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<p>Sydney’s colossal Tech Central precinct is being positioned as Australia’s answer to Silicon Valley.</p><p>But University of Technology Sydney director of entrepreneurship Murray Hurps is unsure whether enough thought is being given to the unifying elements of the development.</p><p>The ambitious NSW government project is <a href="https://www.theurbandeveloper.com/articles/sydney-central-precinct-tech-central" data-mce-href="https://www.theurbandeveloper.com/articles/sydney-central-precinct-tech-central">made up of six neighbourhood hubs</a>, spanning the suburbs of Haymarket, Surry Hills, Ultimo, Redfern, Chippendale and Everleigh.</p><p>It will include about 250,000sq m of space for tech start-ups, who will be able to access rent subsidies from the state government, creating 25,000 innovation jobs.</p><p>As well, Dexus has inked a transformative deal with Atlassian to<a href="https://www.theurbandeveloper.com/articles/dexus-atlassian-sign-sydney-hq-deal" data-mce-href="https://www.theurbandeveloper.com/articles/dexus-atlassian-sign-sydney-hq-deal"> fund, develop and invest in Atlassian’s new headquarters</a> in the precinct. The development is next to <a href="https://www.theurbandeveloper.com/articles/dexus-frasers-central-place-sydney-development-application-2022" data-mce-href="https://www.theurbandeveloper.com/articles/dexus-frasers-central-place-sydney-development-application-2022">Central Place Sydney</a>.</p><p>Dexus will fund 100 per cent of the project costs during construction and will retain an estimated 60-65 per cent equity interest in the asset. Total project costs are expected to be around $1.4 billion, with construction expected to reach completion in 2026.&nbsp;</p><p>As tenants begin to move into the buildings, how the growing number of developers, investors, real estate agents and tenants will find a way to work harmoniously together to ensure the project is unified remains, according to some, unclear.</p><p>Tech Central will not have a single ownership and there is currently no ground-plane solution connecting and unifying the project. Somes are also questioning if there are enough start-ups in the post-pandemic landscape to fill the spaces.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</p><p>Hurps was involved in the original business case for the project. He wonders whether, as more people get involved in the project, the big-picture vision could, over time, be watered down.</p><p>For example, the office space above Union Station in Sydney will have 2000 people working in different start-ups.&nbsp;</p><p>“Australia’s economy is built on technology adoption and adaption from all parts of the world, enabled by our multicultural population,” he said.</p><p>“An eclectic set of buildings taking inspiration from around the world but adapting them to the local environment could almost be a perfect physical representation of this history and future for Tech Central.</p><p>“I hope the buildings are each able to project and maintain a distinctiveness of purpose and of tenants that can rapidly be understood and engaged with by the public, so that distinctiveness can increase over time.”<a href="//images.ctfassets.net/8pr762qjocl3/6oNRne13bQkdpagqr7BlJj/773efee245dadcbb42510a3539edcfc4/Tech_Central_Mid_Article_July_1.jpg" target="_blank" rel="noopener" data-mce-href="//images.ctfassets.net/8pr762qjocl3/6oNRne13bQkdpagqr7BlJj/773efee245dadcbb42510a3539edcfc4/Tech_Central_Mid_Article_July_1.jpg"></a></p><div id="4E3IRLgNJt692Pr7P5KFGU"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6oNRne13bQkdpagqr7BlJj/773efee245dadcbb42510a3539edcfc4/Tech_Central_Mid_Article_July_1.jpg" alt="Artist impression of Tech Central in Sydney. " data-mce-src="//images.ctfassets.net/8pr762qjocl3/6oNRne13bQkdpagqr7BlJj/773efee245dadcbb42510a3539edcfc4/Tech_Central_Mid_Article_July_1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Tech Central has the potential to be a focal point for an economic transition for Sydney and Australia.<br><br> </span></div></div><p>Developers who wanted to solve infrastructure issues in the technology sector post-pandemic needed to be certain that they understood how the spaces would be utilised and by whom, Hurps said.</p><p>Tech Central had the potential to be a focal point for an economic transition for Sydney and Australia, enabling a vibrant ecosystem of rapidly growing technology-enabled companies, all creating high-paying new jobs, new exports and productivity uplift for Australia, he said.</p><p>“This precinct will allow people and companies to share what they otherwise couldn't, to attract what they otherwise couldn't, and to show people what's possible in their own career choices. It will need to be more than just distinctive buildings to achieve this though,” Hurps said.</p><p>“The pandemic has had a terrible impact on Australian start-ups as well as the incubators, accelerators and early-stage venture capital that supports them.</p><p>“Hard infrastructure is great but outside that we have a lot of work to do to rebuild the start-up ecosystem we had just three years ago and much more work to do to achieve the ambitions and potential of this precinct.”</p><p>Meanwhile, technology-focused coworking space provider Tank Stream Labs has moved into five floors of the Transgrid building at 24 Campbell Street in Haymarket.</p><p>Chief executive Bradley Delamare said that a diversification of property offerings was crucial.</p><p>“Not all businesses want A-grade corporate offices, so how will the property be diversified to attract a variety of businesses?” he said.</p>

Sydney’s colossal Tech Central is being positioned as Australia’s answer to Silicon Valley, but with thousands of new workers joining the precinct, how will it all come together?

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<p>Melbourne apartment developers keen to take advantage of severe medium-term undersupply are grappling with long lead times, skyrocketing construction costs and shrinking market demand.</p><p>Developers halted apartment projects after investors turned their backs on the sector over the past couple of years as the pandemic forced border closures.</p><p>But as investors return to the market seeking a <a href="https://www.theurbandeveloper.com/articles/reserve-bank-rate-hike-slugs-homeowners-extra-2000" data-mce-href="https://www.theurbandeveloper.com/articles/reserve-bank-rate-hike-slugs-homeowners-extra-2000">safe harbour in real estate</a>, apartment developers may be forced to increase prices to maintain margins.&nbsp;&nbsp;&nbsp;</p><p>Melbourne buyers may be increasingly sceptical, not helped by recent media headlines that JD Group had deliberately misled the buyers of a high-end penthouse, and had no intention of building it, according to a Federal Court judgment.</p><p>Justice Paul Anastassiou&nbsp;found that the developer had received advice from architects that the artistic render it was using to sell the off-plan apartment was impossible to build.</p><p>The $9.58-million contract two buyers had with JD Group for the apartment in the Victoriana development on Queens Road was revoked. The court is yet to rule on damages, including legal costs. It did not fine JD Group or issue them with any other penalty.</p><p>JD Group has appealed, and the development remains listed for sale on its website. JD Group did not return <em>The Urban Developer's </em>request for comment by the time of publishing.&nbsp;</p><div id="39EaRWV2Azi4hZIQncLdDh"><picture><img src="//images.ctfassets.net/8pr762qjocl3/F9UmSmiGFXEtpnMf8gnU8/37a4f2687f218267cbc34d2a97e3a34a/2.jpg" alt="Ruling appealed: JD Group’s Victoriana development on Queen Street." data-mce-src="//images.ctfassets.net/8pr762qjocl3/F9UmSmiGFXEtpnMf8gnU8/37a4f2687f218267cbc34d2a97e3a34a/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Ruling appealed: JD Group’s Victoriana development on Queen Street.<br><br></span></div></div><h2>Diminishing pipeline<br></h2><p><br>In 2021, there were <a href="https://www.theurbandeveloper.com/articles/market-appetite-stays-keen-for-apartments" data-mce-href="https://www.theurbandeveloper.com/articles/market-appetite-stays-keen-for-apartments">12,100 apartments completed across 178 projects</a> in metropolitan Melbourne, according to Charter Keck Cramer.</p><p>But with only 5600 apartments commencing construction across 109 projects that year, and a further 4300 apartments launched across 68 projects, the short-term future pipeline in Melbourne has diminished and will continue to do so.</p><p>By and large, the sector missed out on incentives during the pandemic plus suffered from the loss of foreign and local investors.</p><p>As well, building defects, cladding issues and the substantial loss of occupier demand have all added up to weigh down the sector, according to Charter Keck Cramer’s associate director of research Richard Temlett.</p><p>He says that the market suffered substantial side-shock to occupier demand due to Covid-induced international and domestic border closures. This demand shock was felt most acutely in the inner-city apartment markets and locations close to tertiary educational institutions.</p><p>Even now, the market is experiencing a marked slowdown. In Melbourne, 709 properties went under the hammer in the week ending May 22, down 45.1 per cent from the week before, Corelogic data reveals.</p><p>The 61.9 per cent clearance rate overtook the previous week as Melbourne’s lowest preliminary clearance rate of the year to date. It was the quietest week since the Easter long weekend.</p><p>Indeed, a number of CBD apartments and student accommodation are listed for sale from a stunningly low $160,000.</p><h2>Structural changes under way<br></h2><p><br>Temlett says the Melbourne apartment market is undergoing cyclical and structural changes that will support the next cycle of build-to-sell apartment projects as well as the emergence of the <a href="https://www.theurbandeveloper.com/articles/build-to-rent-developers-circle-prime-melbourne-precinct" data-mce-href="https://www.theurbandeveloper.com/articles/build-to-rent-developers-circle-prime-melbourne-precinct">nascent build-to-rent sector</a>.</p><p>These include consumer acceptance of living in apartments, increased detached dwelling affordability constraints, record median <a href="https://www.theurbandeveloper.com/articles/price-gap-luring-investment-back-to-apartments" data-mce-href="https://www.theurbandeveloper.com/articles/price-gap-luring-investment-back-to-apartments">house to apartment price gap</a> and the market’s adoption of long-term renting options, he says.</p><div id="2T8qVxxm9tGWRy9sdgkKmp"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6EuMLSapeNzfg1ZDiXuEdM/064403b614c3c329e370700e0e5b1da6/3.jpg" alt="A render of the five-tower redevelopment of Chapel Street’s Jam Factory by Newmark Capital, Gurner and Qualitas." data-mce-src="//images.ctfassets.net/8pr762qjocl3/6EuMLSapeNzfg1ZDiXuEdM/064403b614c3c329e370700e0e5b1da6/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of the approved five-tower redevelopment of Chapel Street’s Jam Factory by Newmark Capital, Gurner and Qualitas.<br><br></span></div></div><p>However, while vacancy rates in the inner city increased and rents decreased, the most <a href="https://www.theurbandeveloper.com/articles/sqm-research-residential-vacancy-rate-may-2022" data-mce-href="https://www.theurbandeveloper.com/articles/sqm-research-residential-vacancy-rate-may-2022">recent figures suggest that the rental and purchase markets</a> are recovering, Temlett says.</p><p>There were elevated levels of apartment completions in 2020 and 2021, which was a legacy of the previous investor-driven cycle, and that is unlikely to be repeated.</p><p>He also says that there are elevated levels of unsold apartments in the central city area currently, which he predicts will be absorbed in the short term as demand returns, driven back into the apartment market due to high prices for established housing.</p><p>Few apartment projects launched during the past two years due to weak occupier demand amid market uncertainty. Projects that were launched and met with the greatest acceptance were smaller, owner-occupier-focused apartment developments.&nbsp;</p><p>The outlook suggests a shortage of rental apartments when tenant demand returns, with population growth predicted from 2023 onwards.</p><p>Temlett paints a picture of a severely undersupplied apartment market which is presenting opportunities for developers and investors. However, he anticipates that as the pressure and mismatch between supply and demand continues to build, prices will be forced to increase.</p><h2>Bullish outlook<br></h2><p><br>But some in the market remain hopeful. Demand for apartments in Melbourne remains, according to Stonebridge Property Group national partner Julian White.</p><p>White, who admits he’s an optimist, says: “There isn’t enough housing supply on the ground, so the next period is going to be very interesting.”</p><p>Samuel Property paid $21 million in an off-market deal for a 1950s flats at 8 Louise Street, St Kilda just 11 months ago, which will make way for a new tower.</p><div id="JMyvPlrNQMHMOURiS33QB"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2XvF1T6VhukyfX8ONtTJz4/0882941d15d759039349b71c30de3c9e/1.jpg" alt="An artist’s impression of Samuel Group’s Louise project." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2XvF1T6VhukyfX8ONtTJz4/0882941d15d759039349b71c30de3c9e/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ An artist’s impression of Samuel Group’s Louise project.<br><br></span></div></div><p>But managing director Illan Samuel admits that it hasn’t been smooth sailing.</p><p>“Challenges have included site acquisition, town planning and navigating rising construction costs, while balancing favourable asking prices for apartments,” he says.</p><p>Samuel expects to commence construction early next year for completion by early 2025.&nbsp;</p><p>“Regardless of all the challenges, we are extremely bullish on the launch.”</p><p>Samuel agrees that the market is coming out of a prolonged period of reduced supply, with a general feeling of strong underlying pent-up demand.</p><p>“Buyers are circling back to the incredible amenity that the inner city provides,” he say.</p><p>“However, the ability to capture these opportunities is difficult with a lack of suitable sites, together with continued competition from build-to-rent operators, who are working to lower margins.”</p><p>Developers are extremely prudent about site selection, noting that there are many moving parts to the current market.</p><p>“On the development side, we have land prices holding steady, combined with rising construction prices,” Samuel says.</p><p>“On the consumer side, we have rising interest rates and vacancy rates at record lows (sub-1 per cent), combined with population growth likely to return to previous levels of 200,000 per annual, and wage growth in many sectors following slow rates during the pandemic.”</p><p>Samuel predicts a rise in sale prices as developers seek to maintain margins, with no drop in construction prices in sight. </p><p>“The lack of supply alone will see prices rise for qualityplaced developments,” he says.&nbsp;&nbsp;</p><p>He points out that the apartment sector has been overlooked for specific government stimulus payments, but any favourable changes on this front would trigger greater demand.</p><p>“The difficulty with residential development is the long lead times to market, due to archaic town planning processes,” he says.</p><p>“Those who are well placed with product may well be best placed to capitalise over the coming two to three years as the above plays out.”<br><br></p><hr><p><strong><br>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><br></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>

A pronounced under supply is luring development and investment into the Victorian capital’s apartment sector—but the hurdles to success remain high…

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<p>Investor dollars are pouring into property technology projects that promise to bring radical change and cost savings to new developments.&nbsp;&nbsp;</p><p>In particular, digital twin technology is on the rise with industry analysts predicting it will become the central way companies understand and operate their physical assets in the coming years.&nbsp;&nbsp;</p><h2>What are digital twins?</h2><p><br>A digital twin, in its simplest sense, is a linked virtual model of a physical object. By connecting the real-time data of the physical object or process into its digital representation—programmed with physics, mathematical models, AI and pattern recognition to faithfully recreate its sibling—the digital twin comes to life.</p><p>These on-screen reproductions of a physical building or asset are often rendered as a 3D version of the building and can show the exact state and health of an asset in real time.</p><p>The concept is growing increasingly sophisticated with sensors connected to the internet and cloud, enabling digital twins to become accessible anywhere, anytime.&nbsp;&nbsp;</p><h2>Here to stay</h2><p><br>NSW <a href="https://www.theurbandeveloper.com/articles/building-commissioner-warns-developers-to-listen-up" data-mce-href="https://www.theurbandeveloper.com/articles/building-commissioner-warns-developers-to-listen-up">Building Commissioner David Chandler</a> has predicted that all industry practitioners who have important roles to play in building assurance will have digital twins by 2025, as will the buildings they help build.</p><p>“Consumers will benefit from both regulators and strata managers being able to access a single source of truth for the buildings they live in,” Chandler says.</p><p>“The lodgement of these documents will be governed by new digitally enabled protocols where only accredited or licensed players will be able to access these systems.”</p><p>Partner at real estate advisory PWC Integrated Infrastructure Tony Massaro agrees that change is here.</p><p>“Real estate as an industry is on the cusp of having some great innovation as early adopters are scaling up,” he says.</p><p>“Prop-tech has now become a fast-growing segment of the real estate market, with new start-ups seemingly being created every week.”</p><div id="4KqcbWaRJbENH6MyapqZnu"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4h27n0t5MktlM0DdJBM6b9/0c150b821e72f59de983880e3dea8e92/Mid_article_resizes.jpg" alt="The use of digital twins on Australian projects is rising rapidly." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4h27n0t5MktlM0DdJBM6b9/0c150b821e72f59de983880e3dea8e92/Mid_article_resizes.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Across the globe, the use of digital twins on projects is rising rapidly. <br><br></span></div></div><p>Digital twins are being used for multiple projects in Australia—buildings as well as linear infrastructure assets.</p><p>“The value proposition is that through gathering real time data on multiple facets of the infrastructure asset, strategic decisions can be made on running those assets in the most efficient way,” Massaro says.&nbsp;</p><p>The technology is about getting real time data to decision makers about their assets so they can make strategic decisions on how best to utilise them, he explains.</p><p>“Thus, all developers and builders should be interested to see how digital twin technologies could add value to their projects, and then they should run the numbers to see if it makes sense to incorporate digital twin technologies into the projects,” he says.&nbsp;</p><p>A recent report confirms that digital twins are commanding increasing attention from industry professionals.</p><p>Produced by the Royal Institute of Chartered Surveyors, the<a href="https://cdn.roxhillmedia.com/production/email/attachment/1040001_1050000/3115e05932db33b06d86328b9fb204141a13848d.pdf" data-mce-href="https://cdn.roxhillmedia.com/production/email/attachment/1040001_1050000/3115e05932db33b06d86328b9fb204141a13848d.pdf"> report</a> points out that real-time, structured data has never been so accessible over the lifecycle of an asset, but this potential presents risks and disruption.&nbsp;</p><p>RICS global construction and infrastructure sector lead Anil Sawhney suggests that the construction sector needs to move faster to reap the benefits of digital twins.</p><div id="7jd9g6zmm5epSFsSaVGwbK"><picture><img src="//images.ctfassets.net/8pr762qjocl3/79BJirprSbOxKzXL3Vixy1/336a1aafdac1d872029bb83a8293b470/feed-digital-twins-1920x1080-b84.jpeg" alt="Tech start-up Reveal has created a digital twin of the New Zealand capital, Wellington." data-mce-src="//images.ctfassets.net/8pr762qjocl3/79BJirprSbOxKzXL3Vixy1/336a1aafdac1d872029bb83a8293b470/feed-digital-twins-1920x1080-b84.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Tech start-up Reveal has created a digital twin of the New Zealand capital, Wellington.<br><br></span></div></div><p>“Digitisation in construction continues to gather momentum, but like the wider construction sector, adoption of such technologies is being held back by increasing costs and a shortage of skilled professionals,” Sawhney says.&nbsp;&nbsp;</p><h2>Investors circle</h2><p><br>Managed property fund EG confirms it has been <a href="https://www.theurbandeveloper.com/articles/fund-manager-raises-stake-in-proptech-sector" data-mce-href="https://www.theurbandeveloper.com/articles/fund-manager-raises-stake-in-proptech-sector">investing heavily in this space</a>. Chief executive Adam Geha is adamant that the real estate and property industry is ripe for disruption.</p><p>In recent weeks, Geha announced the launch of a technology incubator EGX. Its goal is to scale prop-tech start-ups into high performing, global businesses.</p><p>Geha says he’s committed to leading them all the way to their IPO while ensuring returns for investors.</p><p>Among the technologies on his radar is digital twins, which he says has the promise to drive the future of the real estate industry. His team includes entrepreneurs, engineers and finance professionals, who will evaluate start-ups from a variety of perspectives and assist with mentorship and scaling.</p><p>“Technology is bringing amazing opportunities to the table and it is important that start-ups with ambitious teams and great ideas find the support they need to bring these ideas to life,” Geha says.</p><h2>Unlocking data</h2><p>One of the big names in this space includes Willow, which has been co-founded by EG, using digital twin technology to help asset owners unlock data to grow their profits. The company has already raised $58 million as it expands globally.</p><p>A start-up out of New Zealand called Reveal has already built the world’s largest subsurface digital twin in Wellington and is looking to take its technology platform to the world.</p><p>The technology enables cities and engineering firms build a digital twin that provides mapping for sub-surface infrastructure, Reveal chief executive Sam Wiffen says.&nbsp;&nbsp;</p><div id="3f8i50Avz4Sh2xxhniR2VD"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2ndYLSIkwKaU6JtcKfm4LW/4487778b896849b6db3d77ffebf599ec/wellingon.jpeg" alt="The Wellington digital twin demonstrates the power and advantages the technology can bring to the property sector." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2ndYLSIkwKaU6JtcKfm4LW/4487778b896849b6db3d77ffebf599ec/wellingon.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The Wellington digital twin demonstrates the power and advantages the technology can bring to the property sector.<br><br></span></div></div><p>“The digital twin sector is expanding at massive rates right now, both in the amount of investment dollars going in, and the number of vendors, platforms and integrations available to developers,” Wiffen says.</p><p>“We firmly believe that applying this technology to sub-surface infrastructure has the potential to revolutionise many industry areas from property development to city infrastructure maintenance, and more.”</p><h2>Benefits for developers</h2><p>Digital twins offer developers the ability to visualise information about their properties over time in an intuitive way and model the effects of changes before committing major dollars to construction or refurbishment, Wiffen says.&nbsp;</p><p>For example, a digital twin of a building integrated with motion sensors or video capture could model foot traffic through a site, which could help identify the optimal place for a footpath or on-site utility.</p><p>A subsurface digital twin that displays the location of underground utilities or hazards in 3D could give engineers accurate, up-to-date information to feed into their engineering plans, reducing project delays and contingency costs, Wiffen says.</p><p>Reveal has mapped over 50ha of the subsurface environment in New Zealand’s capital city, including the CBD and Golden Mile stretches of Lambton Quay—in total, more than 336sq m of road corridor and footpaths, 1600 access holes and chambers laser scanned and documented, and 161,000m of utilities detected and accurately mapped in an interactive 3D digital environment.</p><p>This information is being used by Wellington City Council to make data-driven planning and maintenance decisions with a level of visibility into the subsurface risks never previously available. It also allows for significant cost savings and efficiencies for public works.</p><p>Developers with projects in design phase should be looking to incorporate digital twin functionality into their projects now, so they can take advantage of the data and insights from day one, Wiffen says.&nbsp;</p><p>“The insights that digital twins will enable will directly improve the profitability of property portfolios, improve their operating efficiency and lead to happier customers and inhabitants,” he says.<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>

Creating a digital twin of a building or indeed an entire city can unlock huge savings in costs, time, compliance and more—and the property sector is being told now’s the time to get onboard…

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<p>Russia’s invasion of Ukraine is triggering turmoil in Australia’s already constrained construction sector, adding to woes that include <a data-mce-href="https://www.theurbandeveloper.com/articles/construction-labour-shortages-weigh-down-industry" href="https://www.theurbandeveloper.com/articles/construction-labour-shortages-weigh-down-industry" target="_blank" rel="noopener">labour shortages</a>, rising <a data-mce-href="https://www.theurbandeveloper.com/articles/construction-costs-drive-inflation-spike-rates-rise-tipped" href="https://www.theurbandeveloper.com/articles/construction-costs-drive-inflation-spike-rates-rise-tipped" target="_blank" rel="noopener">inflation</a> and supply chain issues.</p><p>Master Builders has confirmed that timber from Russia and neighbouring Belarus accounts for a portion of Australia’s overall lumber imports with the local industry relying on laminated beams used as structural supports in new home construction from that region.&nbsp;</p><p>Last year,<a href="https://industryedge.com.au/whats-the-shape-of-the-wood-products-trade-with-russia-and-the-ukraine/" data-mce-href="https://industryedge.com.au/whats-the-shape-of-the-wood-products-trade-with-russia-and-the-ukraine/"> Australia imported</a> $80-million worth of wood products from Russia and $2.6 million from the Ukraine. Most of the imports related to builders’ wooden posts and beams—structural elements of housing construction.&nbsp;</p><p>One Ukrainian firm known in the Australian sector is the family-owned and operated company Heluz, which has been operating in Kyiv manufacturing bricks, lintels, chimneys and ceiling systems since 1876.&nbsp;</p><p>Sanctions are adding to the war’s disruption to actual supply. Wesfarmers-owned retailer Bunnings ordered suppliers to stop buying “conflict timber” from Russia in March, adding its influence to global sanctions. This is in line with the company’s timber policy.&nbsp;</p><p>At the time, Bunnings warned of a shortage of supply on top of existing constraints, particularly of composite laminated veneer lumber, in the coming months.&nbsp;</p><p>Increasing costs in building materials are weighing heavily on builders.&nbsp;</p><p>The war is directly responsible for timber shortages, with 60 per cent of the world’s supply of engineered wood product known as LVL (laminated veneer lumber) coming from the Ukraine, First Place Building Company’s Mark Vujovich says.&nbsp;</p><p>“Right off the bat, as soon as the conflict started in Ukraine, it was like everything stopped,” he says.</p><p>“We copped a 35 per cent increase in costs pretty much on day one. We are hearing forecasts of that increasing by another 20 or 25 per cent”.</p><div id="4MYMVdHdlzNKtK0I6vIulo"><picture><img src="//images.ctfassets.net/8pr762qjocl3/isSEx6RiHQ7IOUEo4npzS/294bb1d31bbc496c805e68adc7790b75/iStock-1343885833.jpg" alt="The impact of the cessation of timber from the region due to Russia’s invasion of the Ukraine have been, and will continue to be, dramatic for many of the world’s construction sectors." data-mce-src="//images.ctfassets.net/8pr762qjocl3/isSEx6RiHQ7IOUEo4npzS/294bb1d31bbc496c805e68adc7790b75/iStock-1343885833.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Australia imported $80-million worth of wood products from Russia and $2.6 million from the Ukraine in 2021.<br><br></span></div></div><p><a href="https://www.theurbandeveloper.com/articles/construction-costs-drive-inflation-spike-rates-rise-tipped" data-mce-href="https://www.theurbandeveloper.com/articles/construction-costs-drive-inflation-spike-rates-rise-tipped">Official figures show</a> that the cost of building a new home rose by 20 per cent in 2021 due to material shortages, including timber, disrupted supply chains and demand for skilled tradespeople.&nbsp;</p><p>But it seems certain that is only the start, with costs set to rise further due to a 35 per cent tariff increase on imports from Russia imposed by the federal government.&nbsp;</p><p>Builders have been pushed to the wall, some saying that if the situation doesn’t change, they would have to consider leaving the industry.&nbsp;</p><h2><strong>No easy answer</strong></h2><p><br>It doesn’t look likely that the construction industry will be out of the woods any time soon.&nbsp;</p><p>The Reserve Bank of Australia has<a href="https://www.rba.gov.au/speeches/2022/sp-gov-2022-05-03.html" data-mce-href="https://www.rba.gov.au/speeches/2022/sp-gov-2022-05-03.html"> confirmed</a> that the war has resulted in sharp increases in the prices of oil and gas, base metals and many agricultural commodities. These shocks to global prices will ultimately flow through, adding to inflationary pressure in Australia.&nbsp;</p><div id="19IJ9TJPhiPcG3IaUmJKxA"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2SI6vcFiwJ3xtcWFo9rLFL/d7b220ee65a8f8f0426e98e4a1611154/Responsible-Sourcing-Bayswater-W.jpeg" alt="Bunnings is among firms to apply sanctions to Russian-sourced timber in the wake of the invasion." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2SI6vcFiwJ3xtcWFo9rLFL/d7b220ee65a8f8f0426e98e4a1611154/Responsible-Sourcing-Bayswater-W.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Bunnings is among firms to apply sanctions to Russian-sourced timber in the wake of the invasion.<br><br></span></div></div><p>Ukraine is a crucial element of the global economy, holding the fifth-largest iron reserves after Australia and is one of the largest exporters of iron.&nbsp;</p><p>As such, a range of countries outside Europe—including Australia—are closely linked to the Ukraine and Russia in the construction sector.&nbsp;</p><p>According to Moody’s Investor Service, the war is impacting companies across the Asia Pacific, adding to existing challenges from supply chain disruption and the pandemic.&nbsp;</p><p>Its baseline scenario of the Russia-Ukraine crisis assumes that commodity shocks, higher inflation and interest rates will result in lower global growth through 2023. Even if ceasefires are negotiated, sanctions on Russia will remain in place through next year at least.&nbsp;</p><p>The analysis suggests that about a quarter of nearly 4000 rated non-financial companies worldwide would face significant stress under Moody’s downside scenario for Russia’s invasion of the Ukraine.</p><p>The crisis would put more companies under stress. The most exposed sectors would be those that depend on consumer spending, or rely on delicate global supply chains, according to Moody’s analysis.&nbsp;</p><h2><strong>Profits tumbling</strong></h2><p><br></p><p>This view is shared by CreditSource, which says that the war in Ukraine has only worsened conditions for a construction industry already operating on low margins.&nbsp;</p><p>Chief executive Shavantha Mallawa warned that suppliers and subcontractors need to have a good understanding of the financial position of the construction companies they deal with.</p><p>“Our analysis of financials of both large and small construction companies show profitability coming under enormous and unsustainable pressure,” he said..&nbsp;</p><p>“Companies with strong balance sheets and liquidity will survive the current crisis, but many others will be compelled to close shop.”&nbsp;</p><p>Meanwhile, there will be a boost to construction as supplies become more plentiful, Deloitte Access Economics Outlook confirms.&nbsp;&nbsp;</p><div id="5h1C7zTCzsciSS2Jz2A7dN"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4hCYaOGSexzRq44evngw8X/75b668b9fca1dd20abcde6a7c09d7419/wooden-interior-with-kerto-q-lvl.jpeg" alt="The region is the main supplier of laminated veneer lumber (LVL) for the Australian market, among others." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4hCYaOGSexzRq44evngw8X/75b668b9fca1dd20abcde6a7c09d7419/wooden-interior-with-kerto-q-lvl.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The region is the main supplier of laminated veneer lumber (LVL) for the Australian market, among others.<br><br></span></div></div><p>But Deloitte warns that there are risks, including higher borrowing costs for businesses, particularly those already in debt. The end of pandemic-driven tax breaks and uncertainty around global geopolitical instability only add to the industry’s woes, Deloitte predicts.&nbsp;</p><h2><strong>No relief in sight</strong></h2><p><br>Australia is reliant on imported timber products, which is predicted to double by 2050, a report by Forest &amp; Wood Products Australia released in April found.&nbsp;</p><p>Demand for new housing will rise from the current 183,000 new homes per year to 259,000 by 2050, fuelling an increase of almost 50 per cent in demand for timber, according to the Australian Forest Products Association (AFPA).&nbsp;</p><p>As such, Australia has been unable to source around 20 per cent of its housing requirements needed from imports.&nbsp;</p><p>“The critical timber shortages of the past two years have exposed Australia’s over-reliance on timber imports, which have become more expensive and difficult to source, driving up building costs and significantly delaying construction,” AFPA chief executive Ross Hampton says.&nbsp;</p><p>The global push for more fibre to transform building systems, the pivot away from plastics toward sustainable biofuels and a push to halt deforestation internationally will only make gaining timber imports more challenging, he says.&nbsp;</p><p>Hampton wants Australian policymakers to commit to reaching a million new production trees to fill the supply gap with Australian-grown, renewable timber, which would also support jobs.&nbsp;</p><p>Regardless, the war in the Ukraine has added another level of heartache for the construction sector in this country. And with no clear end in sight, how it will cope is a question only time can answer.<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><br></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>

Russian’s invasion of the Ukraine has effectively ended timber exports from the region due to the conflict and international sanctions. It’s another blow to Australia’s construction sector it can ill afford…

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<p>The Tasmanian government has unveiled a 30-year plan to manage significant growth in Hobart, signalling that medium-density dwellings are a key part of the strategy.</p><p>The inaugural draft plan highlights infilling some of the central business district within greater Hobart as part of a plan to cater for a projected extra 60,0000 residents who will call the city home during the next 30 years.</p><p>Unveiled on Monday by the Department of State Growth, the plan outlines the need for an additional 30,000 homes to cater for the growth.</p><p>It says 695ha of vacant land supply and $539 million in residential building approvals will be required.</p><p>The analysis, completed on behalf of Hobart’s council as well as the state government, recommends the mix be 70 per cent infill development and 30 per cent greenfield development, which is largely consistent with the development split of the past decade.</p><p>The plan conservatively suggests infilling potentially more than 21,000 additional dwellings, including in the local government areas of Clarence, Glenorchy, Hobart CBD and the Kingborough area.&nbsp;</p><p>Meanwhile, the proposed 9000 new greenfield dwellings needed during the next 30 years will require a faster rate of delivery than in the past.</p><p>Infill development is proposed to be primarily low-impact, medium-density residential dwellings, while allowing for higher-density swellings in some locations.</p><p>“This means encouraging more contemporary terrace and townhouse dwellings within, and surrounding the key business districts and along corridors with high frequency public transport services,” the plan says.</p><p>The plan says that managing growth in a sequenced and strategic manner and limited diversity in housing options remain a key challenge for the southernmost city in Australia.&nbsp;</p><div id="1oyQJI69a539nijfBqrEN7"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2tAF9jhM0ldhDULKXWqtTe/485c82f00ff570ad3be0becd16891238/iStock-483419839.jpg" alt="The move away from inner-city living will bring its own pressures to bear on Hobart." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2tAF9jhM0ldhDULKXWqtTe/485c82f00ff570ad3be0becd16891238/iStock-483419839.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The move away from inner-city living will bring its own pressures to bear on Hobart.<br><br></span></div></div><p>The plan provides a direction on how to respond to these challenges, including access to land and greater diversity in housing to provide greater choice to suit different lifestyles and stages of life.</p><p>“More people are living further away from where they work, shop and play,” the plan says.</p><p>“This outward spread increases the pressure for major road infrastructure improvements, which can add to cost of living pressures.</p><p>“A focus on providing our community with more housing options in, and near and away from our city centres can help reduce these pressures.”</p><p>An implementation plan is now being drafted with an action list focusing on priorities for the next three to five years under way.</p><p>The most recent Australian Bureau of Statistics figures reveal that 999 homes were built in Tasmania in the December, 2021 quarter, the highest number in almost 30 years.</p><p>The number of completions grew 31 per cent in the quarter, which was the highest growth rate in the country. In 2021, 3234 homes were completed.</p><p>Feedback is now being sought on the<a href="https://content.api.news/v3/files/bin/9109bcbeee66b3af3c180fd0abd475ea" data-mce-href="https://content.api.news/v3/files/bin/9109bcbeee66b3af3c180fd0abd475ea"> draft plan.</a></p>

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<p>No one likes turning down work, especially not builders in the middle of a construction boom.</p><p>But given the labour shortages, it’s the only solution for the managing director of Prime Build, Dean Willemsen.</p><p>He lost three workers from his 130-strong workforce who, at the start of the pandemic, chose to return to Ireland. He has been unable to replace them.</p><p>“As an industry, we love saying ‘yes’ and winning the next job, but for us, this is the time to be more selective and focus on projects that are either in your wheelhouse or offer better returns,” Willemsen says.&nbsp;&nbsp;</p><p>Trying to trade when <a href="https://www.theurbandeveloper.com/articles/skills-shortages-challenge-of-the-decade-for-australia-s-construction-industry" data-mce-href="https://www.theurbandeveloper.com/articles/skills-shortages-challenge-of-the-decade-for-australia-s-construction-industry" target="_blank" rel="noopener">labour is hard to come by</a> has forced him to become more strategic and purposeful, he says.</p><p>“The days of extending ourselves and just miraculously finding those extra resources are not here anymore. Everyone has been challenged emotionally and mentally the past couple of years. As business leaders, we’ve got to be careful about how we do more with less.”</p><p>In Melbourne, First Place director Mark Vujovich is forking out up to 25 per cent more for labour. “You can’t get painting crews anymore, you can’t get brickies for new builds. And then there’s downtime related to Covid,” he says.</p><p>Managing build times when labour is short is increasingly tricky. He’s pre-ordering frames before the slab is down to pick up time in projects.</p><p>“The margins are very skinny in the construction industry now. The cost to build has risen by close to 45 per cent in the past eight to 12 months. We’re leaning hard on suppliers to stop price increases, but the pressures remain. It makes it very difficult to keep business viable when there’s no labour.”</p><p>Longstanding arrangements, loyalty and paying on time are crucial in the tight labour market, Hutchinson Builders <a data-mce-href="https://www.theurbandeveloper.com/articles/hutchies-takes-control-of-probuild-busting-project" href="https://www.theurbandeveloper.com/articles/hutchies-takes-control-of-probuild-busting-project">chairman Scott Hutchinson</a> says.</p><p>“What else wrecks efficiency in labour shortages is that your good guys are spread out a lot thinner. Less skilled people get employed and that means prices go up as well. It’s not just supply and demand,” he says.</p><p>It’s a stark sign of the times.</p><div id="LQ9BpjFq8Pracr75xQA8i"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1bT3hW8w3sjgKJKiCQip50/291a949704fe2cdb194c95791b456281/180323_443-Queen-St_Hero-Website.jpeg" alt="Queensland-based Hutchinson Builders has been appointed to take control of the completion of Cbus Property’s 443 Queen Street tower project on the Brisbane riverfront after the Probuild collapse. 
" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1bT3hW8w3sjgKJKiCQip50/291a949704fe2cdb194c95791b456281/180323_443-Queen-St_Hero-Website.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Queensland-based Hutchinson Builders has been appointed to take control of the completion of Cbus Property’s 443 Queen Street tower project on the Brisbane riverfront after the Probuild collapse.<br><br></span></div></div><p>International border closures literally shut the gate on labour, which coincided with government sweeteners many agree artificially inflated the market.</p><p>The construction industry employs more than 1.1 million people, representing 8.7 per cent of the total workforce. Construction industry salaries for entry level positions start at $72,609 per year, and average at $99,958, while more experienced workers are earning up to $152,841 per year.&nbsp;</p><p>But<a href="https://www.theurbandeveloper.com/articles/skills-shortages-challenge-of-the-decade-for-australia-s-construction-industry" data-mce-href="https://www.theurbandeveloper.com/articles/skills-shortages-challenge-of-the-decade-for-australia-s-construction-industry"> construction job vacancies</a> have increased by a massive 80 per cent since late 2019. By 2023, it’s forecast that there will be more than 100,000 unfilled roles in the sector.</p><p>Meanwhile, delays on major construction projects have blown out, more than doubling from 100-plus days before the pandemic to more than 200 days now, new analysis has found.</p><p>Across both post and pre-pandemic developments, nine out of every 10 projects are delivered late with almost two-thirds of projects late by two months or more, according to analysis from construction software provider nPlan.</p><p>At the extreme, almost one in four projects are delivered more than 250 days late, while almost one in 10 are delayed by more than a year, it found.</p><p>But the market isn’t slowing down. During February, 559 projects moved into the construction phase across Australia, up 6.6 per cent month-on-month. There were $1.5 billion worth of new apartments and units identified by Cordell during February.</p><p>But how the construction sector will handle these projects given the huge labour shortages being reported is yet to be seen. Meanwhile, employers are grappling with absentees for weeks due to Covid.</p><div id="56mNWIsqyuq66T7QZemzXU"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1yobOQTBYWWvX4ep8eNxEw/51e14375056241c58529f3153b00fcba/iStock-1224368340.jpg" alt="How the industry will deal with the labour shortage crisis remains to be seen." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1yobOQTBYWWvX4ep8eNxEw/51e14375056241c58529f3153b00fcba/iStock-1224368340.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ How the industry will deal with the labour shortage crisis remains to be seen.<br><br></span></div></div><p>The labour shortage is partly to blame for rising rates of insolvency in the construction industry, with a tough journey ahead, says Brad Walters, head of product and rating services at Equifax.</p><p>Labour shortages have coincided with months of inclement weather, supply chain issues, interest rate rises and high demand.</p><p>Construction insolvencies for March increased 24 per cent month-on-month, 28 per cent higher than the same time last year. That reflects a 33 per cent increase in construction insolvencies in the past 12 months, Walters says.</p><p>Mortgage arrears rates for sole traders in the construction industry are twice that of the average consumer, indicating that these business owners are dipping into their personal finances to keep their operations afloat in the face of major industry collapses, rising costs and ongoing supply chain issues, Equifax data shows.</p><p>During the first quarter of 2022, 270 construction companies filed for insolvency, which is up 21 per cent on last year.</p><p>Preliminary results for the first half of April show that construction insolvencies were 46 per cent higher year-on-year, which means the trend is continuing, Walters says.</p><p>“We know that 54 per cent of construction businesses are continuing to experience supply chain disruptions in April, which is up from 35 per cent last April. And one in five businesses are constrained and finding it tough to have enough employees to continue to service current operations,” he says.</p><p>Walters says we will continue to see challenges in the months ahead, and signs of stress among smaller operators, who tend to use their personal finance to support their businesses.</p><div id="5E3IIpAw0jRLDGW4SxoUI9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/47xtdwjUQsgx0PrXU6hS12/7f8931fbc6cd081181bc515bdffbfcf9/iStock-1394090414.jpg" alt="The crisis seems likely to spell the end for more firms." data-mce-src="//images.ctfassets.net/8pr762qjocl3/47xtdwjUQsgx0PrXU6hS12/7f8931fbc6cd081181bc515bdffbfcf9/iStock-1394090414.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The crisis seems likely to spell the end for more firms.<br><br></span></div></div><p>“The reality is that the industry is continuing to grapple with the same challenges that we’ve seen in the past, and that’s causing ongoing delays to projects as a result of the continuing supply chain disruptions.”</p><p>Understandably, construction industry recruiters such as Gearóid Considine are in high demand. He’s spent the past six weeks on a desperate recruitment drive for four Australian construction firms in the hope he can attract international talent to Australia to fill jobs, and also lure diaspora back home.</p><p>The construction industry needs to build relationships for the long-term and have a full relocation strategy in place, Considine, of Brightside Consultants, says.</p><p>“You need to go where the talent is and make agency recruiters your best friend, as they have great networks and constantly talk, meet, advise and influence the talent in the market with integrity,” he says.&nbsp;</p><p>Hutchinson says the next year or two is not the time to be rolling the dice if you’re in construction.</p><p>“We should all just bed down for a while and work within our means, don’t take on too much work that requires a whole pile of new and untried people.</p><p>“Stay close to your business because difficult issues are going to be the order of the day and you need to be on your guard and be able to confront these types of issues regularly and proactively.”<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 </a></strong><span style="font-family: -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif;"></span><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans" style="font-family: -apple-system, BlinkMacSystemFont, &quot;Segoe UI&quot;, Roboto, Oxygen, Ubuntu, Cantarell, &quot;Open Sans&quot;, &quot;Helvetica Neue&quot;, sans-serif;"><strong>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>

Building firms have been warned they’ll need to change how they work if they are to survive the dire labour shortages plaguing the sector…

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<p>Few could argue that the New South Wales construction and development industry desperately needed an overhaul given the damage to its reputation during the past few years.</p><p>Building defects have been in the spotlight after multiple tower evacuations, prompting industry watchdogs and the government to look at how to make developers more accountable for their work.&nbsp;</p><p>In fact, research found at least <a data-mce-href="https://www.theurbandeveloper.com/articles/study-finds-three-quarters-of-buildings-have-defects" href="https://www.theurbandeveloper.com/articles/study-finds-three-quarters-of-buildings-have-defects">one in four apartment blocks</a> in Sydney between 2007 and 2017 had one or more defects, including cracking, fire safety concerns such as shoddy cladding, or water ingress and flooding issues.&nbsp;</p><p>The UNSW Sydney and the University of Technology Sydney report reveals<a href="https://www.theurbandeveloper.com/articles/defects-building-construction-sydney-nsw-unsw-report" data-mce-href="https://www.theurbandeveloper.com/articles/defects-building-construction-sydney-nsw-unsw-report"> 51 per cent of buildings,</a> with adequate documentation included in the sample, had at least one type of building defect. About 28 per cent had at least three types of defects and 12 per cent had more than 10 different defect types.</p><p>But the<a href="https://www.theurbandeveloper.com/articles/nsw-introduces-ratings-for-developers-builders" data-mce-href="https://www.theurbandeveloper.com/articles/nsw-introduces-ratings-for-developers-builders"> new Independent Construction Industry Rating Tool</a> (iCIRT) promises to weed out the bad apples, and construction firms and developers in NSW are currently working to complete their certification requirements. <a href="https://www.theurbandeveloper.com/articles/nsw-building-commissioner-david-chandler-interview" data-mce-href="https://www.theurbandeveloper.com/articles/nsw-building-commissioner-david-chandler-interview">NSW Building Commissioner David Chandler</a> has ushered it in as part of six pillars of reform.&nbsp;</p><p>Created by Equifax, the iCIRT aims to provide national and globally facing capability records, with plans to expand from the early works in NSW to other states and territories.&nbsp;</p><p>But it’s an intensive process for time-strapped builders and developers, prompting questions about whether it’s a barrier for newcomers entering the industry.&nbsp;</p><p>Equifax confirms 75 builders and developers are currently going through the certification process, including Deicorp, Helm and Ultra Building. A further 100 construction companies are also in line to undertake the certification.&nbsp;</p><p>Undertaking the certification is anything but easy. Luxury apartment builder Helm chief executive Mark Monk says it took his team more than 300 hours to complete the certification.&nbsp;</p><p>“It’s incredibly arduous. It’s not a simple process in any way. It took us about three months or longer to get rated, so it’s a very intensive process,” Monk says.&nbsp;</p><div id="12UDOKpX9Ivl0qdlX17CBt"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6P21lQ6ogP0kUkBWAsKAIw/80d6a42a49c2f70aee0b11ce1805048d/ora-south-east_helm_dolls_point.jpeg" alt="Helm's Ora at Dolls Point: the process is involved and time-consuming but worth it, says" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6P21lQ6ogP0kUkBWAsKAIw/80d6a42a49c2f70aee0b11ce1805048d/ora-south-east_helm_dolls_point.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Helm’s Ora at Dolls Point: the certification process is ‘arduous’.<br><br></span></div></div><p>Auditors required three years of audited accounts, he says. “There’s a lot of back and forth in terms of questions and wanting to know what’s happened throughout the life of your business, right back to your credit history with sub-contractors to ensure you’re honouring payment terms.”</p><p>Conscious of the negative media reports about developers being unable to fund projects and sloppy work, he signed up to complete the iCIRT process. </p><p>“We wanted to stand out from the crowd. This was a differentiator for us, which we believe will set us apart in the future,” he says.&nbsp;</p><p>“There had been nothing that differentiates our business from the bottom 20 per cent in the industry. And there’s nothing that rewards us in terms of recognition for the reputation we’ve earned over the years, compared to the companies that we continually read negative things about in the media.</p><p>“The rating system goes some way toward recognising that we do have the right systems and processes in place and that we’re financially stable and well resourced. There needs to be something that differentiates the better players from the poorer ones.”</p><p>Monk warns the certification will prove an impediment for unprepared operators trying to enter the industry.</p><p>“I certainly think it will stop builders with two wheelbarrows and a ladder from trying to start a construction business, and I don’t have any problem with that to be perfectly honest. It’s the people who come into our industry under-resourced and under-funded that create a lot of the issues in our industry.&nbsp;</p><p>“But for the people who have done their homework, have a business plan and are well funded, this process won’t be any impediment at all.”</p><div id="OcMExeAnnwDU6yQXssZFe"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2Bmm9wTZ5xhMcbfq7IynIN/6b63aad7bb94cfc9736ebcd1a8d5acc1/ultra_building_co_2.jpeg" alt="Ultra Building Co’s managing director Adrian Sicari said he was happy with their four star rating." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2Bmm9wTZ5xhMcbfq7IynIN/6b63aad7bb94cfc9736ebcd1a8d5acc1/ultra_building_co_2.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Ultra Building Co’s managing director Adrian Sicari said he was happy with the company being awarded a four-star rating.<br><br></span></div></div><p>Ultra Building Co is also one of the first to complete the accreditation, which managing director Adrian Sicari says took over four months “and a huge amount of time involving Ultra’s resources providing evidence of compliance”.&nbsp;</p><p>The firm walked away with a four-star rating of a possible five.&nbsp;</p><p>“I’m happy Ultra Building Co are the only builder with four stars but was not happy at first with a 4-star rating—Ultra wanted five stars, but I understand why,” he says.</p><p>“We asked how a builder gets five stars and iCIRT gave us a few items to improve on—one was a succession plan as part of our leadership team so there’s someone else in place with the power to make decisions if I passed away.”</p><p>He hopes the rating system will be better understood by the broader industry and potential clients in time. </p><p>“All stakeholders need to be aware of the importance of being rated. The consumer needs to be made aware of the importance of a builder having a iCIRT rating, giving confidence and certainty of high quality successful project outcomes,” he says.&nbsp;</p><div id="29QmXtHeSMP5bs1UeKVu3u"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6tpVKjBPR6ww9219MItI1U/d2ca47fbd640aa3c11066e5979ea106f/david_chandler.jpeg" alt="NSW Building Commissioner David Chandler" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6tpVKjBPR6ww9219MItI1U/d2ca47fbd640aa3c11066e5979ea106f/david_chandler.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;"><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The tool is part of NSW Building Commissioner David Chandler’s sweeping reforms of an industry desperate to rebuild its reputation.<br></span></span><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">&nbsp;</span></div></div><p>The new Equifax tool was developed to carefully consider the assessment of new entrants and small businesses, Equifax head of product and rating services Brad Walters says.&nbsp;</p><p>He expects to be rating builders and developers through iCIRT on an ongoing basis, anticipating the number of rated constructors to continue. Equifax uses an auditable process to consistently assess structured and objective data, removing the potential for parties to “game” the system.&nbsp;</p><p>“For newly-established operators, the tool reviews the character and capability of key persons, including their track record, past projects, experience and qualifications, as well as the capitalisation and funding of the business, existence and maturity of their plans, processes and controls,” Walters says.&nbsp;</p><p>“We will be releasing a public-facing register of trustworthy constructors within the next few weeks to recognise those who have obtained at least three gold stars and have demonstrated their commitment for improved transparency by publishing their rating.”</p><p>While some countries have explored a subjective consumer-input, industry-influenced, social-scoring model, these have had limited success due to their reduced quality, integrity and objectivity, he says.&nbsp;</p><p>Equifax says it will maintain audit records to support independent and analytical reviews of rating outcomes, and perform annual reviews of its models, methodologies and performances.&nbsp;</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>

[+] Waitrose effect hero web.jpg

Location is everything, but can a supermarket nearby, especially a ‘posh’ one, drive up property values? The Urban Developer looks into the Waitrose Effect down under…

[+] Hero images w logo.jpg

<p>Australia’s largest home builder, <span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_480976908111646020705458" aria-invalid="spelling" data-mce-highlight-id="mce-cram_480976908111646020705458" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span>, has been forced to renegotiate contracts with customers as the cracks widen in the nation’s construction crisis.</p><p><span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_785992233121646020705459" aria-invalid="spelling" data-mce-highlight-id="mce-cram_785992233121646020705459" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span> chief executive Mario <span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_482121680131646020705459" aria-invalid="spelling" data-mce-highlight-id="mce-cram_482121680131646020705459" data-mce-bogus="1" data-mce-annotation="Biasin" data-mce-lingo="en_au">Biasin</span> confirmed that the builder was in the process of renegotiating contracts “in a small portion of contracts where customers have not met their contractual commitments”.&nbsp;</p><p>“<span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_798738657141646020705459" aria-invalid="spelling" data-mce-highlight-id="mce-cram_798738657141646020705459" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span> is assisting the customer at their election to enter a new contract reflecting current pricing,” <span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_886176387151646020705459" aria-invalid="spelling" data-mce-highlight-id="mce-cram_886176387151646020705459" data-mce-bogus="1" data-mce-annotation="Biasin" data-mce-lingo="en_au">Biasin</span> said.</p><p><span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_869041435161646020705460" aria-invalid="spelling" data-mce-highlight-id="mce-cram_869041435161646020705460" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span> has been in the building industry for 40 years.&nbsp;<span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_884923084171646020705460" aria-invalid="spelling" data-mce-highlight-id="mce-cram_884923084171646020705460" data-mce-bogus="1" data-mce-annotation="Biasin" data-mce-lingo="en_au">Biasin</span> would not elaborate, but said it was not the same thing as handing back contracts.</p><p>“<span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_583374460181646020705460" aria-invalid="spelling" data-mce-highlight-id="mce-cram_583374460181646020705460" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span> is committed to fulfilling every valid contract in which a fixed price has been agreed,” he said.</p><p>“<span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_63165117191646020705460" aria-invalid="spelling" data-mce-highlight-id="mce-cram_63165117191646020705460" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span> operates within the law and according to the terms of signed contracts. We also seek to work collaboratively with affected customers to find solutions and are factoring in their individual circumstances.”</p><div><div><div><picture><img src="//images.ctfassets.net/8pr762qjocl3/3Z1EvPNQir8Gm7B8sLUCwb/d69aa19dc55ea1a5094722e83072e327/metricon_build_1.jpeg" alt="Metricon has confirmed in is renegotiating some contracts." data-mce-src="//images.ctfassets.net/8pr762qjocl3/3Z1EvPNQir8Gm7B8sLUCwb/d69aa19dc55ea1a5094722e83072e327/metricon_build_1.jpeg"></picture><div><span style="align-content: center; opacity: 0.8;" data-mce-style="align-content: center; opacity: 0.8;">▲ Metricon has confirmed in is renegotiating some contracts. </span></div></div><span style="align-content: center; opacity: 0.8;" data-mce-style="align-content: center; opacity: 0.8;"><br></span></div><div><p>Industry speculation that Metricon was handing back contracts<a href="https://www.theurbandeveloper.com/articles/housing-construction-demand-builders-collapse" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/housing-construction-demand-builders-collapse"> began percolating </a>last year. When approached by <em>The Urban Developer</em>, Metricon’s Biasin dismissed the rumours as "malicious, false and baseless”.</p><p>Metricon undertook 6052 new home starts in the 2021 financial year, up from 4534 the previous year, according to the <a href="https://www.theurbandeveloper.com/articles/hia-reveals-top-home-builders-for-2021" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/hia-reveals-top-home-builders-for-2021">HIA-Colourbond Steel housing 100 report</a>.</p><p>Angry customers have contacted <em>The Urban Developer</em> about the situation, saying Metricon was not honouring contracts. One customer has begun litigation against Metricon, they said.</p><p>“We are now in February and Metricon sent me a letter cancelling my contract, with the excuse that they cannot keep the price due to Covid, and I have to pay $80,000 if I want to go ahead. Or walk away and leave my $20,000 deposit. They are not honouring contracts,” one customer said.</p><div><div><picture><img src="//images.ctfassets.net/8pr762qjocl3/2iOdUKwLxHUtyrBZGEYgXj/648a67511ebb0d6e3919265246f9e7fd/Metricon.jpg" alt=" Construction sector insolvencies have risen to 28 per cent of total insolvencies." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2iOdUKwLxHUtyrBZGEYgXj/648a67511ebb0d6e3919265246f9e7fd/Metricon.jpg"></picture><div><span style="align-content: center; opacity: 0.8;" data-mce-style="align-content: center; opacity: 0.8;">▲ Construction sector insolvencies have risen to 28 per cent of total insolvencies.<br><br> </span></div></div></div></div></div><p><span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_8794036591231646020781254" aria-invalid="spelling" data-mce-highlight-id="mce-cram_8794036591231646020781254" data-mce-bogus="1" data-mce-annotation="Metricon" data-mce-lingo="en_au">Metricon</span> isn’t the only builder feeling the heat. The competing pressures of a white-hot property market and <a href="http://white-hot" data-mce-href="http://white-hot" target="_blank" rel="noopener">rising construction costs</a> are claiming victims as builders are pushed to the brink.</p><p>News that tier-one building contractor <a href="https://www.theurbandeveloper.com/articles/probuild-administration" data-mce-href="https://www.theurbandeveloper.com/articles/probuild-administration" target="_blank" rel="noopener"><span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_1626849691291646020781561" aria-invalid="spelling" data-mce-highlight-id="mce-cram_1626849691291646020781561" data-mce-bogus="1" data-mce-annotation="Probuild" data-mce-lingo="en_au">Probuild</span> had called in administrators</a> due to cost blowouts and delays increased speculation that it is just the tip of the iceberg for the troubled construction industry. It’s left staff and contractors reeling.</p><p>“The demise of a business with the scale and reach of <span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_5032808201301646020781639" aria-invalid="spelling" data-mce-highlight-id="mce-cram_5032808201301646020781639" data-mce-bogus="1" data-mce-annotation="Probuild" data-mce-lingo="en_au">Probuild</span> is bound to send shock-waves through the industry as thousands of small businesses are impacted,” <span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_97235041311646020781639" aria-invalid="spelling" data-mce-highlight-id="mce-cram_97235041311646020781639" data-mce-bogus="1" data-mce-annotation="CreditorWatch" data-mce-lingo="en_au">CreditorWatch</span> chief executive Patrick <span class="mce-spellchecker-annotation mce-spellchecker-word mce-cram_562784131321646020781639" aria-invalid="spelling" data-mce-highlight-id="mce-cram_562784131321646020781639" data-mce-bogus="1" data-mce-annotation="Coghlan" data-mce-lingo="en_au">Coghlan</span> said.</p><p>“Sadly, I fear we could see many more going under as an industry already under significant pressure is dealt another heavy blow.”</p><p>Other high-profile casualties include <a href="https://www.theurbandeveloper.com/articles/builder-abd-group-voluntary-administration" data-mce-href="https://www.theurbandeveloper.com/articles/builder-abd-group-voluntary-administration" target="_blank" rel="noopener">Melbourne’s ABD Group</a> and Brisbane-based homebuilder Privium, which <a href="https://www.theurbandeveloper.com/articles/privium-voluntary-administration" data-mce-href="https://www.theurbandeveloper.com/articles/privium-voluntary-administration" target="_blank" rel="noopener">folded in November owing $28 million</a>.</p><p>The Tasmanian franchise of home builder Hotondo Homes <a href="https://www.theurbandeveloper.com/articles/hotondo-homes-tasmanian-constructions-voluntary-administration" data-mce-href="https://www.theurbandeveloper.com/articles/hotondo-homes-tasmanian-constructions-voluntary-administration" target="_blank" rel="noopener">entered liquidation</a> at the start of this year, with 40 unfinished homes on its books. Liquidator Revive Financial confirmed that the difficulties in obtaining building materials and the increased costs of these materials were to blame.</p><p>The federal government had hoped that the nation could build its way out of the pandemic. More than 121,000 people applied for the <a href="https://www.theurbandeveloper.com/articles/-homebuilder-a-trojan-horse-for-builders" data-mce-href="https://www.theurbandeveloper.com/articles/-homebuilder-a-trojan-horse-for-builders" target="_blank" rel="noopener">HomeBuilder grant</a>, which is expected to support around $30 billion of residential construction projects.</p><p>But industry insiders say the $2.5-billion support package over-stimulated the sector and pushed builders to the brink.</p><p>And the cracks are starting to show elsewhere. <a href="https://www.theurbandeveloper.com/articles/cashflows-driving-construction-insolvencies-spike" data-mce-href="https://www.theurbandeveloper.com/articles/cashflows-driving-construction-insolvencies-spike" target="_blank" rel="noopener">Building industry insolvencies</a> rose to 28 per cent of total insolvencies at the end of last year, rising from 27 per cent in March 2020.</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> </strong><strong>Click here to learn more.</strong></a><br></p><div><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>

Australia’s embattled construction sector has been dealt another blow as angry buyers accuse Metricon of handing back contracts as the builder negotiates pricing blowouts…

Developers are clambering to secure tenancy agreements with luxury retailers among the growing number of shop-top developments under way in inner-city suburbs across the country.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Developers are clambering to secure tenancy agreements with luxury retailers among the growing number of shop-top developments under way in inner-city suburbs across the country.</p><p>In yet another post-Covid residential trend, owner-occupiers want convenience right on the doorstep, seeking out developments above high-end retailers.</p><p>Convenience-based apartment stock chalked up an <a href="https://www.theurbandeveloper.com/articles/new-shop-top-plans-for-sydneys-north-shore">average 16 per cent premium on prices</a>, compared to suburb averages. </p><p>And developers are definitely delivering.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>What is shop-top living?</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Shop-top housing is defined as one or more dwellings above ground-floor retail premises or commercial premises. It offers an alternative to more traditional housing types and is favoured by some councils in a bid to cater for a growing residential footprint.</p><p>While there’s evidence a number of developers are delivering shop-top housing in inner-suburban areas of Brisbane, Sydney and Melbourne, the trend is also emerging in the regions.</p><p>Lismore City Council in northern NSW has been pushing for these developments to add to the vibrancy of the CBD and to renovate disused floor space above shops and offices.</p><p>In Queensland, gourmet grocery brand Harris Farm Markets has <a href="https://www.theurbandeveloper.com/articles/brisbane-apartment-tower-aviary-residences-position-property">announced a deal with State Development Corporation’s</a> (SDC) Aviary Toowong with plans to take up residency on the ground floor of the residential project.</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/9ba1a34f-d224-4a71-80cf-857bca08803e.jpg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ Harris Farm Markets in on board SDC’s Aviary Toowong residential project.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The ground floor will include a mix of retail, hospitality and entertainment options for the inner-western suburbs, coupled with a 20-level building and prime residential tower.</p><p>SDC managing director Ross McKinnon confirmed that other retailers in the development include cafes, restaurants, specialty shops and a state-of-the-art cinema complex.</p><p>A shop-top housing project has developer <a href="https://www.theurbandeveloper.com/articles/new-shop-top-plans-for-sydneys-north-shore">Thirdi joining forces with Coles Group</a> to create the $180-million Balfour Place, a soon-to-be-released mixed-use development planned for the existing Coles supermarket site in Lindfield, on Sydney’s North Shore.</p><p>The DA-approved site was sold by Coles Group to the developers in 2020 after more than 50 years of trading on the site. </p><p>Strong supermarket yields underpinned by high transaction volumes, with data showing a 230 per cent year-on-year increase and $854.2 million in shopping centre deals recorded over the three months to the end of July, 2021.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Vicinity’s big play</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Vicinity Centres confirmed that shop-top living is also a key investment focus. It has plans to <a href="https://www.theurbandeveloper.com/articles/vicinity-centres-buranda-village-development-application">transform Queensland’s Buranda Village </a>into more than 600 residential apartments above commercial space across four buildings. </p><p>Vicinity is also revitalising Melbourne’s Box Hill to create new residential and retail development.</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/d927befc-975e-4979-93ce-a635b3b78924.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ Vicinity and Golden Age Group’s The Glen will have 50 speciality stores and more than 500 apartments.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>In one of Victoria’s largest private urban regeneration projects, the vision is to transform 5.5ha into a mixed-use and retail precinct for more than 3800 residents by 2030. </p><p>Vicinity and Golden Age Group has delivered a $450-million, three-tower “above-mall”  project in Melbourne’s south-east atop The Glen. The $430-million redevelopment includes 50 speciality stores and more than 500 apartments.</p><p>Vicinity chief executive Grant Kelley said the ambitious mixed-use project had a combined value of $1 billion. </p><p>“Our strategy takes advantage of our shopping centres’ great locations around Australia as more and more people seek to live in areas which satisfy a range of diverse lifestyle needs,” he says. </p><p>NSW-based developer <a href="https://www.theurbandeveloper.com/articles/sunland-the-lanes-panthera-group-mermaid-waters-gold-coast">Panthera Group is also on the bandwagon</a>, paying $45.8-million for Sunland Group’s retail development precinct The Lanes in the Gold Coast suburb of Mermaid Waters.</p><p>The 12,500sq m shopping village will feature retail laneways interwoven with a fresh food market hall, cafes, restaurants, medical centre, office space, lifestyle entertainment, and a lakeside communal space.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Not all good news</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>But not all councils are in favour of shop-top developments. </p><p>Late last year, the Central Coast voted down a relatively modest shop-top housing plan on the foreshore of Ettalong.</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/1812dace-d0e1-456c-b948-3d08da301497.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ Panthera Group’s The Lanes on the Gold Coast.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The $5.4-million plan for 302-306 Ocean View Drive came to the Central Coast Local Planning Panel due to a number of objections over the height. Opponents voiced concerns that the quaint village feel of Ettalong was in danger if the development was approved.</p><p>The proposal, by KHMS Corp, was for the partial demolition of the existing commercial building on the corner of Ferry Road, removal of a house and the construction of a three-storey shop-top housing development with parking.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>What buyers want</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Whittaker Property Group’s Grant Whittaker says the trend toward shop-top living has been noticeable in Sydney, Melbourne and Brisbane in particular. He has other similar developments in the pipeline in Brisbane, saying that this new generation of buyer wants convenience and amenity.</p><p>“People are buying into these developments knowing that a supermarket is going in, which always fuels a lot of interest. There are buyers out there who want to live on top of a good supermarket,” Whittaker says.</p><p>Developers are listening to the market and playing the role of visionary when planning new developments, he says. An interesting retail experience focused on food and convenience is coveted by buyers keen on this type of lifestyle, he says.</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/3ac72ebb-6c66-4d2c-a754-0a689d59f39d.jpeg" width="940"/></picture><div><span style="align-content:center;opacity:0.8">▲ Vicinity’s Buranda Village redevelopment will include 600 apartments across four towers.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“For this to work, you have to have the right location and to appeal to the right demographics; often downsizers and up-and-coming professionals. You can’t just buy any site and say we’re going to put a supermarket down below and then residential above. It’s about striking the right balance,” he says.</p><p>“I know there’s other developers in Brisbane looking to capitalise on this trend, and are working on similar concepts at the moment.”</p><p>Retailers are bending over backwards to secure these locations, too, he says: “It’s a captive market—and can underwrite their business.”</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>

Residential developments atop retail, especially luxury outlets, are on the rise across the country. We explore into this growing trend...