp;<div id="5L5BbHvGr7Ohod8LgKgKmo"><picture><img src="//images.ctfassets.net/8pr762qjocl3/28urok8w9f43v8h7xeytin/d4195049b8fc3abba8619350f6f40b33/6.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/28urok8w9f43v8h7xeytin/d4195049b8fc3abba8619350f6f40b33/6.jpg"></picture><div>▲ Ray White head of commercial research Vanessa Radar. </div></div>“Despite the elevated demand for these assets, location will remain key to ensure the long-term prosperity of the asset and its stable, ongoing income stream,”While transaction volumes for established assets are down, Radar points out that there has been there has been an uptick in development assets coming to market this year.“A combination of higher financing costs together with elevated building rates has put pressure on some developers and vendors, causing them to reconsider their future development plans,” she says.“The strong population growth experienced across the country has resulted in many of these developments able to secure pre-commitment tenants and leasing activity has seen improvement.”&nbsp;The future of the asset class looks bright, with research by Colliers showing demand for essential services including childcare only set to grow due to their better resilience to economic challenges.&nbsp;“The surge in demand for childcare services as a result of population growth and accessibility of childcare services has caught the attention of investors, who see potential for stable financial returns and profitability in well-run childcare centres,” Colliers Queensland Investment Services executive Sam Polichronis says.&nbsp;<div id="4FYf5NXqzqsYYDFzelbXma"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5xvp2fWz8oiuMmJyMFl3ta/889f9cfd5bbb84fc93d426e61a2cf44e/Mid_article_resizes__45_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5xvp2fWz8oiuMmJyMFl3ta/889f9cfd5bbb84fc93d426e61a2cf44e/Mid_article_resizes__45_.jpg"></picture><div>▲ This centre sold for $6.17 million on a 4.88 per cent yield in Rochedale South, 20km south of Brisbane. </div></div>So far in the Sunshine State this year, a childcare centre sold for $6.17 million for a 4.88 per cent yield in Rochedale South, south of Brisbane; while at Robina on the Gold Coast, a centre sold for $8.8 million for a 5.43 per cent yield, Polichronis confirmed.“With the economic slowing in 2023, sales volume remains low, but the market appears to be on track for a bigger year than in 2018 and 2019, with roughly $18 million in transactions changing hands in the first quarter of 2023,” he says.&nbsp; <hr> You are currently experiencing The Urban Developer 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><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>

Growing government subsidies are helping drive demand, pushing up prices as investor move their assets on and reap the reward… 

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Developers are frothing over the potential of Western Sydney suburbs, with unprecedented levels of stock in the pipeline.The region’s booming population is outstripping demand in Western Sydney and the pipeline needs to be rapidly advanced in order to meet <a href="https://www.theurbandeveloper.com/articles/build-to-rent-btr-parramatta-nsw-development-concept-filed" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/build-to-rent-btr-parramatta-nsw-development-concept-filed">housing supply needs</a> in the future, according to research.&nbsp;And much like the 1979 Village People classic, developers chasing a return in this tricky market will also Go West, where the skies are blue. But more importantly where the land is cheaper.Significant population growth over the next 20 years due to the combined impacts of natural population increases, interstate movements back into the state and immigration has fuelled strong demand for residential housing stock. Particularly in the more affordable climates of Western Sydney.&nbsp;A Ray White Commercial Western Sydney report predicts that the population is expected to balloon to 2.9 million by 2036.The <a href="https://www.theurbandeveloper.com/articles/parramatta-planning-LEP" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/parramatta-planning-LEP">region is also expected to be Australia’s third-biggest economy</a>, contributing $104 billion to gross domestic product.<div id="6VOVFpWnliFxN8hiIWwCw4"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6cpdhMj8L26reoVjzujukX/40cdd86302607f8c5063f5e05bd93775/Parramatta_Square_Walker_Corporation" alt="Walker Corporation's Parramatta Square project, part of why it has posted record profits for the June 2022 financial year. " data-mce-src="//images.ctfassets.net/8pr762qjocl3/6cpdhMj8L26reoVjzujukX/40cdd86302607f8c5063f5e05bd93775/Parramatta_Square_Walker_Corporation"></picture><div>▲ Walker Corporation’s Parramatta Square project.</div></div> Up until March this year, Ray White has tracked 487 projects in the development pipeline that have the potential to add 40,774 dwellings over the next three to five years in Western Sydney.There are 6889 units now under construction, which are likely to be completed in the next 18 months, the bulk of these are in Parramatta, followed by Cumberland.A further 19,295 units are in early planning and DA-application phase in the region.<h2>Infrastructure and investment&nbsp;</h2> It is not just Parramatta that is forging ahead in the boom of Western Sydney.&nbsp;There are also major infrastructure projects in the pipeline for the region, including the Aerotropolis and the Parramatta Light Rail, due for completion in late 2026 and late 2023 respectively.&nbsp;Minor changes to the Aerotropolis Precinct Plan were finalised in May 2023, bedding down planning controls for the $5-billion Sydney Science Park at Luddenham. It is planned as a mixed-use smart city that will create an epicentre for research, development, education, commercialisation and innovation.<div id="Xt4iGwpSce5Dou0Er05zX"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7MX3nKneVXmNAVZjFQcovH/541ba0932b02b914614189c7f8d37a1c/Western_Sydney_Aerotropolis_MID.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7MX3nKneVXmNAVZjFQcovH/541ba0932b02b914614189c7f8d37a1c/Western_Sydney_Aerotropolis_MID.jpg"></picture><div>▲ The Western Sydney Aerotropolis masterplan has been finalised following minor amendments to the Sydney Science Park area. </div></div> The Nancy-Bird Walton Airport is due to open in 2026 and will be a major drawcard to the region.&nbsp;The Bradfield City Centre, a 114ha site adjoining the airport, is being planned by the NSW Government’s Western Sydney Parkland Authority as a “21st century global city with a 24/7 economy” and a strong focus on advanced manufacturing.&nbsp;Plans for new office precincts in regional centres such as Liverpool and Penrith across university campuses and within shopping centres are being considered.Ray White’s latest office forecast also predicts 959,878sq m of new office stock coming on to the market. While smaller developments are trickling into the marketplace over the next 12 months, the bigger story for Parramatta is the churn of refurbishment space expected to exit and re-enter the market as tenants vacate their current accommodation.For example, 150 George Street will bring 21,964sq m of refurbished space into the market, along with 8899sq m at 97 Macquarie Street, which has recorded some partial pre-commitment.<h2>Developments under way</h2> Property developers Cite Group say developers are being attracted to the Western Sydney region due to its projected economic growth.Large <a href="https://www.theurbandeveloper.com/articles/intergenerational-living-australia-granny-flats-development-opportunities" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/intergenerational-living-australia-granny-flats-development-opportunities">suburban blocks able to accommodate a granny flat</a> have been increasingly popular over the past few years, providing value for developers. Cite Group pinpointed Blacktown, Pendle Hill and Baulkham Hills as developer hotspots in the hunt for development upside.&nbsp; The NSW Land and Housing Corporation has a $32-million build-to-rent housing development at North Parramatta under way, with a community housing provider required to deliver 65 dwellings for the project.Delivered over six stages, there’s also a new residential development at Macarthur Heights, which will deliver 950 homes over 122ha in Campbelltown in partnership with UrbanGrowth NSW. &nbsp;Coronation Property has also sold more than 60 per cent of its 346 studio, one, two and three-bedroom apartments in its Western Sydney Mason &amp; Main project, located in Merrylands.Prolific private builder and developer <a href="https://www.theurbandeveloper.com/articles/deicorp-dual-towers-parramatta-development-application" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/deicorp-dual-towers-parramatta-development-application">Deicorp has stepped up its focus on Sydney’s western suburbs</a>, filing plans for twin 46-storey mixed-use towers—its third major move in the area in less than 12 months.<div id="5A7hoK6s7xaNu5hjuKZDP0"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1pmEfwESs2TdBA1iM6tpuk/d7f2714a5e336f0b2ca7f9f2e196ce2f/Mid_article_resizes__7_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1pmEfwESs2TdBA1iM6tpuk/d7f2714a5e336f0b2ca7f9f2e196ce2f/Mid_article_resizes__7_.jpg"></picture><div>▲ A render of Deicorp’s proposed 46-storey tower in Parramatta. </div></div> And Western Sydney developer Aland also has a number of projects under way across the suburbs of Parramatta, Schofields, Merrylands and Campbelltown.The developer has also sold 80 per cent of its $170-million Carson on the Park development (pictured in the main image) at 12 Carson Lane at St Marys, with construction expected to wrap up at the end of 2023.While the developer admits it’s a challenged environment, it is better equipped to manage pressures being a builder/developer.Aland chief executive George Tadrosse says investors and first-home buyers have shown particular interest in the development.“St Marys is expected to undergo a big transformation with several major infrastructure projects across civic facilities, health, retail and transport, including the highly anticipated Western Sydney International Airport, all due to be completed within the next few years,” he says.Aland founder and director Andrew Hrsto says: “We understand the urgency of the housing crisis in NSW and, wherever possible, have taken a proactive approach to accelerate our developments to help address this issue.”<h2>Favourable terms</h2> Western Sydney’s Ray White Commercial managing director, Peter Vines, says the opportunity for developers to buy land with favourable terms is appealing for many.“We’re seeing a lot of developers negotiate terms that include prolonged settlement periods and deals that are subject to DA approvals,” Vines says.“We also know that industrial land sellers in this market are keen to maintain strong values so they will consider these sorts of contractual arrangements, which allow developers to de-risk investments in land projects.”&nbsp;He adds that land prices have reduced given the increased cost of capital, softening yields and construction costs. &nbsp;“We also know land financing is becoming more difficult in the current climate. So, for more sophisticated investors, industrial assets in Greater Western Sydney are certainly something that is valuable,” Vines says. <hr> You are currently experiencing&nbsp;The Urban Developer&nbsp;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">&nbsp;Click here to learn more.</a>&nbsp;<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> </div></div>

Developers are frothing over the potential that Western Sydney offers, with unprecedented levels of stock in the pipeline...

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“For years, we’ve been looking for ways to bring the work environment into the hotel and get people to come and dwell and spend time there,” Fender Katsalidis hotel specialist Angela Biddle says.But with the rise of “workspitality” the lines between the hotel and office sectors have never been more blurred as the two asset classes look to unlock their disused space.&nbsp;Biddle says the architecture firm is working on a number of “workspitality” sites across Melbourne as the trend takes off.&nbsp;Aiming to attract day workers looking to escape lockdown cabin fever, hotels globally transformed spaces to office use during the pandemic.Dubbed “workspitality” or “hotelification”, these mixed-use spaces are also being billed as strong investment opportunities after renovation by savvy developers to suit the new purposes.&nbsp;In some cases, REITs are bringing hospitality spaces in to funds to commercialise city spaces, giving investors a chance to get into the lucrative hospitality industry, which can deliver higher returns and dividends than other investments.“Tenants are more focused on tangible and improved building amenity, such as spaces with AV capabilities, town hall meeting spaces, outdoor meeting areas, quiet spaces, exercise areas and electric vehicle charging spaces,” Centuria Office REIT fund manager Grant Nichols says.&nbsp;<div id="6WwhyRDpWAXYjAFTbcCL7t"><picture><img src="//images.ctfassets.net/8pr762qjocl3/9Yrvr5AbrOUngiHk6qtWa/f64f242130e71a15e810512a2a1e3ec1/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/9Yrvr5AbrOUngiHk6qtWa/f64f242130e71a15e810512a2a1e3ec1/2.jpg"></picture><div>▲ QT Sydney was among the first hotels in Australia to give over space for workers. </div></div>QT Sydney was one of the Australian hotels promoting vacant spaces to cooped-up workers during the pandemic, while globally Accor added modular workspaces to its hotels.The company said a number of its hotels have been transformed since the pandemic to incorporate contemporary and flexible public spaces for work, including Accor’s new Hotel Morris Sydney.Some believe it’s a trend that will endure in the post-pandemic work mix.Global workspace designers Space Matrix is billing “workspitality” as one of the top trends that will dominate the landscape, saying it enables companies to boost company culture.And increasingly new hotel projects are expanding to be truly mixed use, such as 1 Hotel in Melbourne that comprises 125 apartments, 280 hotel rooms, a 1000-seat function room, restaurants, cafes, gym, pool and spa facilities.Fender Katsalidis principal Angela Biddle specialises in hotel design. She says that hotels have long looked for innovative ways to encourage people to linger in their lobbies, but some have started taking that concept one step further by encouraging workers into vacant spaces as an alternative to working from home.<div id="SmkwWLGHvr6OGCtasfTMq"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1JHZDqU689Fz35bGmMZ2as/ff5622fefec00b93f87470388fdf8754/4.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1JHZDqU689Fz35bGmMZ2as/ff5622fefec00b93f87470388fdf8754/4.jpg"></picture><div>▲ Hotel spaces can become an extension of the workplace. </div></div>“We’re now in a space in the post-Covid commercial world where we’re trying to work out how we can get people to come back into the office, and how hotels can secure more permanent tenants,” Biddle says.Fender Katsalidis has a couple of projects under way that provide a level of amenity within a commercial sector for tenants.“Whether it’s a co-working environment, meeting places and lounge and bar spaces, where people gather, these spaces can be an extension of their own commercial workspace as a way to meet and engage with others within a commercial building,” Biddle says.She says that developers have been conceptualising these spaces as work spaces for people who don’t want to invest in huge office spaces, where a percentage of the floor space is dedicated to meeting rooms, for example.“This meant that businesses could leverage off these hospitality spaces and also utilise the concierge services and making it a hotel experience if attending a conference.”Fender Katsalidis has a workspitality space under development in Melbourne at 500 Bourke Street which incorporates a public mezzanine with a wellness area, retail and a lot of space encouraging people to work in the lobby area.<div id="RdzUDjmACWrclv9TY0yKp"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2Fkb5NwC9rnRatlRz5jOn9/66950294d6d208f30a6f2b28d5ea8188/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2Fkb5NwC9rnRatlRz5jOn9/66950294d6d208f30a6f2b28d5ea8188/1.jpg"></picture><div>▲ Accor has created workspaces in its hotel around the world—this one is in Paris. </div></div>Two more “workspitality” spaces are being developed in the Melbourne Airport precinct, which will encompass a wellness offering and meeting place.“These developments will almost be an extension or alternative to an airline lounge, and there will also be an opportunity for other businesses to take up tenancies in the building,” Biddle says.“Hotel chains are looking for ways to tap into the trend towards working in spaces beyond the office.“Operators want to come in and provide the hospitality offer. There’s definitely a move towards this idea of bringing that level of service and amenity into the workplace that we haven’t seen before.”Lobby spaces that encourage people to stay in them have been increasingly popular among developers over the past decade or so, Biddle says. <div id="A8lwA0800owZtpjhDlfqu"><picture><img src="//images.ctfassets.net/8pr762qjocl3/CBT8k5LIeXfhujVlNvPMg/35dcbd4fc18af726ae93d888090d1da3/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/CBT8k5LIeXfhujVlNvPMg/35dcbd4fc18af726ae93d888090d1da3/3.jpg"></picture><div>▲ The lobby of 1Hotel, Melbourne. Bringing life into lobbies has been an aim of the sector for decades. </div></div>“These spaces have tended to look at how to encourage people to live, work and play within the hotel lobby.“And not only is that designed to keep guests there, but also to encourage locals to come and work.“What’s happening now has flipped, where we’re trying to bring the hotel offer into a commercial environment, so that you’re not just here to come and sit down at your desk.“You’re actually looking for ways to incentivise people who work in an office to instead come to a hotel to work.” <hr> You are currently experiencing The Urban Developer 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><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>

Workers are being lured out of their homes and into hotels as what the workplace looks like post-pandemic continues to evolve…

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A growing number of developers are learning how to engage Indigenous voices to bring a deeper level to projects—and to avoid cultural faux pas.Known as Designing with Country, developers want to ensure that First Nation insights form part of the design and development process well before the first sod is turned.Designing with Country aims to reset the balance between Indigenous, colonial and migrant histories, and bring a First Nations’ perspective to sustainable design.While perhaps not quite mainstream as yet, it’s a concept making its way into key development projects around Australia.The consultation process has several aims, including to improve the health and wellbeing of Country to reduce the impact of natural events such as fire, drought and flooding through more sustainable practices.It also aims to show value and respect to Aboriginal cultural knowledge and to ensure Country is cared for appropriately. Ensuring sensitive sites are protected so that Aboriginal people can have access to their homelands is also a part of the process.A number of architecture firms are winning projects from developers after demonstrating their knowledge and understanding in this space.<div id="5TMnegEcZaSoCLYfqqofy3"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4Bch6tbtZyFvqlIdEdumhG/0a35ee70784c04f16b09a049d017ce35/2_Atlassian-Tech-Central_image-c.jpeg" alt="The Atlassian project in Sydney, designed by BVN. Main image: the Kimberwalli Centre for Excellence, a place of empowerment for Aboriginal youth in Western Sydney, also designed by BVN." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4Bch6tbtZyFvqlIdEdumhG/0a35ee70784c04f16b09a049d017ce35/2_Atlassian-Tech-Central_image-c.jpeg"></picture><div>▲ The Atlassian project in Sydney, designed by BVN. Main image: the Kimberwalli Centre for Excellence, a place of empowerment for Aboriginal youth in western Sydney, also designed by BVN. </div></div>Firms such as BVN, HDR, Hassell, SJB and Distinctive number among them.Indigenous architect Kevin O’Brien, of BVN, led the Designing with Country strategy for <a data-mce-href="https://www.theurbandeveloper.com/articles/work-begins-on-aud1-4bn-atlassian-sydney-headquarters" href="https://www.theurbandeveloper.com/articles/work-begins-on-aud1-4bn-atlassian-sydney-headquarters" target="_blank" rel="noopener">the Atlassian project</a>.The firm also went through the process for the design of <a data-mce-href="https://www.theurbandeveloper.com/articles/first-look-inside-parramatta-powerhouse-plans" href="https://www.theurbandeveloper.com/articles/first-look-inside-parramatta-powerhouse-plans" target="_blank" rel="noopener">Powerhouse Parramatta</a>, which was proposed to be built on Darug Country in the most diverse multi-cultural populations in the nation.The $50-million Office of Environment and Heritage NSW in Kurnell also incorporated a strong Designing with Country consultation process.When releasing the plans in 2018, Neeson Murcutt Architects said: “Design cannot heal the impact of 250 years of occupation, but it can provide a platform for diverse cultures and dialogue.”&nbsp;&nbsp;Greg Kitson, a Wakka Wakka man and Brisbane Black, is completing a PhD at the Cities Research Institute at Griffith University. His research explains that the concept of Country is not only a common noun but also a proper noun.“People talk about Country is the same way that they would talk about a person: they speak to Country, sing to Country, visit Country, feel sorry for Country, and long for Country. People say that Country knows, hears, smells, takes notice, takes care is sorry or happy.”<div id="2L2w6BBxYq51d9IMDHOMWm"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2Ny8xeZ6mZH68iJJN2nCjM/b612ba5349b6e37569d6d85f39e91c55/2.jpg" alt="The Powerhouse Parramatta by architects Moreau Kusunoki and Genton." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2Ny8xeZ6mZH68iJJN2nCjM/b612ba5349b6e37569d6d85f39e91c55/2.jpg"></picture><div>▲ The Powerhouse Parramatta by architects Moreau Kusunoki and Genton. </div></div>The NSW government has been sharing tools and strategies to assist Aboriginal and non-Aboriginal communities share knowledge about places with a shared cultural and heritage significance.It has released a draft framework to help developers and architects understand the value of Aboriginal knowledge in the design and planning of places.It outlines that constant change requires us to continuously reimagine our way of living and think about renewal, and change requires leadership and willingness to challenge business-as-usual practices within government.The draft framework continues to be ‘tested’ across the sector through case studies and further research. The next steps will be to refine the framework and test it with Aboriginal Communities to ensure it supports their aspirations.However, leading architects, Indigenous designers and creatives told attendees of The Urban Developer’s Urbanity 2022 conference<a href="https://www.theurbandeveloper.com/articles/sector-finally-embracing-designing-with-country" data-mce-href="https://www.theurbandeveloper.com/articles/sector-finally-embracing-designing-with-country"> that embedding and weaving Indigenous design principles</a> through our cities will be challenging. The event was held in August.While there has been an emergence of Indigenous design principles, there is a greater need to engage with First Nations people to tell the story of Country in cityscapes, Burundi Design Studio’s Theresa Bower says.Meanwhile, HDR director Jacqui Straesser reveals she has been fielding a growing number of enquiries related to Designing with Country. She has been working on government projects for five years and has been part of pilot programs that introduce the concept to key stakeholders in new developments.&nbsp;&nbsp;<div id="7CnYanX0WRIFc9OoazPQDo"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4xklJh7HortksGjDXnJV1d/094d40a8f88654918137049ef98e5ad4/1.jpg" alt="The UTS IRC is proposed at the University of Technology’s Haymarket precinct and is considered to be Australia’s first home away from home for indigenous people studying in the heart of Sydney. Designed by BVN." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4xklJh7HortksGjDXnJV1d/094d40a8f88654918137049ef98e5ad4/1.jpg"></picture><div>▲ The UTS IRC is proposed at the University of Technology’s Haymarket precinct and is considered to be Australia’s first home away from home for Indigenous people studying in the heart of Sydney. Designed by BVN. </div></div>While a framework exists, basic knowledge about how to implement Designing with Country into a new project is lacking, she says.“It’s mandatory for our industry to understand the cultural component as part of our professional development,” Straesser says.“We’re a multicultural society, and we need to create a unity around our history and how we articulate that.“We’re starting to see a few projects that have got a Country response, but it would be good to see more consulting with Aboriginal user groups when driving design. To handle this properly, developers need to go back to understanding Aboriginal people’s relationship to Country as a starting point.”She urged developers to explore the importance of a more harmonious approach to projects.“I think a lot of developers have fought back against this approach as it isn’t mandatory, but what would be good to see is that people are doing it because they can see the benefit in it, even though it’s going to cost more money. It doesn’t need to cost a lot more money, but the benefits are significant.” <hr><div id="3pJlqrMjgENHSWv9uDy0eb"> <div id="4WsmHC3KBLf8qCnByrzk6"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5qR7Al9mRX744TYmJhVoFG/2ee4e89152d1d14480ebf12ca370c997/4.jpg" alt="d with c principles" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5qR7Al9mRX744TYmJhVoFG/2ee4e89152d1d14480ebf12ca370c997/4.jpg"></picture><div> </div></div><h2>Designing with Country </h2></div> Seven design objectives that define the key considerations in the design of the built environmentBetter fit: contextual, local and of its placeBetter performance: sustainable, adaptable and durableBetter for community: inclusive, connected and diverseBetter for people: safe, comfortable and liveableBetter working: functional, efficient and fit for purposeBetter value: creating and adding valueBetter look and feel: engaging, inviting and attractive^ Source: NSW government, Better Placed <hr> You are currently experiencing The Urban Developer 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><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> </div></div>

A growing number of developers are taking a more informed and inclusive view of design in Australia’s urban landscapes while embracing diverse perspectives…    

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Communal electric vehicles and state-of-the-art charging stations have emerged as a hot-ticket item in luxury developments.Developers including Top Spring Australia and Cedar Woods are incorporating charging equipment for electric vehicles (EVs) or communal EVs as a drawcard for residents as part of their projects. The move may also enable developers to cut down on the number of parking spaces in some developments, explains tech start-up Outbound chief executive Luke Rust. He confirmed the company is currently working with 40 developers on projects in Australia and the UK. “Councils in denser regions are using development application conditions to enforce the provision of carshare spaces in new developments, and developers are using this as an opportunity to enhance their resident experience with a more intelligent, sustainable and exclusive carshare offering,” Rust says. “The writing’s on the wall when it comes to electric vehicles, but owning one yourself is still very expensive. Longer term, we’re seeing a trajectory away from private car parking spaces altogether, with developments in Queensland and Victoria approaching us regarding exclusive mobility clubs that include more than 20 shared vehicles.” Beulah is introducing the Sth Bnk Auto Club, a first-of-its-kind fleet of luxury vehicles for residents to use. It has committed to a full EV fleet by 2030. Addenbrooke is also offering communal Teslas at its new Sydney workplace development, Merchant House. Construction is due for completion in 2024. <div id="6lkFRfuPDbZbzXDh8IlESh"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4rq4Q2yoMOurNDD8rcVMgC/b07b8e4768ba783bf77e013f70bce405/4.jpg" alt="Top Spring Australia has teamed up with tech startup Outbound to roll out a fleet of communal Teslas in a new $500-million leafy residential development in Sydney, The Newlands in St Leonards." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4rq4Q2yoMOurNDD8rcVMgC/b07b8e4768ba783bf77e013f70bce405/4.jpg"></picture><div>▲ A render of Top Spring Australia’s $500-million The Newlands in St Leonards. </div></div>Top Spring Australia has teamed up with tech startup Outbound to roll out a fleet of communal Teslas in a new $500-million leafy residential development in Sydney, The Newlands in St Leonards. Top Spring managing director Sydney Ma hopes the addition of electric vehicles as a part of the development will be a key selling point as it hits the market. He says the cost of the service will likely be included in the owners’ body corporate fees along with a nominal usage charge. The shift to include communal electric vehicles comes after a meeting of state and federal building and energy ministers in October agreed to update the National Construction Code minimum energy efficiency requirements from 6 to 7 Star NatHERS ratings to ensure residential projects are equipped for the future. The reforms, which will commence from May next year, will include additional energy efficiency measures that extend to making new homes electric vehicle-ready to avoid the costly exercise of retrofitting chargers.Federal industry minister Ed Husic, who chaired the meeting, says new apartment buildings will also be required to incorporate infrastructure for future cabling and control-point installation to make them EV charger-ready. Despite relatively low uptake among Australian drivers, the ability for developers to tick the ESG box to show investors that they are part of the push to a greener future is part of the motivation to embrace electric vehicles. Access to a communal vehicle is also increasingly enticing amid rising cost of living pressures and a steady decline in car ownership in Australia.The Electric Vehicle Council has been speaking to developers about the lower costs involved in installing charging stations during the construction phase.<div id="1KbQjZSes93mChA1zBFi2Z"><picture><img src="//images.ctfassets.net/8pr762qjocl3/247yzLTtJCvSTPuqDmLW4r/f10d9fe40e0d1558a571263b29fef3d5/Mid_article_resizes__5_.jpg" alt="The inclusion of EV charging facilities from the earliest stages of a project can equal significant savings in time and money." data-mce-src="//images.ctfassets.net/8pr762qjocl3/247yzLTtJCvSTPuqDmLW4r/f10d9fe40e0d1558a571263b29fef3d5/Mid_article_resizes__5_.jpg"></picture><div>▲ The inclusion of EV charging facilities from the earliest stages of a project can equal significant savings in time and money. </div></div>“If there’s one resident who has an EV after the apartments are developed, the cost to incorporate a charging point could weigh heavily on everyone else in the building, with upgrades potentially costing tens of thousands of dollars,” the council’s head of energy and infrastructure Ross De Rango says. If every car in the complex was charging at the same time, it would be costly, De Rango says. There’s also a need to incorporate costs in a way that doesn’t impact residents who are not using EVs. This could be done through strata fees or an external network provider, he says. “Developers need to include systems that will schedule the majority of EV charging to off-peak times, when electricity is cheaper, such as at night when residents are sleeping and there’s spare network capacity,” De Rango says. Lendlease is also rolling out around 80 electric vehicle charging stations nationwide across key retail and office precincts to meet growing customer demand. The charging stations will be available at 16 commercial and office precincts nationally including Barangaroo and Darling Square and Melbourne Quarter, as well as a range of shopping centres in NSW, Queensland and WA. Installing electric vehicle charging infrastructure and having the ability to adapt the technology as required is increasingly important for developers,&nbsp; Lendlease managing director, investment management, Vanessa Orth says. <div id="4YvFgowg7jCeaVEJ4pp52k"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5bT61cJOQUEH691i42IUqP/f12327b217e049b1a4493470937226a6/5.jpg" alt="Lendlease is also rolling out around 80 electric vehicle charging stations nationwide across key retail and office precincts to meet growing customer demand.

The charging stations will be available at 16 commercial and office precincts nationally including Barangaroo and Darling Square and Melbourne Quarter, as well as a range of shopping centres in NSW, Queensland and WA." data-mce-src="//images.ctfassets.net/8pr762qjocl3/5bT61cJOQUEH691i42IUqP/f12327b217e049b1a4493470937226a6/5.jpg"></picture><div>▲ Barangaroo in Sydney is among the Lendlease developments slated for EV charging facilities. </div></div><a href="//images.ctfassets.net/8pr762qjocl3/5bT61cJOQUEH691i42IUqP/f12327b217e049b1a4493470937226a6/5.jpg" target="_blank" rel="noopener" data-mce-href="//images.ctfassets.net/8pr762qjocl3/5bT61cJOQUEH691i42IUqP/f12327b217e049b1a4493470937226a6/5.jpg"></a>“We remain forward-thinking on introducing key sustainability focused infrastructure within our developments to ensure our assets are adaptable now and into the future to meet our customer needs, while accelerating us on our pathway to achieving absolute zero carbon by 2040,” Orth says. &nbsp; &nbsp; EV chargers have been installed by developer Cedar Woods at its Huntington Apartments in Clayton South. A Tesla will also be available to hire by the hour for residents. “Our own new requirements mean EV infrastructure must be installed in a way that services all cars in the building. This includes switchboard sizing, off peak load management and cable trays for future EV charging installations by the purchasers,” Cedar Woods managing director Nathan Blackburne says. Typical budget is between $5000 and $10,000 per shared car for the set-up of the site including charging stations, signage, cameras, communications network and community activation. “The key variable cost is associated with access to and availability of power, which differs from building to building,” Rust says.&nbsp; For it to work for both developers and councils, properties also need to be well connected to public transport and located close to amenities such as supermarkets, gyms and shared workspaces, he says. <hr> You are currently experiencing The Urban Developer 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><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><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>

Australia's luxury developers are moving to include communal electric vehicles and charging infrastructure as part of their offerings. The Urban Developer looks at the dynamics driving this gear-shift...

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Solid auction volumes for sites across NSW and much of the rest of the eastern seaboard are creating favourable conditions for developers to build up pipelines despite residential auction numbers declining.And while it is early days yet for 2023, the signs are there it could well be a solid year for development sites on the block, bringing opportunity to those ready, willing and able to make the most of a more challenging economic period.Expressions-of-interest campaigns remain a common tactic to move on sites earmarked for development, but tightening monetary policy, rising inflation and interest rates coupled with higher construction costs and labour shortages have hit the market hard, with sale volumes of development sites cooling.&nbsp;Experts predict that the dampening of the property market is likely to fuel a renewed appetite for auctioning development sites, using auctions to squeeze the highest price out of a tightening market.CoreLogic predicts a weaker real estate auction market to continue in 2023 after its quarterly Auction Market Review showed 25,637 properties went under the hammer across the combined capitals with a clearance rate of 57.8 per cent in the December quarter.For 2022, CoreLogic figures show that 103,911 properties went under the hammer across the combined capitals, resulting in an annual clearance rate of 61.2 per cent.Time will provide more clarity around vendors’ willingness to go to auction and whether buyer confidence has picked up, CoreLogic research director Tim Lawless says.“We also anticipate at least one more rate hike which means we’re likely to see fewer properties go to auction as vendors may not be willing to test the market, opting to hold their property,” Lawless says.<div id="4m7atyFaGJFLPJDOfRZVM1"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6mPsPO5Y6i9RVfZdgDciFP/fc7758774f21beedaa11968cb06def3e/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6mPsPO5Y6i9RVfZdgDciFP/fc7758774f21beedaa11968cb06def3e/1.jpg"></picture><div>▲ Colliers national director of investment services Miron Solomons. </div></div>However, sellers favour auctions as a sales tool when the market has deteriorated or the agent is trying to move distressed assets, Colliers national director of investment services Miron Solomons says.While a strong appetite for development sites remains, there is a limited pipeline of stock suitable for development over the next few years, keeping prices elevated.Development sites with complicated planning or ownership structures often suit expression-of-interest campaigns, while auctions are a good strategy when the market dips, he says.&nbsp;&nbsp;“Banks and lenders will lean towards auctions because they feel it could be the quickest, most transparent form of transaction in this economic environment,” Solomons says.However, he acknowledges that it’s early in the year and that auction season for a new year usually begins in earnest from March, when the results of auctions in the first couple of months of the year are reported.“What I can tell you is that we’re seeing good levels of enquiry and good levels of engagement from developers, so I think we’re going to see quite positive results in that first tranche of auctions on development sites.“But otherwise, we’re still seeing good auction volumes across the nation. It is early in the year and the first true litmus test starts after Australia Day or thereabouts, so the true picture will emerge when we see the results from these auctions.”Despite more difficult trading conditions, there has been no shortage of developers keen to acquire sites to develop in any format, whether it has DA approval or not, he says.<div id="2Y4bUToyBw2JCeo9ISgGIF"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7s7zDEnyS3HsaJ2QPToJMI/b3cf504933fc3256c7b1be826d4bdd93/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7s7zDEnyS3HsaJ2QPToJMI/b3cf504933fc3256c7b1be826d4bdd93/3.jpg"></picture><div>▲ It’s a good time to be building the pipeline as a developer, according to Solomon. </div></div>“It’s a good time to be building the pipeline as a developer. We’re still seeing good auction volumes across NSW and the rest of the Eastern seaboard,” Solomons says.&nbsp;&nbsp;The residential market, where some auctioneers report decent activity, may provide some clue as to the appetite for auctions across all sectors in the near future.&nbsp;While traditionally fewer auctions are held during the December and January period, solid activity was recorded in most capital cities, according to Apollo Auctions director Justin Nickerson.Apollo’s team of auctioneers report an optimistic start to the 2023 property year, underlined by the increasing numbers of people attending and bidding at auctions. These results are likely to also flow through to auctions of development sites.“This was especially the case in Brisbane, where the auction clearance rate rose to nearly 65 per cent–up from 58 per cent in November,” Nickerson says.Compared to November, the average number of registered bidders at auction increased from 2.8 to 3.3 while the average percentage of active bidders rose from 54 per cent to 57 per cent, according to the December 2022-January 2023 auction report.&nbsp;In Melbourne, auctioneer Andy Reed says that market conditions remain challenging but that there are signs of optimism.Fortune, the adage goes, favours the bold. It seems likely that the auction climate for sites with development potential will indeed test the mettle of the property sector’s bold in coming months. <hr> You are currently experiencing The Urban Developer 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><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>

While it’s early days, the number of development sites going to auction seems likely to rise, handing developers opportunities if they’ve confidence and nerve despite the cooling market…


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The shift to work from home has transformed the way developers design residential living.Words including ‘study’ or ‘office’ have been top search terms for buyers scouring property websites for the past three years, according to such sites, including Domain.And property developers are sitting up and taking notice, thinking outside the box to bring properties to market that are a cut above the corner study nook.&nbsp;&nbsp;<h2>Highrise takes it to new level</h2> One development among those putting such consideration seriously is Nineteen First Avenue on the Gold Coast, which features a dedicated floor for residents to work from in the residential building. The 37-storey tower is due for completion in 2025.NPA Projects marketing agent Andrew Erwin says the work-from-home floor is in direct response to buyer feedback. “I’ve been hoping for a while to see a dedicated work-from-home level like this and now we have it,” he says.“More and more people are working from home, coupled with the growth of the gig economy but usually it’s a makeshift office set up in their lounges or bedrooms.&nbsp;<div id="32nwg6lcZKPWOl6EYyZNmL"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3O7WmKIPI3h00CbfQiatFj/989179deb396e33fe94321e652c992ba/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/3O7WmKIPI3h00CbfQiatFj/989179deb396e33fe94321e652c992ba/2.jpg"></picture><div>▲ A render of the workspace floor planned for Nineteen First Avenue at Broadbeach. </div></div>“But this is a purpose-built work-from-home floor with all the creativity, opulence and practicality of a city-styled workplace and it just happens to be in your building, so the commute is literally just a trip down the lifts.”The $100-million-plus Nineteen First Avenue at Broadbeach has, the developers say, been designed to appeal to the evolving demand for a property that strikes an even more realistic work/life balance. Apartments are larger at 280sq m and have been designed to feel like a resort.The gig economy was already growing strongly before Covid, with home offices mandatory in new builds. “I’ve seen some developers replace what would have been a laundry or bar area with an office to capitalise on this trend,” Erwin says.Mirvac also recently announced the launch of Trielle apartments in Melbourne’s Collins Street, where 191 apartments include work pods to feed prospective purchasers’ appetite for premium, lifestyle-focused apartments.A survey by Mirvac last year found respondents wanted a hybrid working arrangement, reflected in demand for home offices.Of the property professionals surveyed (including developers, investors and real estate agents), 86 per cent revealed a separate work area was more important than ever.Principal of property valuation firm Suburbanite Anna Porter says there’s also a trend for homes to incorporate more than one office, which adds value.Backyard pods pre-manufactured off-site valued at between $10,000 and $40,000 and fitted out as offices are also popular, Porter says.“People are still working from home very regularly, as well as the office. His and hers offices are becoming more popular so people can have their own private workspace, independent of our partners or children, allowing them to conduct zoom meetings in private.”<div id="3SCRONXjROUY9syr1wCTsK"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7IWjVJOidrTqZttnoqQAyJ/91b3faf34667ff6d0b1ec770ee95d8c9/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7IWjVJOidrTqZttnoqQAyJ/91b3faf34667ff6d0b1ec770ee95d8c9/1.jpg"></picture><div>▲ Principal of property valuation firm Suburbanite Anna Porter says pre-made pods fitted out as offices are popular. </div></div><h2>Hoping for a hybrid life</h2> Data from the National Australia Bank that outlined evolving buyer priorities since the pandemic highlighted the increased demand for an office area. Demand was particularly strong in NSW and Victoria.Research by demographer Mark McCrindle reveals that since Covid began, two in five Australians (41 per cent) have worked from home. Almost one in four (24 per cent) continue to work from home, while 13 per cent are back in the office.Half (51 per cent) of Australians see remote working as the default way to work as workplaces strive for employee wellbeing and improved mental health outcomes. Young Australians are more likely to look for a hybrid work approach, preferring to only come into the office for meetings and project collaboration.<h2>Offices here to stay</h2> The home office might be having its moment in the sun but that hasn’t detracted from the value of office space in the current market.JJL’s Workforce Preferences Barometer (2021) revealed that 63 per cent of the workforce wants to maintain the flexibility of being able to alternate between the office and working from home.Colliers reports that there was 1.690 million square metres of inquiry nationally during the second half of 2022, a 4 per cent increase compared to the start of the year and a 5 per cent increase on 2021 levels.The numbers suggest that demand for office space is returning post pandemic, Colliers managing director office leasing Simon Hunt says.Office tenants were once mostly concerned about how many per seats they could squeeze into an office but there’s now a growing focus on other measures such as the cost impact of a building’s ability to help the tenant meet their environment, social and governance (ESG) commitments, the Colliers national director, tenant advisory and occupier services, Sarah Hughes says.<div id="1tmYgJtxjNB8XDfsFWkaz9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/50hrUn3gAneYkv3dwn1SZV/ca0e3cfee111fde3de75f21a828caa31/Mid_article_resizes__11_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/50hrUn3gAneYkv3dwn1SZV/ca0e3cfee111fde3de75f21a828caa31/Mid_article_resizes__11_.jpg"></picture><div>▲ While work-from-home alternatives continue to emerge and grow in popularity, the offices of CBDs are far from a spent force. </div></div>Even major companies that have championed flexible work arrangements are investing in new office space, including Deloitte, she says.“The office is now much more than a tool to facilitate work—it is a place you go to undertake tasks that you cannot complete from your home office while enabling collaboration and connection and providing a sense of belonging that ultimately fosters a positive culture, in an era of varied working styles,” Hughes says.Real estate valuers Preston Rowe Paterson chairman Greg Preston predicts that the office market will tread water this year until inflation is brought under control and capital markets normalised.He expects the office market will come back into line this year as employers look to strike a balance on time spent working from home and time in the office. <hr> You are currently experiencing The Urban Developer 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><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>

From home offices to whole-floor spaces in apartment towers to work pods, the shift to work-from-home continues to transform the way developers are designing residential living…

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Tight vacancies and dwindling supply is creating the perfect storm for the “rent-a-demic” emerging in both the industrial and residential sectors, experts warn.It marks a pivotal shift in the market this year, according to CBRE head of research Sameer Chopra, who says construction cost escalation and delays in delivery of pipeline stock are constraining supply.&nbsp;CBRE’s latest research points to something much more than the usual fluctuations in rental demand, prompting warnings of what it’s calling a ‘rent-a-demic’ in residential markets in its latest Pacific Market Outlook report.Consistent interest rate rises have put the brakes on Australia’s run-away housing market with fewer property investors in the market exacerbating the shortage of rental properties, and pushing up rents.It’s a bleak outlook for household budgets already under pressure. The National Shelter Rental Affordability Index highlights a 14 per cent decline in rental affordability over the past year, which has hit lower income households the hardest.Vacancy is at an all-time low of 0.6 per cent nationally, and in some markets it’s even tighter. Demand from occupiers remains resilient and even with the forecast 50 per cent fall in occupier demand this year, there is still a floorspace supply shortage.<div id="4qKfXtqxsPP0HAfBgimxNX"><picture><img src="//images.ctfassets.net/8pr762qjocl3/38O37k6joC6W9VXVtof3wc/272b23f294bddd9934228ba2820d7a9b/rentademic_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/38O37k6joC6W9VXVtof3wc/272b23f294bddd9934228ba2820d7a9b/rentademic_mid.jpg"></picture><div>▲ Construction cost escalation, bad weather and interest rate rises have all led to a dwindling rental supply forecast for the next three years. </div></div> During the next 10 years, National Housing Finance and Investment Corporation (NHFIC) data indicates, there will be an increase of 1.9 million more households in the market for accommodation. About 148,500 houses are expected to be delivered this financial year with a fall to 127,500 in 2024-2025.NHFIC chief executive Nathan Dal Bon says the supply pipeline has been constrained by “decade-high construction costs and significant increases in interest rates”.“Analysis shows housing affordability and supply are likely to remain challenging for some time, underscoring the need for a holistic approach to mitigate the housing pressures Australians are facing.”But NHFIC research shows new housing supply is also being constrained by the availability of serviced land, community opposition and long lead times for delivery of new projects.NHFIC is forecasting a recovery in supply in 2025-26 when macroeconomic conditions shift and demand intensifies.Property Council chief executive Mike Zorbas said the NHFIC data was a grim warning of a 79,300 home deficit.&nbsp;“It reminds us that state, territory and local governments simply have to lift their run rates on housing supply across the at market, key worker and social housing spectrum,” Zorbas says.“We also need to urgently move the housing needle by creating the right investment conditions for new build-to-rent housing, purpose-built student accommodation and retirement living communities.”<div id="3ptDyrPXiAFdRXRgvb5OcU"><div id="5pgsqTLRbDD2KoMfCqLNFZ"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1tf0F7Sc9JkIX7gokPDQQo/78548f5593192f5a9ad97ae65b40ff38/AssembleKensingtonMID2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1tf0F7Sc9JkIX7gokPDQQo/78548f5593192f5a9ad97ae65b40ff38/AssembleKensingtonMID2.jpg"></picture><div>▲ Residents have moved into Assemble’s 38 Albemarle Street, Kensington affordable rent-to-buy project.&nbsp; </div></div>Meanwhile, CBRE predicts that apartment rents could grow 30 per cent over five years across capital cities, while construction costs could fall 15 per cent this year as labour supply rises and material costs drop. </div><h2>Build-to-rent to fill the gap</h2> Ray White research shows there are 3800 built-to-rent homes completed, and a further 8400 under construction and 22,500 proposed. Once these are complete, it will still only mean that 1.2 per cent of all rental properties are owned by companies, while a whopping 84 per cent is owned by private landlords, typically mum and dad investors.Ray White chief economist Nerida Conisbee says build-to-rent is in its infancy in Australia, but believes the model could supply enough homes for the future. In the US, build-to-rent is the largest property asset class, with institutions developing, financing and owning most rental properties.Conisbee says advertised rents increased 22 per cent in the past year on average, but were even higher in some parts of the country. Meanwhile, the total number of new loans to investors has fallen by 30 per cent from the peak in March 2022, with the rate of decline continuing.A wider mix of landlord types would bolster the resilience of rental availability, but given that the cost of finance is so high, large companies remain active in the provision of rental properties, she says.“Right now, large companies are one of the few groups still active in the provision of rental properties, as well as being able to attract funding to do so. Planning for greater diversification of rental property ownership should be encouraged and build to rent is our best bet to supply enough homes for the future,” Conisbee says.The situation highlights a compelling investment case, with rents growing 4-6 per cent per annum over the next five years for cities on the eastern seaboard and 6-7 per cent in Western Australia. CBRE’s report also pointed to a significant mismatch between demand and supply for inner-city apartments.Head of research Sameer Chopra describes it as a reversion of history to play out this year. “We expect weaker values and strong rent growth, with tight vacancy rates likely to lead to a ‘rent-a-demic’ in residential markets.”<h2>Industrial stock absorbed</h2> Construction delays, supply chain disruption and pool weather placed a lid on new supply in the industrial sector last year, pushing back projects, CBRE director of NSW Research Sass J-Baleh says.New supply coming into the market will be soaked up this year in cities like Sydney, Melbourne and Queensland.“As a result, the forward pipeline has a high pre-commitment rate of about 60 per cent. The remaining supply, if not taken up by year’s end will not move the vacancy needle by much,” J-Baleh says.“Sydney and Perth have the lowest vacancy rates in Australia, which has driven rents in these cities to the highest year-on-year growth over 2022.“Sydney and Melbourne naturally benefit from higher population, and therefore greater throughput of goods and logistic requirements.“Melbourne is attractive for occupiers given the large rental differential to Sydney’s average rents, as well as being home to the largest port in Australia.”<div id="46GtRp1ytn6aX4SeEZUsQ3"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2f0gR02Fc1REhWhvige2Yz/a7b2b5c508cff0af546434091d4f6fd6/Broadmeadows_Industrial_Hero.jpg" alt="Broadmeadows industrial Hero" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2f0gR02Fc1REhWhvige2Yz/a7b2b5c508cff0af546434091d4f6fd6/Broadmeadows_Industrial_Hero.jpg"></picture><div>▲ The crisis in available rental properties is being felt across the logistics sector also. </div></div>CBRE’s report suggests that the rent-a-demic will endure for the next few years before it improves. The winners are landlords able to secure a premium for their property, though for some investors, the increased demand will be needed to cover increasing costs. &nbsp;The national housing crisis has promoted a joint call from the nation’s four peak housing and homeless advocacy bodies in the hope that the government will step in and pass a package of legislation that will begin tackling the housing crisis.The Community Housing Industry Association, National Shelter, Homelessness Australia and the National Aboriginal and Torres Strait Islander Housing Association points to recent ABS Census data showing a 5 per cent increase in the number of Australians experiencing homelessness, while the UNSW City Futures Research Centre analysts have found 640,000 Australians are in housing stress. That is tipped to reach one million by 2041.Community Housing Industry Association CEO Wendy Hayhurst the lack of affordable rental housing was restricting Australia’s social and economic potential. She wants new policies put in place to build a better supply of social and affordable housing.The Property Council of Australia has highlighted the grim warning in today’s State of the Nation’s Housing research from NHFIC that points to a widening national housing gap. <hr> You are currently experiencing&nbsp;The Urban Developer&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;<a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans">Click here to learn more.</a><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>

Tight vacancies and delays in the delivery of stock in the pipeline has resulted in a ‘rent-a-demic’ emerging in both the industrial and residential sectors, experts warn…


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Property developers are banking on a government-backed funding and rental guarantees to be a safe bet as construction and labour costs continue to rise.The Federal government has committed to stimulating private investment in the Specialist Disability Accommodation (SDA) sector by providing rental income, meaning investors can receive a steady income—and make a positive social impact.In all, the government will pay up to $700 million a year to providers of SDA as part of the $20 billion spent annually under the National Disability Insurance Scheme (NDIS).Specialist disability accommodation supported through the NDIS refers to houses built with modifications necessary to make them more accessible to those with chronic or severe medical conditions, mobility issues, visual impairments or psychological disorders.And amid volatility in the financial markets, there has been a surge in the number of properties built for the NDIS, suggesting that developers hope that the government program will provide some economic shelter.&nbsp;&nbsp;Figures show that the total number of participants in specialist disability accommodation funding through the NDIS has risen from 15,667 in December 2020 to 23,451 in December 2022, a 50 per cent increase in two years.&nbsp;<h2>Disability accommodation</h2> The introduction of the NDIS and Specialist Disability Accommodation in 2013 created a vehicle for financing SDA constructions and increased investors’ interest in housing projects that attract government funding.&nbsp;&nbsp;As of September 2022, 534,655 participants are enrolled in the NDIS, and 20,920 of these meet the criteria for Specialist Disability Accommodation funding. The essential criteria to access this funding is that participants should have an extreme functional impairment or high support needs.<iframe src="https://www.youtube.com/embed/Z3YR9yEm--A" width="560" height="314" frameborder="0" allowfullscreen="allowfullscreen" data-mce-src="https://www.youtube.com/embed/Z3YR9yEm--A"></iframe> Data from September 2002 NDIS quarterly report reveals that 3419 participants in an SDA home are seeking an alternative residence, while another 1559 participants not in an SDA home are seeking a vacancy.Meanwhile, the National Disability Insurance Agency is preparing to issue grants of between $80,000 and $400,000 for projects that test and evaluate different models to provide participants with information, assistance and connections about home and living options in a bid to increase independence among residents.It will hand out up to $1.5 million in grant funding over the next two years as part of the program, with applications closing on 20 April, 2023.<h2>Funding pipelines open up</h2> Institutional investors including Macquarie and Goldman Sachs have also been rushing to secure some of the cash flowing into the sector, while a handful of property investors have mushroomed up in a bid to capitalise on the guaranteed funnel of cash destined for the property sector.NDIS Property points to a fast-paced market emerging with new land releases often selling out in a less than a week.“Developers may now require pre-approval letters or a broker qualification letter with an EOI. In some cases, they may also require larger deposits of $5000,” according to its website.The market specialists have development sites in the Moree, Punchbowl and Wauchope in NSW, and four further sites earmarked for development in Queensland.It points out that while the space can be lucrative, the process of NDIS and SDA property investment is not straightforward and involves eligibility criteria.Yields in the SDA sector can be as high as 10 to 15 per cent and are well placed for maximum capital growth, director and group head of acquisitions at Melbourne-based Apollo Investment, Nicholas Logan-Alessio says.<div id="4wOFAJpmeEhOgWqxqOT6Y0"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6zduKFIBEW1bzXxQnjrcVa/917280a28ed15b74d1eaedada1f21d39/queens_garden_WA.jpeg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6zduKFIBEW1bzXxQnjrcVa/917280a28ed15b74d1eaedada1f21d39/queens_garden_WA.jpeg"></picture><div>▲ Safer bet: Queens Garden Residences in Perth has 15 SDA apartments over three levels. Main image: Angelo Property Group’s The Hampshire, Sunshine, Victoria. Architect: Cera Stribley. </div></div>The state of the economy and the rising cost of living is driving strong enquiry as market players look for safer rabbit holes to stash their investment dollars.Demand for these properties is strong nationally. However, he says that there had been development hold-ups of up to 15 months for stock to hit the market, mirroring delays experienced in the residential sector.&nbsp;&nbsp;&nbsp;&nbsp;“In Australia, there are currently over 45,000 people with a disability who are looking for accommodation to suit their needs and there are simply not enough properties to meet their needs,” Logan-Alessio says.While there is strong demand for NDIS properties nationally, he warns that some areas are oversaturated by builders and investor groups chasing a quick buck.SDA Housing Investments points to a large demand for SDA homes, guaranteed financial support from the government and investment returns of upwards of 11 per cent per annum.NDIS Property also points out that NDIA forecasts suggest that more than a million scheme participants will be enrolled in the SDA by 30 June, 2032, meaning that demand will only grow.However, claims of high returns and low risk due to a pipeline of secure funding from the government has brought complaints to the Australian Securities and Investments Commission (ASIC).&nbsp;It reminds property developers that the government funding is attached to the NDIS participant, not a property development. <hr> You are currently experiencing The Urban Developer 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><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 getting projects to stack up becomes harder, and the construction crisis continues to deepen, developers are banking on government-backed funding and rental guarantees as a safe bet…