[+] qld developer review web.jpg

Setting the tone or just plain tone deaf?An avalanche of insolvencies, escalating construction costs, crippling skilled labour shortage, worsening housing supply and affordability crisis, rising interest rates and stubbornly high inflation.It would seem all that’s missing in the challenged Queensland property industry are the haunting strains of composer Ferederic Chopin’s Funeral March.But according to industry players, the orchestra has started tuning up following the release of a raft of reforms proposed by the <a data-mce-href="https://www.theurbandeveloper.com/articles/queensland-developer-review-discussion-paper-released" href="https://www.theurbandeveloper.com/articles/queensland-developer-review-discussion-paper-released" target="_blank" rel="noopener">Queensland government’s Developer Review Panel</a>.“How to worsen housing supply. How to crash the (expletive) market. How to increase homelessness. How to kill (expletive) everyone.”That was the blunt, nail-in-the-coffin assessment by one Brisbane property heavy-hitter, who added:&nbsp; “You know that’s what everyone wants to say but they’re not going to put their name to it—it’d be political suicide.”Another high-profile local industry figure contacted by The Urban Developer also declined to comment on the record on the panel's recommendations.“Look, I reckon I’ll just pass on it. There’s no upside in joining that debate. They’re going to do whatever they want to anyway, so there’s not much we can do about it.”According to peak body the Property Council of Australia, the reaction is symptomatic of a bruised and battered sector that is already “on its knees”.<div id="6HnIJC0MC9EhIs1PqLYz1h"><picture><img src="//images.ctfassets.net/8pr762qjocl3/71vu44JJa2RIGBf1GJEpRg/d1392213ce3af39435304179df0fffc0/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/71vu44JJa2RIGBf1GJEpRg/d1392213ce3af39435304179df0fffc0/2.jpg"></picture><div>▲ Property Council Queensland executive director Jen Williams: The report is completely off-key. </div></div>Not surprisingly then, it has been quick to decry as completely off-key the panel’s long-awaited final report, Setting The Tone: The Role of Developers in Queensland’s Building and Construction Industry.The centrepiece of reforms contained in the report is the introduction of a new regulatory framework for accreditation, disclosure and registration of developers.Under the recommendation, a developer would be prevented from entering into a contract requiring a project trust account unless they obtained and maintained an accreditation.Minimum requirements for accreditation would include ensuring they were a fit and proper person of influence, they meet minimum educational requirements and comply with a code of conduct and legislative requirements. Accredited developers also would be required to register each development activity and under disclosure obligations affirm they have appropriate finance to complete a proposed contract.It is intended the new framework would be supported by a regulator—either a standalone organisation or incorporated into an existing statutory authority—with effective compliance and enforcement powers.“Could there be a worse time to propose such a heavy-handed burden on the industry?” Property Council Queensland executive director Jen Williams says.&nbsp;After weathering supply chain issues, labour shortages and escalating construction costs—and at a time when the industry was being called on to “step up” and solve the housing crisis—she says: “It seems implausible the Queensland government would choose now to pursue a new regulatory framework that adds further costs and administrative burden to developers”.“The past few years have been difficult for all participants in the property industry—builders, developers and consumers alike.<h2>No smooth sailing</h2> “And the outlook is certainly not one of smooth sailing ahead, with projects continuing to be placed on hold as consumer sentiment starts to crumble and feasibilities are placed under pressure.&nbsp;“Now is not the time to be adding additional barriers to investment, confidence and delivery.“A new regulatory framework will do nothing to boost or fast track housing supply—in fact, it will do quite the opposite.”Inner-city Brisbane developer Pikos Group’s newly appointed chief executive Michelle Wooldridge agrees.<div id="7xh5XDuHH2hq68gYUyBHay"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4CjUGLazDXarEYECPmZ0Ln/3b725c5e07530c50eeadbd9f507b6925/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4CjUGLazDXarEYECPmZ0Ln/3b725c5e07530c50eeadbd9f507b6925/1.jpg"></picture><div>▲ Pikos Group chief executive Michelle Wooldridge: Unprecedented headwinds. </div></div>“As an industry, we are facing unprecedented headwinds to unlock housing supply in Queensland,” says Wooldrige, who is also the Property Council’s Queensland vice president.“It’s disappointing that in a time when the public and private sector should be working together collectively and collaboratively, we are defending against increased regulation that will ultimately impact those suffering the most—Queenslanders in desperate need for housing.“We encourage the government to carefully consider the ramifications and how this will impact every day Queenslanders.”&nbsp;The Developer Review Panel was appointed in November 2021 under the Queensland Building and Construction Commission Act 1991 to conduct a review of the role of developers in the building and construction industry.<h2>A case for change</h2> It was established following industry feedback about the important role of developers, and the need to examine the impact of their financial and operational capacity, ethical behaviours and work practices.The review came off the back of industry feedback about the important role of developers, and the need to examine the impact of their financial and operational capacity, ethical behaviours and work practices.Its remit was to address security of payment in the sector and examine the impact developers have on the quality and safety of design, construction and certification of the built environment.In the panel's final report tabled in the Queensland parliament on June 8, Developer Review Panel chair Alison Quinn says the review had determined there was “sufficient qualitative evidence to warrant a case for change”.“Developers have a primary role in setting the tone of projects, and they influence security of payment, solvency and building quality and safety in several ways,” she says. “This influence can be both positive and negative.”Quinn says the panel's suite of recommendations sought to “resolve identified issues, minimise regulatory burden, and provide the Queensland government with additional data insights to inform future policy development”.“The panel has been conscious of current economic conditions, the impact this has on industry participants, and the impending increased level of construction to meet the state’s needs over coming years,” she notes.Five key recommendations have been made to lay the foundation of “a benchmark for a better standard for developers in Queensland”.“The panel stresses that the proposed reforms are not the ‘high-water mark’, but rather minimum standards on which to build the future of the role of developers in the building and construction industry,” Quinn says.<div id="h4zsP3cWJS6Rbz5HRGpv9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3Ayve2A0N7FtxwIhJlu9b7/17554a8f08d2ace6170128df311e739c/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/3Ayve2A0N7FtxwIhJlu9b7/17554a8f08d2ace6170128df311e739c/3.jpg"></picture><div>▲ &nbsp;Developer Review Panel chair Alison Quinn: The issues identified in this report are unlikely to recede. </div></div>As well as a new regulatory framework, the reforms include improved industry education, clarity of developer responsibilities in relation to non-conforming building products and fairness in contracting, and promotion of the uptake of digital tools for recording design and construction information.“Queensland is about to undergo an extensive period of development and growth,” Quinn says. “The issues identified in this report are unlikely to recede.“The panel encourages all parties—government, industry and consumers—to work together to consider the outcomes of this report promptly.”Queensland Minister for Public Works Mick de Brenni says the government has not yet committed to implementing the recommendations and the release of the report is the start of a consultation process.“The panel’s recommendations will need to be tested alongside feedback before the government forms a view,” de Brenni says.“Industry experts, those working within the industry, and members of the public will be invited to provide feedback.”<h2>Issue unclear</h2> The Property Council’s Jen Williams says there is no denying there is always room for improvement in any industry, and property is no different.“Throughout the review process, we expressed our support for improving education and business skills across the industry… rather than adding complex regulatory requirements.”But she says from its inception it had been unclear what “issue” the review of developers sought to address.“After more than 18 months of investigation, the panel has failed to find any significant or systemic wrongdoing by developers,” Williams says.“In the absence of any issue being able to be articulated or quantified, the panel has chosen to focus on the role developers play in setting the ‘tone’ of a project.“An extensive regulatory framework—requiring significant government investment in its establishment and administration—is now being proposed.“Surely, in the midst of a housing crisis and with government balance sheets under pressure, public sector resources could be allocated to better uses than setting up a framework to regulate ‘tone’?” <hr> You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. <a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans">Click here to learn more.</a><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Developers say the timing could not be worse to put more restrictive governance on an already-stressed industry...

1.jpg

There Is A Lot Going On.As the six-word title slide of his keynote presentation flashed on to the screen, Urbis director Paul Riga could feel the collective thought bubble popping up in the room.It was quite an understatement, to say the least.To be fair, however, and as Riga quickly pointed out, emphasis was given to the third and fourth words.“I've underlined the ‘a lot’ bit because there is a fair bit happening right now and that’s probably an understatement in itself,” he said.The irony of the title’s succinctness and simplicity also was not lost on the gathering of 300 industry players at The Urban Developer Brisbane Residential Developer Summit.Things have got somewhat chaotic and complicated in the Queensland capital’s development sector of late.The city’s to-do list—with the 2032 Brisbane Olympics the cherry on top—is enviable but somewhat of a blessing and a curse in the current challenging and uncertain environment.“There’s all these things happening and it is a lot going through people’s minds,” Riga said. “But I guess sometimes it’s easy to forget that the fundamentals for pure residential property demand are still relatively strong.”State government forecasts for population growth indicate at least 190,000 new residents will be coming into the Brisbane LGA by 2036.“That’s a lot of people that we’re needing to house,” Riga said. “And depending on how you cut that figure in terms of persons per household, it could be anywhere between 70,000 and 100,000 homes required over that period. That’s 7000 to 7500 homes we need to deliver per annum.“Then there’s other factors that are coming in and—while again we look at these and say ‘fantastic’ from the perspective of investment, creating opportunity, creating jobs and therefore pulling people into our region—they do perhaps provide some challenges in construction and delivery of our residential homes.”Specifically, he cited a combined $24.7-billion-plus, resource-sucking pipeline—focused largely in the state’s south-east—including healthcare-hospital and transport infrastructure as well as the delivery race to get the city match fit to stage the XXXV Olympiad.Overlaying all of that is a worsening housing supply and affordability “emergency”, as Riga described it, compounded by ongoing escalation in building costs and a demand-driven crunch that has maxed-out the city’s construction capacity due to a critical shortage of skilled labour.According to Riga, overall unemployment was low but construction unemployment was “even tighter”—with estimates currently sitting at about 2 per cent.Quantity surveyor and Mitchell Brandtman partner Caitlin Shields told the summit that construction cost escalation—by its estimates, forecast to rise on average a further 7.5 per cent over the next 12 months across south-east Queensland—was “all about the labour now”.“We’ve got to figure out this labour problem … and opening up migration internationally should help a little bit.“There’s a famous quote that says ‘build it and they will come’ but maybe we should be saying ‘they will come and they need to build it’.“So, hopefully we’ll end up with some more skilled labour because we’re lacking in that regard.”Shields said with the additional pressure of rising inflation and interest rates, the industry was “at a turning point where sales are cooling off a bit and the feasibilities are starting to get challenged”.The trend, according to Riga, was reinforced by the lastest data—particularly in the last quarter—that showed “supply is starting to drop off”.&nbsp;“And it’s not looking like it’s going to come back in the next 12 months to figures where we probably need them to be,” he said.Nevertheless, both he and Shields agreed there were opportunities to be had for developers going forward.Riga said the medium-term outlook for Brisbane and Queensland’s south-east was a “tale of two markets”—the rising build-to-rent sector and the premium boutique-scale apartment market.“We know from clients there’s significant [build-to-rent] interest here in SEQ, given the complete lack of supply that we’ve got going in the market.“That product typology in itself has the ability to supply markets relatively quickly … not necessarily within the next 12 months, which is potentially when we need some of that supply, but it will come on and supply the market in time.“And over the next 10 years there’s a potential depth of market just within inner-Brisbane of 25,000 to 30,000 new renters ... so there’s quite a market there.”Meanwhile, activity was expected to continue in the top end of the boutique multi-residential market because “from a price point, there’s a bit more tolerance from a buyer perspective, less reliance on interest rate movements and affordability caps to enter that market”.Nevertheless, Riga said, innovation, collaboration and partnerships would be needed across the board to deliver projects in the next 12 months and beyond.“We’re already seeing that happening and, ultimately, for us to be able to potentially move from the emergency we’re in from a housing supply perspective a lot more of that will be required.“It’s certainly going to be a bit of a challenge ... but where there’s a will there’s a way.“And there are definitely opportunities out there. But it’s getting on top of some of those constraints that is going to be key.”Yes, as Riga's opening slide concisely articulated, there is a lot going on in the Brisbane market and—judging from Shields’ final words of advice to the summit delegates—clearly much more to come.“Hold on for the ride,” she said “There’s a lot of excitement, there’s a lot of activity and there’s a lot of challenges out there.” <hr> You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. <a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans">Click here to learn more.</a><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

Labour shortages, a “resource-sucking” infrastructure pipeline, housing shortfalls—Brisbane is facing challenges, but opportunities remain, a summit in the capital has been told…

queens wharf delayed.jpg

The opening of The Star’s Queen’s Wharf in Brisbane has again been pushed back.The landmark riverside development was slated to open at Christmas; however, it is now scheduled to open the doors in April next year, The Star’s Group chief executive and managing director Robbie Cooke said.“The revised opening date follows careful consideration of current progress by our builder,” Cooke said in a statement to the ASX.“Queen’s Wharf has not been immune from the types of pressures that other major infrastructure projects across Australia have encountered.&nbsp;“We are disappointed, but this transformational development for Brisbane has been eight years in the making already, and it will be well worth the wait.“Queen’s Wharf will be a game-changer for a city that continues to attract the eyes of the world as we charge towards the 2032 Olympic and Paralympic Games.”The multi-billion-dollar Queen’s Wharf development, on either side of&nbsp;William Street&nbsp;in Brisbane’s CBD, is the largest development undertaken in Queensland and the largest casino resort in Australia.This is far from the first time the opening date has been revised—in July, 2022 The Star advised that the cost of materials, the pandemic and substantial rain had delayed the project by six months and added 10 per cent to its cost.In February of this year, chief operating officer Kelvin Dodt said it would open by year’s end.However, it was not all bad news for the Destination Brisbane Consortium, the privately owned and operated joint venture between The Star and its partners Chow Tai Fook Enterprises and Far East Consortium.<div id="77CCv4kl18c1USxTBN7FKZ"><picture><img src="//images.ctfassets.net/8pr762qjocl3/bcLiDUwaky5R9A89pqPFD/30867f7703654210dab06c3fbd47ba2c/Mid_article_resizes__8_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/bcLiDUwaky5R9A89pqPFD/30867f7703654210dab06c3fbd47ba2c/Mid_article_resizes__8_.jpg"></picture><div>▲ A render of Queen’s Wharf from William Street looking south. </div></div>In the statement it said it had “received the keys” to several dining, entertainment and gaming areas on Levels 5 and 6 of the resort, representing the first handover of control for an area within the construction precinct, from<a data-mce-href="https://www.theurbandeveloper.com/articles/multiplex-wins-out-on-36bn-queens-wharf-" href="https://www.theurbandeveloper.com/articles/multiplex-wins-out-on-36bn-queens-wharf-" target="_blank" rel="noopener"> building contractor Multiplex</a>.&nbsp;“This milestone provides The Star, as the operator, the opportunity to commence bump-in of the respective areas. The handover occurred on June 2, 2023.”On the same day, the third and final Sky Deck bridge section was moved into place, ahead of the Sky Deck lift and connection to take place in the coming weeks.“The completed Sky Deck will connect all four towers of the Queen’s Wharf development and signify a further milestone in the project’s progression,” the statement said.&nbsp;“The Sky Deck will showcase a 250m open-air rooftop runway of bars and restaurants, provide panoramic views from 100m above the Brisbane River and have capacity for up to 1500 people.”

Brisbane now won’t be getting The Star’s multi-billion-dollar mega-project before the end of the year…

Willawong Warehouse HERO .png

An industrial facility in Brisbane’s south-east has been acquired by a private investor for a 31 per cent above premium price.&nbsp;Spanning 3415sq m, the property at 373 Sherbrooke Road, Willawong, was offloaded by Centuria Capital Group for $12.75 million. Centuria paid $10.6 million for it eight years ago.CG Property Group’s Ben Clarke and Mark Gilbride handled the sale.Akzo Nobel, a painting and coating specialist—with headquarters in the Netherlands— has a five-year lease on the warehouse, including 1420sq m of office space, 52 on-grade carparks and two loading bays.&nbsp;The site at Willawong, 19km south of the Brisbane CBD, has access to the the Centenary Highway, the Logan Motorway (M2), and the Pacific Highway (M1).The transaction comes as <a data-mce-href="https://www.theurbandeveloper.com/articles/industrial-vacancy-rates-knight-frank" href="https://www.theurbandeveloper.com/articles/industrial-vacancy-rates-knight-frank" target="_blank" rel="noopener">industrial market vacancies</a> for Brisbane’s south-east hit new lows.Centuria Industrial head Jesse Curtis said Centuria purchased the asset in 2015 through value-add leasing and since then had achieved attractive returns for investors.“Limited vacancy and persistent tenant demand within infill industrial markets across the Australian eastern seaboard continues to drive outsized rental growth,” he said.“These enduring strong market tailwinds continue to drive investor demand for quality industrial assets.”Centuria has a $3.5-billion Queensland portfolio of 101 properties that includes healthcare, agriculture, industrial, retail, and property finance.

An industrial facility in Brisbane’s south east has been acquired by a private New Zealand-based investor for a 31 per cent above premium price. 

19 Hercules HERO.jpg

Wentworth Equities has re-listed its DA-approved site at 19 Hercules Street in Brisbane’s 2032 Olympic athlete village precinct after a deal with Descon failed to get over the line.&nbsp;In November last year, The Urban Developer reported that Descon had splashed $70 million on the site, however the deal did not complete.&nbsp;Real estate investment fund Wentworth acquired the site more than eight years ago and engaged Fuse Architecture to design a three-tower proposal for the property, next to Portside Wharf.&nbsp;The 7637sq m site has an approval for three towers up to 30 storeys, and 433 apartments above retail and commercial space.&nbsp;Tower One has final approval, while the second and third towers have preliminary approval.Wentworth Equities executive chairman Sameh Ibrahim said the site had previously been under offer by a company that failed to reach settlement.“As the vendors we are now absolutely committed to sell this amazing development opportunity, this is a very rare opportunity to be part of building an exciting new Brisbane precinct,” Ibrahim said.“The detail that has gone into the planning puts this development at the top of its field in quality and design, with every apartment offering a great aspect to either the Brisbane River and City, Hercules Park or the Eagle Farm racecourse.”<div id="5QFvJJj1OepCtZTpLcjBA2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6V5OUQXjoZIGDks3NYxYVE/e97c3634b6736a727c41539657cd4499/HerculesDesconMID.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6V5OUQXjoZIGDks3NYxYVE/e97c3634b6736a727c41539657cd4499/HerculesDesconMID.jpg"></picture><div>▲ Descon chairman Danny Isaac, pictured with Wentworth Equities directors Simon Slavin and Sameh Ibrahim at the $70-million site last year. </div></div>Approved plans for tower one comprise 153 units with 20,096sq m of residential Gross Floor Area (GFA) and 1434sq m of retail/commercial GFA.Preliminary approval was granted for two 30-storey mixed-use high-rises allowing for up to 60,000sq m of GFA with about 55,000sq m residential and 5000sq m non-residential, allowing for up to 433 units across the site.The Portside Hamilton area has become a hotbed of development activity with Brookfield most recently filing plans for its first foray into build-to-rent on Australian shores on the site of the former cruise terminal, following an announcement that its Portside lifestyle precinct was in line for a $20-million refurbishment.&nbsp;Colliers Queensland national director of investment services Hunter Higgins said the Brisbane 2032 Olympics was the accelerator for creating the next generation of CBD and inner-city real estate precincts.“This rare site located within the Northshore Hamilton ‘Precinct of Gold’ is expected to fetch about $60 million to $70 million, and offers the opportunity to be part of Brisbane’s Olympic legacy,” Higgins said.<div id="3OOumlssdhFcSXObrcLPxo"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5mFlqdw7YJcFXVG7MkA5XX/7efe9a0cdb1e68368185498b84361fad/DesconHercules.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5mFlqdw7YJcFXVG7MkA5XX/7efe9a0cdb1e68368185498b84361fad/DesconHercules.jpg"></picture><div>▲ Three towers would rise up to 30 storeys on the expansive site adjacent to Portside. </div></div>“It also offers a unique opportunity for residential development to capitalise on the potential land value uplift created from the renewal of the area and the additional amenity and desirability created from the area’s redevelopment.”Colliers Queensland director residential development sites Troy Linnane said based on historical demand and likely anticipated supply, inner Brisbane would experience a shortfall of 16,000 new apartments over the next four years.Linnane said the site could potentially be flipped to accommodate build-to-rent, hotel or office.&nbsp;Iris Capital, a company directed by billionaire hotelier Sam Arnaout and developer of the mammoth Victoria &amp; Albert Broadbeach project, is reportedly suing Descon Group Australia, according to court documents.Descon had been contracted to build the 56-storey twin-tower project on the site of the former Niecon Plaza. But the deal broke down in February this year.

Wentworth Equities has re-listed its DA-approved site at 19 Hercules Street in Brisbane’s 2032 Olympic athlete village precinct, after a deal with Descon failed to get over the line...

Untitled design - 2023-06-01T131937.773.jpg

As the development sector still navigates the cliff’s edge,&nbsp; Sydney-based Fortis is forging ahead with its Queensland expansion, unveiling plans for a riverfront apartment tower at Brisbane’s inner-city Kangaroo Point.The $100-million tower proposal has been designed to “hover” three levels over a 1197sq m site at 44 O’Connell Street it acquired this year from local architect-developer Joe Adsett.After Adsett’s plans for a 15-storey, 14-apartment tower on the site were given the green light by the Brisbane City Council in October 2021, the narrow battle-axe-shaped property became a NIMBY frontline.The approval was subsequently cancelled in November last year after proceedings were initiated in the Planning and Environment Court over the validity of the council’s decision.Under the new plans filed by Fortis, the go-ahead is being sought for a similar-sized residential tower, which would replace an existing 1960s six-storey block of 13 units.It would comprise a ground-floor lobby and tiered communal recreation area topped with 14 whole-floor three-bedroom apartments, including a penthouse with a private rooftop terrace and pool. Indoor and outdoor resort-style communal amenities would include a lap pool and leisure deck, wellness retreat and landscaped pockets for entertaining, are planned for the tower’s base.Three basement levels would provide 46 carparking spaces.According to a submitted planning report, the proposed 15-storey building height and site cover of 44.9 per cent meet code assessable requirements.As well, it noted setbacks and building separation “achieve wider dimensions than the previous approval” but, without strict compliance with the 6m to side boundaries, performance outcomes were being sought.“Paying homage to the natural beauty and earthy tones of the Kangaroo Point cliffs ... the building’s profile is slender and will introduce a dynamic experience to the Kangaroo Point skyline,” the report said.<div id="carousel-root" data-reactroot=""><image-carousel-remove-button><div class="rm-carousel-wrapper"><button id="rm-carousel" class="rm-carousel-btn">Delete</button></div></image-carousel-remove-button><div class="slider-wrap"><image-carousel><div class="slider-el"><img style="height: 100%;" title="Untitled design - 2023-06-01T132055.132.jpg" src="http://images.ctfassets.net/8pr762qjocl3/3lxBkko1fzjAqZ9L1TISDD/0e710d0824b3f84916edaef2a9be1e49/Untitled_design_-_2023-06-01T132055.132.jpg" data-mce-src="http://images.ctfassets.net/8pr762qjocl3/3lxBkko1fzjAqZ9L1TISDD/0e710d0824b3f84916edaef2a9be1e49/Untitled_design_-_2023-06-01T132055.132.jpg" data-mce-style="height: 100%;"></div><div class="slider-el"><img style="height: 100%;" title="Untitled design - 2023-06-01T132021.212.jpg" src="http://images.ctfassets.net/8pr762qjocl3/4kaatYAuF4UI6gSz9IcabC/8c775f3362edb9877316eb7f0ea5aebb/Untitled_design_-_2023-06-01T132021.212.jpg" data-mce-src="http://images.ctfassets.net/8pr762qjocl3/4kaatYAuF4UI6gSz9IcabC/8c775f3362edb9877316eb7f0ea5aebb/Untitled_design_-_2023-06-01T132021.212.jpg" data-mce-style="height: 100%;"></div><div class="slider-el"><img style="height: 100%;" title="Untitled design - 2023-06-01T132122.378.jpg" src="http://images.ctfassets.net/8pr762qjocl3/7KlyCKHhVShJQ7t9jl0O4V/ce0f1af4f2b85f0feab964d666b93715/Untitled_design_-_2023-06-01T132122.378.jpg" data-mce-src="http://images.ctfassets.net/8pr762qjocl3/7KlyCKHhVShJQ7t9jl0O4V/ce0f1af4f2b85f0feab964d666b93715/Untitled_design_-_2023-06-01T132122.378.jpg" data-mce-style="height: 100%;"></div></image-carousel></div></div> Access to the site is via a 50m single-lane driveway with a “signalised system” proposed to facilitate safe and efficient movement of vehicles in and out of the property.“The site’s pronounced topographical decline demands a specialised planning solution that prioritises pedestrian access and connections to the Brisbane River, both visually and physically,” the report said.It said the proposal provided an innovative, contemporary and functional design outcome that would “exude elegance and establish a harmonious connection with its surrounds”.“The proposal represents a modern and sophisticated design that is emblematic of Kangaroo Point and high end riverside living that has become increasingly popular in Brisbane’s inner located suburbs,” the report said.It concluded: “The proposed 15 storey built form is consistent and complementary with the area’s local character and reflective of the existing scale and massing present within this section of the Kangaroo Point precinct.”Plus Architecture designed the latest scheme—dubbed O’Connell—to “align with a luxurious riverside lifestyle” as well as “replicate the terrestrial makeup of its context at Kangaroo Point and emphasise the historical significance of the area”.“Our design seamlessly connects to the river, creating a welcoming atmosphere,” its design statement said. “The building hovers three levels over [the site] offering an impressive focal point from the river and an expansive and active undercroft.“The design incorporates panoramic views of the scenic New Farm area and the serene Brisbane River, fostering a strong connection to nature.”In 2021, developer Pikos Property Group was granted approval—with conditions, including a reduction in apartments—by the&nbsp; Planning and Environment Court to build <a data-mce-href="https://www.theurbandeveloper.com/articles/pikos-kangaroo-point-triple-towers-approved" href="https://www.theurbandeveloper.com/articles/pikos-kangaroo-point-triple-towers-approved" target="_blank" rel="noopener">three 15-storey towers on a 5284sq m site at 108 Lambert St, Kangaroo Point</a>.The decision followed the Brisbane City Council rejecting the development application after community backlash over the height of the towers.

Plans have been filed for a $100-million residential tower designed to “hover” three levels over a NIMBY stronghold on Brisbane's riverfront...

GQ Fitzroy North HERO.jpg

Build-to-rent developer GQ is boosting its pipeline to 3650 apartments in a move to expand its footprint considerably across the eastern seaboard, notably including a Brisbane debut.&nbsp;<a data-mce-href="https://www.theurbandeveloper.com/articles/gurner-qualitas-build-to-rent-two-billion-raise-sydney" href="https://www.theurbandeveloper.com/articles/gurner-qualitas-build-to-rent-two-billion-raise-sydney" target="_blank" rel="noopener">The Gurner-Qualitas joint venture</a> announced it would progress its plans for Fitzroy North after Gurner bought the site for a build-to-sell development in 2016 for about $45 million.&nbsp;It’s a move that Gurner is likely to replicate across other sites in its portfolio as the build-to-sell market cools and build-to-rent develops as a stronger long-term play.&nbsp;GQ has two sites, at St Kilda and Southbank, in Melbourne under construction with its <a data-mce-href="https://www.theurbandeveloper.com/articles/gurner-qualitas-parramatta-build-to-rent-tower-plans" href="https://www.theurbandeveloper.com/articles/gurner-qualitas-parramatta-build-to-rent-tower-plans" target="_blank" rel="noopener">Parramatta</a> and Fitzroy North developments due to start construction by the end of 2023, taking its number of apartments under way to 1500 this year.&nbsp;But the developer has announced an additional 2150 apartments in the pipeline on <a data-mce-href="https://www.theurbandeveloper.com/articles/gurner-harbour-esplanade-docklands-melbourne-development" href="https://www.theurbandeveloper.com/articles/gurner-harbour-esplanade-docklands-melbourne-development" target="_blank" rel="noopener">sites at Docklands</a>, South Melbourne, Melbourne Inner East and Brisbane.&nbsp;Gurner Group chief executive Tim Gurner said they were undertaking initial demolition works on the 7990sq m North Fitzroy site at 26–56 Queens Parade.“Our access to capital and shovel-ready sites mean we are able to move quickly and rapidly build on our portfolio,” Gurner said. &nbsp;“Our aim is to have 5000 apartments worth $5 billion under management by 2026 and we are well on the way to achieving this and to exceeding it.“The scale is critical for cost management, efficiencies and to offer our customers an opportunity to move around Australia while always staying within a GQ Multifamily building.”<div id="7nePZVzq7zFiwbSfYRiVGz"><picture><img src="//images.ctfassets.net/8pr762qjocl3/kd7xb3fi8sSuFWPR5tjpF/422a9fe34dcff9ecf00dca0a8bb92c46/Gurner_and_Qualitas_are_planning_to_build_a_61_storey_tower_in_Parramatta_after_buying_the_site_from_Toplace._" alt="Render of the Gurner-Qualitas mixed-use build-to-rent development proposal earmarked for a 2049sq m Parramatta site that, if approved, will comprise 385 apartments.
" data-mce-src="//images.ctfassets.net/8pr762qjocl3/kd7xb3fi8sSuFWPR5tjpF/422a9fe34dcff9ecf00dca0a8bb92c46/Gurner_and_Qualitas_are_planning_to_build_a_61_storey_tower_in_Parramatta_after_buying_the_site_from_Toplace._"></picture><div>▲ A render of the Gurner-Qualitas mixed-use build-to-rent development proposed for Parramatta.&nbsp;</div></div> Gurner said the Fitzroy North project would offer diversity of product from studios to four-bedroom apartments catering to families.&nbsp;“The current rental conditions and chronic undersupply of quality housing for our population means the sector is well-placed to service this growing deficit. GQ is ready to deploy all capital at our disposal to deliver this stock to the market,” Gurner said.&nbsp;“I love working in Melbourne’s north—it’s such an incredible area with vibrant streetscapes, rich heritage and such a unique character. I am looking forward to celebrating that with our Queens Parade project, which will bring new retail and hospitality, greater housing diversity and some world-class residences to Fitzroy North.“Fitzroy North has long been one of my favourite parts of Melbourne, and it consistently ranks as one of the coolest and most sought-after parts of the city—we think there’s a real opportunity to deliver stock that’s a cut above the rest, particularly as vacancy rate continues to put pressure on the market and the need for greater diversity in housing grows.”Qualitas global head of real estate Mark Fischer said there were “strong and long-term underlying fundamentals” underpinning GQ’s position in the sector.&nbsp;“We are favourable to the residential sector compared to all others as it is perfectly aligned to investors focused on assets generating defensive and resilient cashflows through all economic cycles,” Fischer said.“These through-cycle structural drivers of the sector make GQ Multifamily well positioned to deliver much needed apartment stock, specifically across the eastern seaboard of Australia as well as providing additional services to these locations as part of the projects being delivered—which is central to the vision for the platform offering—along with high-quality amenity.”

Build-to-rent developer GQ is boosting its pipeline to 3650 apartments in a move to expand its footprint considerably across the eastern seaboard, notably including a Brisbane debut...

Brisbane Resi EDM.jpg

Major players are moving in on Brisbane greenfield sites that three years ago they wouldn’t have looked at twice.Chapter Two director Oliver Bagheri, who will present at The Urban Developer’s <a data-mce-href="https://web.cvent.com/event/7f31abf7-09ca-4622-9f4b-dde75c44182b/summary?rt=X_aufiJPxEeHOTaMYZfoiQ" href="https://web.cvent.com/event/7f31abf7-09ca-4622-9f4b-dde75c44182b/summary?rt=X_aufiJPxEeHOTaMYZfoiQ" target="_blank" rel="noopener">Brisbane Residential Summit on June 8</a>, said that the dearth of land was causing seismic changes in the residential development sector, especially at the smaller end.“If you look at a map of South-East Queensland, it appears as though there’s large concentrations of developable land which may easily service demands of the expected population growth over the next 10, 20 or 50 years.&nbsp;“The reality is that it’s not readily developable—this land is limited by planning scheme overlays, environmental corridors or physical constraints.”The pandemic also accelerated supply challenges as Brisbane became an attractive market for developers, buyers and sellers.“As we transitioned through the various waves of Covid, it became evident there was a clear uptick in transaction volumes,” Bagheri said.“Initially we observed this at the retail purchaser level, which when compounded with investor demand resulted in larger numbers of site acquisitions than pre-covid”“But both segments of the market were underpinned by a wave of capital from privates and institutions domiciled here and offshore.”This brings us to the challenging situation we are in today.&nbsp;“Institutional developers are now considering smaller greenfield community options than they usually would, as well as opportunities further afield, because they are finding it much harder to identify and purchase large sites,” said Bagheri.“The smaller end of the market where Chapter Two operates is now also being fiercely contested by larger well established private developers.“Once upon a time, the larger established developers wouldn’t bother looking at anything under, say, 50 lots. Fast forward to now, we see them regularly pursuing opportunities of under 50 lots and sometimes as small as 15 lots, offering vendors unbeatable pricing and terms.“In some cases, we even share similar capital bases with our competitors and are competing for the same sites.”&nbsp;<div id="32DSKaKx8QMCHFt9xH4QxI"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3hjuDhwHgS0TpuCCsgfVdP/ce0a13c3a1b0106f6671dc5aa0dc3c80/Brisbane_Resi_In-article__39_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/3hjuDhwHgS0TpuCCsgfVdP/ce0a13c3a1b0106f6671dc5aa0dc3c80/Brisbane_Resi_In-article__39_.jpg"></picture><div>▲ Chapter Two director Oliver Bagheri says smaller developers are prepared for the challenges posed by the dearth of greenfield land in Brisbane. </div></div>Compounded with labour shortages, high construction costs and long approval times, it is a tricky situation for developers, especially those at the smaller end, to traverse.&nbsp;“It’s a perfect storm – quite simply developable land is scarce”.&nbsp;“Brisbane has benefitted from being a ‘village town’, which it is no longer and we’re on the trail to the Olympics—its value proposition has become very clear, and this is creating a highly competitive market.”&nbsp;But smaller developers can focus on planning and preparation to ensure they have a strong position going forward.“In terms of forecasting, we’re focusing on working closely with our project teams to ensure we can move swiftly when site opportunities materialise”“We’re spending much of our time engaging with our project team as early and as often as possible in an attempt to analyse opportunities quickly and pierce through the market noise, understanding that Brisbane’s value proposition is very strong.”<hr> The Urban Developer&nbsp;Brisbane Residential Developer Summit&nbsp;will take place in&nbsp;Brisbane&nbsp;on&nbsp;Thursday, June 8. The summit will also offer premium networking opportunities that will allow attendees to connect with like-minded professionals, industry leaders, and potential partners. &nbsp; &nbsp;<a href="https://cvent.me/KLxeKl?rt=X_aufiJPxEeHOTaMYZfoiQ" target="_blank" rel="noopener" data-mce-href="https://cvent.me/KLxeKl?rt=X_aufiJPxEeHOTaMYZfoiQ">Click here to learn more and to register.</a>

Competition will only increase as major players look to lucrative but limited Brisbane greenfield development for growth…


CDL 500 BtR Plan Hero.jpg

Global real estate conglomerate City Developments is bursting onto Australia’s burgeoning build-to-rent sector with a bang, promising construction start to projects in both Brisbane and Melbourne “within the next few months”.CDL Australia Holdings, a wholly owned subsidiary of Singapore-listed City Developments Limited, has announced more than 500 build-to-rent apartments across the two locations.It will be the company’s first build-to-rent projects in Australia.“The group is very positive about the future of the build-to-rent sector in Australia,” CDL’s head of development Cameron Laird said in a statement.The projects are at Toowong in Brisbane’s inner west for an anticipated 320 apartments, and Melbourne’s growing Fishermans Bend precinct with about 240 apartments.CDL first entered the Australian market about eight years ago with apartment and townhouse projects.“We are extremely pleased with the strong foothold we have gained since our re-entry into the Australian property sector with our Ivy and Eve project in Brisbane in 2015 and the opportunity to leverage the rising demand for rental accommodation with build-to-rent projects in Brisbane and Melbourne,” Laird said.<div id="7qTER6RWXNiMAKzCOczdDw"><picture><img src="//images.ctfassets.net/8pr762qjocl3/laYyLuXsfRsjt0E1v0BX4/90edcdb139a85b4531d2cf466980504c/CDL_Australia_Fishermans_Bend_BTR__1_.jpg" alt="An artist's impression of CDL’s fishermans Bend project in Melbourne " data-mce-src="//images.ctfassets.net/8pr762qjocl3/laYyLuXsfRsjt0E1v0BX4/90edcdb139a85b4531d2cf466980504c/CDL_Australia_Fishermans_Bend_BTR__1_.jpg"></picture><div>▲ Work on CDL’s projects in Fishermans Bend, Melbourne, and Toowong, in Brisbane’s inner west (main picture) are expected to get under way this year.</div><div> </div></div>That foothold includes the company’s Brickworks Park community in Brisbane’s inner north.&nbsp;&nbsp;Construction has already begun on the first stage of the 215-apartment project at the historic brickworks site in Alderley, Brisbane.Construction is also under way on a joint venture with Metro Property Development for 96 townhouses in Brisbane’s western suburbs.&nbsp;&nbsp;The first phase of the project—Treetops at Kenmore—is fully sold, according to CDL, while about 60 per cent of the second phase is sold with a third phase yet to be released.Last year CDL finished construction on another joint venture—The Marker in West Melbourne—comprising 198 apartments, some retail including an Aldi supermarket, and food and beverage outlets.The developer said it is also planning construction on a joint-venture in Fitzroy, in Melbourne’s inner north, which will include 56 apartments and five terrace homes, again with ground-floor commercial and retail leases.The global real estate company has offices in 28 countries.

Global real estate conglomerate City Developments is bursting onto Australia’s burgeoning build-to-rent sector with a bang, promising construction start to projects in both Brisbane and Melbourne “within the next few months.”

Untitled design - 2023-05-29T144347.146.jpg

A boutique six-storey office building proposal has been filed for an infill site within the mixed-use zone of inner-city Brisbane’s popular James Street precinct.It has been lodged with the Brisbane City Council by an entity linked to Lion Property Group co-founders Garry Pesochinsky and John Sader.Earmarked for a 562sq m parcel at 43 Commercial Road, Newstead, the proposal would comprise a gross floor area of 2034sq m across five levels of office space, including a communal wellness floor, and a ground-level shop tenancy as well as a pocket park.It would also incorporate a partially covered rooftop garden terrace designed as a breakout area for tenants with views of the CBD and Brisbane River.The proposed commercial building would replace a block of four two-bedroom units that now occupies the site. Under the plans, however, some of the bricks from its demolition would be reclaimed and utilised as part of the development on the ground floor.A submitted planning report noted the proposal exceeds the four-storey acceptable height outcome for the site under the Fortitude Valley Neighbourhood Plan within the James Street precinct.But it deemed that a six-storey building would “not feel or appear out of place” and the plans aligned with community expectations as the James Street precinct “supports a range of building heights, depending on the zoning and location of a site”.<div id="3UTtk59Vb4i98mLdJGajrt"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7Hp0e2rjzDEpSm9dBCNa0k/bb4f3c9bba7e825d9b4ef0e1d99dcc54/newstead1__1_.png" alt="Render of the proposed boutique office building at Newstead." data-mce-src="//images.ctfassets.net/8pr762qjocl3/7Hp0e2rjzDEpSm9dBCNa0k/bb4f3c9bba7e825d9b4ef0e1d99dcc54/newstead1__1_.png"></picture><div>▲ A render of the proposed boutique office building at Newstead. </div></div>“The proposal delivers a building that is of a height and proportion that responds to other emerging developments in the locality,” the report said.“While it is acknowledged that the acceptable outcome for height is exceeded, a lesser height would not result in a superior built form or amenity outcome, particularly at the streetscape level.“To this end the development has put greater emphasis on creating a superior ‘human scale’ and ‘activated frontage’ which is commensurate with a building of this scale.”<div id="1UQ2g8CPGXhuHdHkAQYea6"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1z0JXpReFsJGfGsXQ6HLXB/a4cb1405db2e92d8e9b9817b44359066/Untitled_design_-_2023-05-29T144453.148.jpg" alt="Render of the proposed boutique office building at Newstead." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1z0JXpReFsJGfGsXQ6HLXB/a4cb1405db2e92d8e9b9817b44359066/Untitled_design_-_2023-05-29T144453.148.jpg"></picture><div>▲ A render of the interior of the proposed office building on James Street. </div></div>The scheme designed by architecture studio Bayley Ward also includes car and bicycle parking spaces at ground level.“The site benefits from being a part of an evolving suburb that showcases architectural excellence and is currently undergoing significant transformation and growth,” a design statement said.“The subject site proposal upholds the ambitions of the mixed-use zoning, delivering a premium commercial workplace … [and] reinforces the varied and diverse architecture and urban form that distinguishes Fortitude Valley from the CBD and other parts of Brisbane, through innovative building construction, architecture and urban design that reflects its creative and heritage values.”

A boutique six-storey office building proposal has been filed for an infill site within the mixed-use zone of inner-city Brisbane’s popular James Street precinct.

BrookfieldBTR HERO.jpg

It’s one of the biggest asset owners in build-to-rent internationally and now Canadian-owned Brookfield is making the move into the Australian market, revealing its two-tower, 560-apartment project at Hamilton in Brisbane.The developer and asset manager has more than $18 billion and 60,000 build-to-rent apartments under management globally.It now plans to further pad out its pipeline in Brisbane’s northshore area, which is earmarked for the 2032 Olympic athletes village.&nbsp;Two Fender Katsalidis-designed towers will rise to 23 storeys and will be set on opposing diagonals to maximise views for residents under the proposal while minimising visual bulk on the site at 11-23 Macarthur Avenue, which is the carpark and former cruise ship terminal check-in building. &nbsp;An application for the project was lodged under Economic Development Queensland’s new Northshore Hamilton Priority Development Area scheme.&nbsp;Brookfield head of Australia real estate Sophie Fallman said the asset manager would bring its international learnings to Australia’s build-to-rent sector as Brookfield looked to boost its alternative assets exposure.“Housing and affordability are strong investment thematics for Brookfield and we want to invest in them around the world including Australia, where there are compelling tailwinds for these strategies,” Fallman said.“We are very pleased with this opportunity to bring our deep global experience in multifamily real estate to bear in the local Australian build-to-rent sector.&nbsp;“We believe the proposed design combines the best of our global operational advantages with a strong response to the local context and will meaningfully contribute to the community of Hamilton.”<div id="1XOhQih30pFTN6BwE1UqV0"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4ShZg1nsfanvzLVvyg7yFM/a7a3fab30b9731f95f03efd476a3361b/Brookfield_BTR_MID.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4ShZg1nsfanvzLVvyg7yFM/a7a3fab30b9731f95f03efd476a3361b/Brookfield_BTR_MID.jpg"></picture><div>▲ The former cruise ship terminal at Portside will make way for two towers of 23 storeys. </div></div> The 560 apartments will be a mix of studio, one, two and three-bedroom options.&nbsp;The development would also comprise a building concierge, resort-style pool and gym, podium recreation spaces, barbecue areas, health and wellness spa, and co-working spaces to complement the retail and cafe district in the neighbourhood.Brookfield has about 14,000 build-to-rent apartments under development across North America and China, another key market. It also <a href="https://www.theurbandeveloper.com/articles/brookfield-citiplan-plot-31-storey-brisbane-student-digs" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/brookfield-citiplan-plot-31-storey-brisbane-student-digs">recently filed plans for a student accommodation development</a> in Brisbane.&nbsp;Brookfield residential properties managing director Lee Butterworth said low vacancy rates in Brisbane were a compelling case for build-to-rent in Australian markets.&nbsp;“Vacancy rates in Brisbane are among the lowest in the country at under 1 per cent, so the demand for new rental properties in the city is significant,” Butterworth said.&nbsp;“This is a highly desirable location to live, next to the Brisbane River and with an array of dining, retail, entertainment and public transport at the doorstep. It is an area that has undergone significant revitalisation over the past 15 years, spearheaded by our $1.3 billion Portside Wharf mixed-use precinct.&nbsp;“We believe the timing and build-to-rent proposal are ideal for our final legacy in this landmark location.”Fender Katsalidis partner Nicky Drobis said the architecture firm had designed more than $1-billion worth of build-to-rent properties.Late last year Brookfield revealed it would <a href="https://www.theurbandeveloper.com/articles/portside-wharf-redevelopment-northshore-Brookfield-brisbane" target="_blank" rel="noopener" data-mce-href="https://www.theurbandeveloper.com/articles/portside-wharf-redevelopment-northshore-Brookfield-brisbane">splash $20 million on Portside Wharf </a>to lure the local community back to the restaurant and cinema precinct.&nbsp;Hamilton’s Northshore has been fast-tracked for development ahead of the area becoming a central focus for the 2032 Olympic Games athletes village.&nbsp;The Cavill Architects and Urbis-designed plans are for an extended entry plaza and main street with additional shading and landscaping to support year-round outdoor dining and a refreshed riverfront, according to Brookfield.

It’s one of the biggest asset owners in build-to-rent internationally, and now Canadian-owned Brookfield is making the move into the Australian market, revealing its two-tower 560-apartment project at Hamilton in Brisbane...

[+] bne tier 1 builders.jpg

“We’ve knocked back about $7 billion worth of work just this year.”That jaw-dropping confession from Scott Hutchinson, chairman of Australia’s largest privately-owned construction company, paints a telling picture.And, clearly, the view from the industry’s top tier is no postcard to send home.Rather, it is a grim panorama of an industry still reeling from pandemic-induced challenges—notably supply chain disruptions, materials shortages and cost escalation—and is now grappling with a dire lack of capacity to deliver a massive national pipeline of public and private projects.At last count, Australia’s construction industry was facing a shortage of 214,000 skilled workers.“The market will sort itself out but it won’t be pretty,” Hutchinson says.Perhaps nowhere more so than Hutchinson Builders’ home state of Queensland, where the&nbsp;demand-to-supply ratio for labour is 2:1—meaning&nbsp;there are two workers needed for every one worker that is available.&nbsp;According to the latest Construction Skills Queensland data, across the state there is a construction pipeline of $65.6 billion in committed projects and $107.2 billion in planned projects.Overall, its five-year public infrastructure program now stands at a level not seen since the resources boom in 2012. And that is without works for the 2032 Olympics factored in.But the challenge for Queensland—particularly in the ever-shortening lead-up to the Brisbane Olympics—lies in the fact it is competing with demand for talent, materials and resources from significantly greater pipelines south of its border in New South Wales and Victoria.And, historically, the Sunshine State has not been a preferred stomping ground of many Tier 1 construction firms—somewhat constraining its capacity by comparison.“Right now, we’ve got a shocking bottleneck,” Hutchinson says. “It’s as bad as it can get and as bad as I’ve seen.”&nbsp;<div id="1YwyK5IROX5urSuWOgp5ie"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2JoURHt5eymsebDyxW8nMR/e21ae05d31b93900be78eef54a749599/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2JoURHt5eymsebDyxW8nMR/e21ae05d31b93900be78eef54a749599/1.jpg"></picture><div>▲ Scott Hutchinson: you can only do so much. </div></div>Of the $1.7 billion worth of work put in front of Hutchinson Builders in the past couple of weeks alone, it agreed to go ahead with just $150 million of the projects.But Hutchinson says its judgement calls on jobs are not being based just on capacity but also “quality of clients”. That is, if the price of construction—by his estimates, still “creeping up” by 1 to 2 per cent a month—continues to go up “will that client still be able to build it”.“A lot of it we’ve knocked back because we don’t reckon it’s got much chance of getting off the ground.“You can only do so much,” he says. “So you go with the stuff that’s most likely to go ahead and most likely to make some money.”<h2>Too-hard basket</h2> Australian Constructors Association chief executive Jon Davies says from a vertical construction perspective Queensland is viewed as “a very difficult place to operate”.“That has limited the number of players that operate in Queensland because it’s quite hard to move into the state given the regulatory environment with things like the best practice industrial conditions.“So it’s going to be interesting to see how that plays out because Queensland’s pipeline is increasing significantly … and obviously there's an Olympic overlay to that as well, but it is something that could become problematic,” Davies says.Difficulty in securing a builder has already led to a rising number of developers mothballing their Queensland projects or selling their development approved sites, particularly in Brisbane and the Gold Coast.<div id="1rFThpogC3rwF57roHoFwg"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2c6EjI6mCSgFLlB9PmXq0j/a59ad43350de354b4dd6dacd5f382fb1/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2c6EjI6mCSgFLlB9PmXq0j/a59ad43350de354b4dd6dacd5f382fb1/2.jpg"></picture><div>▲ Australian Constructors Association chief executive Jon Davies: Queensland is viewed as “a very difficult place to operate”. </div></div>But, according to Hutchinson, therein lies the key to the industry’s capacity woes.“The big issue is just supply and demand and there's no answer or cure for it,” he says. “We’ll get through it because the private work will fall away, nothing will stack up“That's what’s going to calm it down. And we’re going to see more builders go bust, more jobs mothballed until it sorts itself out.”Davies says with a review under way into the nation’s $120-billion federal infrastructure program, and NSW and Victoria running the rule over their major projects, another scenario also could well play out providing a boost to Queensland’s top tier construction capacity.“We are seeing a greater amount of uncertainty in pipelines of work across the country, with the one exception of Queensland,” he says. “It’s now becoming one of the few places in the country that has a strong and reliable pipeline of work.“And I think despite those sovereign risks associated with doing business in Queensland we will see a natural gravitation of contractors and resources to Queensland for that reason.”Hutchinson, however, has his doubts.<div id="2jOHN3fn6IOVVA1isl5bEB"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4NqrWSoIqodfna5kgdRUMA/ed4a3df8adbce6b60b18428981c6adac/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4NqrWSoIqodfna5kgdRUMA/ed4a3df8adbce6b60b18428981c6adac/3.jpg"></picture><div>▲ Brisbane-based developer Don O’Rorke says the bottleneck can only get worse before it gets better. </div></div>“It has been the same thing for years. Queensland has always been a graveyard for interstate builders. The Tier 1 builders come up here, they lose money and then go back. It’s so overly competitive they struggle to make money.”But recently a number of contracts have been awarded to interestate construction firms—including Built, Hansen Yuncken and John Holland—to deliver hospital expansions across the state.Queensland Major Contractors Association chief executive Andrew Chapman says&nbsp;both blue-collar and white-collar workers were needed and for years there has been a “brain drain” to the southern capitals.“There is an attractive pipeline of work up here there is no doubt but when there is still a lot of work going on in Melbourne in Sydney, which is effectively double the amount that's being spent here, you find that companies tend to dedicate a lot more resources to those markets.“But I think as Melbourne, in particular, starts to contract its capital works program we'll start to see resources coming back up here because there’s some exciting projects. You've got the Olympics going to come online … a lot has to happen in a short period of time.“And if we want to make it attractive for industry to work in Queensland we need collaborative procurement and delivery across everything to make that happen.”Davies adds: “There's all these different pipelines of work within the state. Our concern is that there's been a lack of coordination by the government as to how all that work is going to get done. Essentially, they've let a hunger games develop between the delivery agencies, where they are competing against each other for the available rersources.“That isn't helpful for the market. The government needs to play a more active role in coordinating that overall pipeline, because the reality is it's unlikely that combined pipeline as it stands at the moment will be able to be delivered with the resources that are currently available.”Brisbane developer Don O’Rorke—the chief executive of Consolidated Properties, which has teamed with Hutchinson Builders on projects for more than 30 years—says Queensland’s construction pipeline bottleneck can only get worse before it gets better.“It's going to get worse because of the Olympics, public works and housing,” he says. “There’s a huge amount of demand for construction services and an inability of the market to meet that demand.”And despite higher interest rates resulting in a drop in apartment approvals and new starts that may help curb demand for construction services, O’Rorke says: “I think we’re in for a bumpy few years.“It’s going to be a volatile market where not everything that perhaps people want delivered is delivered … only a select number of projects will stack up and get up.”<h2>Problems of growth</h2> On the positive side, he says, the challenges facing Queensland’s development and construction sector are “the problems of growth”.“We are in a high growth economy in south-east Queensland and these are the problems that come with places growing fast.“A country like Japan—where there’s no immigration, the population is ageing and they have very low birth rates—would love to have the problems we’ve got.&nbsp;“So we shouldn’t complain too much. These are the problems of growth and growth we’ve always been after.”<div id="4xbYQwCIEoDe3aBtI9IYh9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/38bpMAxqx4e0iXsYZljTXN/2383a2d329ed56c21865ed47fa571eeb/4.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/38bpMAxqx4e0iXsYZljTXN/2383a2d329ed56c21865ed47fa571eeb/4.jpg"></picture><div>▲ Riye Arai-Coupe: if you’re expecting to go out to hard tender right now, good luck. </div></div>Riye Arai-Coupe, partner at Brisbane-based development project management and advisory firm Bluebird, agrees but says the market is challenging“Everyone that is delivering or trying to deliver a project right at the moment has never experienced the conditions that we're currently facing.”Last year, she says, the firm's team did more than 2000 feasibilities “so we’re well across what's working and what’s not working”.“If you’re expecting to go out to hard tender right now, good luck. Basically, you’re not going to get anywhere because the builders are so busy. Their workbooks are pretty full right now and they’re very selective in terms of who they want to build with.”But she says there are projects progressing and developers who have “invested in long-term relationships with builders are the ones that will prosper”.Or as Hutchinson sees it: “You don’t want rubbish clients. That’s why a lot of people are struggling to get a builder because they’ve wrung their builder dry for 10 years and everyone knows that now”.Arai-Coupe says Queensland's construction crunch is not only about a lack of builders but, more significantly, a lack of subcontractors in the market able to deliver on the work.“Even if interstate builders come up here, we still need to have the subcontractor base to be able to deliver on those projects.“When they have a choice of whether they deliver traditionally riskier projects relative to government-funded projects, it's a bit of a no-brainer in terms of where they would want to go spend their time and energy right now.“And in terms of the volume of infrastructure projects that are proposed for south-east Queensland and the limited amount of projects getting out of the ground right now … I think it’s a pretty simple picture that’s been painted for our foreseeable future. We just need more people.” <hr> You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. <a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans">Click here to learn more.</a><div id="2GhuueZl01Zwo2aFfjNVi2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg" alt="TUD + Banner" data-mce-src="//images.ctfassets.net/8pr762qjocl3/12UMq5eMSEOh0QxJVBYaDt/d7507cf4ceb1365cc9ce7eaff84d06cc/tud___banner.jpg"></picture></div>

When one of Australia’s top builders says he’s knocked back $7 billion worth of work this year, you know things are far from normal...

BRISBANE