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<p>Build-to-rent and student accommodation asset owners could create step-change in apartment sustainability but it all comes down to data.</p><p>It’s something that Hip V. Hype founder Liam Wallis is well across. Wallis and his family have been living by the numbers for the past 12 months as part of a live-in experiment.&nbsp;</p><p>They were the guinea pigs in the year-long post-occupancy experiment dissecting the developer’s award-winning Ferrars &amp; York residential development’s building performance against sustainability goals.&nbsp;</p><p>The 22 apartments in the all-electric building at South Melbourne were set up as embodied carbon neutral and operational carbon neutral, powered by 100 per cent green power.&nbsp;</p><h2>The numbers game</h2><p><br>The data reveals apartments in the six-storey residential building achieved an average 8.6 NatHERS rating (out of 10), while the highest rated apartment in the building achieved a 9.3 NatHERS rating.&nbsp;</p><p>The self-funded 12-month research project has been driven by Hip V. Hype’s Better Buildings team, which specialises in green buildings and engineering.&nbsp;</p><div id="6f1stMBzRm8XJiZILcTDln"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5CX0n0TLOBlRyVvgGI8yc9/824d85275c203515af1bcd399c415f6a/Hip_V_Hype_MID2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5CX0n0TLOBlRyVvgGI8yc9/824d85275c203515af1bcd399c415f6a/Hip_V_Hype_MID2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Achieving good air quality was no easy feat for a development between a train line and a major road through South Melbourne. Image: Tess Kelly<br><br></span></div></div><p>The development was fitted with technology to monitor building performance as well as indoor air quality, carbon dioxide, humidity, temperature and volatile organic compounds, which are all key measures of Indoor Environment Quality (IEQ).</p><p>“The industry in Australia typically has a poor understanding of how apartments perform when complete,” Wallis says.&nbsp;</p><p>“Rating tools are not yet calibrated against performance in any meaningful way. It is in our DNA at Hip V. Hype to seek to improve design and performance outcomes with each successive project we undertake and to share learnings through our advisory and advocacy work to help raise the bar more broadly across industry.”</p><p>Hip V. Hype’s head of better buildings, David Mahony, says the Ferrars &amp; York apartments had cut annual heating and cooling costs by 30 per cent, while reducing cooking-power costs 32 per cent, and water heating was down 21 per cent on average.&nbsp;</p><h2>Broader applications for BtR and PBSA</h2><p><br>Mahony says this is a cost saving of about $295 an apartment a year, which may seem like small change, but the ripple effect for high-density, long-hold assets is significant.</p><p>For a 2500 apartment build-to-rent asset it could represent a $7-million saving over a 10-year period, he explains.&nbsp;</p><div id="6RJPeu6qhvrbEWJzN8lWTh"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7cO3EgM1ryymLeTBkHcVaK/84de04a5f55c99bb7ca374ad28b3838a/hesta_super_housing_kensington_btr_edm_hero.jpg" alt="HESTA and Super Housing Partnerships have now joined Assemble and Housing Choices Australia as work gets underway with a build-to-rent project at Kensington in Melbourne." data-mce-src="//images.ctfassets.net/8pr762qjocl3/7cO3EgM1ryymLeTBkHcVaK/84de04a5f55c99bb7ca374ad28b3838a/hesta_super_housing_kensington_btr_edm_hero.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ HESTA and Super Housing Partnerships have now joined Assemble and Housing Choices Australia to develop high-sustainability build-to-rent apartments at Kensington.<br><br></span></div></div><p>During the coldest fortnight of the year a three-bedroom apartment at Ferrars &amp; York maintained a temperature of 19C to 25C with very little reliance on additional heating, at just 32c a day.&nbsp;</p><p>Mahony says the building’s high performance was down to the selection of building fabric and energy recovery ventilation (ERV) system.&nbsp;</p><p>“Occupants are likely to be healthier and happier in buildings that have higher performing building envelopes and systems, such as energy-recovery ventilation that promote healthy internal environments like consistent temperatures, cleaner air and significantly better acoustic performance,” he says.&nbsp;</p><p>Hip V. Hype founder Liam Wallis agrees.&nbsp;</p><p>“Assets with better indoor environment quality can reasonably expect to see lower churn, lower vacancy and higher rental rates over time,” he says.&nbsp;</p><h2>The bottom line</h2><p><br>Building efficiency is key to operational expenditure management for long-hold assets such as build-to-rent and purpose built student accommodation.</p><p>Wallis says there is “immense potential” for the research to feed into all housing typologies but particularly build-to-rent, where performance is closely linked to asset value.&nbsp;</p><p>“For build-to-rent asset owners in particular, a building built to the standard of Ferrars &amp; York would likely result in a lower operational cost base for energy, lower vacancy and higher rates in what promises to be a competitive market for tenants with flexibility,” he says.&nbsp;</p><p>“Other upsides, such as lower maintenance and system upgrade costs due to systems working less hard, are also worthy of consideration.</p><p>“For those seeking to develop, own and operate an asset for more than 10 years, an integrated design-optimised approach to sustainability and greenhouse gas emission reduction is likely to result in a positive return on investment.”</p><div id="4yWqsMYiHorO3MB4A8gc4b"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1tFF11T8wxHtzfzbvGMSJm/a010c151fde15b343c7361627d7f29ea/Hip_v_hype_data_MID.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1tFF11T8wxHtzfzbvGMSJm/a010c151fde15b343c7361627d7f29ea/Hip_v_hype_data_MID.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Hip V. Hype’s Liam Wallis acknowledges the initial outlay for strong sustainable outcomes is significant. Image: Tess Kelly<br><br></span></div></div><p>Wallis acknowledges the upfront costs of an optimised approach to sustainable building design but says the proof is in the pudding, so to speak.&nbsp;</p><p>He says capital expenditure may be higher but this is counterweighted with reduced operational maintenance and replacement costs and the “asset value can be higher as a result of outgoing cashflows being lower and incoming cashflows being higher in aggregate”.</p><p>Hip V. Hype’s advisory services provide sustainable design advice to some of Melbourne’s biggest developers.&nbsp;</p><h2>Only 5pc exceed minimum standards</h2><p><br>Australian Housing and Urban Research Institute (AHURI) data shows that demand for sustainable apartments is not being met.</p><p>While Australians are increasingly moving into apartment living, a spatial analysis of sustainable apartment development and major retrofit projects in metropolitan and regional NSW and Victoria shows less than 5 per cent of building projects are exceeding minimum standards for sustainability.&nbsp;</p><p>And the ones that are achieving strong sustainability results are primarily concentrated in premium suburbs.&nbsp;</p><p>The report says there is a disconnect in the speculative build-to-sell developments between what consumers want, and what is built.&nbsp;</p><div id="7oddHRqkbxfc5rpEzkgYlj"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5pghZX5w5cTjfhhBWYjNZ8/19ed3eba2f3d7ca3e0578c612d7bb7a9/Gamuda-Crema_Mid_2__Long_.jpg" alt="An artist's impression of the tower.  Gamuda’s green credentials for the Fishermans Bend development are deep below the ground." data-mce-src="//images.ctfassets.net/8pr762qjocl3/5pghZX5w5cTjfhhBWYjNZ8/19ed3eba2f3d7ca3e0578c612d7bb7a9/Gamuda-Crema_Mid_2__Long_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Gamuda Land has embedded strong green credentials in the design of its Canopy build-to-sell development at Fishermans Bend.<br><br></span></div></div><p>While it may be a bottom-line decision for developers in a challenged feasibility environment, the build-to-rent sector has an opportunity to drive change.&nbsp;</p><p>“Build-to-sell are often designed to only meet minimum standards, and the sector’s reliance on investor demand, which is especially vulnerable to economic cycles, works against developers delivering innovative, sustainable apartments,” the report says.&nbsp;</p><p>But build-to-rent, community housing providers and student accommodation are less vulnerable to these market forces, explains UNSW City Futures Research Centre’s Dr Hazel Easthope.&nbsp;</p><p>“During our research, a planning consultant suggested build-to-rent could become a major driver for sustainable apartments across all development models, as it could boost the scale of sustainable development and therefore could ‘push’ the whole apartment sector forward,” Easthope says.<br>&nbsp;</p><hr><p><strong><br>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></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>

A year-long experiment by Hip V. Hype’s Liam Wallis and his family has serious implications for property’s hottest sector: build-to-rent…

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<p>Analysts think we could be looking over a cliff edge as demand for student accommodation remains unmet.</p><p>A series of reports from CBRE and KPMG has highlighted the extent of the problem, with <a data-mce-href="https://mktgdocs.cbre.com/2299/c5166330-37d3-4674-8cda-dce518da0b37-1392467054.pdf" href="https://mktgdocs.cbre.com/2299/c5166330-37d3-4674-8cda-dce518da0b37-1392467054.pdf" target="_blank" rel="noopener">CBRE’s research</a> finding that 8000 purpose-built student accommodation (PBSA) rooms will be delivered across Australia between 2023 and 2026.&nbsp;</p><p>While this may be a 7 per cent uplift, it is far less than individual global cities, such as Paris, which is expecting 18,000 rooms, and London with a projected 15,000 rooms for the same period.</p><p>In fact, Australia is “deeply under-penetrated” with just one PBSA bed for every 16 students compared to nearly one bed for every two students in markets such as the UK.</p><p>With the expected return of large numbers of international students and domestic students back on campuses, the situation, like that in housing in general, is becoming critical.&nbsp;</p><p>“Supply is of course the larger question,” says chief executive of student accommodation operator UniLodge Tomas Johnsson.</p><p>“We can’t open the papers without hearing about that problem. The whole government, the whole industry, is focused on it, and as a result, a lot of energy, a lot of resources and a lot of funding is shifting into the space.&nbsp;</p><p>“That is very positive, and it also provides an opportunity for us.”</p><div id="5irp5YkuuN0CrsxlgbmB0c"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4z52mFH7HO7y7Xcizfhe5P/00e4506537bf98db17fc9fbb2cb1d985/Scape_South_Bank_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4z52mFH7HO7y7Xcizfhe5P/00e4506537bf98db17fc9fbb2cb1d985/Scape_South_Bank_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Australia now has three universities in the top 20 for 2024 rankings, demonstrating the improving quality of education in Australia, says Darling. </span></div></div><p><br>Chief executive of Scape Anouk Darling says that education is Australia’s fourth largest export, and the performance of its universities in global rankings would always make it attractive to international students.&nbsp;</p><p>“Every year, our top universities are jumping in the world rankings, demonstrating the improving quality of education available to students in Australia.</p><p>“[But] we're entering a period where we are already experiencing, and going to continue to have, a structural undersupply of PBSA to accommodate the rapid return of and growth in student demand.</p><p>“In Brisbane, we currently have significant waiting lists and we’ve had significant rental increases, now withstanding the Brisbane City Council have increased rates upwards of 200per cent. </p><p>“We have universities asking us whether we can set aside a certain number of beds for their students because their accommodation has become exhausted.&nbsp;</p><p>“From a supply side, we saw a few buildings come online during Covid, but supply moving forward is heavily muted.”</p><h2><strong>PBSA in context</strong></h2><p><br>CBRE’s Pacific head of research Sameer Chopra says that the situation has come about due to multiple factors, some quantifiable and others cultural.</p><p>“Volumes dropped in terms of enrolments but they’ve come shooting back. The issue is that the pace of student recovery has been a lot stronger than expected.</p><p>“The other thing which is really hard to measure is a social change where, 20 or 30 years ago, [domestic] students might have been happy to stay at home and go to the local uni, but now even domestic students want their independence—they want to go out and experience life and live with their friends.</p><p>“My son is going to university in Sydney next year and has applied to to stay on campus, rather than being at home—he doesn’t need to, but they are saying they want the experience, and part of that is staying on campus.”</p><div id="e3urN03WZemHnKAQibjSc"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5kMQs8P2BgGALvpql3gbSg/1e395b4404d43153c45d053d68cc461c/UniLodge_melbourne_CBD.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5kMQs8P2BgGALvpql3gbSg/1e395b4404d43153c45d053d68cc461c/UniLodge_melbourne_CBD.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Median rents for student studios grew from $406 per week to $530 per week between 2018-2023 in the Brisbane, Melbourne and Sydney markets, according to CBRE. </span></div></div><p><br>Johnsson says that major changes to demographics and student preferences happened during Covid, but it was difficult to see which would stick and whether these trends would compound the problem.</p><p>“We certainly saw a lot of the domestic uplift happening over the Covid period.There was much more interstate movement during Covid and moving away from home, there’s definitely a trend,” he says.</p><p>“Whether that’s a lagging effect or a trend here to stay I couldn’t tell you—but there were other forces at play, including Covid in its own right.”&nbsp;</p><p>Affordability is also a major issue, with private residential accommodation prices skyrocketing, making PBSA potentially a better option for students.</p><p>“Accommodation [during Covid] was comparatively affordable compared to now. We didn't have the international students so rates were competitive in student accommodation. Now those international students are back and those Covid dynamics are no longer the case.”</p><div id="4w5Ehh476FnB0Mng0ahOLJ"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4zKDEDhrDEKjJpRt4aEBZu/87d22912a11bc7a7ec67b270d8153e3d/LinkCity_Newcastle__2_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4zKDEDhrDEKjJpRt4aEBZu/87d22912a11bc7a7ec67b270d8153e3d/LinkCity_Newcastle__2_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ New market entrant LinkCity has launched Newcastle CBD plans marking its first foray into Australian PBSA. </span></div></div><p><br>Student housing has absorbed a considerable amount of the returning visitors to Australia, KPMG urban economist Terry Rawnsley says, meaning that the increased population has not been funnelled fully into the private housing market.&nbsp;</p><p>In fact, KPMG found that 20 per cent of new arrivals into the country are taking up existing capacity in “non-private homes”, mainly student accommodation but also worker accommodation.&nbsp;</p><p>“We’ve kind of soaked up all the spare capacity that we did have, now it’s a case of if we want to have more then it’s up to developers to provide it themselves and work with the university sector to deliver that,” Rawnsley says.</p><h2><strong>Changing landscape for the sector</strong></h2><p><br>Student accommodation poses several problems not shared by the general residential sector, and these issues are being exacerbated by an increasingly tight rental market.</p><p>Proximity to campus is key, which means there is little room to manoeuvre with location. Building layouts favour studio apartments or larger numbers of bedrooms and even co-living spaces, which means adaptive reuse of other buildings, be it offices or other residential buildings.&nbsp;</p><p>Then, of course, is the ongoing problem of construction.&nbsp;</p><p>“One of the biggest challenges is the higher cost of construction and where interest rates have moved to and their impacts on financing, and the combined impact of these on the feasibility of being able to develop and build more PBSA," says Scape's Anouk Darling. </p><p>“We’ve seen unprecedented construction cost escalation over the Covid period, and while it’s starting to slow down a bit now, the market hasn’t yet fully caught up in terms of a correction downwards to land prices. </p><p>“In Sydney there’s also the added impact that there just isn’t the same availability of sites in and around these university precincts.”</p><div id="5iCVDUdcWKik7EBkpJ7mr7"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6mhYPru4k8K1TL8QixRY24/8c5a9495bb3a77a17a29dab6514d2410/Student_One_Brisbane.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6mhYPru4k8K1TL8QixRY24/8c5a9495bb3a77a17a29dab6514d2410/Student_One_Brisbane.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ New York alternative asset manager Blackstone spent $500 million on Student One in Brisbane, which controls three sites with around 2300 beds. </span></div></div><p><br>CBRE’s Sameer Chopra says that while land might be available, it can cost 25 per cent more to build on it, and this could materially impact Australia’s intake of students in future.</p><p>“Housing has almost become an impediment to attracting international students.</p><p>&nbsp;“If they are coming from US or Canada for instance, it’s one of those things you want to tick off earlier on, so Australia might lose out in the short term.”</p><p>However, despite these challenges, student accommodation in the longer term could take the pressure off the private residential market.&nbsp;</p><p>“We need more of it coming through, and a bigger scale to absorb current demand,” says Chopra.&nbsp;</p><p>A sign of more positive things to come is the influx of new entrants to the market, on the developer and funding side of things.&nbsp;</p><p>“Investors tend to be from overseas, it’s the way their portfolios work out. In time domestic funders will come,” says Chopra.&nbsp;</p><p>“But we’re getting a lot of interest from people kicking the tyres on the sector, not just around Sydney and Melbourne but &nbsp;away from that as well. You can build out in Macquarie Park, Parramatta or Carlton for instance, and there are a lot of other places where universities exist.”&nbsp;</p><div id="3bbl32kPKvjhdBjujHsV6W"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7DBBt45AehS0DUl42AbSZM/ca2bf1981a889e1185d01f99a81d63b5/LinkCity_Newcastle.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7DBBt45AehS0DUl42AbSZM/ca2bf1981a889e1185d01f99a81d63b5/LinkCity_Newcastle.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ LinkCity and UniLodge teamed up to launch a Newcastle CBD location as developers and operators look outside Melbourne and Sydney. </span></div></div><p><br>Recently, for instance, French construction firm Bouygues’s development arm Linkcity Australia entered the Australian student accommodation sector, filing plans for <a data-mce-href="https://www.theurbandeveloper.com/articles/french-bouygues-construction-targets-australian-pbsa-newcastle" href="https://www.theurbandeveloper.com/articles/french-bouygues-construction-targets-australian-pbsa-newcastle" target="_blank" rel="noopener">a $105-million, 19-storey mixed-use tower in Newcastle’s western suburbs</a>, and Blackstone made its first investment in the Australian student housing market with the purchase of Student One in Brisbane last week.&nbsp;</p><p>“But the constraining factors already mentioned will hamstring foreign investment into delivering future PBSA supply," says Scape's Anouk Darling.</p><p>The downside compared to other areas of great potential, such as build-to-rent, is asset pricing.</p><p>“Relative to build-to-rent, the pricing on these assets is a little bit wider,” says Chopra.&nbsp;</p><p>“It’s cheaper, by almost 100 basis points. Cap rates in student accommodation are around the 2.25 level, multi-family is closer to 4 to 4.25. You’re getting it with slightly different or cheaper entry point, partly because build-to-rent is so new.”&nbsp;</p><h2><strong>Land of opportunity</strong></h2><p><br>While the outlook could appear bleak, there is reason for hope with major new projects in the works including the University of NSW’s partnership with Iglu <a data-mce-href="https://www.theurbandeveloper.com/articles/iglu-and-unsw-agree-huge-student-village-in-sydney-s-east" href="https://www.theurbandeveloper.com/articles/iglu-and-unsw-agree-huge-student-village-in-sydney-s-east" target="_blank" rel="noopener">to develop 1066 apartments opposite its Kensington campus</a> and Wee Hur <a data-mce-href="https://www.theurbandeveloper.com/articles/wee-hur-rounds-out-redfern-plans" href="https://www.theurbandeveloper.com/articles/wee-hur-rounds-out-redfern-plans" target="_blank" rel="noopener">planning 411 beds to service the University of Sydney</a> and University of Technology Sydney (UTS).</p><p>In Queensland, Brookfield and Citiplan have plans for 935 beds near QUT, as well as 465 beds in Carlton close to the University of Melbourne, while Scape is planning a 465-bed PBSA project.</p><p>Earlier this year Unilodge’s 46-storey Melbourne Central and its UniLodge Melbourne CBD tower <a data-mce-href="https://www.theurbandeveloper.com/articles/cedar-pacific-cbre-student-accommodation-towers-rmit-melbourne-cbd-pbsa" href="https://www.theurbandeveloper.com/articles/cedar-pacific-cbre-student-accommodation-towers-rmit-melbourne-cbd-pbsa" target="_blank" rel="noopener">were completed by Cedar Pacific,&nbsp;</a>and Scape has plans for 10,000 apartments by 2030.&nbsp;</p><p>“We hope this would contribute to alleviating pressure on the rental market,”&nbsp;says Darling.</p><p>“We’re also continuing our growth in the PBSA space, both in our existing precincts as well as expanding into new growth markets, looking at opportunities near Macquarie University, Western Sydney University and Monash. </p><p>“But we would like to see more regulatory and statutory support for this, similar to what build-to-rent is going through at the moment.”&nbsp;</p><div id="6cpVJ38QHULSF5KrmjKLlw"><picture><img src="//images.ctfassets.net/8pr762qjocl3/592ogTMqBUbrolVMsvLLl2/eb7be3950b84dfc912ea05d03711edfb/In-article__43_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/592ogTMqBUbrolVMsvLLl2/eb7be3950b84dfc912ea05d03711edfb/In-article__43_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The Boulevard was Perth's first PBSA site, topping out in 2018, but there has been very little sector development since. </span></div></div><p><br>CBRE's Chopra says there is a “tremendous” amount of room for growth, with only 100,000 student beds and 1.6 million students in Australia, and opportunities in unexpected places.&nbsp;</p><p>“Perth is an interesting market, it’s very underpenetrated, there isn’t enough student accommodation there, and it has four universities with strong relationships to Singapore and Malaysia.</p><p>“People tend to stay close to markets they know, you have to have construction relationships, you have to know local councils and the like, so it’s easier to focus over here.&nbsp;</p><p>“But Perth has some of the lowest residential vacancies, and not a lot has been constructed in terms of real estate in the last decade, but the economy is doing really well, so there can be decent opportunities over there.”&nbsp;</p><p>Clearly, there is appetite and support but this needs to translate through, says Johnsson.&nbsp;</p><p>Councils are prioritising student accommodation and various state governments are trying to make it easier to make development so there's certainly plenty of goodwill in this affordable space. It’s a matter of translating that to genuine opportunities for development, that's the key issue in driving the supply side, he says.</p><p>“The supply side is where our focus needs to stay.”<br><br></p><hr><p><strong><br>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></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>

Student accommodation soaked up returning visitor numbers post-Covid, but limited pipeline set to stunt sector growth and put pressure on private rentals...

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<p>“The interest in people and the planet has probably never been greater and it’s been building. As interest grows, capital flows.”</p><p>So says Peter Johnston, the managing director of one of the fastest-growing sustainable infrastructure and real assets fund in the country.</p><p>Lighthouse Infrastructure moved to the sustainable asset sector in 2007 and now has more than $700 million in assests under management across three funds—and is expanding to another property sector.</p><p>Johnston heads the growing team at the firm that is looking to use capital to do good in the world and investor interest, not just the financial kind, is growing.</p><p>“What you did for others is probably a better way to define your purpose in life than what you did for yourself,” Johnston says.&nbsp;</p><p>“We came together as a group wanting to finance hard assets but assets that make good returns while having a positive impact and if it didn’t do that we weren’t interested.</p><div id="7Ir0RN4xQq5HAG3Iebmy3q"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5fRAK3c7Wcdl0cIhzBqxyM/a8686e8b6ed35cc48d7f13950aa182ef/Mid_article_resizes__68_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5fRAK3c7Wcdl0cIhzBqxyM/a8686e8b6ed35cc48d7f13950aa182ef/Mid_article_resizes__68_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Peter Johnston, the managing director of Lighthouse Infrastructure.<br><br></span></div></div><p>“We are at that stage of our careers where we can choose what we do, which is an extraordinary luxury.&nbsp;</p><p>“Some of the stories we get are intoxicating, about the impact that we can change or have on people’s lives ... it’s really refreshing.</p><p>“My children never cared when I closed a really big toll road deal. They want to know what I did yesterday now.</p><p>“We’ve been able to take on two very senior advisors in the past few months because they believe in our purpose.”</p><p>Former ISPT chief executive officer Daryl Browning recently joined the firm as well as Adrian Harrington, former chair of the the Federal Government’s National Housing Finance and Investment Corporation (NHFIC) and former chair of the Australian Housing and Urban Research Institute (AHURI).</p><p>“The worship of the dollar has started to diminish and the validation is not the size of the house but how did you change people’s lives or the planet’s existence,” Johnston says.</p><p>“We need to bring our investments there as well, so they’re our touchstones at the moment.</p><div id="5Ih0aXPTN1rhWP5hLpC14i"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3iHgtjZvgEgZPBuLQMDz5i/d1242fe9365fcd616b704682ce59125c/Copy_of_Mid_article_resizes__55_.jpg" alt="A solar farm on a sunny day in Germany." data-mce-src="//images.ctfassets.net/8pr762qjocl3/3iHgtjZvgEgZPBuLQMDz5i/d1242fe9365fcd616b704682ce59125c/Copy_of_Mid_article_resizes__55_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Lighthouse Infrastructure is working on a $400-million capital raising to decarbonise the energy sector with its LEAF fund.<br><br></span></div></div><p>“We’re working on other areas and housing looks like a really big challenge for the country.</p><p>“You can just start to see people moving towards the sector. The money comes after the people, it never precedes.”</p><p>Johnston said now is the time to decide what the market is going to look like, what the risks are and in what sector they belong to.</p><p>He is looking abroad to Europe and the US at how things have shaped up there in the past 15 to 20 years for major fund managers.</p><p>“Today, 15 to 20 per cent of their total allocation of capital sits in residential, so yes, they are in office towers and shopping malls, yes they own industrial parks but also [up to] 20 per cent of their allocation is residential,” he says.</p><p>“Affordable housing is most likely, we think, to be a successful investment in that class and that’s what offshore investors are doing.</p><div id="4rT32ocumY9XQcUBmMdCXq"><picture><img src="//images.ctfassets.net/8pr762qjocl3/42flr1w73YerHrvpoDlN8R/17b8453b7c9225576af1763fe27c4d41/Copy_of_Mid_article_resizes__54_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/42flr1w73YerHrvpoDlN8R/17b8453b7c9225576af1763fe27c4d41/Copy_of_Mid_article_resizes__54_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ SGCH is a community housing provider with 7000 homes across the Sydney region.<br><br></span></div></div><p>“That’s what we see when we analyse the investment proposition in detail.</p><p>“Where do the risks lie, they look like property risks, they don’t look like infrastructure risks.</p><p>“The only way you can make it an infrastructure risk is if the government actually wraps all the risk and says, ‘I’ll take the risk away’ and everyone says, OK, now it’s infrastructure and we’ll take a highly secure income stream.”</p><p>Lighthouse Infrastructure has invested in key worker accommodation in Westmead and Paramatta in western Sydney with SGCH Keys, a subsidiary of SGCH Group (St George Community Housing).</p><p>Lighthouse has also provided funding to Home4Life through its Australian Disability Accomodation Projects Trust 2 to build 118 homes in NSW.</p><p>The success of these investments bolster the case for institutional investors’ potential to make an impact on the housing crisis.</p><p>“At the end of the day, we’re going to have human beings who are going to need to be housed and institutions will have to participate in it,” Johnston says.<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>

Interest in funds where a positive impact matters as much as a return is on the rise as investors’ appetites shift…

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<p>Uncertainty is rife across the apartment market but the horizon looks less bleak, according to Charter Keck Cramer data for the first half of 2023.&nbsp;</p><p>Charter Keck Cramer national executive director Richard Temlett says there are “green shoots” emerging in the market.</p><p>Apartment projects that are able to get out of the ground are recording strong sales but the supply side constraint continues to flag as feasibilities don’t stack up, he says.</p><p>“Australia’s three biggest markets—Sydney, Melbourne and Brisbane—remain critically undersupplied and overseas <a data-mce-href="https://www.theurbandeveloper.com/articles/national-population-australia-march-2022-2023" href="https://www.theurbandeveloper.com/articles/national-population-australia-march-2022-2023" target="_blank" rel="noopener">migration is very strong</a>, which is accentuating the mismatch between demand and supply,” Temlett says.</p><p>“Green shoots are starting to come through in Sydney, Melbourne and Brisbane, but for Brisbane developers the biggest risk is securing and retaining a builder.”</p><p>In Sydney there were 7300 apartments launched (for sale) to market in the past financial year. This is a 48 per cent decrease in apartment launches compared to the previous year and also a considerable decrease from the peak between 2014 and 2018.&nbsp;</p><p>Melbourne had just 4400 apartments launched to market, 82 per cent below its peak in 2016.&nbsp;</p><p><strong>Launches and commencements: Sydney</strong></p><div id="6E5SbxQctMt1nvEKczheDi"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2Kd7sPqazcUhRIPJw2DjX2/38c460cae7ff453e2db65750a8e6d48a/Screen_Shot_2023-09-14_at_2.06.05_pm_copy.png" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2Kd7sPqazcUhRIPJw2DjX2/38c460cae7ff453e2db65750a8e6d48a/Screen_Shot_2023-09-14_at_2.06.05_pm_copy.png"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Source: Charter Keck Cramer<br><br></span></div><p><strong>Launches and commencements: Melbourne</strong></p><div><div id="4AYNWW4SzsMDmIWCfUc9RH"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7wx6DvJ4Qla3Dc1WA1fuqu/4e59fac9823b10064a1deeaa09a8d5ac/Screen_Shot_2023-09-14_at_2.08.02_pm_copy.png" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7wx6DvJ4Qla3Dc1WA1fuqu/4e59fac9823b10064a1deeaa09a8d5ac/Screen_Shot_2023-09-14_at_2.08.02_pm_copy.png"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Source: Charter Keck Cramer<br><br></span></div></div></div></div><p>Master Builders Australia is warning that at current building rates there is no way we will hit the National Housing Accord target of 1.2 million new homes.&nbsp;</p><p>And AMP chief economist Shane Oliver concurs.&nbsp;</p><p>Oliver says high interest rates are stymieing the industry and it would take a combination of faster land release, faster development times and a boost in the volume of institution-grade social and affordable housing to get anywhere near the proposed figure.&nbsp;</p><p>But there could be a way to grease the wheel and create upside in the build-to-sell apartment market.&nbsp;</p><p>Temlett says the Australian government should look to Ireland for guidance on how to support the housing industry and create momentum in the market.&nbsp;</p><div id="33QW6cqsyDZaplhPrqpqZA"><picture><img src="//images.ctfassets.net/8pr762qjocl3/xs5QFWkNjFr5hNLIaMhc0/240236c8d290fa9bc49e02f5680a6b19/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/xs5QFWkNjFr5hNLIaMhc0/240236c8d290fa9bc49e02f5680a6b19/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Apartments along the River Corrib at Galway, in Ireland’s west.<br><br></span></div></div><p>This year the European Commission approved a $750-million scheme to support the construction of build-to-sell apartments in Ireland.&nbsp;</p><p>The money is tied to the construction of four-storey apartment blocks in urban infill areas in Dublin, Cork, Galway, Limerick and Waterford where there is an acute shortage of housing supply.&nbsp;</p><p>It is designed to reduce the gap between construction costs and sales figures, which could, in theory, put feasibilities back in the black.&nbsp;</p><p>While Temlett acknowledges it’s a short-term solution to a long-term problem, it could, he says, create the momentum needed to get the build-to-sell market moving again.&nbsp;</p><p>“An Apartment Viability Fund would close the gap between what we can build it for and sell it for and make it feasible to build build-to-sell apartments,” he says.</p><p>“It would stimulate supply. They could target it to certain areas or even extend it to investors.”</p><p>Temlett says there is a significant number of sites across the country where there is an approved apartment development scheme but the project is not feasible in the current market.&nbsp;</p><div id="6E5SbxQctMt1nvEKczheDi"><div id="1cbWDlBABMHw3IBqAd2TJC"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4JVg8ps6Ah9yX9GUdf7CsY/7af043fab9cecca1dbee19549fb1cde9/4.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4JVg8ps6Ah9yX9GUdf7CsY/7af043fab9cecca1dbee19549fb1cde9/4.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Apartments at Burwood in Sydney’s west. <br><br></span></div></div></div><p>“Building costs have gone up between 30 and 50 per cent across the various cities. Having that subsidy could support these projects to get out of the ground and stimulate the apartment market and create momentum.”</p><p>Australia is staring down the barrel of a target of 1.2 million extra homes by 2029. Temlett says the apartment market can and should do the heavy lifting.&nbsp;</p><p>Research released this week from the Australian Housing and Urban Research Institute demonstrates that policy settings aimed at getting first homebuyers into the market have had the opposite effect.&nbsp;</p><p>“While high house prices are often cited as the biggest challenge faced by first homebuyers, our inquiry highlights that the problem is significantly more complex,” University of Sydney Professor Stephen Whelan says.&nbsp;</p><p>“Critically, we found existing policy settings are likely to have exacerbated rather than alleviated the challenge faced by first homebuyers to finance home ownership.&nbsp;</p><p>“Politically seductive measures such as first home owner grants and tax concessions have failed to arrest declining rates of home ownership over time.”</p><div id="41cIPEs7LHh9NhmzeI0Dc8"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1lAgPTF0szBtHWZKzdr7kw/27eaf35fd7b65922f6e036629e90038e/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1lAgPTF0szBtHWZKzdr7kw/27eaf35fd7b65922f6e036629e90038e/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ There are still “recalibration pains” in the pipeline for the residential sector.<br><br></span></div></div><p>Whelan says it is supply-side measures that could move the needle. He says making home ownership more affordable and accessible was crucial.</p><p>“Policy settings in Australia have focused almost exclusively on demand-side measures that boost first home buyers’ purchasing power, such as first home owners grants and stamp duty concessions,” he says. &nbsp;</p><p>“A mix of supply-side and demand-side approaches would help more households who would not otherwise be able to buy a home.”</p><p>Temlett says there are still “recalibration pains” in the pipeline for the residential sector. Buyers are facing confronting price tags but, he warns, these price tags will not be coming down.&nbsp;</p><p>“They are having a bit of a crisis getting their heads around what they can afford. It may be that they have to take a smaller property or move further out,” he says.&nbsp;</p><p>“The market is going to have to recalibrate upwards.”<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>

Grease the wheel: An apartment viability fund might be the impetus needed for the stagnant build-to-sell market…

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<p>Paul Salter has just returned to Australia after opening the company’s first Singapore office, marking a major move by Salter Brothers in the chess game that is the hotel industry.</p><p>The Melbourne-based firm is a advisor and private wealth and funds management business with diverse assets that range from equities and private credit to residential and childcare real estate.&nbsp;</p><p>But most important for Salter Brothers is hotels—it has 35 in Australia, worth an estimated $2 billion, and manages more than $3 billion in assets overall.</p><p>“From a positioning perspective, we’re playing in the living space, whether that is a one-night rental of a hotel room or a 12-month lease from a build-to-rent perspective, to everything else in the middle,” managing director Paul Salter says.&nbsp;</p><p>“But our core focus is still hospitality and hotels. Across multiple funds, we cover everything from CBD mid-market and upscale and luxury through to boutique luxury retreats, and we work with most of the operators in Australia.”</p><p>With so much on, you’d be forgiven for thinking that Paul Salter and his team would want to steady the course but the next move will take Salter Brothers into the murky waters but mammoth opportunities of Asian markets.&nbsp;</p><h2><strong>Asia: the new frontier</strong></h2><p><br>Salter Brothers is in the process of getting licensed and employing staff in Singapore with expectations the office will be operational by the end of the year.&nbsp;</p><p>It marks a major departure from Salter’s pre-Covid plans, under which it invested in its first US asset, in Washington, as well as the site for an InterContinental-branded, 252-room luxury hotel in Charlotte, North Carolina.&nbsp;</p><p>“The US move was a pre-Covid move,” explains Salter. “We had some high-net-worth Asian clients who wanted US exposure, so the logical thing was to do hotels in the US.”&nbsp;</p><p>“We developed a strategy in that direction but Covid made life incredibly tough.</p><p>“The US presents a lot of challenges with capital markets, particularly on the debt side of the equation, as raising debt is difficult.”</p><p>“We refurbished and rebranded the hotel in the US and it’s going fairly well, so the strategy worked, but when we looked at where we should prioritise our efforts, we realised we could manage a whole lot of things in this time zone for pan-Asian markets.</p><p>“It made sense for us to focus on that region from a capital partners perspective as well, where our platform has the most leverage.”</p><div id="4JeW6xQG9fyFmveb0KURzo"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5kkH40tbjL5xnWioWiUEJ8/fc160426d6ada5b91b2d00ddd505c6d6/Paul_Salter_MD_Salter_Brothers_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5kkH40tbjL5xnWioWiUEJ8/fc160426d6ada5b91b2d00ddd505c6d6/Paul_Salter_MD_Salter_Brothers_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Salter Brothers managing director Paul Salter had an extensive career in funds management before moving into hotels.<br><br></span></div></div><p>CBRE’s Asia Pacific market outlook in 2022 found that international arrivals were still at 20 per cent of pre-Covid levels, with a full recovery expected in 2024.&nbsp;</p><p>“The Asian market from a hospitality perspective is strong. Markets such as Japan have good tailwinds for tourism growth, as they are opening up visa channels and flights to different markets are increasing,” Salter says.&nbsp;</p><p>In fact, according to CBRE, many market average daily rates (ADR) and revenue per available room are already above 2019 levels.&nbsp;</p><p>“We’re bullish on hospitality in Asia. It has weathered the storm a bit better for real estate, full stop—even offices in a number of Asian markets have remained more buoyant because work-from-home is not as prevalent.”&nbsp;</p><p>But there are other ways in which Asian markets differ from those in Australia.&nbsp;</p><p>“The major difference in terms of how to run hotels in Australia versus Asia is that the cost of labour is materially different. Here, you have to optimise service levels around process and technology more so than in Asia.</p><p>“This means that there is opportunity in some of the more developed markets there to optimise processes and use technology to get better outcomes but still be able to deliver fantastic service.”</p><div id="2ueXttzVpdJcu1pJxbJkWm"><picture><img src="//images.ctfassets.net/8pr762qjocl3/63fUuklmeDyO3lX4TarhnA/a9fc42963fa384b293b8822e1e876b05/Spicers_Guesthouse_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/63fUuklmeDyO3lX4TarhnA/a9fc42963fa384b293b8822e1e876b05/Spicers_Guesthouse_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Spicers Guesthouse in the Hunter Valley was in the portfolio acquired by Salter last year.<br><br></span></div></div><p>Technology is a major focus of Salter Brothers, which has just launched its hospitality management platform for its own hotels, Salter Brothers Hospitality, slimming down and amalgamating operational functions under the direction of new chief executive Tash Tobias.</p><p>As for what it will target, Salter Brothers is bringing its tried-and-tested methods in Australia to the Asian markets.&nbsp;</p><p>“From an Asian perspective we’re focused on value-add opportunities where we can take an existing product and improve it,” Salter says.</p><p>The Asian hotel markets are not without headwinds, however.</p><p>“The current challenge for the hospitality market probably on a global basis is international travel hasn’t returned to pre-Covid levels, with China the one major market still below pre-Covid levels.</p><p>“How long that will take to come back is the million-dollar question. Our expectation is that the Chinese visitor numbers won’t rebound until mid-next year.”&nbsp;</p><h2><strong>Market positioning and strategy&nbsp;</strong></h2><p><br>The move into Asia follows a trend of acquisitive behaviour from Salter Brothers. According to MSCI, the company acquired 22 properties and sold none in the past two years, making it a highly active investor.&nbsp;</p><p>“The value-add repositioning play for us is the core strategy—finding an asset that hasn’t been renovated for a while, in a good location with good bones which warrants being refurbished and potentially repositioned as a better brand,” Salter says.</p><div id="3ecCcH24SvRSZmHsQ7GyjZ"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6ZeRwmYm90wV5xf7m6JE8Y/d664eba6391c3bc923ecb3ce386e65c3/Lilianfels_Spicer_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6ZeRwmYm90wV5xf7m6JE8Y/d664eba6391c3bc923ecb3ce386e65c3/Lilianfels_Spicer_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Lilianfels Resort &amp; Spa in the Blue Mountains was one of the luxury retreats Salter Brothers acquired in its Escarpment Group deal.<br><br></span></div></div><p>After acquiring the Travelodge hotel portfolio from Mirvac and the NRMA in 2021 for a record $620 million, alongside GIC and Swiss private equity firm Partners Group, for instance, Salter rebranded its flagship Wynyard hotel into a Mercure.&nbsp;</p><p>“We’re doing a refurbishment which finishes in December when it will become a Novotel,” says Salter.&nbsp;</p><p>“That materially lifts that proposition so we’re able to charge a better ADR but even just moving it to Mercure had a positive impact, and we’ve seen that strategy work in other assets in our portfolios.”&nbsp;</p><p>Salter Brothers also has a core hospitality fund which is focused on new assets in CBD locations and its focus on the luxury end of the market led to the development of its Ardour Hotels &amp; Estates brands. The first Ardour properties is slated to open in the second quarter of 2024.</p><p>“[These assets] tend to be more luxury. The first acquisition we did for that was Sofitel in Adelaide [<a data-mce-href="https://www.theurbandeveloper.com/articles/salters-brothers-bag-adelaide-sofitel" href="https://www.theurbandeveloper.com/articles/salters-brothers-bag-adelaide-sofitel" target="_blank" rel="noopener">Salter splashed $154 million on Adelaide’s five-star Sofitel Hotel</a>] which we expect will complete in the next few months.</p><p>“In Australia we have our retreat strategy, which is buying what we consider to be assets in ‘unrepeatable’ locations that can be quite experiential, then again doing some capex and positioning those as luxury lifestyle type products.”</p><div id="3UjX6ZRnefUoDIEZF8uCYs"><picture><img src="//images.ctfassets.net/8pr762qjocl3/19sdGrmhZkxgfghCzVHmHG/7e798742e9429e202d8ebc945ca1de05/The_Convent_Salter_Brothers_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/19sdGrmhZkxgfghCzVHmHG/7e798742e9429e202d8ebc945ca1de05/The_Convent_Salter_Brothers_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Boutique luxury hotels such as The Convent in the Hunter are a staple of the Salter Brothers portfolio.<br><br></span></div></div><p>This approach was underlined after the acquisition of the Spicers Retreats business at the end of 2022, which included hotels in regional Queensland and NSW, and there are further opportunities in geographic locations across the country, Salter says.</p><p>“There are one or two markets that have had a lot of supply [previously] and are coming out of that with not as much supply: Brisbane and Perth, and we would probably pick Brisbane, with the Olympics on the horizon.”</p><p>Salter highlighted the Queen’s Wharf development as being one of the future standouts of the Brisbane hotel market but the lack of supply following its completion could prove to be a new opportunity for Salter Brothers.&nbsp;</p><p>“There is some fantastic product up there, but apart from the casino, there’s not a lot in the pipeline.”&nbsp;<br><br></p><hr><p><strong><br>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></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>

With $3 billion of assets under management, Salter Brothers could have sat back, but the team led by Paul Salter is pushing ahead with major expansion plans in Asia…

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<p>James Baulderstone is unashamedly passionate about trucks, trains and the freight they carry.</p><p>“Freight is life,” he tells his audience.</p><p>The audience—members of a Property Council of Australia meeting in Melbourne—laugh as one. But Baulderstone is only half joking.</p><p>Freight is life, and the backbone of the Australian economy, he reiterates. And he has the statistics to prove it.</p><p>Freight and logistics employ 1.2 million people in Australia who collectively help move 3.7 billion tonnes of product a year.  That represents 8.6 per cent of the country gross domestic product. And it’s set to grow by 26 per cent by 2050.</p><p>As chief executive of federal government’s National Intermodal, Baulderstone’s job is to oversee the country’s critical logistics infrastructure and prepare for the explosive growth just around the corner.</p><p>Australia’s online spend last year was about $64 billion—up 23 per cent from the year before—and all amid a global pandemic, a war in Europe and what Baulderstone calls “China being difficult”.</p><p>“And that’s really put a focus on industrial land,” he says. “It has never been more important.”</p><h2>Industrial floor space demands growing</h2><p><br>Colliers, the real estate services and investment manager, says suppliers are now taking 5-20 per cent more warehouse space to buffer against the kinds of global disruptions that threatened supply chains in the past three years.&nbsp;</p><p>In fact, Colliers argues online retail alone will need an extra 520,000sq m of storage space each year.</p><p>National Intermodal has a single shareholder—the Australian Government. It was set up to look at both current operations and future development of open access intermodal precincts along the country’s eastern seaboard. In short, how to get as much freight around the country in as short a possible time.</p><div id="6oLNlPTy2Vd6xaF8JoeJpp"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1qsCXxhpmUB9QmBIuE5Z6n/ef9a9410f6330f8b64ce4637df4fe05b/Intermodal_Mid_1__800x500_.jpg" alt="Victoria's newest intermodal freight terminal will be able to handle 1800-m-long, double-stacked freight trains." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1qsCXxhpmUB9QmBIuE5Z6n/ef9a9410f6330f8b64ce4637df4fe05b/Intermodal_Mid_1__800x500_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Victoria’s newest intermodal freight terminal north of Melbourne (main picture) will be able to handle 1800m-long, double-stacked freight trains.</span></div><div><br></div></div><p>Those intermodal precincts are designed to co-locate transport modes, such as rail, road and shipping with large-scale warehouse solutions and delivery routes. </p><p>Very large scale.</p><p>When completed, Moorebank Intermodal Precinct for example—32km south-west of Sydney and covering 240ha—will be about the size of the Sydney’s central business district, stretching from Circular Quay to Central Station.</p><h2>Billion-dollar co-located warehouse developments run hot</h2><p><br>Industrial developer Logos is leading a consortium—including Australian Super, AXA IM Alts, Canada’s Ivanhoé Cambridge and TCorp—in a deal with Qube for the giant facility.</p><p>Ultimately, the decade-long development will create 850,000sq m of warehousing and two intermodal transport terminals.</p><p>Those will be integrated with the Import Export (IMEX) rail shuttle that runs non-stop between Port Botany and Moorebank on the dedicated Southern Sydney Freight Line (SSFL).</p><p>At a time of&nbsp;<a href="https://www.theurbandeveloper.com/articles/melbourne-industrial-land-undersupply-warning-pca" data-mce-href="https://www.theurbandeveloper.com/articles/melbourne-industrial-land-undersupply-warning-pca">severe shortages of gazetted industrial land&nbsp;</a>in NSW and Victoria, tenants have flocked to take up early space in what will be the biggest freight and logistics terminal in the country. Purpose-built warehousing facilities are already completed for Catch, Caesarstone, Mainfreight and Qube Logistics.&nbsp;</p><p>Critically, according to Baulderstone, Woolworths—the country’s biggest supermarket chain—was a foundation customer at Moorebank “who came in early and are spending over a billion dollars on this facility as we speak” on regional and national distribution centres.</p><p>“This is where industrial land and the logistics sector really come together,” Baulderstone says.</p><p>“This is where the co-location of warehousing, the ability of the trucks to come and use that last mile, and the ability to retrofit and to actually put in place renewable energy zones inside a logistics precinct is really important.”</p><p>And it’s about rail.&nbsp;</p><div id="54wSITpItv7769wzEnA9T1"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1JBCkepZ21qfZVMTbxbDVp/e0732a149d14da1048ae2e524b916aa4/Beveridge_MID1.jpg" alt="National Intermodal's James Baulderstone:  He says freight by road produces 16 times more carbon emissions than freight by rail." data-mce-src="//images.ctfassets.net/8pr762qjocl3/1JBCkepZ21qfZVMTbxbDVp/e0732a149d14da1048ae2e524b916aa4/Beveridge_MID1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ National Intermodal’s James Baulderstone: He says freight by road produces 16 times more carbon emissions than freight by rail.</span></div><div><br></div></div><p>At full capacity, the Moorebank Logistics Park will cut more than 3000 heavy truck movements from Sydney’s roads each day, in turn reducing truck emissions by more than 110,000 tonnes of carbon dioxide (equivalent), each year.</p><p>Rail, which produces about 16 times less carbon, will pick up the slack.</p><p>Baulderstone says in the past 30 years, the amount of freight moving across the country has tripled, but freight delivered by road has taken almost all of that growth.</p><p>“Over that period of time the share of the market that rail moves has gone from 30 per cent to less than 10 per cent,” he said.</p><p>But the real problem, he says, is the forecast growth in Australia’s freight.</p><p>“We’re talking about 1.4 million containers moving up and down the east coast of Australia.</p><p>“Our roads and truck networks cannot handle this much freight and we’ve got to get better and more efficient at managing this volume that is coming at us.”</p><p>Governments, both federal and state, as well as National Intermodal are betting on the multibillion-dollar, 1727-km-long Inland Rail project—which will connect the ports of Melbourne and Brisbane, as well as the Sydney-Perth rail corridor—to solve the problem.</p><h2>Victorian freight project to dwarf Moorebank</h2><p><br>Despite&nbsp;<a href="https://www.theurbandeveloper.com/articles/inland-rail-report-2023-freight-terminals-east-coast-australia" data-mce-href="https://www.theurbandeveloper.com/articles/inland-rail-report-2023-freight-terminals-east-coast-australia">a scathing review of the rail project&nbsp;</a>thus far, in June this year National Intermodal completed a deal to buy a sprawling 1100ha property in Beveridge, 40km north of Melbourne.&nbsp;</p><p>If the Moorebank’s boast is it’s the biggest intermodal freight terminal in the country, it won’t be for long.</p><div id="1YvyiFp1VZVkZCMK7Hu1md"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5ZAl5zLTYpmxygURtV63b8/d63bd76b028284e3b440665fd2d9a985/Intermodal_Mid__2.jpg" alt="Moorebank Intermodal Precinct.  The freight and logistics hub is just 32km south-west of Sydney and covers 240 hectares.  Source: LOGOS" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5ZAl5zLTYpmxygURtV63b8/d63bd76b028284e3b440665fd2d9a985/Intermodal_Mid__2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Moorebank Intermodal Precinct. The freight and logistics hub is just 32km south-west of Sydney and covers 240 hectares. Source: LOGOS</span></div><div><br></div></div><p>Melbourne is the freight capital of the country and the Beveridge Intermodal Precinct will reflect that.</p><p>Two-and-a-half times the size of Moorebank, Beveridge will have 600ha of developable land, upon which there is the possibility of up to two million square metres of warehousing.</p><p>The rail journey for freight between Melbourne and Brisbane will be under 24 hours—12 hours less than freight by road. But most importantly, Beveridge will be the only Victorian intermodal capable of handling 1800m-long, double-stacked freight trains.</p><p>Baulderstone predicts Beveridge could be fully energy sufficient.</p><p>He says rooftop solar on a facility that size, together with battery storage, can power all the terminal operations, all the warehouse tenants and electric trucks, as well as electric locomotives for port shuttles.</p><p>In fact, Beveridge’s solar capacity—estimated about 200MW—would currently make it the six biggest solar farm in Australia.</p><h2>Growth opportunity for northern corridor development</h2><p><br>But the big opportunities, says Urbis director Eleni Roussos, will come from the 6800 direct jobs the facility will create, with another 20,000 indirect jobs expected.</p><p>“This is going to sow the seeds of a shift into the that northern corridor,” says the urban planner, who specialises in the industrial sector.</p><p>“The west has been the centre of industrial and logistics land in Victoria for a long period of time.&nbsp;</p><p>“It’s where the supply has been. It’s got easy connections to the port, it’s got proximity to staff, and flat land at a good price. It had all the right metrics and criteria to develop but it’s very close to reaching its end.</p><div id="2jqDgt80IiSS8PuNDoII8b"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4MeWTcqfZFGOkdmdENryA1/85bb91f9e990c67fb76e3c1b30c9b4fa/Beveridge_MID2.jpg" alt="Urbis director Eleni Roussos.  The urban planner says the Beveridge Intermodal Terminal will create opportunities in Melbourne's northern corridor." data-mce-src="//images.ctfassets.net/8pr762qjocl3/4MeWTcqfZFGOkdmdENryA1/85bb91f9e990c67fb76e3c1b30c9b4fa/Beveridge_MID2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Urbis director Eleni Roussos. The urban planner says the Beveridge Intermodal Precinct will create opportunities in Melbourne’s northern corridor.</span></div><div><br></div></div><p>“And you’ll well know the land supply issues that we’re facing from a state perspective, and specifically in that western corridor, and I suspect that the intermodal in the north will help move from everyone looking in the west to now starting to look to the north.”</p><h2>Ripple effect in ‘quantum of development’</h2><p><br>Roussos says once there is the quantum of development, particularly given the big plays from large tenant types, there will be the opportunity for new campus-style developments.</p><p>“Someone might want a head office out there as a part of their warehouse,” she says.</p><p>“And whether that’s a bespoke office within the facility itself, or whether that’s a custom-built office facility with multiple tenants … and then there’s all sorts of synergies that are around that.</p><p>“Would there be a hotel there for people that are flying in for the day or the week to do their board meetings and the like, coming in from overseas or from interstate or wherever?</p><p>“This is something that you could certainly anticipate in the future and remember we’ve got a significant residential corridor up there as well.</p><p>“So there’s very good access to employment.”</p><p>Roussos says there is now a realisation Australia can’t rely on the rest of the world for everything.</p><p>“Now we’ve got to start doing a few things for ourselves and hopefully that means we’ll see a bit of a change in the way we manufacture, produce and move our goods,” she says.</p><p>“We need a bit more self-reliance, I think.”&nbsp;<br><br></p><hr><p><strong><br>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></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>

Freight and logistics employ 1.2 million people in Australia who collectively help move 3.7 billion tonnes of product a year.   With that's set to grow by 26 per cent in the next 30 years, there's opportunity in new growth corridors...

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<p>No question Charlie Buxton is making a pretty good fist of things.</p><p>Almost a decade deep into running Melbourne-based Cadence Property Group, his development and investment firm has transacted more than $1.54 billion of deals, controls $500 million of assets under management and has a landbank with a potential end value of about $2 billion.</p><p>Quite impressive for a bloke still under 40.</p><p>Not only that, he has also managed to negotiate a path beyond the sizeable shadows of his father and uncle, Victorian property identities Andrew and Michael Buxton—the fifth generation property developers who head up the powerhouse MAB Corporation, a pioneer of Melbourne’s Docklands precinct.</p><p>And therein lies the rub—or, perhaps, more of a mild annoyance.</p><p>Invariably, articles—yes, like this one—still refer to his high-profile property pedigree as a fortunate son or scion of one of Australia’s most successful real estate clans.</p><h2>What’s in a name?</h2><p><br>“Yeah, look, absolutely I find it incredibly frustrating,” he says.</p><p>However, he quickly adds it is “not a big thing” or something he dwells on for too long.</p><p>“It’s about eyeballs and that attracts more eyeballs and I get it.”</p><p>Buxton is also by no means insensitive to the very good hand he has been dealt and the head start it has given him with Cadence, which he started in 2014 at the age of 26.</p><div id="6sL1aJFa0SmGbQAtrTfC1G"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4qCMCLslAW9W5VP5LB7pbs/9a5e69ac6bebd58bf8e5c56eea03e7bc/Cadence_MID1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4qCMCLslAW9W5VP5LB7pbs/9a5e69ac6bebd58bf8e5c56eea03e7bc/Cadence_MID1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Spotswood Sheds are currently under construction in Victoria.</span></div><div><br></div><div><p>“The ability to leverage knowledge from the greater family has been invaluable for sure. I have a massive advantage through all that ... and it would be insincere to suggest that is not a head start,” he says.</p><p>“So, really it’s all fine. They’re running a business. I’m running a business. We do things together. The family invests in a lot of deals we do. I wouldn’t say it has been an issue in the slightest.</p><p>“But I’ll let you know when they write an article about me without mentioning my dad or my uncle … we’re not quite there,” he muses.</p><h2>Future focus for Cadence</h2><p><br>Gearing up for future growth opportunities, Cadence has recently undergone a restructure “to sharpen operational efficiency and to establish a robust foundation” for the journey ahead.</p><p>The ambitious five-year goal is to continue growth within the development business and target $5 billion worth of assets under management.</p><p>Buxton has moved from his long-held role of managing director to chief executive officer to lead the charge for Cadence, particularly in the areas of transactions and capital raising.</p><p>“We’re almost 10 years into running the business and it has got to a certain size where we want to put a little more formality into our hierarchy,” he says. “And what that will allow me to do is just focus on the areas that I think I can add more value to.”</p><p>He says he started the business with “fairly modest ambitions … just doing some things and seeing what happens without saying this is where I want to be in 10 years”.</p><p>“But I’d say that the development side of the business is probably bigger than maybe where where we had initially thought and that maybe the funds management part of our business has been slower to grow and scale.”</p><p style="margin-top: 0pt; margin-bottom: 0pt;" data-mce-style="margin-top: 0pt; margin-bottom: 0pt;"><br></p><div id="6sL1aJFa0SmGbQAtrTfC1G"></div></div></div><div id="6Io7WFPy6qFtiFQhP3jC4x"><picture><img src="//images.ctfassets.net/8pr762qjocl3/UdCNBlMf05zASJHyMBNYm/fb58ac4bb9b2cb1f88c0e409e70ae334/Cadence_MID2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/UdCNBlMf05zASJHyMBNYm/fb58ac4bb9b2cb1f88c0e409e70ae334/Cadence_MID2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The sixth generation developer has a growing portfolio of owned, managed and developed industrial projects with more in the pipeline.</span></div><div><br></div><div><br></div><div><p>Cadence’s management shuffle follows another milestone for the company—the successful $55-million capital raise for its first multi-asset value-add fund, the Cadence Australian Real Estate Partnership I (CAREP I)—surpassing its initial $50-million target.</p><p>It comes off the back of 14 single-asset value-add real estate investments, acquired alongside its partners for about $200 million since 2015. Of those investments, it has successfully exited five assets, generating an average net annual return on equity of 55.4 per cent.</p><p>Core plus, value-add, build-to-sell and build-to-hold are currently the four main strategic focuses within the business.</p><h2>Risk and opportunities in current market</h2><p><br>“We run a number of strategies across a number of sectors which to a degree sit in various risk buckets,” Buxton says. “We set shorter and longer-term goals within those buckets and all of them represent growth.”</p><p>He says although industrial will remain a major focus for the business “we’re not pure play”.</p><p>“We don’t want to just do that. But nor do we want to be fully diversified.</p></div><div><br></div><div><hr></div></div><p><strong><em><br>The Urban Developer</em> Industrial Development vSummit will take place on Thursday, September 28.&nbsp;</strong></p><p style="text-align: center;" data-mce-style="text-align: center;"><strong><a href="https://web.cvent.com/event/4bba1b94-b195-48e2-8a51-12b51636639b/summary?RefId=General%20Admission%20%7C%20Editorial&amp;rt=X_aufiJPxEeHOTaMYZfoiQ" data-mce-href="https://web.cvent.com/event/4bba1b94-b195-48e2-8a51-12b51636639b/summary?RefId=General%20Admission%20%7C%20Editorial&amp;rt=X_aufiJPxEeHOTaMYZfoiQ">Click here to register and learn more</a></strong><br><strong><br></strong></p><hr><div><p><br></p><p>“To date, a key focus area for us has been industrial and logistics. We’ve built some fairly unique capability and a really strong track record there.&nbsp;</p><p>“And while we expect that to continue to be the biggest part of our business, over time we want to have a few other focus areas and build up similar capability and track record there.</p><p>“It<span style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;" data-mce-style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;">’</span>s about finding opportunities that we think we can buy well … [and] it<span style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;" data-mce-style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;">’</span>s about finding the right level of risk. We need to take on a bit of risk in that strategy to get our return profile.</p><p>Buxton still recalls the thrill of his first deal and the delivery Cadence’s debut development—optioning up a site in Melbourne’s south-west, entering into a pre-lease for a logistics facility and pre-selling the asset to a Sydney fund manager.</p><p>“The asset was worth about $10 million, which at the time felt very big … we delivered it conventionally with debt and equity, upon completion they settled, we made a profit and that was it—off to the races.”</p><p>Since then, there have been several key deals that have been what he calls “step changes” for the business.</p><p>“Going from a $10 million dollar deal like that to a $50 million deal to $100 million deal to a $300 million deal … each time you do that things change because the business gets bigger, the scale gets bigger and the complexity gets different.</p><p>“Along that journey, there have been a number of step changes on the development side that have sort of jumped us into the next bracket …taking us from that first asset we did in 2014 to more recently large-scale built form projects of 40,000 to 60,000 square metres under roof.</p><p>“On the investment side, we started off doing single asset syndicates with private capital in that value-add strategy as a way to get into the space … to more recently raising a co-mingled drawdown fund which is CAREP I.</p><p>“And if we’re successful continuing that strategy, particularly through that style of vehicle, it certainly will put the business in a different bracket again.</p></div><div id="7Cvmy7Q6llr0TZmF3ZzKfb"><picture><img src="//images.ctfassets.net/8pr762qjocl3/2uxvH4gDm8ntdAnNwE0slS/f4ad68422fd8d9f5a409e28a210255de/5.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2uxvH4gDm8ntdAnNwE0slS/f4ad68422fd8d9f5a409e28a210255de/5.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Infill industrial is a hotly contested asset class across the eastern seaboard as industrial vacancy rates remain at record lows.</span></div><div><br></div><div><div><div><p>“Things are definitely getting more interesting at the moment.</p><p>“The ability to acquire real estate at attractive valuations has traditionally been heightened in periods of uncertainty, following dramatic economic shocks and generally in environments that promote unique situational buying opportunities.</p><p>“In terms of where we sit, we can do commercial, industrial and retail in that vehicle … we have some overall views of the various markets but we’ll look at all deals on their merits and try to find an opportunity.</p><p>“But it’s really good to have a dedicated multi-asset vehicle like that at the moment because for the right things we can move quickly.”</p></div><div id="7Cvmy7Q6llr0TZmF3ZzKfb"></div><p>Passion for property has been a driving force for the business success of the Buxton dynasty, dating back to 1860 when W.P. Buckhurst and J.R. Buxton established one of Melbourne<span style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;" data-mce-style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;">’</span>s first real estate agencies.</p><h2>The property bug&nbsp;</h2><p><br>But according to Buxton—who studied business at Swinburne University—although he remembers being “always around” property development, tagging along with his dad to Docklands and various industrial estates, there was never a line drawn in the sand.</p><p>“I<span style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;" data-mce-style="font-size: 11pt; font-family: Arial, sans-serif; color: #222222; background-color: #ffffff; white-space-collapse: preserve;">’</span>ve just done this because I find it interesting. I enjoy it. I enjoy the people I work with. I find it challenging. And if you do it well it can be really rewarding financially as well. So it was never about proving anything for me.</p><p>“I’ve always had an interest in business in general and various forms of investment.”</p><p>However, Buxton admits property development was not something that particularly appealed to him off the bat—that is, not until the penny dropped when he started working on-and-off informally at MAB Corp while studying at university.</p><p>“Looking at spreadsheets and starting to understand development and that if I do x, y and z I can create value, control that and scale it. That was really exciting for me and that’s when I sort of got the bug.”</p></div></div><div><br></div></div><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>

There’s no doubting Charlie Buxton’s property pedigree. But the sixth generation developer is carving his own path with $1.5 billion in deals behind him…

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<p>Antony Catalano freely admits he wants it all.</p><p>“I didn’t want to just be in the listings game.</p><p>“The plan is to have a complete view of the market,” the journalist entrepreneur said of his vertically integrated View Media Group, which has the property listing portal RealEstateView.com.au at its core.</p><p>“We want to build the real estate superstore of the future.”</p><p>Catalano was the big finish to the Urbanity conference on the Gold Coast where he was speaking in conversation with Adam Di Marco, chief executive of <em>The Urban Developer</em> which staged the three-day knowledge and networking event for property professionals.</p><p>‘The Cat’, as Catalano is affectionately known, co-owns View Media with Melbourne billionaire Alex Waislitz. The ANZ bank and Kerry Stokes’ Seven West Media are also investors.</p><p>In pursuit of its ‘superstore’ strategy, View has assembled a set of proptech tools, including the listing portal, advertising technology, lead generation and management, media strategy and purchasing, AI capabilities and data integration.</p><p>This creates a cohesive property ecosystem where each entity enhances the value of the others, as View aims to profit from both the buying and selling sides of property sales transactions.</p><div id="4Jz6luJJ5mMVf6ChoRLsgM"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4iFckQh7wutc9rPv1Pobcp/14ce3a469cdc448f07ecd6cb11898527/Mid_article_resizes__46_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4iFckQh7wutc9rPv1Pobcp/14ce3a469cdc448f07ecd6cb11898527/Mid_article_resizes__46_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Antony Catalano in conversation with <em>The Urban Developer</em> founder Adam Di Marco at Urbanity 2023.<br><br></span></div></div><p>At its core is the listing portal, which competes against established heavy-hitters RealEstate.com.au and Domain.com.au, the latter led by Catalano until 2018.&nbsp;<br></p><div id="1gV90deueoU5zUjPja4Uj6"><p>“We want to be a marketplace where you can come in and look at listings for free and list for free.</p><p>“We want to have 11 million listings so we have every house in the country,” he told delegates at The Star, Broadbeach, about 90km up the M1 from Raes at Wategos, his exclusive Byron Bay guesthouse.</p><h2>Steep discount</h2><p><br>Also feeding into this ecosystem is Australian Community Media, a stable of more than 100 former Fairfax regional and rural newspapers and websites that Catalano and Waislitz bought from the merged Fairfax and Nine Entertainment in 2019.&nbsp;</p><p>They paid $115 million for the business, which was a steep discount to the $3 billion Fairfax outlaid for it in 2007. The assets included a $60-million property portfolio.</p><p>“I wouldn’t be spending $115 million without a plan,” Catalano said at the time.</p><p>“With 8 million people [living in the regions] you’ve got a massive revenue opportunity. Deals like this don’t come along very often.</p><p>“It shouldn’t be a surprise to anyone that I’m here. I think it’s a good deal.”</p><picture><img src="//images.ctfassets.net/8pr762qjocl3/1tNao4yIl1AIJwJwB5MPYs/9caf1d50fef7bb038920bb38c7fd1620/raes.jpeg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1tNao4yIl1AIJwJwB5MPYs/9caf1d50fef7bb038920bb38c7fd1620/raes.jpeg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Inside Catalano’s Raes at Wategos, Byron Bay.<br><br></span></div></div><div id="3ORCnhLLKnSpqnT5HrhPMP"><h2>Mr Property</h2><p><br>At Urbanity, Catalano shared details of his origin story as Australia’s Mr Property.</p><p>“I was always obsessed with it,” he said of real estate.&nbsp;</p><p>“I wanted a holiday home before I had my own house.”</p><p>He was aged 27 and working at Melbourne’s <em>The Age</em> newspaper when then-editor Alan Kohler, in need of a new property editor, learned that the young production journalist was converting a warehouse with Scott McElroy [now a Belle Property principal] and, out of the blue, he offered him the senior role.</p><p>Kohler, now finance presenter on ABC TV news, has referred to Catalano as “one of the great entrepreneur journalists in Australia”.</p><p>As <em>Age</em> property editor in the mid-1990s, Catalano wrote a widely read property gossip column called Trading Places, later Private Property, which allowed him to build a large and valuable network among Melbourne’s real estate agents.</p><p>The promotions kept coming and he moved to the commercial side of the business as marketing director, before things soured at Fairfax and he was made redundant in 2008.</p><p>The former high-flyer had hit some career turbulence. He was having no luck finding a replacement job and the financial pressure of a large mortgage and five children to support was building.</p><picture><img src="//images.ctfassets.net/8pr762qjocl3/2keroWXnp7DJ8bEE73SUYs/cb436d3c4ca41412bcbf83d7d0f5e9f1/BonoboMID.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/2keroWXnp7DJ8bEE73SUYs/cb436d3c4ca41412bcbf83d7d0f5e9f1/BonoboMID.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Raes plans to bring its understated luxury services to a new hotel-style development in the heart of Byron in a deal inked with developer Podia.<br><br></span></div></div><p>He considered buying a cafe with his redundancy payout. “I was going to buy myself an income because I clearly wasn’t qualified to do anything,” he said in a 2015 interview.</p><p>“I didn’t have a degree, the economy was in tatters, I couldn’t get a call back from anyone and the media industry was falling apart at a rate of knots,” he said.</p><p>It was now that the strong connections he formed while writing the Private Property column proved their worth, as he approached leading Melbourne real estate agents with a business proposition—back him as investors and become both co-owners and advertisers in their own suburban news publication.</p><h2>Overnight success</h2><p><em><br>The Weekly Review</em> was an immediate financial success.</p><p>In what must have been a satisfying deal for Catalano, just 18 months after launch Fairfax was losing so much agent advertising to Metro Media Publishing they were forced to buy half the business for $35 million and then acquire the remaining stake for $72 million in 2013.&nbsp;&nbsp;&nbsp;</p><p>“It was really that column that transformed my relationship with the estate agents from being a journo to a trusted reporter within the industry to a friend and ultimately to a business partner,” Catalano has said.</p><p>“People talk about overnight success stories. Mine was a 20-year overnight success story.”</p><h2>Fairfax: The Sequel</h2><p><br>Catalano was now wealthy and welcomed back to helm Fairfax’s Domain.com.au. Under his leadership the listing portal grew to generate the bulk of Fairfax’s profits and it listed on the ASX in November 2017 with a $2.2 billion valuation.</p><p>Shortly after the float, Catalano left Fairfax again, to resurface most notably with the Australian Community Media acquisition, a key piece of his post-Domain plan.</p><p>“All these big tech companies have big media partners and the reason is that you need the eyeballs,” Catalano said at Urbanity.</p><h2>Raes at Wategos</h2><p><br>Among the strategising, network building and deal making, Catalano finds time to pursue his passion for property from the development side.</p><p>In 2016 he bought and refurbished the seven-room boutique hotel and restaurant, Raes at Wategos, at Byron Bay.</p><p>And with developer Podia he is <a href="https://www.theurbandeveloper.com/articles/raes-wategos-byron-bay-podia-calile-development-hotel" data-mce-href="https://www.theurbandeveloper.com/articles/raes-wategos-byron-bay-podia-calile-development-hotel">parlaying that brand’s luxury reputation into an exclusive residential project at Byron</a> called The Bonobo by Raes, featuring 41 hotel-style apartments.</p><h2>Strategies, tech, relationships&nbsp;</h2><p><br>With a mix of forward-thinking strategies and tactical investments, Antony Catalano is cementing his leading place in Australia’s real estate landscape. His ambitions for the View Media Group are driven by his blend of media, technology, marketing and real estate expertise. The value he places on relationships highlights the importance of partnerships to business success.</p><p>Up against stiff competition in Domain.com.au, Rupert Murdoch’s RealEstate.com.au and every other savvy operator who wants to dominate the hugely lucrative real estate transaction space, only time will tell whether Catalano’s View to making a killing will pan out as planned.&nbsp;</p><p>But he is hoping the first portal of call for anyone looking for property in Australia will be his.</p><p>The Urban Developer<em>’s annual Urbanity conference for the creators of cities in the Asia-Pacific was staged on August 29-31 at the Gold Coast.<br></em><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>

Speaking to The Urban Developer founder Adam Di Marco at Urbanity 2023, Antony Catalano outlines what he thinks the future of real estate will look like…


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<p>Somewhat bemusingly Bert Dennis still feels the need to explain he’s playing the long game.</p><p>In April, he turned 88.</p><p>Still overseeing one of Australia’s largest privately owned residential developers, he is the inaugural recipient of <em>The Urban Developer</em>&nbsp;Lachlan Webb Lifetime Achievement Award.</p><p>From budding civil engineer at the City of Chelsea in Melbourne’s south to Dennis Family Corporation patriarch nurturing a third generation, it has been an equally long and, sometimes, steep learning curve.</p><p>That remarkable journey is something he hopes will now pave the way for his 11 grandchildren, three of whom are already working in the business.</p><p>For their eyes only, Dennis has compiled a 6cm-thick dossier he calls his “guiding principles”.</p><div id="2xpOs6B36q7tSA1lpeO4Rc"><picture><img src="//images.ctfassets.net/8pr762qjocl3/43mgm31e7IupPIhh99BCBJ/562b860e602e8f6ed8978a5696d73f14/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/43mgm31e7IupPIhh99BCBJ/562b860e602e8f6ed8978a5696d73f14/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Bert Dennis and his wife, Dawn, [<em>both centre</em>] with their four children [<em>from left</em>] Grant, Natalie, Marshall and Adele.<br><br></span></div></div><p>It is a compendium distilling the lessons he has learnt and the knowledge he has gained across six decades that have underpinned the growth and success of the family’s diversified business.</p><p>Not only has it developed thousands of hectares of land into residential communities and built tens of thousands of homes but it also has retail, farming as well as overseas investment interests.</p><p>“It’s a complicated business and it’s getting more and more complicated on a day-to-day basis,” he says.</p><p>“So I thought if I can impart those guiding principles on to the grandchildren, by the time they’re 30 they’ll have a very good idea how business works rather than getting to the stage of 65 or 70 and then starting to understand how everything works.</p><p>“And it’ll give them a hell of an advantage.”</p><p>All that Dennis would reveal to <em>The Urban Developer</em> of his tome of guiding principles was its three-page table of contents.</p><p>Understanding Market Cycles, Profit Phases, Taxation and Stamp Duty, Bank Borrowing and Interest Rate Hedging, JVs and DAs, Gearing Land, Critical Success Factors, Dennis Family Moat, Long Term Strategy and Structure, Competitive Advantage, Philanthropic and Charitable Donations, and The Purpose of Wealth.</p><p>From these section titles—just to name a few—it appears to be quite a forensic manual.</p><p>And if Dennis were ever inclined to publish his words of sage advice on the machinations, market forces and moral values for doing business—essentially the secrets to his survival and success—it would surely be a bestseller.</p><p>But don’t hold your breath.</p><p>As <em>The Urban Developer </em>founder Adam Di Marco discovered in conversation with the development stalwart at Urbanity, its three-day annual conference on the Gold Coast, what happens in the Dennis family, stays in the Dennis family.</p><div id="7rT5K7pJSotKwBHXmIxfax"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5J7picKJLHOmTipEur7irz/591fdf878f03e54759f52cf7b1578f13/Mid_article_resizes__44_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5J7picKJLHOmTipEur7irz/591fdf878f03e54759f52cf7b1578f13/Mid_article_resizes__44_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Bert Dennis on stage with <em>The Urban Developer’</em>s Adam Di Marco during Urbanity 23.<br><br></span></div></div><p>Cheekily, Di Marco asked Dennis how much a copy of his guiding principles would cost.</p><p>“Best of luck, Adam,” was the wry reply from the sharp-as-a-tack octogenarian.</p><h2>All about family</h2><p><br>From tragic and humble beginnings, it has always been about family for Dennis … well, and sport.</p><p>He still plays tennis three times a week.</p><p>As a schoolboy in Melbourne’s north-east, however, it was hitting home runs on the baseball field that would set him on the path to one day establishing one of Australia’s largest greenfield development and home building companies.</p><p>Dennis lost his father, George—who was psychologically scarred from fighting in Europe during World War I and committed suicide—when he was aged just 3 years.</p><p>Raising five children on her own, his mother, Coy, was determined to keep the family together. They lived an itinerant life, moving throughout regional Victoria—sometimes living in a tent on the banks of the Murray River—to avoid her children being taken into state care.</p><p>By the time Dennis was aged 13, he had lived in 15 different houses. He attended 19 different schools before graduating at 21. So impoverished was his upbringing that he did not get his first pair of shoes until he was 8 or a pair of underpants until he was 13.</p><p>It is only in recent years Dennis has spoken openly about the tough and turbulent years of his early life.</p><p>“Life was very bloody tough—very tough for mum, she had five children under 10 and no government assistance whatsoever.</p><p>“But I wouldn’t change a moment of it. It was character building. I had to learn to fend for myself and that makes you very determined, resilient and capable.”</p><div id="3DwJLSNSwojee2UQVUeMjn"><picture><img src="//images.ctfassets.net/8pr762qjocl3/28wMoNPqnrT8iVcRi7FDCG/a9632bd2c3a5c0b15a38891605426b57/coy_bert_dawn_bert_21.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/28wMoNPqnrT8iVcRi7FDCG/a9632bd2c3a5c0b15a38891605426b57/coy_bert_dawn_bert_21.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Determined: Bert Dennis with his mother, Coy, and wife, Dawn.<br><br></span></div></div><p>His only ambition as a youngster was to become a member of Victoria’s under-17 schoolboy baseball team but to qualify he had to continue into senior school and do a diploma course.</p><p>Without any intention of it becoming a career path, Dennis chose to study civil engineering. Halfway through the course he had not only made the baseball side but was its captain.</p><p>Having made it that far through his studies he decided he “might as well finish” and then—after a short stint working as a labourer “to build up muscles to impress the chicks”—he was on his way, initially working in council civil engineering jobs.</p><p>Within a few years, however, he had branched out into the private sector in a consultancy partnership, which by the mid-1960s he owned outright. He began small-scale land development on Melbourne’s fringe, providing the foundations for the family business.</p><p>In the ensuing years, the family business has developed about 30,000 lots and built as many homes. It currently has a landbank of 18,000 lots in Victoria and south-east Queensland—including its largest project to date, the 750ha Manor Lakes it began developing in Melbourne's west in 2002, that still has a 10 to 15-year pipeline of development.&nbsp;</p><p>Dennis was awarded the Medal of the Order of Australia (OAM) in 2005 for his services to the housing industry, the community through contributing to the debate on urban planning and his support to charitable organisations.</p><p>His four children—Grant, Adele, Marshall and Natalie—are directors of the family business and its various entities.</p><p>“When the children came into the business I said I don’t want you to work for me I want you to work with me … and they now own as much of the business as what I do.</p><p>“In all my life I’ve been driven by trying to do the very best I can at all times ... and I think what we’ve managed to create is absolutely unique.</p><p>“But I had no intention of building a big business … it was more just a means of making money to support the family. I never set my sights on becoming wealthy.</p><p>“My priorities in life have always been my own health first—because if I have a nervous breakdown or die I can’t look after my family—family second, sport third and business fourth.”<span style="font-size: 14pt; font-family: 'Times New Roman', serif; white-space-collapse: preserve;" data-mce-style="font-size: 14pt; font-family: 'Times New Roman', serif; white-space-collapse: preserve;"><br></span></p><div id="3vJUFWEjXELpNPudiuIeSm"><picture><img src="//images.ctfassets.net/8pr762qjocl3/144lZofQZoCeTyTE2DE4O8/1a3f814a6c6a66666d8608362679b28b/bert_oam.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/144lZofQZoCeTyTE2DE4O8/1a3f814a6c6a66666d8608362679b28b/bert_oam.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ In January 2005, Bert was awarded the Medal of the Order of Australia in the General Division.</span></div><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;"><br></span></div></div><h2>‘By nature, I’m an optimist’</h2><p><br>He says what still excites him is “helping people get into their own house-and-land packages” although he concedes the challenges the industry is currently grappling with are making the delivery of affordable homes more difficult.</p><p>Given his early background and having weathered his share of property cycles, however, it should come as no surprise that Dennis deems things are only “a bit tough at the moment”. He has been through much worse.</p><p>Even with the prevailing economic uncertainty and volatility in the market, the Dennis family is still delivering about 1000 homes a year.</p><p>“There are dark clouds coming in. We haven’t seen the end of this cycle yet by any means. But by nature, I’m an optimist.”</p><p>Asked from his lifetime of experience what advice he would have given to the “young Bert”, Dennis does not hesitate: “Marry the right person”.</p><p>And there is no doubt he did just that when he slipped a wedding ring on the finger of wife Dawn back in 1958.</p><p>“Dawn has been the absolute rock of our family,” Dennis said in accepting his lifetime achievement award to a standing ovation.</p><p>“And without her support none of this would have been possible.”</p><div id="6qhQGZZ86zNcbbOY00mtCE"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5Bfhz3Xb0awZNxjnY5KqRl/78ac84fbe6fac816d0957ac5232dfc6d/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5Bfhz3Xb0awZNxjnY5KqRl/78ac84fbe6fac816d0957ac5232dfc6d/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Bert and Dawn Dennis with son Grant and Adam Di Marco at <em>The Urban Developer</em> Awards for Industry Excellence—Bert was named the inaugural recipient of <em>The Urban Developer</em>&nbsp;Lachlan Webb Lifetime Achievement Award.<br></span>&nbsp;</div><div><hr><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;"><strong style="font-family: 'Droid Regular'; font-size: 18px;" data-mce-style="font-family: 'Droid Regular'; font-size: 18px;"><br></strong></span></div><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;"><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;"> </span></span><p><strong>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></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>

The inaugural recipient of The Urban Developer’s Lachlan Webb Lifetime Achievement Award looks back on his career and what matters most…

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<p>“It’s time for us to roll up our sleeves.”</p><p>No stranger to doing some heavy lifting, Andrews Projects sales manager Sarah Andrews grew up on building sites and spent school holidays in the back of her parents’ car nursing carpet and benchtop samples.&nbsp;</p><p>Her builder-developer father Danny Andrews has built scores of houses, industrial sheds, shopping centres and medium-density apartment developments across the Gold Coast during the past two decades.&nbsp;</p><p>And now he’s firing up the tools alongside Sarah and son Jordan to build their most ambitious project yet, a $270-million, 299-apartment masterplanned community at Robina.</p><p>While so many other DA-approved sites are gathering dust amid a growing builder shortage in Queensland, Andrews Projects is one of a new breed of developers who are taking the bull by the horns to start up their own construction arm.&nbsp;</p><p>“We were working with a builder but the cost ended up being too high. So we set up our new construction company at the start of July, we’ll have better control of our costs now,” Sarah Andrews says.&nbsp;</p><p>“We’re still mapping out what we need (in terms of labour), but we’ve made some significant hires already. It’s a natural progression for us.&nbsp;</p><p>“It’s control of your destiny and control of your work program.”</p><div id="hcpcySOjqUgPnh19XjCZr"><picture><img src="//images.ctfassets.net/8pr762qjocl3/3Jx38p2yQ1Usy67xAe6lun/c5b13e52e8021662738c28a126fce244/Andrews_Projects_MID1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/3Jx38p2yQ1Usy67xAe6lun/c5b13e52e8021662738c28a126fce244/Andrews_Projects_MID1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The 299-apartment masterplanned community at Robina is the developer’s biggest project yet.<br><br></span></div></div><p>Cascade is Andrews Projects’ biggest development to date at a scale which Andrews says is not likely to be repeated.&nbsp;</p><p>“We have a finite amount of developable land, we have the beach on one side, and the mountains on the other. The only answer is to go up,” she says.&nbsp;</p><p>“[Cascade] is such a big piece of land.</p><p>“We settled on the site in January last year. The DA was approved late last year and we are hoping to be on site late this year or early next year.”</p><p>New data from PRD demonstrates just how dire the builder drought is in Queensland, particularly in the fraught high-density residential sector.&nbsp;</p><p>The risk profile is not appealing for many of the nation’s biggest builders, including Queensland’s own Hutchinson Builders.</p><p>According to PRD, more than a third of the 196 residential projects worth over $10 million slated for construction in south-east Queensland’s between January 2022 and 2024 do not have a builder assigned.</p><p>As well, more than half the Gold Coast developers with projects in the pipeline are waiting to secure a builder, and about a third of projects in Brisbane are experiencing the same problem.</p><div id="3Iw7cdBRzxZcsyao5ig14G"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4WFVoOkQ4pSz5qOhss218w/b2a343ddb1f8da761720d447499cdedd/Andrews_Projects_MID2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4WFVoOkQ4pSz5qOhss218w/b2a343ddb1f8da761720d447499cdedd/Andrews_Projects_MID2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Sales manager Sarah Andrews says they have made some key hires for their construction firm and will grow further once on site at Robina. </span></div></div><p><br>But it’s not for lack of buyer demand on the Gold Coast, according to Sarah Andrews. She says she has kept a list going for seven years of all the projects that have been shelved on the Gold Coast.&nbsp;</p><p>“It’s really hard to get projects out of the ground,” she says.</p><p>“If your site is not DA-approved and you don’t have a builder, you can’t go to market without a lot of weakness or vulnerability.</p><p>“We’re directly employing a team of people, there will be a site team and an office team … and the team will continue to grow once we get on site.”</p><p>And while labour hire has been constrained in the past two years, Andrews says the market is shifting on the Gold Coast. Andrews Projects plans to run its construction arm, A Construct, indefinitely as it pads out its future pipeline.</p><p>“To my knowledge I think there’s only been one build contract get off the ground this year. A lot of those subcontractors who have been absorbed in projects will be looking for work.</p><p>“We’ve got a tunnel vision for the Gold Coast. I think it’s moved out of the traditional boom-bust cycle … I think it’s got a stronger foundation.”</p><div id="4f1RCHrG6jpPs4au9UHTrJ"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4ZhJ5c9DvaZRxK6aIpww3f/4c212bafff96469521b24f6884fce289/Beach_House_Andrews_MID.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4ZhJ5c9DvaZRxK6aIpww3f/4c212bafff96469521b24f6884fce289/Beach_House_Andrews_MID.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Buyer demand remains strong on the Gold Coast. Andrews Projects’ Beach House broke price-per-square-metre records at Broadbeach. </span></div></div><p><br>Andrews Projects joins a growing list of developers to launch their own construction arms after the high-profile collapse of ConDev last year and, more recently, GCB.</p><p>And non-bank lenders are rallying to the cause.&nbsp;</p><p>Holden Capital’s Dan Holden told <em>The Urban Developer</em> the specialist non-bank lender sees the developer-builder structure as a benefit.</p><p>“Historically, the traditional banks have seen it as a high risk and been quite reluctant to be involved because if there is a problem, then they see it as having two problems instead of just one.</p><p>“Whereas, we actually look at it as a benefit, particularly at the moment with material costs and labour costs being the hardest thing to manage. If there is a problem, then you’ve got visibility, and you can solve it quickly.”<br><br></p><hr><p><strong><br>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></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>

While so many other DA-approved sites are gathering dust amid a growing builder shortage in Queensland, Andrews Projects is one of a new breed of developers who are taking the bull by the horns to start up their own construction arm...

<p>The three days of Urbanity 23 brought together people working in every aspect of the property industry, from developers to builders, architects to marketers, and researchers to media.</p><p>Outside a common interest in property, perhaps what brought such a range of people together was the that drives and evolution regardless of the subject—ideas.</p><p>And there was no shortage of them at Urbanity 23, <em>The Urban Developer’s</em> flagship conference held on the Gold Coast.</p><p>Across the three days, participants heard ideas from presenters as well as fellow attendees, ideas to prompt thought, contemplation, action … and more ideas.</p><p>Here are just five of the best from Urbanity 23.</p><hr><div id="5n3QgO0QZyZXVDoVVJ4cK9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4dxUl7oyoOL0wWYxLFrW2l/cf9702f04fd525e247063a745f733abc/1.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4dxUl7oyoOL0wWYxLFrW2l/cf9702f04fd525e247063a745f733abc/1.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Stefano Boeri Architetti’s Bosco Verticale, a two-tower vertical forest prototype in Milan.<br><br></span></div></div><h2>1) Vertical forests champion biodiversity</h2><p><br>Meaningful and well-deployed vertical forests can significantly impact carbon emissions and reduce the heat island effect in cities by up to 2 degrees, according to Stefano Boeri Architetti architect Maria Lucrezia De Marco.</p><p>The architecture&nbsp;firm created the ground-breaking Bosco Verticale, a two-tower vertical forest prototype in Milan, which champions biodiversity in a high-density&nbsp;setting.</p><p>The two towers in the Porta Nuova area comprise about 800 trees, 15,000 perennials&nbsp;and 5000 shrubs across the 80m and 112m buildings.&nbsp;</p><p>De Marco said that nine years after its construction the vertical forest in Milan was now home to people—and about 1600 birds and butterflies.&nbsp;</p><p>With a ratio of two trees, eight shrubs and 40 bushes for each occupant, the building is championed as a “tower for trees, occupied by humans”.</p><p>The vertical forest model was then applied to a social housing project in Eindhoven. Another project is now under way in Utrecht in the Netherlands, which is due for completion in 2024.&nbsp;</p><hr><div id="UEffy9tqT4bXzebmJKTBZ"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7jRSsO4y407qHrvgGTjpqy/09d19fe3db412120a88965aaa4573325/5.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7jRSsO4y407qHrvgGTjpqy/09d19fe3db412120a88965aaa4573325/5.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Ben Martin-Henry during his keynote at Urbanity 23 on the Gold Coast.<br><br></span></div></div><h2>2) Shorter down cycles</h2><p><br>Walking onto the main stage at Urbanity, keynote speaker Ben Martin-Henry, MSCI head of real assets research, Pacific, warned the room: “At this moment in the market, I don’t have a lot of positive things to say”.</p><p>“There was a lot of positivity from the other speakers … so, now I get to burst everyone’s bubble.”</p><p>Overall, he said, the numbers—based on settlements—indicate transaction volumes are at record lows, real returns on properties are in the negative and values of assets are declining.</p><p>Across the sectors, only industrial had avoided any “negative capital growth”—that is, value loss.</p><p>“It has been the darling of the property industry for the past five years, it may yet be the darling of the property industry for the next five years—it’s definitely one to watch,” he said</p><p>With the bad news out of the way, however, the commercial property data cruncher did offer a glimpse of hope going forward.</p><p>“If you look at the downturns we have had … back in the early 1990s, very sharp, quite protracted and it took a long time to get values back to where they were before.</p><p>“Then look at the GFC, very sharp but didn’t take as long to get values back to where they were before.</p><p>“And with Covid, obviously a health crisis with financial impacts, still a bit of a downturn but again shorter.</p><p>“I’m hoping we’ll see a short one this time around as well.</p><p>“What we’ve seen in markets across the world is that over the past 30 to 40 years or so, downturns have become shorter. They’re still quite sharp, the actual overall value decline doesn’t appear to be lessening, but importantly they are bouncing back quicker.”</p><hr><div id="257kGGeGbPuygePwJry4b0"><picture><img src="//images.ctfassets.net/8pr762qjocl3/45278pqIBCfuXysTZZKs5A/0ad2c7255bdded9650985db8be97fdf2/3.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/45278pqIBCfuXysTZZKs5A/0ad2c7255bdded9650985db8be97fdf2/3.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ A render of the Aboriginal Art and Cultures Centre in Adelaide.<br><br></span></div></div><h2>3) Placemaking and Designing with Country</h2><p><br>Designing with Country needs to move away from lip service and closer to yarning and a deeper understanding of the history of place.&nbsp;</p><p>Speaking at Urbanity’s roundtable on The Value of Placemaking, <a data-mce-href="https://www.theurbandeveloper.com/articles/urbanity-23-wowowa-monique-woodward-creating-joy" href="https://www.theurbandeveloper.com/articles/urbanity-23-wowowa-monique-woodward-creating-joy" target="_blank">WOWOWA’s Monique Woodward</a> said Designing with Country was an important part of placemaking that needed to be incorporated from the outset.&nbsp;</p><p>“It’s about acknowledging our gratitude,” Woodward said.&nbsp;</p><p>Hoyne place strategy director Tom Payne agreed. Payne said they were entrenching this in their placemaking processes and the space was evolving.&nbsp;</p><p>But it’s not just connecting with First Nations history, it’s also a living concept that needs to be part of a conversation.</p><p>UAP managing principal Owen Craven said public art played an important role in storytelling and reinforcing connection to country and place.</p><p>A roundtable delegate also contributed to this discussion on the naming of places and ensuring it was culturally sensitive and not appropriation for the sake of being seen to do the right thing.&nbsp;</p><p>Designing with Country from the initiation of projects will lead to deeper sense of place and acknowledgement of First Nations connection to the land.&nbsp;</p><hr><div id="33duBFYJhV7aM1DuOwVrUo"><picture><img src="//images.ctfassets.net/8pr762qjocl3/1L8nU4yGghJCLm9piLCtbB/4a2193168388e7933cfde9aec487bf8a/4.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/1L8nU4yGghJCLm9piLCtbB/4a2193168388e7933cfde9aec487bf8a/4.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Urbis director Kate Meyrick during her keynote presentation at Urbanity 23.<br><br></span></div></div><h2>4) Economic growth tied to fairness</h2><p><br>Australian cities faced growing inequality, with fairness directly impacting economic growth and prosperity, <a href="https://www.theurbandeveloper.com/articles/kate-meyrick-australia-cities-inequality" data-mce-href="https://www.theurbandeveloper.com/articles/kate-meyrick-australia-cities-inequality" target="_blank">warned urbanist and Urbis director Kate Meyrick</a>.</p><p>Although Australia’s GDP had grown over the past 50 years, the overall wellbeing, happiness, and fairness in society, termed as “urban equity”, had declined, Meyrick said.</p><p>Cities that were unfair failed to prosper in the long run, she said.</p><p>Using data from the 2021 census, Urbis analysed the fairness and equity of six major Australian cities across various parameters such as housing, green space, health, and education.</p><p>The findings suggested that the sustainability of economic growth was directly related to the level of fairness in a city, Meyrick said.</p><p>Cities such as London, New York, and Paris were experiencing chronic levels of disadvantage.</p><p>Among Australian cities, Perth emerged as the fairest, while Brisbane and Gold Coast raised concerns.</p><p>Sydney presented a mixed picture, and Melbourne was average in its fairness metrics.</p><p>She urged cities to prioritise fairness as it directly impacted economic development and attracted investment.</p><p>“Cities that are not fair, don’t prosper,” Meryrick told attendees during her keynote at Urbanity 23.</p><hr><div id="DK96AZkNAAmmNGda9GiX9"><picture><img src="//images.ctfassets.net/8pr762qjocl3/5kej6Z6mBPdVwTKwM8nuen/b6cc3dfcdd811a2fa66c49f899f296df/2.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/5kej6Z6mBPdVwTKwM8nuen/b6cc3dfcdd811a2fa66c49f899f296df/2.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Changing work patterns are affecting much more than our jobs, Dror Poleg told Urbanity 23.<br><br></span></div></div><h2>5) The impact of changing work patterns</h2><p><br>As work patterns evolved, with a growing emphasis on flexibility and remote capabilities, the traditional structures of office spaces, retail environments and residential designs must adapt,<a href="https://www.theurbandeveloper.com/articles/five-stages-of-grief-as-office-bounceback-hopes-fade" data-mce-href="https://www.theurbandeveloper.com/articles/five-stages-of-grief-as-office-bounceback-hopes-fade" target="_blank">&nbsp;presenter Dror Poleg, author of <em>Rethinking Real Estate,&nbsp;</em></a>said his presentation at Urbanity 23.</p><p>The future of real estate was not just about constructing buildings but creating adaptive environments that catered to the modern workforce’s diverse needs.</p><p>Offices should be versatile, accommodating team collaborations in communal hubs and individual tasks in serene remote work areas.</p><p>This isn’t merely about aesthetics but about functionality that aligns with modern work patterns.</p><p>The emphasis was on creating spaces that matched the fluidity and adaptability of today’s workforce.</p><p>The implications of this shift extended beyond office boundaries, Poleg said.</p><p>The broader real estate market, encompassing retail and housing, was also feeling the impact.</p><p>Retail spaces might need to reimagine their purpose, potentially blending traditional shopping with workspaces.</p><p>In the housing sector, the demand for homes with dedicated workspaces is on the rise, reflecting the remote work trend.</p><p>Poleg suggested a holistic transformation of real estate, driven by changing work paradigms.<br><br></p><div id="5n3QgO0QZyZXVDoVVJ4cK9"></div><hr><div id="6qhQGZZ86zNcbbOY00mtCE"><div><p><strong><br>You are currently experiencing&nbsp;<em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p></div></div><div id="2GhuueZl01Zwo2aFfjNVi2"><div data-rmiz-wrap="visible"><div><img style="width: 0px; height: 0px;" src="https://www.theurbandeveloper.com/_next/image?url=https%3A%2F%2Fimages.ctfassets.net%2F8pr762qjocl3%2F12UMq5eMSEOh0QxJVBYaDt%2Fd7507cf4ceb1365cc9ce7eaff84d06cc%2Ftud___banner.jpg%3Fw%3D1500&amp;w=3840&amp;q=75" sizes="100vw" srcset="/_next/image?url=https%3A%2F%2Fimages.ctfassets.net%2F8pr762qjocl3%2F12UMq5eMSEOh0QxJVBYaDt%2Fd7507cf4ceb1365cc9ce7eaff84d06cc%2Ftud___banner.jpg%3Fw%3D1500&amp;w=640&amp;q=75 640w, 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The Urban Developer's annual conference Urbanity 2023 was a hotbed of innovative ideas for the property development industry - here are five key takeaways from the event...

Affordable Housing Hero EDM.jpg

<p>Affordable housing is rapidly becoming the industry’s most talked about sector as the cost of living increases, population growth continues and housing supply dwindles.</p><p>A National Housing Finance and Investment Corporation report earlier this year suggested that there would be a shortfall of 106,300 homes during the five years to 2027, and often it is the lower end of the market most adversely affected by such shortfalls.</p><p>But the shape and form of affordable housing are changing rapidly—and so are the opportunities this presents.&nbsp;</p><p>Founder of social and housing company My Bella Casa Tamika Smith spoke at <em>The Urban Developer</em>’s Urbanity 23 conference last week.</p><p>“The property development industry in Australia can be incredibly innovative … it will navigate and find solutions,” she said.&nbsp;</p><p>“There are so many roads that we can go down, but even though there isn’t one size fits all, it shouldn’t deter us that this situation is so complex.”&nbsp;</p><div id="gx45UGNYb4O6DiV7v6Y6M"><picture><img src="//images.ctfassets.net/8pr762qjocl3/158Ot0vLrCs1D8d6zQbkVq/bc00ef9ca7029c3fec92551cc27dd599/Housing_Supply_Solutions_Panel_Urbanity_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/158Ot0vLrCs1D8d6zQbkVq/bc00ef9ca7029c3fec92551cc27dd599/Housing_Supply_Solutions_Panel_Urbanity_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ My Bella Casa's Tamika Smith (second from left) was a panellist at <em>The Urban Developer’s</em> Urbanity conference last week with <em>The Urban Developer’s</em> managing editor Taryn Paris, Dr Tom Alves from AHURI, Carolyn Viney from Super Housing Partnerships and Andrew Welsh from Wel.Co.<br><br></span></div></div><p>The “affordable” label now covers a whole host of housing types, from emergency and transitional housing to homes for key workers.</p><p>Group chief executive of Haven Home Space Andrew Cairns heads up the affordable and social housing development and support company.</p><p>“In Australia, we look at things beautifully vertically,” Cairns says.&nbsp;</p><p>“We look at homelessness, then crisis housing, then social, then affordable, then into the private market. But what we’ve had is this expectation that people should invest across the whole continuum, and they don’t.&nbsp;</p><p>“Now, we have to look at where the market is failing.</p><p>“We have the resources, we just need to deploy them in a different way of thinking with correct risk weighted outcomes, while involving community in the strategy.”</p><h2><strong>Build-to-rent’s role</strong></h2><p><br>Affordable build-to-rent is the next stage of the growing trend which has focused on more lucrative, high-end build-to-rent projects.&nbsp;</p><p>In the private residential sector, build-to-rent is still relatively small albeit accelerating trend, and could be one that investors understand as a major opportunity in the affordable space.</p><p>“One of the things driving Australian super fund’s interest in build-to-rent, and affordable build-to-rent, is their exposure to all other assets they own around Australia that need people on low and middle incomes to operate them,” Tamika Smith says.</p><p>“There is no point spending 10 years building a hospital if there is no-one to work there, not just doctors and nurses, but people to clean the corridors, disinfect the instruments.</p><p>“There is a level of sophistication in the investment mandate saying actually, with all these other assets, I need a defensive play that makes sure I have key workers in that geography to run that [operation].”&nbsp;</p><div id="7jCdIw0BVwU6g3RerDmlq5"><picture><img src="//images.ctfassets.net/8pr762qjocl3/7yLNy22P4MfiStDeIRqQkO/fd036328ebc403e06b0532ac50a01fc5/Andrew_Cairns_In-article__39_.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/7yLNy22P4MfiStDeIRqQkO/fd036328ebc403e06b0532ac50a01fc5/Andrew_Cairns_In-article__39_.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Andrew Cairns was a banker with Bendigo and Adelaide Bank for 20 years before moving into the social housing support and development sector. </span></div></div><p><br>But, <a data-mce-href="https://www.theurbandeveloper.com/articles/intergenerational-retirement-development-baptistcare-baby-boomers" href="https://www.theurbandeveloper.com/articles/intergenerational-retirement-development-baptistcare-baby-boomers" target="_blank" rel="noopener">much like aged care</a>, the build-to-rent model is not new for the social and affordable housing sector, according to Andrew Cairns.</p><p>“Haven Home Safe was established by trade union groups in central Victoria who wanted to provide housing for union members who were finding it tough, so we’ve been in the build-to-rent model for 40 years ... our whole model is build-to-rent.</p><p>“There’s a market for that concierge build-to-rent version, with a stockbroker in their apartment in South Yarra, but that is not our model.&nbsp;</p><p>“While people are moving from build-to-sell to a build-to-rent model, we’re actually looking at how we can get from build-to-rent and leverage the build-to-sell model, with different outcomes.&nbsp;</p><p>“These could be increased skillsets through to intergenerational investment, and there’s also a market for long-term intergenerational build-to-rent.</p><p>“But then how do you define the modelling required to do that?”&nbsp;</p><h2><strong>Making the sector attractive</strong></h2><p><br>The perception has historically been that affordable housing was not necessarily lucrative for investors or developers.&nbsp;</p><p>“[Investors/developers might not] get into affordable as defined by government, because they can’t get the returns in there,”&nbsp; Cairns said.&nbsp;</p><p>“But in affordable, you can get near market returns, not sub-market returns.”&nbsp;</p><div id="5gKY58UesWXxDDaEIWIO2"><picture><img src="//images.ctfassets.net/8pr762qjocl3/776rahuDdV5bNrzVsqoniH/7925f273dee099f4ef55a70ffefa4e07/Haven_Home_Safe_Epping_development_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/776rahuDdV5bNrzVsqoniH/7925f273dee099f4ef55a70ffefa4e07/Haven_Home_Safe_Epping_development_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ Haven partnered with the Victorian government, private property group Riverlee and construction company Hacer Group on its $60-million Epping project. </span></div></div><p><br>One of these growing niches is worker accommodation—<a data-mce-href="https://www.theurbandeveloper.com/articles/worker-accommodation-shortage-housing-supply-crisis-hermes" href="https://www.theurbandeveloper.com/articles/worker-accommodation-shortage-housing-supply-crisis-hermes" target="_blank" rel="noopener">already an area of interest for cutting-edge developers</a> and hard-pressed employers—according to KPMG economist Terry Rawnsley, who identified key workers as a major mover in the “non-private” home space, soaking up international workers as Australia’s borders reopened.&nbsp;</p><p>“We’re seeing worker accommodation make a comeback,” Rawnsley said.</p><p>Last year, for instance, the owners of the $120-million Hotel Continental project in Sorrento on Victoria’s Mornington Peninsula acquired a vacant aged care facility to ensure that future workers would have accommodation close to their place of employment.</p><p>“The biggest risk to them isn’t customers coming in the door, it’s ensuring they have workers such dishwashers, chefs, baristas, people who cannot afford to live there and provide them with cheap accommodation, shorter term maybe at a subsidised rate,” Rawnsley said.&nbsp;</p><div id="yxRDbB1HoJIe4riViRH9L"><picture><img src="//images.ctfassets.net/8pr762qjocl3/6DZ0rXUO1KiPeRysMS4Bpl/05950939be3526f0f14719d3d9d157ba/Epping_Haven_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/6DZ0rXUO1KiPeRysMS4Bpl/05950939be3526f0f14719d3d9d157ba/Epping_Haven_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ The New Epping precinct achieved an integrated mix of social, affordable, key worker and mid-market housing outcomes, Haven said. </span></div></div><p><br>In the general affordable housing landscape though, government subsidies and financial support for affordable housing is attractive to investors, but there is a suggestion that growth should be coming from the industry itself.&nbsp;</p><p>“Governments need to start to think about how to use their balance sheet differently, rather than just providing grants or loans, because that will be finite. The problem is too big to just write a cheque,” Cairns said.</p><p>“Housing providers need to stop asking for grants and be in a position where can use our balance sheets better, be agile and play across the whole housing continuum, and use our strengths to be able to support housing supply.&nbsp;</p><h2><strong>The future of affordable&nbsp;</strong></h2><p><br>“Markets only change as a result of the introduction of a new technology or government intervention, whether that is positive or negative; a levy or an incentive,” Cairns said.</p><p>“But the government is looking at making new market participants and how to mobilise existing participants.”&nbsp;</p><p>State governments are stepping in at the social end of housing—the Queensland government recently announced the transformation into social housing of a disused retirement home in Toowoomba it bought for $10.6 million.</p><p>But social housing is part of what Cairns called an “ethical contract” which the government has with society, while “affordable” is a much more elusive concept.</p><p>This then begs the question, what do we mean by affordable, and what does this mean to governments and investors?</p><p>“We do need to renegotiate the term ‘affordable’,” Cairns said.</p><p>“All of them [governments, investors and developers] will have a different definition of affordable and what it actually is, and what returns they can expect from it.”&nbsp;</p><div id="36RXjsiRvZHoDjzwpmreIW"><picture><img src="//images.ctfassets.net/8pr762qjocl3/4GJ71fTb5h9759gqsd2XMX/07271e8013e3c6ad6f2688c15d0ec714/My_Bella_Casa_mid.jpg" alt="null" data-mce-src="//images.ctfassets.net/8pr762qjocl3/4GJ71fTb5h9759gqsd2XMX/07271e8013e3c6ad6f2688c15d0ec714/My_Bella_Casa_mid.jpg"></picture><div><span style="opacity: 0.8;" data-mce-style="opacity: 0.8;">▲ My Bella Casa is one of the developers working with modular homes, built offsite with short lead times, to plug the housing gap. </span></div></div><p><br>However, things are changing at all levels, according to My Bella Casa’s Smith.&nbsp;</p><p>“The visibility around [affordability and housing stress] is more widespread now and by extension and there are actually votes in social and affordable housing to the extent it wasn’t previously.”&nbsp;</p><p>Cairns suggested that we talk about housing affordability, but the conversations will shift towards obtainability and accessibility.&nbsp;</p><p>“Our purpose as an organisation, we believe in better futures; that everyone should have a better future than today.&nbsp;</p><p>“Whether that is someone who doesn't know where they are sleeping tonight that now has somewhere to sleep, someone that wants long term access to a home, or that aspires to own, we should help people get a better future, our vision is very simple.&nbsp;</p><p>“So what are we doing to help people get a home?”<br><br></p><hr><p><strong><br>You are currently experiencing <em>The Urban Developer</em>&nbsp;Plus (TUD+), our premium membership for property professionals.&nbsp;</strong><a href="https://www.theurbandeveloper.com/membership-plans" data-mce-href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></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>

Our thinking about affordable housing—what it is and its returns—need to change to be more attractive to investors, say industry insiders...

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