[+] esport fortress hero web.jpg

<p>After launching straight into two years of pandemic shutdowns, Melbourne esports venue Fortress is only just beginning to hit its stride. Yet the company continues to back the new entertainment category that it’s developed.</p><p>That self-belief is so strong that Fortress is already expanding to Sydney, with a mammoth second venue under refurbishment and due to open this summer. At around 2500sq m, Fortress Sydney will be the largest games venue of its kind in the southern hemisphere, according to the company.</p><p>The Fortress Sydney venue will emulate its Melbourne counterpart, including a bar and dining area, arcade machines, gaming computers, and an esports arena, laid out over two levels in Fortius’ Central Park Mall.&nbsp;</p><p>While the Melbourne outlet is trading strongly, launching a novel (and potentially confusing) offering at this scale into a struggling Sydney nightlife economy might be seen as a risk.</p><p>Speaking exclusively to <em>The Urban Developer</em>, Fortress chief executive Jon Satterley explained the logic behind esports as an entertainment venue.</p><p>“Fortress is a hospitality business, with games culture as its theme,” Satterley said.</p><p>“Gaming is hiding in plain sight. The target market of early-mid 20s are almost all gamers. But they’re still being offered things that people were doing in the 1960s, like going to the movies or playing mini golf.</p><p>“And so we just saw that there’s this big desire and hunger for gaming-focused social experiences. Certainly, we’re not pioneering this—there have been LAN lounges for years, cafes and board game nights. But we believed we could inject far more capital into that experience, and create a more mainstream, more polished, luxury version of all of those things.”</p><p>For Satterley, committing to the physical scale of the development is crucial, despite the virtual nature of its offering.</p><div id="68b4zwTV7XyHGxR8lLkAzO"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4e0doZOFYiQ0NvpTLqY4x8/d949478fb3ac6f5838ecfb143d18d889/7728_Fortress_Syd_220421_Cam06_Medieval_Tavern_View_01.jpg" alt="A render of the Fortress esport venue planned for Sydney." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4e0doZOFYiQ0NvpTLqY4x8/d949478fb3ac6f5838ecfb143d18d889/7728_Fortress_Syd_220421_Cam06_Medieval_Tavern_View_01.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of the Fortress esport venue planned for Sydney.<br><br></span></div></div><div id="68b4zwTV7XyHGxR8lLkAzO"><p>“The first and primary initiative for the business is to operate these grand physical venues and build the brand and the experience from there. That’s the unique value proposition.</p></div><p>“Hence the size and scale of Fortress. We believed that this wasn’t going to work if it was a skinny, minimally viable product.&nbsp;</p><p>“The way to make an impact in this space was to really deliver these cathedrals for gamers, these kinds of giant, significant landmark venues. A small hole-in-the-wall, that would have continued that positioning as being a niche pursuit.”</p><p>While the Melbourne venue has had difficulty even opening for trade, the model is starting to prove itself, with double-digit month-on-month growth in traffic and revenue. As a novel proposition, the company is still working to understand the seasonality of the business and benchmarking its financial metrics.</p><p>“This is the first time we’ve ever traded in May, June, July, so we’re looking at the numbers and asking ‘is this good or bad?’,” Satterley says.</p><p>“But we’ve been really happy with our cashflow and significantly exceeding our monthly targets.”</p><p>The multi-entertainment nature of the business means diversity among profit centres. Food and beverage are sizable revenue streams, but the margins on gaming equipment rented for onsite use are particularly strong.</p><p>“One aspect of our business model is to provide corporate event space,” Satterley says.</p><p>“That’s still been a little slower than we would have liked, because of the macro conditions of where the world is, and where Australia is. However, we had a really good July with a lot of corporate groups coming together for an end-of-financial-year shindig.”</p><div id="4hs9xFdL1yjI4FCEKhUr63"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2JxMve6ujAM4cNvw6q5S9s/19e73936a495e5235dc7796b0cc7b885/92051_Central-Park-Retail.jpeg" alt="Fortius says it believes “Fortress Sydney will not only transform Central Park Mall but will also reactivate a thriving night-time economy...”
" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2JxMve6ujAM4cNvw6q5S9s/19e73936a495e5235dc7796b0cc7b885/92051_Central-Park-Retail.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Fortius says it believes Fortress Sydney will transform Central Park Mall and reactivate a thriving night-time economy.<br><br></span></div></div><h2>Location, site characteristics crucial</h2><p><br>A Sydney venue was always part of Fortress’ property strategy, but the location is critical. Unlike other entertainment options with established brands and lower cost of capital, Fortress required a central site to make an impact.</p><p>“We need to fish where the fish are, so when we saw Central Park Mall shown to us as an option, we couldn’t believe how incredible the spot was.&nbsp;</p><p>“You’ve got UTS across the road, Central Station a five-minute walk away, Sydney Uni a 10-minute walk. We just pinch ourselves about how good that location is.”</p><p>Satterley says that placing Fortress in the Broadway precinct, an existing nightlife hub, means that it’s unlikely to attract noise or nuisance complaints from residential neighbours in the area when patrons leave late at night.</p><p>The site should also benefit from the under-development Sydney Tech Central Hub, which will place 250,000sq m of office space in the vicinity, including the Atlassian tower, hosting a projected 25,000 workers in total.</p><p>The venue and its location have the blessing of <a href="https://www.theurbandeveloper.com/articles/michael-rodrigues-night-time-commissioner-sydney-cbd" data-mce-href="https://www.theurbandeveloper.com/articles/michael-rodrigues-night-time-commissioner-sydney-cbd">NSW 24-Hour Economy Commissioner Michael Rodrigues</a>, who says that Fortress will “increase the diversity of offering in the going-out experience”.</p><p>“It further enhances the local precinct, which is already home to great bars, restaurants and cultural institutions, but will now house the largest games venue of its kind in the southern hemisphere,” Rodrigues told <em>The Urban Developer</em>.</p><p>“Scenes from other Fortress venues have been electrifying, and I can’t wait to see the venue packed to the rafters with gamers having an amazing night out.”</p><h2>Building retail around esports</h2><p><br>The Central Park Mall, while benefiting from a CBD-fringe location and attached residential towers, has suffered from high-tenant turnover and several redesigns of its layout.</p><p>“I think perhaps it was just feeling a bit like there wasn’t really a strategy around what was going on in the joint,” Satterley says.</p><div id="4Q5sgSHhs2exdNlSFMtXNz"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7iboCxU7R0qPwHCO10kK3y/f6f0cf5887f823eef6b9dbf8a83155f8/7728_Fortress_Syd_220421_Cam03_Arena_Balcony.jpg" alt="A render of inside the planned Sydney Fortress esport venue." data-mce-src="//images.ctfassets.net/8pr762qjocl3/7iboCxU7R0qPwHCO10kK3y/f6f0cf5887f823eef6b9dbf8a83155f8/7728_Fortress_Syd_220421_Cam03_Arena_Balcony.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of inside the planned Sydney Fortress esport venue.<br><br></span></div></div><p>“It didn’t feel coherent, there wasn’t a narrative to support what was happening in that mall.</p><p>“We want to be able to bring something powerful and different and unique, and give a landlord a story to tell about the venue. Something that can really either flesh out their entertainment offering, or kickstart it.”</p><p>Fortius Funds Management, who acquired the retail assets in 2019, are planning to use Fortress as an anchor to reposition the space as a “contemporary entertainment and lifestyle destination”.</p><p>Marc Fitton, head of syndications at Fortius, told <em>The Urban Developer</em> that “Fortius believes Fortress Sydney will not only transform Central Park Mall but will also reactivate a thriving night-time economy in the entire Central Park precinct.”</p><p>“Central Park Mall is uniquely placed to have secured Fortress’ only Sydney flagship venue by virtue of its location in what is fast becoming Sydney’s technology and innovation hub, proximity to 12 recognised tertiary education facilities and densely populated and segmented main trade area with an estimated 100,000 students, 32,000 residents and 47,000 office workers,” Fitton said.</p><p>“We are incredibly excited to be partnering with a dynamic entertainment technology venue in Fortress, which underpins our vision to reimagine urban retail.”</p><p>Satterley argues that bringing multiple entertainment venues into close proximity will benefit the retail ecosystem.</p><p>“You want to have your frenemies with you, your co-opetition. We’ve had conversations with other landlords in the country where they’ve given us a look at a property site. And we’ve actually said to them, ‘We wouldn’t want to go there unless you can promise there’ll be rivals and competitors in the same area’.”</p><p>“Our competitors are not other venues; our competitors are people staying home and watching Netflix or gaming.”<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer Plus</em> (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="7EWNK3tnvFfpo0dxIe7jE4"><div><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><p><br><br></p>

The esport sector is set to explode, says the group pioneering the sector in Australia as it plots the largest games venue of its kind in the southern hemisphere…

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<p>Developers and industry stakeholders are optimistically looking to NSW planning minister Anthony Roberts to resolve the fracas over commercial height limits and floor space ratios in the Parramatta CBD as the Local Environment Plan inches towards finalisation.</p><p>The council and developers were shocked when the Department of Planning and Environment <a href="https://www.theurbandeveloper.com/articles/high-rise-limit-hike-parramatta-cbd-planning-proposal" data-mce-href="https://www.theurbandeveloper.com/articles/high-rise-limit-hike-parramatta-cbd-planning-proposal">accepted the City of Parramatta’s CBD Planning Proposal</a> in May, while rejecting its proposed height limits and floor space ratios (FSR).</p><p>Commercial tower heights were knocked down from 60 storeys to 52 storeys, and mixed-use residential projects from 75 to 69 storeys.</p><p>The council had proposed unlimited FSR for sites with a footprint greater than 1800sq m but the planning department rejected that proposal and maintained 10:1 limits.</p><p>The plan will expand the boundaries of the CBD but North Parramatta and a block in Phillip Street were excluded from changes to controls by the department over concerns about heritage values and public amenity.</p><p>A City of Parramatta submission on the issue was debated at the council's meeting on Monday, July 11, and will be discussed again at its meeting on July 25.</p><p>That submission is calling for the department to produce a State Environmental Planning Policy allowing unlimited FSR in the commercial core and another allowing higher, albeit limited, FSR in the surrounding mixed-use zone.</p><p>The SEPP process would not require another round of public consultation and could be completed in time to take effect on October 14, when the controls are due to come into place.</p><p>The council is also calling for the department to provide $500,000 for a study into the urban design, heritage, and economic analysis of North Parramatta, with a precinct plan to follow.</p><div id="4ZpFFRF4hNm5yewvpyLT0M"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1SN9HjagwEWbnqLsfq2Hbc/37c70158027c23694c2862277d23a347/3.jpg" alt="Vision unrealised: Developers and the council believe the proposed amendments will strangle development in the Parramatta CBD." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1SN9HjagwEWbnqLsfq2Hbc/37c70158027c23694c2862277d23a347/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Vision unrealised: Developers and the council believe the proposed amendments will strangle development in the Parramatta CBD.<br><br></span></div></div><p>The recommendations were endorsed by the Property Council of Australia, and Business Western Sydney.</p><h2>Disruptions ‘blocking progress’</h2><p><br>The disruptions have halted several projects in advanced stages of planning and threaten Parramatta’s status as a hub for development and its role as the second CBD of Sydney, according to developers.</p><p>Urban Taskforce chief executive Tom Forrest says the DPE modifications will stymie plans from government, tenants, residents and workers to develop Parramatta into a thriving CBD.</p><p>“What's concerning is that there's a demand from large commercial players—banks, public service agencies and the like—for large floor plates,” he says</p><p>“If it's really going to be the second CBD of Sydney, as is the desire of just about everyone, I don't think it's sensible to be placing limits.”</p><p>Supporting infrastructure intended to enable a denser CBD and greater daytime population, including the Sydney Metro and Light Rail, is under construction. The NSW budget handed down late last month committed $600 million to Stage 2 of the Light Rail, due to open in 2023.</p><p>But questions remain over how much office space Parramatta will be able to provide.</p><p>Roberts hailed the plans approval in May, saying, “The finalisation of these plans are the culmination of work with Parramatta City Council to unlock more than 11,000 new homes and almost 16,000 new jobs in the CBD”.</p><p>However, the council’s initial proposal was intended to deliver up to 15,000 new dwellings and support more than 59,000 new jobs.</p><div id="1PuSML57o9XoCYQj0Pbbzj"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7vU7bpWB6B3hdbRALdXmob/a3fb7d00bf507821e8a34ed231550da2/1.jpg" alt="The city’s mayor says ‘the future of the CBD hinges on getting these plans right’. Parramatta" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7vU7bpWB6B3hdbRALdXmob/a3fb7d00bf507821e8a34ed231550da2/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The city’s mayor says ‘the future of the CBD hinges on getting these plans right’.<br><br></span></div></div><p>Parramatta Lord Mayor Donna Davis said that “over the past decade, the council has worked tirelessly with the NSW government, community, landowners and developers to create a blueprint for development that acknowledges the specific needs of our unique city”.</p><p>“The future of our CBD hinges on getting these plans right, so we won’t rest until our vision for the city is realised.”</p><h2>‘Finalisation’ not quite finalised</h2><p><br>Rather than modifying plans or simply upping stakes for more accommodating precincts, developers are placing their hopes in Roberts to unwind the restrictions before the plan is finalised.</p><p>Forrest told <em>The Urban Developer</em> that a relaxation of limits on towers is "not an expectation but certainly a strong hope".</p><p>“And we are calling for the minister to review whether it's sensible for the second CBD of Sydney to be placing limits on the height of commercial buildings. We're calling for the government to step in.”</p><p>St John's Anglican Cathedral, which has launched a 100-year masterplan including a new plaza, a commercial tower, and a residential tower, has spoken out against the planning department modifications.</p><p>Reverend Canon Bruce Morrison of the Anglican Church told <em>The Urban Developer</em> that “the recent Parramatta CBD planning instrument released by NSW Planning is a very serious threat to the viability of our project and a range of other major projects”.</p><p>However, Morrison said, “We have had positive discussions at a ministerial level, and we are hopeful of a resolution”.</p><p>At 43 and 45 storeys, the proposed St. John's towers already sit under the modified height limit but are affected by the floor space restrictions.&nbsp;</p><div id="2aWXRqUZH4FgTFQKZsMCZb"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4ZTtcI6dvC85rlH7mSJk4p/d5b97a929b170d147afff2ffa87d2c30/2.jpg" alt="St John’s Anglican Cathedral has launched a 100-year masterplan for its Parramatta CBD site." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4ZTtcI6dvC85rlH7mSJk4p/d5b97a929b170d147afff2ffa87d2c30/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ St John’s Anglican Cathedral has launched a 100-year masterplan for its Parramatta CBD site.<br><br></span></div></div><p>“Ultimately, if no resolution is reached, investor confidence will be severely shaken, which in turn will undermine the government's broader planning objectives for Sydney,” Morrison said.</p><p>“The current economic outlook has enough headwinds; investors need stability and an effective planning regime should deliver that stability.”</p><h2>Design process upended</h2><p><br>Developers say that projects progressed under existing design processes have received indicative approval for years. The CBD Planning Proposal has been in development since 2013, with many stakeholders working to its parameters while state government agencies signalled approval.</p><p>Morrison said that the St John’s proposal “has been formally supported by Parramatta councillors twice as well as the Department of Planning during the extended approvals process”.</p><p>“We are committed to Parramatta and want to invest in the city but the proposed planning instrument simply renders our proposal uneconomic.</p><p>“This is not what we want, after so many years of working closely with Parramatta Council and Department of Planning, not to mention substantial expenditure getting the proposal this far.”</p><p>Developers argue that the existing design and review process is sophisticated and stringent enough to deliver amenable precincts, without the rigid limitations that DPE has mandated.</p><p>Forrest argues that the government should “let those architectural design processes sort out what is sensible, rather than just placing arbitrary FSR limits”.</p><p>The use of Site-Specific Planning Proposals may allow increased densities on a project-by-project basis but produces a riskier planning environment.&nbsp;</p><p>Planning Minister Anthony Roberts is on leave and was unavailable for comment. The Department of Planning and Environment and City of Parramatta Council were contacted for comment.<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Progress in Parramatta is under threat, say critics of proposed planning changes that would spell the end of a raft of mooted projects in Sydney’s second CBD…

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<p>After years of industry-led research and development, the Property Council of Australia has launched the pilot phase of its voluntary social sustainability reporting tool.</p><p>The <a href="https://campaign.propertycouncil.com.au/supplierplatform-0?hs_preview=evYHYhsz-74342429080" data-mce-href="https://campaign.propertycouncil.com.au/supplierplatform-0?hs_preview=evYHYhsz-74342429080" target="_blank" rel="noopener">Collective Social Impacts Framework,</a>&nbsp;built in consultation with industry stakeholders, is designed to measure and report the benefits or harms of construction projects, precincts and assets.</p><p>Launching the tool at a PCA event on Friday, Lendlease head of responsible sourcing Ro Coroneos was adamant that the tool is not in its final form. While the tool is usable, PCA will continue to develop it through industry feedback during this financial year.&nbsp;</p><p>“It’s a pilot, it’s a pilot, it’s a pilot,” Coroneos told attendees.</p><p>The framework builds on existing industry standards including Green Star, UNSDGs, WELL and GRESB.</p><p>Projects eligible for the tool include residential, industrial, commercial and retail developments larger than $50 million or refurbishments over $30 million.</p><p>Each participating organisation can submit up to five projects completed in the previous 12 months.</p><h2>‘Capital decision-makers’ want more</h2><p><br>The collective social impacts framework is not a rating tool or scoring system, according to its developers, with Coroneos affirming that some social impact metrics “can’t be measured in dollars”.</p><p>However, investors, lenders, shareholders and insurers are increasingly looking to ESG reporting as information material to financial decision-making.</p><div id="5tkhOfWTZNbkSh122e8afM"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6KiEdyVjhecLtOtKeNdjCa/3e5091baf82212c49650573658648934/2.jpg" alt="Something fundamental has changed in capital markets, says KPMG's Richard Boele." data-mce-src="//images.ctfassets.net/8pr762qjocl3/6KiEdyVjhecLtOtKeNdjCa/3e5091baf82212c49650573658648934/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Something fundamental has changed in capital markets, says KPMG's Richard Boele.<br><br></span></div></div><p>Richard Boele, social impact services partner at KPMG, told attendees that “something fundamental has changed in capital markets.”</p><p>“I was talking to a major bank, and their debt provider is asking about their approach to ESG.”</p><p>Increasingly sophisticated quantitative ESG data, as well as narratives built from qualitative ESG data, are “so powerful, and helpful to decision-makers”, according to Boele.</p><p>“Particularly, I would suggest, capital decision-makers,” he said.</p><p>“That's why this framework is inviting you in, to have a look at those key areas where we might not have the silver bullet in terms of how exactly to measure. This framework gives us a place to come together and share experiences, and investors are working on this as well.”</p><p>While the PCA says that participants will benefit from more reporting to capital markets, there is still work to be done.</p><p>“I don't want people to misunderstand and think the tool is giving you a black-and-white kind of solution, because it is something that we're going to have to build on progressively over time as it comes more sophisticated and matures,” Coroneos said.&nbsp;</p><p>“But it will be the stimulus for those very pointed, informed, important conversations with [financial decision-making] stakeholders around those issues.”</p><h2>ESG disclosures voluntary—for now</h2><p><br>Frameworks to measure, monitor and report ESG risks continue to proliferate, and policymakers globally are seeking to forge consensus on appropriate mechanisms. Corporate regulators have also stepped up their focus on ESG risks and disclosure in recent years.&nbsp;</p><p>ASIC is <a href="https://asic.gov.au/about-asic/news-centre/speeches/globalisation-of-financial-services-regulation/" data-mce-href="https://asic.gov.au/about-asic/news-centre/speeches/globalisation-of-financial-services-regulation/" target="_blank" rel="noopener">supporting the work</a> of the International Sustainability Standards Board; APRA <a href="https://www.apra.gov.au/sites/default/files/2021-11/Final%20Prudential%20Practice%20Guide%20CPG%20229%20Climate%20Change%20Financial%20Risks.pdf" data-mce-href="https://www.apra.gov.au/sites/default/files/2021-11/Final%20Prudential%20Practice%20Guide%20CPG%20229%20Climate%20Change%20Financial%20Risks.pdf" target="_blank" rel="noopener">continues to nudge companies</a> into voluntary disclosure of climate-related financial risk under the TCFD framework; and the ACCC has made “consumer and fair trading issues in relation to environmental claims and sustainability” <a href="https://www.accc.gov.au/about-us/australian-competition-consumer-commission/compliance-enforcement-policy-and-priorities" data-mce-href="https://www.accc.gov.au/about-us/australian-competition-consumer-commission/compliance-enforcement-policy-and-priorities" target="_blank" rel="noopener">a top priority for 2022-23</a>.</p><div id="1ctntM2TffHusIC1c1CFOr"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2D5xQgdz4Azj11Ah17wLYm/057a3f3a99625f6173333f657096ad03/3.jpg" alt="social sustainability mid 1" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2D5xQgdz4Azj11Ah17wLYm/057a3f3a99625f6173333f657096ad03/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Corporate regulators have stepped up their focus on ESG risks and disclosure in recent years.<br><br></span></div></div><p>According to Boele, the ACCC has recognised that investors, particularly retail investors, are increasingly reliant on ESG reporting information.</p><p>Some social impact disclosures are already mandated in Australia, particularly under the Modern Slavery Act (2018), which requires businesses with consolidated revenue over $100 million to report, monitor and address modern slavery risks in their supply chain.</p><p>The new federal Labor government has previously made commitments to legislate requirements for large companies to publicly disclose their gender pay gap.&nbsp;</p><p>The government has also indicated it intends to implement <a href="https://humanrights.gov.au/our-work/sex-discrimination/publications/respectwork-sexual-harassment-national-inquiry-report-2020" data-mce-href="https://humanrights.gov.au/our-work/sex-discrimination/publications/respectwork-sexual-harassment-national-inquiry-report-2020" target="_blank" rel="noopener">the recommendations of the 2020 Respect at Work report</a>, which will likely place some demands on companies to disclose sexual harassment data.</p><p>Existing frameworks and certification schemes, such as the Green Star rating system, take some social impacts into account.<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

The launch of the Property Council of Australia’s social sustainability reporting tool has underlined why ESG reporting is increasingly important to get developments off the ground…

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<p>Just weeks after their Coalition colleagues were routed at the Federal election, NSW Premier Dom Perrottet and his treasurer Matt Kean have used the state budget to make the argument that they are a breed apart.</p><p>Ditching the hi-vis and hard hats, the 2022-23 budget has put the focus squarely on investing in humans.</p><p>Budgets in recent years have seen much discussion of NSW’s infrastructure pipeline, but childcare, healthcare, and household budget relief are the biggest priorities for the year ahead.</p><p>“If our state is to reach its fullest potential, then we must invest in more than just bricks and steel. We must invest in our people as well,” Kean told Parliament in his inaugural budget address.</p><p>“This should not only be the starting principle of our politics, it should also be the common sense of our commerce.”</p><p>Rattling off new measures, the treasurer made commitments totalling $7.2 billion towards family budget relief, $5.4 billion towards the healthcare sector, and $3.5 billion (in conjunction with federal funding) towards flood-affected communities.</p><p>While the treasurer flagged a return to surplus in the near future, after coronavirus and floods have pushed unexpected deficits on the state, he also argued that the government won’t be tightening the purse strings.</p><p>“Our covenant to future generations is about more than merely leaving them with the finances in good shape. It’s also about investing today, so that they may enjoy the returns of a more prosperous tomorrow.”</p><p>The budget projects a deficit of $11.3 billion in the year ahead, with gross state product to grow at 4.5 per cent. NSW should return to surplus in the 2024-25 financial year, with net debt to stabilise at 14 per cent of GSP in 2026.</p><h2>Stamp duty reform finally under way</h2><p><br>However, there’s plenty in the budget for the property sector to chew over. The <a data-mce-href="https://www.theurbandeveloper.com/articles/phasing-out-stamp-duty-to-cost-nsw-2.5bn" href="https://www.theurbandeveloper.com/articles/phasing-out-stamp-duty-to-cost-nsw-2.5bn" target="_blank">long-touted reforms to stamp duty</a>, including the introduction of an opt-in land tax for homeowners, will be introduced as part of the package.</p><div id="7eeBD9r8cLQVfxKHnUGarp"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2unVm4Q8QHCdIG2yWHngmj/a0cf0b0c85c59d416c325a5f3ac6b696/1.jpg" alt="NSW Premier Dom Perrottet." data-mce-src="//images.ctfassets.net/8pr762qjocl3/2unVm4Q8QHCdIG2yWHngmj/a0cf0b0c85c59d416c325a5f3ac6b696/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ NSW Premier Dominic Perrottet: we must invest in more than just bricks and steel.<br><br></span></div></div><p>“We want to lower the barriers to owning a home for first home buyers seeking a place of their own,” Perrottet said.</p><p>“In the past two decades, the share of first home buyers under 35 years of age has declined from 67 per cent to 61 per cent. Lifting home ownership is part of this government’s efforts and ambition to help families who are feeling the squeeze.</p><p>“The First Home Buyer Choice will remove one of the largest upfront costs to buying a home and help deliver a brighter future for first home buyers.”</p><p>The new system will allow home buyers to elect whether they will pay a one-off stamp duty, or a smaller, on-going annual land tax. The budget projects that the transition will make a $729-million dent in the state’s finances, as lower revenues from reduced stamp duty are initially felt.</p><p>Properties worth up to $1.5 million are eligible, with fees set at $400 plus 0.3 per cent of the land value of the property annually. The property will not be locked into the land tax system when ownership changes.</p><p>Urban Taskforce chief executive Tom Forrest estimated that stamp duty on a property is the equivalent of 14 to 17 years of land tax under the scheme’s announced rate.</p><p>“While the property sector (and almost all economists) would prefer to see a wider application of the choice between stamp duty payments up front and a much lower level of annual land tax, we appreciate that without some Commonwealth support during the transition this is difficult for states to fund,” Forrest said.</p><p>“Providing this choice for first home buyers represents a good start and is an important step towards real and positive reform.”.</p><p>While the new scheme has been announced with other budget measures, legislation to institute it will only be introduced in the second half of 2022, with the start date projected for 16 January 2023.</p><h2>Investors, foreign owners face land tax increase</h2><p><br>Property investors that take advantage of the 1.5 per cent land tax discount for early payment will be disappointed—the discount will be lowered by two-thirds from January 1, 2023 to 0.5 per cent.</p><p>Budget papers forecast the reduction will generate $34 million next year, and $146 million over four years to 2025-26.&nbsp;</p><p>Separately, the government will also double the foreign investor surcharge land tax to 4 per cent.</p><div id="7kGkEDb3bL4QwaW2XhUWOV"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7HdhU7YaqDvZFXkSk9d9S5/8a15fad1f1b2b5fe4d62f3897ef0abb2/4.jpg" alt="The budget dedicates $2.8 billion to speeding up approvals, unlock new land and increase supply. nsw" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7HdhU7YaqDvZFXkSk9d9S5/8a15fad1f1b2b5fe4d62f3897ef0abb2/4.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The budget dedicates $2.8 billion to speeding up approvals, unlock new land and increase supply.<br><br></span></div></div><h2>Comprehensive approach to supply, affordability</h2><p><br>The budget also includes dedicated funding to a slew of measures aimed at improving equitable access to housing, with a comprehensive $2.8 billion package designed to speed-up approvals, unlock new land, and increase supply.</p><p>“The NSW government is also looking at initiatives to help boost housing supply by cutting planning assessment timeframes, co-funding enabling infrastructure and investing in new and improved social housing,” planning and homes minister Anthony Roberts said.</p><p>“This government will use every lever at its disposal—including tax, planning, supply, or working with the Commonwealth—to give more people in NSW the opportunity to own their own home.”</p><p>Spearheading the NSW government’s efforts to reshape the housing market<a data-mce-href="https://www.theurbandeveloper.com/articles/nsw-allocates-aud500m-to-get-more-homes-built" href="https://www.theurbandeveloper.com/articles/nsw-allocates-aud500m-to-get-more-homes-built" target="_blank" rel="noopener"> is the $500-million 2022 Housing Package</a>, including $300 million to accelerate infrastructure projects that enable new housing projects in Sydney and key regional areas.</p><p>The fund is targeted at filling out water and sewer infrastructure, roads, and parks in areas marked for new developments, and sits alongside a further $69.8 million to accelerate the rezoning of housing precincts for new homes.</p><p>But infrastructure funding will also be directed to regional centres where recent growth has seen demand for services outpace the rate of development. Another $33.8 million has been bundled in to address housing supply in regional NSW, intended to build a 10-year regional housing pipeline.</p><p>“One of the key recommendations from the Regional Housing Taskforce was the lack of infrastructure being built in our regional communities. This investment will help regional NSW keep up with current and future demand,” Roberts said.</p><p>NSW Property Council executive director Luke Achterstraat said it was “great to see the NSW government’s commitment to help Australians achieve home ownership and put housing front and centre”.</p><p>“There is no doubt we are experiencing a housing supply crisis in NSW which is putting a strain on affordability, both in terms of ownership and rentals,” he said.</p><p>“We are some 100,000 homes short of where we need to be in NSW so it is timely to support the private sector in getting on with the job of building quality homes and beautiful communities for the people of NSW.”</p><div id="o0bbZ7OIUUuanvY1bWil4"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3J7VUi9io1veOosLicbocj/b1929e774af39c5df7f1d784700875b9/3.jpg" alt="NSW is “10,000 homes short of where it needs to be”." data-mce-src="//images.ctfassets.net/8pr762qjocl3/3J7VUi9io1veOosLicbocj/b1929e774af39c5df7f1d784700875b9/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ NSW is “100,000 homes short of where it needs to be”.<br><br></span></div></div><p>Achterstraat also praised the push for housing-enabling infrastructure.</p><p>“There is an enormous difference between land that is simply rezoned and land that is ‘development ready’—the missing ingredient is enabling infrastructure such as water, parks and transport,” he said.</p><p>As well, $554.1 million is being poured into social housing, with plans to upgrade 15,800 existing homes—and building 200 new and 260 upgraded houses for Aboriginal families—as well as 120 social homes for rough sleepers.</p><p>Accelerated planning is a key focus of the government’s housing measures, with $89 million to be spent on speeding up planning assessments for new homes, and $3.8 million to build a new “call-in” team to assist with council-led rezonings.</p><p>“Prioritising planning assessments for new homes will make it faster for high quality planning proposals to be approved,” Kean said.</p><p>“We are anticipating hundreds of thousands of homes will be delivered sooner, through faster state and local rezonings and approvals.”</p><h2>Shared equity pilot gets the go-ahead</h2><p><br>While the federal Coalition pushed back on Labor’s <a data-mce-href="https://www.theurbandeveloper.com/articles/labor-targets-housing-with-shared-equity-scheme" href="https://www.theurbandeveloper.com/articles/labor-targets-housing-with-shared-equity-scheme" target="_blank">proposed shared equity scheme</a>, Perrottet and his team have leaned into the idea, stumping up $780.4 million for a trial.</p><p>Teachers, nurses, police, single parents and older singles will be eligible for up to 40 per cent funding from the government for a new property, or 30 per cent for an existing one. A 2 per cent minimum deposit will be required, with property values capped at $950,000 for Sydney and regional metros, and $600,000 for the rest of NSW.</p><p>Up to 3000 participants will be funded annually, with the pilot to kick-off in January 2023 and run for two years.</p><h2>Budget for women, but construction lagging</h2><p><br>In the lead-up to the budget, Perrottet and his team were keen to push initiatives tackling domestic violence, improving access to childcare, and anti-workplace harassment measures.&nbsp;</p><p>Kean’s budget speech to Parliament, delivered over the interjections of his infant son in the gallery, made explicit that this is a budget “about reform ... to break the barriers to women’s opportunity in this state” and “investing in the aspirations of women”.</p><p>Paying tribute to Brittany Higgins and Grace Tame, Kean used his address to outline the broad range of measures designed for women in the budget, with a particular focus on workforce participation.</p><p>By removing the 9 percentage point gap between women’s and men’s workforce participation, Kean argued, the NSW economy will be 8 per cent larger by 2060.</p><p>To achieve that, measures include $5 billion for an extra 47,000 childcare places across the state, and an additional year of schooling offered to all pre-kindergarten aged children. The government has also introduced a new paid parental leave scheme for public sector workers to encourage fathers to take up to 14 weeks leave.</p><div id="xhX1A4JAMNjYWsB5Vu93I"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1C48DDdOiKnKKOTPrGZBS2/e736fb3e2b717b1ce709b91f189cdd4b/2.jpg" alt="The NSW government intends to tripling the proportion of women in the construction industry in seven years." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1C48DDdOiKnKKOTPrGZBS2/e736fb3e2b717b1ce709b91f189cdd4b/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The NSW government intends to tripling the proportion of women in the construction industry in seven years.<br><br></span></div></div><p>In the construction sector specifically, the government has set itself the arduous task of tripling the proportion of women in the industry by 2030, from 5 per cent to 15 per cent.</p><p>“Historic skills shortages coupled with the biggest infrastructure program our state has ever seen means there is no better time to support more women to pursue a career in the construction industry,” infrastructure minister Rob Stokes said.</p><p>However, just $20 million has been allocated to the task—less than the $25 million to be spent on adding a third flagpole to the Harbour Bridge.</p><p>“This funding will go towards breaking down the cultural barriers that stop women from considering a career in construction and help them smash through the gyprock ceiling,” Stokes said.</p><h2>Big ticket items have their place</h2><p><br>Despite tightness in the labour market, rocketing input costs and shortages, and a construction sector struggling with razor-thin margins, there’s no shortage of large-scale infrastructure “mega-projects” in the 2022-23 budget.</p><p>“We’re transforming our state through roads and rail. Over the next four years, we expect to invest a record $112.7 billion in the state’s infrastructure pipeline,” Kean said.</p><p>Kean called out the 23 new and upgraded schools, 30 new ambulance stations, and 45 new or upgraded hospitals under way across the state.</p><p>The largest line items include an additional $8.3 billion for the Sydney Metro network and $1.2 billion dedicated to supporting renewable energy generation, much of which will go towards building transmission infrastructure.</p><p>Transport items include $500 million for a faster rail connection between Sydney and Newcastle, and $602 million to fund the <a data-mce-href="https://www.theurbandeveloper.com/articles/parramatta-light-rail-stage-two-funding" href="https://www.theurbandeveloper.com/articles/parramatta-light-rail-stage-two-funding" target="_blank">second stage of Parramatta’s Light Rail</a>.</p><p>“We are building a Western Harbour Tunnel, extending the M6, upgrading the Great Western Highway, and building a metro network for Sydney,” Kean said.</p><p>“These projects are the arteries of the nation.”<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p><div id="4jUfSdiEvPSAfQx5LE9FzA"><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>

There’s plenty in NSW’s budget for the property sector, with billions being funnelled into rezoning and housing-enabling infrastructure to address a 100,000 home shortfall… 

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<p>Michael Rodrigues has been thoroughly steeped in Sydney’s culture and entertainment sector.&nbsp;</p><p>As a founder of <em>Time Out Australia</em>, he led the publication for 15 years, covering Sydney’s hospitality scene as it responded to lockout laws, evolving precincts, and the decline of live music.&nbsp;</p><p>He’s acted as the chair of the Night Time Industries Association and, since March 2021, as the NSW 24-Hour Economy Commissioner.</p><p>But despite a career spent celebrating Sydney’s nightlife from the inside, when Rodrigues speaks about his current role reinvigorating the state’s after-dark economy, he sounds more like the civil engineer and commercial lawyer he was trained as, rather than a pub mogul or a festival curator.</p><p>“I think about the city as an asset, like a power plant; like a piece of capital. It’s a big complicated machine,” he says.&nbsp;</p><p>“And after you’ve shut down a power plant, you can’t just flick a switch and power it back up straight away. It takes a while to heat things up.”</p><p>Rodrigues describes the city to <em>The Urban Developer</em> in terms of asset utilisation rates, ramping infrastructure and making investments work harder for taxpayers and business owners.</p><p>“You wouldn’t have a trucking company that only ran eight hours a day. You want a truck on the road 24 hours a day, and a city is similar,” he said.</p><p>“The more flexible the city can become, the better the return on investment for capital, and the more amenity is offered to the citizen.”</p><p>The commissioner’s role is underpinned by the 24 Hour Economy Strategy, a whole-of-government approach to revitalising Sydney’s multiple CBDs. It sets Rodrigues apart from so-called “Night Mayors” in cities such as Amsterdam and New York, who sit within city council organisations.</p><p>“NSW is ahead of the game because we have a plan. My role sits as a co-ordinating force between multiple government departments, including Transport, Police, Health, Planning, Destination NSW.”</p><div id="6wwcSTRXFa8iLjFVobwdad"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5AypRXEEH2j3VCT7P9lC3l/80c2d3841743cdefa734994c5c1bf367/image.jpeg" alt="NSW 24-Hour Economy Commissioner Michael Rodrigues: the more flexible the city can become, the better the return on investment for capital." data-mce-src="//images.ctfassets.net/8pr762qjocl3/5AypRXEEH2j3VCT7P9lC3l/80c2d3841743cdefa734994c5c1bf367/image.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ NSW 24-Hour Economy Commissioner Michael Rodrigues: the more flexible the city can become, the better the return on investment for capital. Source: Time Out Australia<br><br></span></div></div><p>Sitting at that nexus, Rodrigues aims to pull the levers which enable results with urgency. He uses the recent example of a venue which, just days before a major concert, was waterlogged.</p><p>“They had to make a decision to either cancel it or relocate it. And within seven days, the NSW government had signed off on changing the planning regulation. That festival was relocated from Victoria Park to the Entertainment Quarter and proceeded incident free.&nbsp;</p><p>“And, you know, that’s a lot of government agencies, working with the private sector, to achieve that. Which then becomes the benchmark for a new way of thinking.”</p><p>Covid-19, of course, is a Night Mayor’s nightmare, with prolonged and unpredictable lockdowns making trading virtually impossible for many industries. Much of Rodrigues’ time in the role has been spent just helping businesses survive, let alone thrive.&nbsp;</p><p>While he’s enthusiastic about activations such as the Vivid Festival, and notes the importance of getting <a data-mce-href="https://www.theurbandeveloper.com/articles/office-sector-boom-quay-quarter-25bn-question" href="https://www.theurbandeveloper.com/articles/office-sector-boom-quay-quarter-25bn-question" target="_blank" rel="noopener">back-to-the-office strategies</a> right, Rodrigues stresses that the next phase of recovery depends on restoring consumer and business confidence.</p><p>“Take a hospitality business: it’s very hard to run it just on Thursdays, Fridays and Saturdays. You also need that early-to-midweek trade because it provides consistency of staffing, turnover, stock.&nbsp;</p><p>“So you want venues to be having consistent trade over a longer period, as opposed to peaks and troughs, and that applies to almost any other type of business in the sector as well.”</p><p>But, according to Rodrigues, Covid has only accelerated global trends which were well under way. The culture and hospitality a city can offer are only part of the story.&nbsp;</p><p>The underlying driver is the confluence of factors—technology, demographic shifts, planning—which have made at-home entertainment more attractive. Even Sydney’s 2014 lockout laws, he argues, were only a minor contributor to a diminishing appetite for out-of-home entertainment.</p><p>“Cities around the world have all experienced this, and this is why night-time economy and 24-hour economy are a growing interest area for cities’ leadership thinking,” Rodrigues says.</p><div id="6GmzOP9pIULXt4COcieGsc"><picture><img src="//images.ctfassets.net/8pr762qjocl3/sxiVvjqh0zKl1CbpnxsUN/d7a699d17bb0d48e3903718f1e586a73/177153l3.jpeg" alt="Rodrigues says Sydney is ahead of the game because it has a plan." data-mce-src="//images.ctfassets.net/8pr762qjocl3/sxiVvjqh0zKl1CbpnxsUN/d7a699d17bb0d48e3903718f1e586a73/177153l3.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Rodrigues says Sydney is ahead of the game because it has a plan.<br><br></span></div></div><p>“In the 19th century, I’d say that going out had a monopoly on entertainment, because dwelling sizes were smaller. ”</p><p>“You couldn’t really do too much at home. Other than make babies.”</p><p>“And then from there, the gramophone became an option, radio, television, and so on. So that home entertainment category has grown and grown.”</p><p>While policymakers, planners and industry leaders are now aware that the pre-pandemic world is not returning, it took years for that realisation to be accepted. Sydney will need to evolve, highlighting the novelty and unique experiences that only a city can provide, while removing the barriers that make accessing them difficult, painful or intimidating.</p><p>The conversations that might be had, according to Rodrigues, include the introduction of late-night retail settings; staggered work hours to reduce transport peaks and stimulate twilight retail; and more personalised and customisable entertainment for millenials.</p><p>“People like familiarity, we like security. There’s very few people who like radical change as a daily diet,” he says.</p><p>He’s also keen on keeping the mix of commercial occupancies healthily diverse, potentially replacing ground-floor high-end couture or luxury tenants with quick-service dining options or other services.</p><p>“One of the responses to the pandemic has been that a number of high-end offerings have come out onto the market; champagne and cavier. However, we need to be allocating for product at all price points,” Rodrigues argues.</p><div id="3p1k6EEgBbzW9So1r2icjd"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1lJJJRzQbb1dj62W24L9Vr/de02e317b60993dcb3829af322955d12/cure-sydney-opera-house-sails-12.jpeg" alt="Enthusiastic about events such as the Vivid Festival, Rodrigues says restoring consumer and business confidence is the next phase of the city’s recovery.
" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1lJJJRzQbb1dj62W24L9Vr/de02e317b60993dcb3829af322955d12/cure-sydney-opera-house-sails-12.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Enthusiastic about events such as the Vivid Festival, Rodrigues says restoring consumer and business confidence is the next phase of the city’s recovery.<br><br></span></div></div><p>“And I think it’s really, really important to the property sector to think about this. If your rental models don’t allow for those incidental experiences across the services industry to take root, then the going out experience as a whole is being impacted.</p><p>“I think that the property sector will grapple with this in the next little while, how it uses its ground plane in particular.&nbsp;</p><p>“Given occupancy rates, some property owners I’ve talked to understand that keeping it animated is really important. And animating it with really expensive product is, you know; not necessarily everyone can do that. So rather than having a $500 tasting menu, are there gaps not being filled by the private sector?”</p><p>Property developers can capture more value by leveraging their cultural tenants, Rodrigues argues, but need to reconsider how they share their profit and risk.&nbsp;</p><p>“My observations and conversations with different parts of the property sector demonstrate there are just different views on how the relationship should be between commercial tenancies, and what I described as cultural use: arts and culture, retail, hospitality,” he said.</p><p>“Perhaps there is some thinking to be done about risk allocation, in the context of trying to find resilient business models.”&nbsp;</p><p>“A tenancy is taken in an under-utilised part of town. It’s a cool venue. And then what happens is the building value increases, because everyone wants to be there. But does the tenant get an upside on the building value?”</p><p>Engineer, lawyer, and now public servant, but Rodrigues is still battling for the hospo sector.</p><p>Grant applications for round three of Investment NSW’s CBDs Revitalisation Program close at midday on April 26.<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>

Lockout laws, Covid and the rise of stay-at-home entertainment—NSW 24-Hour Economy Commissioner Michael Rodrigues has his work cut out for him. The Urban Developer talks to the man charged with bringing the city’s nights back to life…

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<p>NSW Building Commissioner David Chandler has confirmed he has extended his term in the role for another year, while signalling a “pivot” to focus on “calling the customers back”.</p><p>Initially appointed for a two-year term, Chandler has already had a one-year extension in the job—with this second extension he will now stay on until September 2023.</p><p>Speaking at a Property Council NSW event in Parramatta, Chandler said that “I really was set on going fishing on September 30. And then I heard that a whole bunch of these guys, over here in this corner, had already ordered champagne for a party on October 1.</p><p>“And I thought wouldn't it be fun to give them a reason to put the champagne back in the cabinet.”</p><p>Consumer protections and consumer confidence have always been at <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">the core of his office’s work, Chandler says</a>, but it’s now time to take that message to the public.</p><p>“What we haven't been doing in the past two years is we haven't been talking to the customers. [The sector has] had a fabulous conversation with ourselves, but the people who are going to buy your product don't know.”</p><p>Chandler pointed to excerpts from an early version of a report due to be released in May, surveying consumer confidence and attitudes towards the development sector among 1000 NSW residents.</p><div id="1nAY61NNoXjABU6vFYJxIz"><p>That report will show market affordability is the top driver of low consumer confidence. However, distrust of developers, apartment construction quality, and negative media stories are also significant worries.</p></div><p>Speaking to <em>The Urban Developer</em>, Chandler said that he is ready and willing to support the developers who have thrived through the reform process, and are producing quality work.</p><p>“What I’m doing is helping developers get their message out. I’m saying ‘I’m happy to stand side by side with you’, and saying ‘for the right developers, the customers should come back’.”</p><div id="5k3shETIz6Cphi824Znpyg"><div id="5rPQoE0eCCqaEqvZG2YTZS"><picture><img src="//images.ctfassets.net/8pr762qjocl3/LU9h9aCxxUXnak37WT49h/eb53ac680a496e60a13e6101dc805b44/The_NSW_Building_Commissioner_David_Chandler" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/LU9h9aCxxUXnak37WT49h/eb53ac680a496e60a13e6101dc805b44/The_NSW_Building_Commissioner_David_Chandler"></picture></div><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Chandler says he will use his extra year in the job to get the message out to the public that his office is straightening up the industry. <br><br></span></div></div><p>“What I want to do is acknowledge the progress that the developers who want to be part of the future have made. The majority of developers and builders have been acknowledged by consumers as being worthy to deal with,” Chandler says.&nbsp;</p><p>“There's a shrinking number of players who are still in the naughty corner. They need to change, or find another place to do business. And it won’t be NSW.”&nbsp;</p><p>Chandler points to <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">developer ratings as an important tool</a> in communicating with buyers and building confidence. Equifax has produced <a data-mce-href="https://www.theurbandeveloper.com/articles/seeing-stars-developers-take-up-rating-system" href="https://www.theurbandeveloper.com/articles/seeing-stars-developers-take-up-rating-system" target="_blank" rel="noopener">the first rating system in NSW</a>, with other ratings agencies likely to follow.</p><p>“I’ll see you in the display village soon, if you’ve got your transcript,” Chandler told the Property Council audience.</p><p>While his priorities have shifted now that the reform process he helms has progressed to a point of bearing results, Chandler will remain the tough cop on the beat.</p><p>“The development industry is getting the fact that this legislation is serious. It's got teeth and it's going to turn the dial,” Chandler said.</p><p>“Our data assets are the second largest, outside the Defence department, in New South Wales. If you think we don't know how to find you, if you are a bad player, we do.”</p><p>“We know now who's providing the money on every single job. We know whether it's good money or dirty money. Almost anything that you can think of as a question, we’ve probably got the answer to it.</p><p>“So the regulator will land on the bad guys.”<br><br></p><h2><strong>New legislation on the way</strong></h2><p><br>Also due in coming months are several pieces of legislation for industry consultation, including a Building Bill (to establish clear competency and accountability for all design and building practitioners) and the creation of a Building Compliance Enforcement Act (to supersede the RAB Act).</p><p>That legislative work will also establish a holistic fire safety system, bringing all requirements for fire safety under a single framework.</p><p>The Design and Building Practitioners Act will also be expanded to incorporate class 3 (hotels and accommodation facilities) and class 9c (aged care) buildings, while Chandler intends to begin work on a comprehensive regulatory framework for pre-fabricated and modular buildings and building parts.</p><p>“Prefabrication is going to be a big part of our future, given that a lot of work is progressively moving off site,” Chandler says.</p><p>“I don’t want you to have in your mind that prefabrication looks like dongas or ugly little sheds. Prefabrication is a very, very sophisticated part of our business.</p><p>“And I think one of the things we'll speak [about] in the next few months: how do we design for manufacture? DFMA? I think that's a big issue.”<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></strong></p><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture><div><br></div></div><p><br></p>

NSW Building Commissioner David Chandler has announced he will stay on in the role for another 12 months, the second extension to his tenure. In this exclusive interview, he tells The Urban Developer why and what’s planned for the coming year…

[+] Cryptocurrency Mining Land Grab Tipped for 2022

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A wave of investors looking to establish cryptocurrency mining facilities is expected to hit the commercial real estate market in 2022, but industry commentators say the property sector must be prepared in order to seize the opportunity.</p><p>Interest in cryptocurrency mining facilities has been building during the past six months, with China banning on-shore operations in June and a Senate committee chaired by Andrew Bragg reporting on the sector in October. </p><p>Commercial interest has also been proven, with NASDAQ-listed Mawson Infrastructure Group launching its first Australian operation, in Byron Bay in October, co-located with 20 megawatts of renewable energy.</p><p>Investors looking to dip their toes in the alternative asset class will be competing with data centre providers with a specific shopping list of requirements including a large footprint and access to cheap or renewable energy. </p><p>In the US, old industrial infrastructure has been repurposed for data mining operations. </p><p></p><p>Although on-market campaigns have yet to emerge, <em>The Urban Developer</em> has been told by multiple sources of foreign and domestic investors beginning to hunt.</p><p>“The reality is Australia could have already been doing these things, or people within Australia could have been doing them,” Blockchain Australia chief executive Steve Vallas says.</p><p>“But there was some reticence. There weren’t signals of support for this kind of initiative, or that this kind of infrastructure can live here. </p><p>“Now that those signals have been put in place in recent months, people are now looking at potential sites, potential investments—inbound and local—where they can quickly go through the process of getting appropriate planning permissions.</p><p>“A lot of people hadn’t otherwise given thought to the amount of time and effort that needs to go into locating sites. But suddenly there’s a rush on, so the uptick in the past three months has been pretty extraordinary.”</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/56cf3073-4b92-41f1-b2b0-3332b3e029eb.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The initial reticence of the property sector to embrace cryptocurrency mining is breaking down.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Cryptocurrency mining facilities <a href="https://www.theurbandeveloper.com/articles/dirty-data-centres-net-zero-targets">resemble data centres</a> in some ways, generally requiring good access to electricity and telecommunications networks. Operational differences, however, mean that mining sites may have different requirements.</p><p>“We’re starting to field calls about crypto mining,” says Matt Lee, senior director of industrial occupier services at JLL.</p><p>“It’s in its infancy in the sense of real estate, in terms of deals. Data centres—there’s a lot of deals you can point to and there’s a lot in the media.”</p><p>“At the highest overview level, they’re both high-power computing facilities, their DNA is the same. When you start to drill down into it a little further, there does become some separation between the two.</p><p>“You can’t just pick any old big block and stick a data centre on it. It doesn’t work that way. It has to be connected, it has to have power.” </p><p>Lee says that data centre operators are also more concerned with any potential disruptors in the vicinity, such as particulate-emitting heavy industry.</p><p>“[Crypto mining] is not established enough yet to say there’s trends, or anything other than to say it is going to be very high power. And it’s less location sensitive than the data centre space, it’s less critical,” he says.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Winning jurisdictions yet to emerge</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>While government friendliness towards cryptocurrencies is one factor in attracting crypto-mining investors, competition between and within countries is more likely to revolve around energy costs than tax regimes. </p><p>Treasurer Josh Frydenberg was broadly welcoming of Bragg’s report but dismissed the recommendation to provide a 10 per cent company tax discount for miners who pair with renewable energy.</p><p>“None of the businesses that I’ve spoken to, who have sought to invest in this space, are deterred by that,” Vallas says.</p><p>“I don’t think anyone had an expectation and that wasn’t driving the investment decision. The commercial decision is, ultimately, how cheaply can you get energy? How quickly can you get to market? And how quickly can you get hardware at scale?</p><p>“So it’s not people sitting and waiting for a tax policy and these incentives in order to move to the jurisdiction, it’s much more about the regulatory uncertainty that allows them to operate in the jurisdiction.”</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/e11bb150-e75b-43b6-b23c-e7302d01e326.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The time to understand cryptocurrency and the sector’s needs is now, experts warn.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Alongside attractive governance regimes, jurisdictions which appeal to cryptocurrency miners typically have <a href="https://www.theurbandeveloper.com/articles/data-centres-development-southern-migration">cooler climates, which can reduce the costs of cooling hardware</a>, and under-utilised renewable energy or natural gas assets.</p><p>Multiple sources have confirmed to <em>The Urban Developer </em>that miners are currently interested in Tasmania and Western Australia particularly. </p><p>Elsewhere, the US, Russia, and Central Asia have already benefitted from the exodus of miners from China. In the year to August 2021, the US share of bitcoin mining capacity surged from 5 per cent to 43 per cent.</p><p>However, associate professor Joseph Liu, director of the Blockchain Technology Centre at Monash University, warned that ESG concerns may see many cryptocurrencies shift to less energy-intensive models.</p><p>“People are migrating to using new technology, new mechanisms, that don’t require huge computational power,” Liu says.</p><p>“I think this is one of the major concerns of these mining farms.”</p><p>According to Liu, it’s almost impossible to repurpose mining equipment for data centres, potentially leaving mining facilities as stranded assets.</p><h2></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Developers need to improve blockchain awareness</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Blockchain sector leaders argue that the property sector needs to improve their understanding and acceptance of emerging blockchain technology beyond cryptocurrency mining facilities.</p><p>Liu points to improved construction supply chain visibility, as well as blockchain-based contracts facilitating settlement in multi-party transactions. </p><p>Industry and university partnership in the Building 4.0 Cooperative Research Centre at Monash University’s Caulfield campus is also finding new use cases and applications, but take-up is lagging technological innovation.</p><p>“There’s still a long way to go to further explain to [the construction and property sectors] what blockchain is, how blockchain can benefit them, and also how blockchain can overcome their challenges,” Liu says.</p><p>Vallas suggests that blockchain marketplaces will soon allow investors access to fractionalised real estate portfolios, enabling easier access and higher trading volumes.</p><p>“I think a lot of people in the property sector recognise that you have largely illiquid assets. If you tokenise them or fractionalise them, there’s potentially greater liquidity and all sorts of arbitrage opportunities and hedging opportunities that are created there. </p><p>“When it comes, it’ll be high-velocity trading, in what largely would have been traditionally illiquid assets.</p><p>“The reality here is people should educate themselves, there is no excuse now for missing the commercial opportunities and making an assessment as to what they are. </p><p>“The property sector as a whole … there will be arbitrage opportunities in the next year or two as this [marketplace] takes hold.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a><strong></strong></p><p><strong></strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

A wave of investors looking to establish cryptocurrency mining facilities is set to hit the commercial real estate market in 2022...

Australian property developers are unperturbed by a recent escalation of the UK’s cladding crisis in the UK, but a wave of litigation looms as confusion remains over responsibility for the costs of remediating Australian buildings.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Australian property developers are unperturbed by a recent escalation of the cladding crisis in the UK, but a wave of litigation looms as confusion remains over responsibility for the costs of remediating Australian buildings.</p><p>UK Housing Secretary Michael Gove began roundtable discussions with the development industry after an incendiary performance in Parliament earlier this month and <a href="https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1045412/Letter_to_Residential_Property_Developer_Industry.pdf">an open letter targeting the sector</a>. </p><p>The move comes as the five-year anniversary of the June 2017 Grenfell Tower fire looms, with flammable cladding still remaining a serious concern in both the UK and Australia.</p><p></p><p>Gove’s demands include a £4-billion fund voluntarily contributed by property developers, alongside a promise that no apartment owner in a building more than 11 metres will bear any costs for rectification. </p><p>If the sector does not meet his March deadline Gove has threatened to take “any steps necessary”, including “restricting access to government funding and future procurements, the use of planning powers, the pursuit of companies through the courts”, and the introduction of legislation to achieve his aims.</p><p>Industry representatives in Australia are unconcerned that jurisdictions here might follow Gove’s hard-line approach.</p><p>Ken Morrison, chief executive of the Property Council of Australia, told <em>The Urban Developer</em> that “Australia’s already well advanced in cladding rectification, and our building standards are a lot tougher than the UK’s”.</p><p>“In Australia we have the National Construction Code which sets rigorous building standards across the country. These are far more mature than those in the UK, and certainly the combination of failures that occurred in the Grenfell tragedy don’t exist in Australia,” Morrison says.</p><p>“We need to remember that most of the cladding products we are now concerned about were not illegal work. They were installed in accordance with building standards in force at the time.”</p><p>Multiple legal experts told <em>The Urban Developer</em> that UK building codes and specifications are patchwork compared to Australia’s, which has allowed more room for sub-standard projects to be erected in the UK, and created a messier and slower legal environment at the other end.</p><p></p><p></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/69c347c0-4a63-4b45-897e-3df64f5a1202.jpg" width="850"/></picture><div><span style="align-content:center;opacity:0.8">▲ As the anniversary of the Grenfell disaster looms, the UK&#x27;s cladding crisis remains far from resolved.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Philip Bambagiotti, a barrister specialising in construction law who practices in both the UK and Australia, says that cladding-focused approaches resemble a Band-Aid fix to a symptom, rather than a wholesale legislative solution to a systemic problem in design and construction.</p><p>“We are seeing in the UK similar types of problems to those we have in Australia, and we are also seeing similar types of responses,” Bambagiotti told <em>The Urban Developer</em>.</p><p>“The challenge will be for the community to give an honest self-assessment of the quality of its regulation so that the underlying problems in relevant legislation are addressed. If they are addressed, then we have a fighting chance of reaching long-lasting, structural solutions.</p><p>“The various remedial steps haven’t demonstrated logical, cohesive commitment to addressing underlying problems. </p><p>“The danger is that the community can be led to believe that problems that disappear are problems that are solved. This may lead to greater problems in the long run.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Costs will continue to mount, liability unclear</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Cladding is far from a settled issue in Australia, with NSW’s Project Remediate <a href="https://www.theurbandeveloper.com/articles/nsw-combustible-composite-cladding-remidiation">expected to run until 2024</a>, and <a href="https://www.theurbandeveloper.com/articles/victoria-cladding-claims-extension">Victoria’s scheme until 2025</a>. </p><p></p><p></p><p>Despite funding schemes in place, commentators say the total costs of rectifying and remediating buildings with unsafe cladding are still hazy, but likely to be significant and likely to continue to rise.</p><p>Philip Atkin, special counsel in the insurance team at Colin Biggers &amp; Paisley, said that more than 3000 buildings have been assessed as non-compliant to date.</p><p>“We have seen estimates for rectifying non-compliant cladding across Australia of more than $6 billion,” he says. </p><p>“However, no one can be certain about the true cost given that investigations are ongoing. Meaning that we simply do not know how many affected buildings are out there, and material and labour shortages in the building industry are causing steep increases in rectification costs.”</p><p>Dr Trivess Moore, senior lecturer at RMIT, has projected costs of up to $5 billion just for apartment buildings in Victoria, where Cladding Safety Victoria has <a href="https://www.theurbandeveloper.com/articles/victoria-combustible-cladding-rectification">a $600-million fund available</a> for remediation work. He agrees that labour and other factors will contribute to that figure rising.</p><p></p><p>“If anything, [estimates] are probably a little on the conservative side,” Moore says. </p><p>“Given that there’s not a huge amount of people who can do this rectification work, and there’s a whole range of experts who need to be involved.”</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/5bf62e4b-aae3-4a7a-9725-c3d950a88416.jpg" width="850"/></picture><div><span style="align-content:center;opacity:0.8"><br>▲ Australia’s building codes may be far ahead of the UK’s, but issues remain around the cladding crisis.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Moore’s ongoing research has also found significant hidden or indirect costs associated with cladding rectification, including insurance and legal fees, which are not adequately covered by government funding or regulation. </p><p>Some categories of buildings may also require rectification, but fall outside the scope of funding schemes, leaving property owners liable for the entirety of the costs.</p><p>New agencies and regulatory frameworks have been established to provide guidance on cladding remediation, however, uncertainty remains over who will foot the final bill, and whether costs can be pursued post-remediation. </p><p>Moore says that building industry regulations provide inadequate protection for consumers from any bad-faith actors.</p><p>“We still have an industry which will shirk responsibility, companies are still able to phoenix and get out of their requirements to address these issues. There’s still a number of loopholes there,” Moore says.</p><p>Dr Matthew Bell, associate professor at the University of Melbourne, who has expertise in construction law, says that the current debates show that achieving a fair and workable distribution of defect rectification costs is more challenging after the fact.</p><p>“There are going to be unhappy people, and there are going to be people who are less unhappy. Nobody is going to be completely happy, because we’re already deep in the problem already,” Bell told <em>The Urban Developer</em>.</p><p>“Developers, builders and other industry parties often just don’t have enough margin, or insurance, to be able to come back and actually fix these things, so they will resist liability through legal action. </p><p>“So, there’s no perfect solution. Focus needs to be on prevention rather than cure when it comes to regulating construction quality.”</p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>More litigation likely—and soon</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Legal experts agree that litigation is a likely recourse for many stakeholders seeking to recoup costs of rectification.</p><p>“Litigation, or the threat of litigation, is one of the main drivers of cost recovery,” Atkin 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/93095dc7-cc67-4e98-99cd-2894b5089c9a.jpg" width="850"/></picture><div><span style="align-content:center;opacity:0.8">▲ Cost associated with remediation works are among the elements of the crisis that remain hazy.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“Whether that is litigation brought by building owners, by builders against downstream targets like project consultants and suppliers or by state cladding rectification authorities like Cladding Safety Victoria under its rights of subrogation.”</p><p>The potential claimants and targets of lawsuits are wide-ranging, according to Atkin. </p><p>In NSW, the Design and Building Professionals Act 2020 has introduced a statutory duty of care for building professionals towards residential owners. It allows building owners to pursue claims without relying on contracts or warranties.</p><p>In Victoria, apartment owners can access Cladding Safety Victoria funding for remediation, and then pass on the rights to pursue costs to the government.</p><p>“The liability picture varies markedly across the country,” Atkin says.</p><p>“Owners can bring claims against builders and sometimes other building professionals. In NSW they can also bring claims against developers. A <a href="https://www.theurbandeveloper.com/articles/buildings-cladding-class-action-development">cladding product class action</a> is already on foot against a key manufacturer.” </p><p>“Despite how long the cladding crisis has been going, however, relatively few cases have proceeded to judgment and liability in the case of each building will turn on its own facts.”</p><p>A strong precedent exists in the 2019 judgement to <a href="https://www.theurbandeveloper.com/articles/consultants-to-reimburse-builder-lu-simon-for-lacrosse-cladding-fire">the Lacrosse fire case</a>, which apportioned 25 per cent per cent liability to the architect, 39 per cent per cent to the fire engineer, 33 per cent per cent to the surveyor, and 3 per cent per cent to a smoker who unintentionally ignited the fire.</p><p></p><p>A 2021 appeal judgement made slight modifications to the allocation of liability, but upheld the earlier finding that the builder held no liability.</p><p>John O’Kane, a partner in the property and projects team at Hall &amp; Wilcox, says that “the Lacrosse case pretty much sets out the way most cladding cases will run”.</p><p>However, the extent of remediation is “determined on a case-by-case basis, and most builders do not accept liability”.</p><p>“I think litigation will start picking up because a lot of the buildings with cladding are running into their statutory limitation of liability period. Litigation is not something that can be put off indefinitely,” O’Kane says.</p><p></p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a><strong></strong></p><p><strong></strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

A wave of cladding litigation looms as confusion over who is responsible for the costs of remediating Australia’s buildings remains ongoing…  

[+] No Easy Pickings in RSL Redevelopment

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A wave of lucrative, high-profile RSL redevelopments is coming to fruition, with another tranche of proposals under way, but proponents warn that club projects shouldn’t be viewed as low-hanging fruit.</p><p>The combination of long- and short-term trends in the hospitality and clubs sector have made RSLs and other community clubs an enticing target for developers in recent years, with the number and scale of projects accelerating.</p><p>With favourable locations and site sizes, and a hungry partner, the financial appeal for developers is obvious. But proponents involved in club redevelopment ventures warn that the sector comes with a its own set of considerations and requirements, and that each project can be a difficult and individual process to get right.</p><p>Chairman of Capital Corporation Steve Grant suggests that understanding the existing business model and operations of the club, as well as convincing voting club members to get behind a plan, is crucial to success.</p><p>“We’ll go in, we do a demographics study, we look at their financials, we’ll understand the use of this space,” says Grant.</p><p>Capital Corporation’s project Bond, a joint venture with Bondi Junction RSL, is currently under construction with residential apartments at its core, but other club redevelopments in recent years have featured commercial towers, retail, hotels, or community and hospitality spaces.</p><p>“We’re going to have a holistic view of the club and see how we can improve the situation, regardless of whether it’s to knock it down tomorrow, or come up with a staged conversion, or whatever happens. Every case is different,” Grant says.</p><p>“They don’t always have spare land, they don’t always have good zoning. It’s really about meeting the people, understanding their constraints and putting together something that is going to help them survive and prosper.”</p><p></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/9f4d7c9a-f575-4601-8756-d7760f667fb2.jpg" width="960"/></picture><div><span style="align-content:center;opacity:0.8">▲ Capital Corporation’s joint venture with Bondi Junction RSL, Bondi.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Stephen Abolakian is managing director at Hyecorp, developers of a <a href="https://www.theurbandeveloper.com/articles/rsl-willoughby">joint-venture senior living facility with Willoughby RSL</a>, which will break ground next year. He says club projects go beyond simple transactions, and that building trust and understanding for partnership agreements is a long, involved process.</p><p>“We spent a couple of years understanding what was important for the club, the members, and the community,” Abolakian says.</p><p>“And then, once understanding all that, seeing if there is a planning and development pathway that can achieve what they wanted. It took years of discussions before there was any pen to paper—we’re probably eight or nine years in now.”</p><p>“Every club is different. Every membership base is different. You can’t have a short-term view on this. It’s absolutely a long, long game.</p><p>“If you don’t have that local community understanding, you’re not going to be able to do what’s really important. Absolutely it has to stack up, it has to be fundable, but you also need to tick the community box. You have to get that bit right.”</p><p>“I’m in the area. I’m here. I’ll be eating at this club with my family, it’s my local,” Abolakian adds.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Unlocking potential</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>RSL NSW has acknowledged that the brand is associated with “social clubs, pokies, old people, cheap food and cheap drinks”, while both long-term consumer trends and the impact of Covid shutdowns on hospitality have hurt clubs’ revenue.</p><p>“Most clubs are asset-rich and cash-poor, as the old saying goes,” Abolakian says.</p><p>“They need to be, obviously, unlocking the development value. But they also need to ensure the long-term survival of the club and its members, and its social purpose.”</p><p>“Is there some form of non-trading income that can also be generated out of development? How is the club going to ensure long-term survival instead of a sugar hit up front?”</p><p>Grant agrees that a successful joint venture with a club will add value beyond rezoning.</p><p>“It’s not all about building a very tall block of apartments and going home afterwards and thinking, ‘Gee, that was good’. You need to have done something to enhance their operation, so they’ll be around for many years to come,” 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/cda8d4f8-0a58-451d-8609-d735713cdfcb.jpg" width="960"/></picture><div><span style="align-content:center;opacity:0.8">▲ An artist’s impression of the 18-storey commercial tower Endeavour Property has worked with Chatswood RSL on. It is in the final stage of due diligence with an unnamed development partner.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The managing director of Endeavour Property Andrew Gibbons has worked with Chatswood RSL <a href="https://www.theurbandeveloper.com/articles/-opportunity-knocks-for-rsl-tower-partner">on its 18-storey commercial tower project,</a> currently in the final stage of due diligence with an unnamed development partner. He warns that distributing added value equitably can be a challenge for clubs.</p><p>“One of the models that has been put in place on many club projects is that a developer will come along, in those instances where the clubs have been in various states of financial stress, and they will value the land at highest and best-use planning approval,” Gibbons says.</p><p>“Then they will pay for the planning component, and they will share the upside 50-50 with the client. That’s the typical model for clubs that don’t have the cash flow to do their own planning work and add the value.”</p><p>“So the developer will be helping the club significantly extract the value, but they’ll be also taking a lot of that value themselves. It really depends on the financial capability of the club to be able to fund some of the development planning through a DA, to then have the option of choosing a development partner with that value already added.”</p><p>Some clubs may be able to self-fund early development work, <a href="https://www.theurbandeveloper.com/articles/-opportunity-knocks-for-rsl-tower-partner">as in the case with Chatswood RSL</a>, while clubs with extremely distressed finances and poor long-term prospects at the site may consider sale and relocation.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Club projects in all shapes and sizes</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Among projects in early development in Sydney, Castle Hill RSL has proposed a $151-million senior living complex, alongside residential care facilities and other amenities, while Burwood RSL is under way with <a href="https://www.theurbandeveloper.com/articles/burwood-rsl-ramps-up-209m-development-plans">a $209-million commercial and entertainment district</a>. Petersham RSL is pushing <a href="https://www.theurbandeveloper.com/articles/deicorp-lodges-proposal-for-350-apartments-rsl-club-in-west-sydney">a residential and hospitality project,</a> while Campbelltown RSL is working through the approvals process for a hotel tower.</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/0dbc9149-4910-4ff4-8f10-039611802562.jpg" width="960"/></picture><div><span style="align-content:center;opacity:0.8">▲ Tarragindi Bowls Club in Brisbane is about to begin construction of its retirement village project.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>In Brisbane, Coorparoo RSL sold its site this year to Bolton Clark for $10 million, with a short-term leaseback clause. Bolton Clark intends to construct a vertical retirement village or residential tower on the site.</p><p>Melbourne’s Ringwood RSL is undertaking a $120-million project in conjunction with partner Costa Asset Management, a consortium, to add a mixed-use commercial space and apartments.</p><p>A number of clubs have early-stage projects under way in the sub-$100-million range, including a project to build retail, residential and commercial towers at the Cyprus Community Club in Sydney’s Stanmore. The club had been facing forced administration and a sell-off of its assets before refinancing through a community share-raising and successfully rezoning.</p><p>Bowls clubs also fit the sweet spot for site and asset characteristics and membership demographics, with a<a href="https://www.theurbandeveloper.com/articles/market-wrap-up-the-week-in-property-december"> four-building over-55s development</a> by Mirvac currently under construction at Waverley Bowling Club. </p><p>In Brisbane, the Tarragindi Bowls Club will enter construction phase in November 2021 for another retirement village project.</p><p>The success of these projects sits in stark contrast to the troubled Balmain Leagues Club site, which has undergone <a href="https://www.theurbandeveloper.com/articles/approval-for-balmain-leagues-club-redevelopment-in-rozelle-">multiple rounds of failed proposals</a> for more than a decade, before being subjected to a compulsory lease by Transport for NSW this year.</p><p>Mixed-use towers of up to 24 storeys had been proposed, but the site will instead be used to store material related to construction activity on the Western Harbour Tunnel.</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>

Developers and community clubs partnering up for projects is on the rise, but there’s a lot more to it than meets the eye...

[+] Crunch Time for Labour Shortages

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Construction sector analysts are warning that acute labour and skill shortages are unlikely to be resolved in the next few years, leading to intensifying competition for workers.</p><p>While opening the borders is essential, analysts agree, the workforce crisis demonstrates how over-reliance on migration has only papered over structural problems in the past and cannot be relied on as a long-term solution.</p><p>“What I’m seeing in the construction and infrastructure sector is very similar to what we’re seeing in the agriculture and horticulture sector, with builders’ labourers in particular,” chief economist and director at Urbis Richard Gibbs says. </p><p>“It’s come to a head in agriculture first because of the seasonality with fruit and vegetable pickers.</p><p>“But we have a similar ticking time bomb. It’s largely a result of those younger cohorts, particularly working holiday visas, that come in and out of Australia. </p><p>“Our economy is very reliant on them. </p><p>“Those who arrived at the onset of the pandemic are now coming to the expiration of those visas, and they’re needing to return back to where they’re from. </p><p>“The capacity to replenish that workforce is, at this point, limited.</p><p>“And we certainly need to do more than just replenish, if we want to gear back up on an activity basis.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cell-sm-3 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/c62df7a3-812c-4092-8444-6f80bc4c1058.jpeg" width="1280"/></picture><div></div></div></div></div><div class="cell cell-sm-9 cx12"><div class="ci cl"><p><br><a href="https://www.theurbandeveloper.com/articles/bricks-construction-materials-supply-labour-shortages"><strong>No Issue With Bricks, It’s the Tradies<br></strong></a>Timber, not bricks, remains a key material shortage.<em>The Urban Developer</em> investigates...</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Ernst and Young senior economist Johnathan McMenamin says that skilled migration is also only a temporary stopgap.</p><p>“The closure of the borders has exposed the shortfalls that we’re seeing in the education and training space,” he says.</p><p>“The migration pipeline is clearly part of the answer, because it is a lot more rapid than the education and training system. </p><p>“But from a policy point of view, you’d like to see government acting in the higher education space to incentivise people getting into the occupations that we’ll need during the next few years.</p><p>“But also trying to encourage mobility across geographies, across occupations.”</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/520c9008-3f52-4426-b4f1-9156d0c592fe.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ The infrastructure-led aspect of Australia’s post-pandemic recovery is at risk due to labour shortages.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Jonathan Cartledge, policy and research director at Infrastructure Australia, published a suite of market capacity research last week, including a report into infrastructure workforce and skills supply. He’s projecting that demand for infrastructure workers will outstrip supply by 48 per cent during the next four years.</p><p>Cartledge says that skilled migration is “top of mind” for industry, but costs and other challenges mean it will only provide 6 per cent of new construction workforce entrants.</p><p>“Particularly for critical skills in highly specialised areas, skilled migration has a role to play,” he says.</p><p>“But there’s a range of factors at play when you’re looking to access workers through a skilled migration program. </p><p>“Accessing workers domestically is more efficient, and preferable for a lot of organisations.”</p><p>Brutal global and domestic competition for construction workers</p><p>Gibbs cautions that Australia will need to be more proactive in order to recapture the attention of migrants.</p><p>“Australia’s got to recognise pretty quickly, now, that we do need to fully reengage. I think there’s an air of complacency about Australia as an attractive location,” he says. </p><p>“We are going to have to compete very aggressively. Countries like Canada and Japan are now coming through. Even Central Asia is being cited as attractive for these professionals, particularly in construction and engineering.”</p><p>McMenamin says that it’s hard to know when we will see the population growth rate pick up to where it was before the pandemic.</p><p>“But all government projections are saying by 2025, we should be short about 800,000 migrants”.</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/7b0343ab-e744-407b-adb4-f1fea18af751.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ The migration to the north by tradies from southern states is fuelling shortages in NSW and Victoria.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>In a coming report, EY will use a new model to <a href="https://www.theurbandeveloper.com/articles/tradies-make-the-move-to-queensland">investigate labour mobility and skills shortages</a> by occupation and region. McMenamin shared some of his findings with <em>The Urban Developer</em> ahead of its release.</p><p>Interjurisdictional mobility (Australians moving between states) has been declining since the 1990s. Since the start of the pandemic it has fallen again—2 per cent of Australians resettled interstate in 2019, with that figure now at 1.5 per cent.</p><p>“While that doesn’t seem like a lot, to hold on to about 100,000 people moving interstate each year; over a decade, that’s a million people,” McMenamin says.</p><p>“So it’s a pretty substantial slowdown we’ve seen.”</p><p>But more worrying for employers looking to attract workers from adjacent industries, McMenamin’s findings on career switching have shown that a trend of pandemic-induced “job-hopping” might be a myth.</p><p>Only about 7.5 per cent of employed Australians are changing jobs annually; the closest this rate has previously been was in 2012, when around 10 per cent of employees made the switch.</p><p>“We’re at a record low for occupational mobility. It’s never been so low. Back in the 90s it was at 15 per cent, so it’s been a real structural decline,” McMenamin says.</p><p>Cartledge says a more conscientious approach to workplace and career development will help attract and retain staff.</p><p>“When you look at the diversity of the workforce, and we see that well known figure that just 12.7 per cent of the workforce is women, less than 2 per cent in trades, I think that really highlights some of the challenges.”</p><p>“And when you look at the $1-trillion investment in infrastructure in the US, you look at the UK levels of activity and stimulus, through Europe and in other parts of the world, it will be increasingly difficult to attract these skills. Our efforts to make sure we can do that are really critical.”</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/7669cc6f-3669-49a9-bf10-25f6df25d2df.jpeg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ While new construction technology may help alleviate the situation, there is a limit to how much effect it can have.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Cartledge says that the public infrastructure sector will be fighting hard to get the attention of construction workers.</p><p> “Public infrastructure accounts for 20 per cent of the broader engineering and construction work under way,” he says. </p><p>“And when we look at commercial and private engineering construction, they’re expected to grow over the coming years. So there will be a very competitive market for these skills.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Fewer, more productive workers</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>NSW Building Commissioner David Chandler has been at the forefront of pushing education reform, upskilling, and digitalisation as key to combating a “capability shortage”.</p><p>On the release of his Digitalisation of Construction report in August, Chandler said that “we want NSW’s industry to be at the forefront of innovation and able to use every possible lever to increase its productivity”.</p><p>The report found that construction would reach “digital maturity” by about 2031, but that the costs involved, from hardware to BIM software, were hurdles for the SME-dominated sector.</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/4a2b5840-95ff-4257-9ab1-f31ca939da6b.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ NSW building commissioner David Chandler: education reform, upskilling and digitalisation vital to fight labour shortages.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“Reaching digital maturity is a dynamic and evolving process that requires continual exploration of new ways to utilise technology to increase productivity and retain their competitive edge,” the report said.</p><p>“When you run up against these sort of skill shortages, then a clear way of addressing them by making your existing workers more productive,” McMenamin says.</p><p>“It can be a piece of technology, it can be changing a process, changing management styles, micro-credentialling, all sorts of different things.”</p><p>But Gibbs argues that there’s a ceiling on how much productivity can be squeezed out of construction.</p><p>“We’ve been trialling, quite successfully, automated bricklaying and things like that. But there’s only so much of the process at this point in time that we could further automate, with the current technologies, that hasn’t already been automated.”</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>

A perfect storm of factors has created a labour shortage that’s all but crippling the construction industry...