Sydney and Melbourne universities are trying to hold onto their position in the top 10 international student cities as new visa changes are expected to bolster industry and inner city rental markets.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Hopes are high student visa changes will bolster flagging inner-city rents and top up workforces as Australian capitals figure among the most popular places in the world to study.</p><p></p><p></p><p>Prime Minister Scott Morrison announced a series of strategies this week to attract 150,000 students back to the country as quickly as possible, including waiving visa application fees and relaxing work limitations.</p><p></p><p>The incentives were made to boost critical work shortages across the country and would also support hard-hit inner city rental markets and student accommodation providers.</p><p></p><p>This came as Melbourne ranked sixth and Sydney eighth in the 2022 QS Best Student Cities index, the first time the 164 eligible cities had been rated since the pandemic.</p><p></p><p>Brisbane ranked 29th on the list while Adelaide and Perth were equal 35th, Canberra 37th and the Gold Coast 89th.</p><p></p><p><strong>Best student cities in 2022</strong></p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>2022 Rank</th><th>City</th><th>Country</th><th>2019 Rank</th></tr></thead><tbody><tr><th>1</th><th>London</th><th>United Kingdom</th><th>1</th></tr><tr><th>2</th><th>Munich</th><th>Germany</th><th>4</th></tr><tr><th>3</th><th>Seoul</th><th>South Korea</th><th>10</th></tr><tr><th>3</th><th>Tokyo</th><th>Japan</th><th>2</th></tr><tr><th>5 </th><th>Berlin</th><th>Germany</th><th>5</th></tr><tr><th>6</th><th>Melbourne</th><th>Australia</th><th>3</th></tr><tr><th>7</th><th>Zurich </th><th>Switzerland</th><th>8</th></tr><tr><th>8</th><th>Sydney</th><th>Australia</th><th>9</th></tr><tr><th>9</th><th>Boston</th><th>United States</th><th>12</th></tr><tr><th>9</th><th>Montreal</th><th>Canada</th><th>6</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^Source: QS Best Student Cities, QS Top Universities</sub></sup></p><p>Although the new ranking was positive news for national universities, <a href="https://www.theurbandeveloper.com/articles/signs-life-returning-to-inner-city-rental-sectors">the inner-city rental market has already suffered a big blow</a>—rents fell between 8 to 20 per cent in inner Melbourne.</p><p></p><p>Sydney’s inner city rent also dropped, around 3.1 per cent between March 2020 and October 2021, according to Corelogic.</p><p></p><p>Meanwhile, the Savills Australian Student Accommodation 2021 report showed that in early December operators had 50 per cent booking rates, a significant increase since border relaxation.</p><p></p><p>Savills Australia operational capital markets director Paul Savits said 2021 was an extremely challenging year but there was optimism immediately prior to the Omicron wave.</p><p></p><p>“As rental markets continue to tighten, and become more expensive overall than pre-Covid, alongside the historic undersupply of student accommodation, Savills expects the prompt recovery of purpose built student accommodation occupancy and rents,” Savits said.</p><p></p><p>“The residential rental markets in several capital cities have bounced back from a period of softness in 2020 with decreasing vacancy rates and increasing rental levels.</p><p></p><p>“Lower supply levels due to owner occupiers buying apartments and limited completions of new apartments has led to constraints in the market.</p><p></p><p>“This trend will continue into 2022 and will be exacerbated by increasing levels of demand from students and non-students for rental accommodation once the international border opens.”</p><p></p><p>The prime minister said students would have eight weeks from January 19 to enter Australia and take advantage of the visa application fee waiver.</p><p></p><p>“There are around 150,000 students who have visas who we are encouraging to come back to be there for the start of their university or college year, and that is a thank you to them for coming back and continuing to choose Australia,” Morrison said.</p><p></p><p>“But we also want them to come here and be able to be filling some of these critical workforce shortages, particularly those who are working and being trained in health care, aged care, those types of sectors.”</p></div></div></div></div></div>

Sydney and Melbourne universities are trying to hold onto their position in the  top 10 international student cities as new visa changes...

[+] Developers Eye Car Yards as Sector Shifts Gear

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>It comes as no surprise that two-thirds of Australians are buying their cars online due to convenience, perceived price benefits and ease of purchase.</p><p>Which leaves the question: what is the future of car yard real estate?</p><p>Australia is littered with car yards throughout its fringe CBDs and into the suburbs with popular streets such as Parramatta Road in Sydney “over-exhausted” with dealerships taking up valuable commercial property that have been almost vacant with foot traffic due to ongoing lockdowns during the past 18 months.</p><p>In Victoria, the situation has been even worse prompting numerous “off-market” inquiries into car yard sales with expression of interest campaigns launching with regular frequency.</p><p>“In the next 10 years most of the car yards in metropolitan Sydney and Melbourne will be redeveloped for commercial and residential use,” Charter Keck Cramer chairman Scott Keck says.</p><p>“This will be more appropriate development in alignment with the growing population of the states. Councils will come under pressure to rezone the land. Some car yards will move out of the city and inner city suburbs into regional Australia, where there will be more space.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cell-sm-3 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/27a03fd7-7d94-4dbb-bba9-e38cb6bbb884.jpg" width="1280"/></picture><div></div></div></div></div><div class="cell cell-sm-9 cx12"><div class="ci cl"><p><br><a href="https://www.theurbandeveloper.com/articles/carparks-asset-class-development-future"><strong>Future of Carpark Real Estate in Limbo</strong></a><br>What is the future of carparks in major cities globally? <em>The Urban Developer </em>investigates... </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“Car yards are quietly being displaced. I believe there are going to be more selling of vehicles through the internet, boutique presentation of vehicles such as shopping centres, as Tesla have done, and overall, I think there will be different marketing strategies to attract existing and new buyers of cars.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>New car sales slump</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>What is not aiding car yards is the drop in new car sales. There were 916,968 new vehicles sold in Australia 2020—a fall of nearly 14 per cent from 2019, making 2020 the softest year for new car sales since 2003. </p><p>Statistics from the Federal Chamber of Automotive Industries reveal that from 2017 new car sales in Australia have been declining. In April 2021, new car sales had plummeted 48.5 per cent year-on-year, the biggest decline in 30 years and the 25th consecutive month of plunging new car sales.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/ef7a476f-4d64-43e4-9846-b2611fc8223f.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ New car sales have slumped on the back of pandemic lockdowns and as consumers explore new ways to buy a vehicle.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>At the same time, used car sales rose significantly with record prices for second-hand cars. Consumers don’t feel the need to go to a car yard to buy a used car. </p><p>A poll conducted in unison by Bingle and Newspoll found that 64 per cent of Australians found buying a car online was a lot easier than dealing with a salesperson. Almost, 80 per cent of consumers believed they had saved money by purchasing online.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>An outdated model</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>“The retailing of cars by traditional means of large showrooms and open air car yards is outdated, and on the verge of major disruption,” Savills CBD and metropolitan sales state director Clinton Baxter says.</p><p>“The notion of occupying a huge area of land in prime highway positions, millions of unused stock on site sitting for weeks or months in the elements, for just a few sales per week, is fast becoming an absurd business model.</p><p>“With pressure on land use in our major cities leading to rising land values, and hence rising occupancy costs such as land tax, car yard operators are now looking to other methods of selling cars and are vacating or selling sites and freeing them for redevelopment for alternate and better uses.”</p><p>New car companies such as Tesla have also taken a different approach to selling their vehicles, ignoring its competitors by not leasing or paying for vast sums of land but by marketing their vehicles cleverly online or in established areas of heavy foot traffic.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/26995770-f402-4483-b7f6-6007dc9263b8.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The steady rise of Tesla in Australia has shown consumers are not wedded to buying new cars from a dealer.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“Telsa has demonstrated that it can sell thousands of cars in the Australian market without a single traditional dealership,” Baxter says. </p><p>“Tesla uses regular-sized shops in major suburban shopping centres to introduce its product to the market. The rest of the purchase is done 100 per cent online, with delivery and service in non-prime industrial locations—not main highways.</p><p>“Even Eagers Automotive set up Carzoos in Brisbane, which was a little village, where customers could return a car within seven days if they didn’t like it—no questions asked.”</p><p>All cars in the Carzoos village came with a discounted no-haggle price, a 175,000 km warranty and 12-months free comprehensive motor vehicle insurance.</p><p>However, Eagers Automotive has now abandoned that concept and replaced it with Easyauto123—aiming to have 11 used car outlets by the end of the year.</p><p>Most car yard owners don’t want to admit publicly that their business model is in trouble. Many are quietly working behind the scenes to foster deals to sell land and hold less stock. After all, if the pandemic has emphasised to the general public one simple fact, it is that almost anything can be bought online and either delivered to your door or picked up.</p><p>The days of open-air car yards along our main roads are fast-becoming a thing of the past.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/a1e76fbb-9a69-4809-bffd-fe66f5e4d3d1.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ The days of the mega car yard seem numbered as consumers&#x27; habits change and the opportunity these prime sites present for redevelopment become too good to ignore.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“We are sticking true to our ‘hub and spoke’ dealership model, but that is not to say there is no change in the sector, with some manufacturers re-evaluating their distribution strategies,” Peter Warren Automotive Holdings chief executive Mark Weaver says.</p><p>“We firmly believe that this evolving strategy will rely on consumer experience centres, delivery centres and service hubs and hence lend themselves to multi-branded, highly cost effective locations such as our existing auto-mall concepts, which allow for the growth and contraction of individual brands from a single location or in close proximity.</p><p>“The pandemic has obviously touched every corner of the world and car manufacturing and supply chain distribution is certainly among them. This has driven some, in our opinion, fundamental changes to the way the automotive supply chain will manage inventory going forwards which will in turn lead to more customisation of cars.</p><p>“We’re in an online world now and consumers can customise their cars more than ever before.”</p><p>Not only that, but consumers can buy from wherever they want, changing the dynamic back in their favour.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Car yard sales in 2021:</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Sunbury Ford</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/f6dbbbcb-999f-4442-aaa2-ea9fa67e4a45.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Address: </strong>101-107 Horne Street, Sunbury<br><strong>Land:</strong> 4700sq m<br><strong>Lease:</strong> New 15-year lease at $500,000 per annum rental<br><strong>Price:</strong> $9.6 million<br><strong>Sale: </strong>Sold to Sydney-based investor</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Former Honda showroom and car display yard</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/36e02e68-8985-4ff2-9699-afa654404c0e.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Address:</strong> 1022-1028 Burwood Highway, Ferntree Gully<br><strong>Land:</strong> 3930sq m <br><strong>Lease:</strong> Vacant<br><strong>Price:</strong> $2.88 million ($734 per square metre)<br><strong>Zoning:</strong> Commercial 2 zoning<br><strong>Sale:</strong> Sold to a developer</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Former Honda showroom</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/c3858cd6-ece3-4c8a-8f81-073496dabdf2.jpg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Address:</strong> 85 Maroondah Highway, Ringwood<br><strong>Land:</strong> 2616sq m<br><strong>Lease:</strong> Vacant<br><strong>Zoning:</strong> Commercial 1 zone<br><strong>Price:</strong> $6.6 million ($2500 per square metre)<br><strong>Sale: </strong>Sold to a developer  </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Burwood Nissan</strong></h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/62ef18c4-ebc3-46c3-999a-7d70958bd7b3.jpeg" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br><strong>Address: </strong>101 Burwood Highway, Burwood<br><strong>Land: </strong>3928sq m<br><strong>Lease: </strong>Leased at $552,000 p.a. to Autopact Group on a 3-year lease <br><strong>Zoning:</strong> Mixed-use <br><strong>Price:</strong> $10.9 million<br><strong>Sale: </strong>Bought by an investor</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><strong>Click here to learn more.</strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

Card yards in metropolitan areas are already being sold off for redevelopment, with commercial and residential projects springing up...

Lots up to 3ha are now being offered in a development on the southern edge of Brisbane with two major transport routes on its doorstep by Savills Australia.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Savills is currently offering individual lots from 2543sq m up to 3ha in an economic precinct in southeast Queensland.</p><p>Park Ridge Economic Precinct is at 3800 Mt Lindesay Highway, 10km south-west of Logan City centre and 26km south of the Brisbane CBD.  </p><p>The project benefits from being on two main transport thoroughfares—Mount Lindesay Highway and Park Ridge Road.</p><p>The precinct offers lots up to 3ha within walking distance to public transport and a range of established local facilities and amenities.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/276018fb-6198-44e9-b251-983e38a9355b.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Lots up to 3ha are now being offered in the development on the southern edge of Brisbane with two major transport routes on its doorstep by Savills.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Park Ridge, is a developing residential suburb on the doorstep of Brisbane and commercial uses with proposed preliminary approval for business activities for the precinct include childcare, food and drink, health care, offices and warehouses.</p><p>The project has been identified as a future suburban area of Park Ridge, which indicates the council’s intention for this area to become a significant residential area and employment hub. </p><p>The strategic framework notes that this area is to house more than 30,000 people and will supply an additional 13,000 jobs.</p><p>The closing date for offers is Wednesday September 8, 2021 at 4pm.</p><p>Contact exclusive marketing agents Will Carman (0477 666 355, wcarman@savills.com.au) or Robert Dunne (0418 888 840 rdunne@savills.com.au) for more information.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><em><strong>The Urban Developer</strong></em><strong> is proud to partner </strong><a href="Savills.com.au"><strong>Savills</strong></a><strong> to deliver this article to you. In doing so, we can continue to publish our daily news, information, insights and opinion to you, our valued readers.</strong></p><p><strong></strong></p></div></div></div></div></div>

Lots up to 3ha are now being offered in a development on the southern edge of Brisbane with two major transport routes on its doorstep…

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Melbourne’s CBD office market is in free-fall, recording its largest drop in demand for space on record, according to the Property Council of Australia.</p><p>Melbourne’s CBD office vacancy rate has increased to 10.4 per cent, which Property Council chief executive Ken Morrison said was concerning especially with new supply in the pipeline.</p><p>“Demand for space in the Melbourne CBD dropped by more than twice as much as its previous largest six-monthly fall on record,” Morrison said.</p><p>“As a result, vacancy in Melbourne CBD increased to 10.4 per cent, which also has some 220,000sq m of new supply coming online over the next six months.”</p><p>According to the Property Council’s Office Market report the net absorption of CBD office space in Melbourne was -96,635 square metres.</p><p>CBRE’s head of office leasing in Victoria Ashley Buller said the number of enquiries compared to the same time last year was up 40 per cent, with about three-quarters from tenants seeking less than 1000 square metres.</p><p>“More than 140,000sqm of 1000sq m [or more] leases have been completed in the CBD since the start of the year,” Buller said.</p><p>“This is a significant improvement on last year, and demonstrates larger tenants are back in the market and finalising lease commitments.”</p><p>Buller said Medibank and Australia Post had signed big leasing commitments in the Melbourne CBD but it was government and government-associated tenants who had been the most active in the market. </p><p>Buller said face rents had “held up relatively well” and incentives were expected to level out.</p><p>Savills state director for Victoria’s office leasing Mark Rasmussen said there continued to be steady enquiry in the Melbourne market despite a 25 per cent occupancy cap and multiple lockdowns. </p><p>“A significant proportion of the market are catering for work from home models however others including IT and some professional services are expanding their office requirements,” Rasmussen said.</p><p> “Demand is strong for fitted tenancies and well-presented accommodation … tenants are taking advantage of the current conditions and upgrading to higher office grades to attract the best and brightest staff. </p><p> “We expect inquiry levels to improve to cater for pent up demand after lockdown.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>Net CBD absorption to July 2021</strong></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4e8b7c5c-fccb-4bfb-b60a-c7e89c594807.png" width="800"/></picture><div></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup><sub>^ Melbourne recorded a negative net absorption of -96,635 square metres. Source: Property Council of Australia.</sub></sup></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Elsewhere the market outlook was not as bleak, with most Australian capital city office markets continuing to show resilience  with a small increase from 11.1 to 11.2 per cent, despite the impacts of Covid-19 and lockdowns.</p><p>Morrison said Australia’s aggregate vacancy rate for all office markets had increased only slightly from 11.6 per cent to 11.9 per cent over the six month period to July 2021.</p><p>Net absorption over the six month period was 11,742 sq m, which was low compared to the historical average of 147,051 square metres.</p><p>“Australia’s office markets have shown remarkable resilience over the past six months, with overall aggregate vacancy levels only increasing slightly,” Morrison said.</p><p>“Excluding Melbourne, demand for CBD office space grew by 85,000sq m over the six months, a result that few would have predicted given the impacts of the pandemic.</p><p>“While Sydney was the only other CBD market to experience an increase in vacancy, this was the result of a significant amount of new office space coming online – demand actually grew by 27,000 square metres.</p><p>“Vacancy in other capital cities all declined: Brisbane to 13.5 per cent, Perth to 16.8 per cent, Adelaide to 15.7 per cent and Canberra to 7.7 per cent.”</p><p>Morrison called on governments to do more to encourage the recovery of Australia’s city centres to underpin the economy.</p><p>Savills national head of office leasing Graham Postma said the negative effects of lockdowns were decreasing as it became the “new normal”.</p><p>Postma said there had been increased activity in the “spec fit-out” market, particularly in small- to medium businesses. </p><p>“Occupiers are moving towards making strategic longer term decisions, which will continue to see the office as the dominant and critical workplace,” Postma said.</p><p>“We anticipate post lockdowns business sentiment will continue to improve and many employees suffering from work from home fatigue will actively look for and embrace the opportunity to return to the CBDs around the country.”</p></div></div></div></div></div>

Melbourne’s CBD office market is in free-fall recording its largest drop in demand for space on record...

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A large mixed-use development site in one of Brisbane’s hottest sectors that has been in the same family for six decades is being offered for sale via an expressions of interest campaign.</p><p>The site, which is being offered with vacant possession, is located at <a href="https://search.savills.com/au/en/property-detail/aus4rt039302s">56 Breakfast Creek Road, Newstead</a>.</p><p>About 2kms north-east of the Brisbane CBD, the site has been the home of Alex Gow Funerals since the 1960s.</p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/cc3b4ede-b4ec-4627-95b8-7fae5dec36be.jpg" width="920"/></picture><div><span style="align-content:center;opacity:0.8">▲ The Newstead site has been in the same family business since the 1960s.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>It is within walking distance of public transport and close to the popular Gasworks precinct.</p><p>That precinct is a commercial, residential and retail development at Newstead that includes restaurants, cafes, shops, a supermarket and a public plaza inside the old gas holder of the heritage-listed Newstead Gasworks.</p><p>The property sale is being handled by Savills, whose national director Peter Tyson said the site located on the gateway of the main route between the CBD and the city’s airport.</p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><iframe sandbox="allow-forms allow-scripts allow-pointer-lock allow-same-origin allow-top-navigation allow-presentation" class="embed-responsive-item" allowfullscreen="" frameBorder="0" style="max-width:574px;width:-webkit-fill-available" height="300px" src="https://www.youtube.com/embed/cpB3PdAAliE"></iframe></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>“The site is in Brisbane’s most desirable development location, the Newstead—Teneriffe—Fortitude Valley locale, which provides a high level of existing amenity,” he said.</p><p>“The site’s large size, 5272sq m, means it has potential for development of significant size.</p><p>“Sites of this scale with wide-ranging mixed-use potential in such prime locations are increasingly rare and this site will be seen as a trophy opportunity by residential and commercial developers alike.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/aef30586-93ef-4646-80d7-a67a32839ee7.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The site, which is being offered with vacant possession, is located at 56 Breakfast Creek Road, Newstead.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Zoned flexible mixed-use, permissible uses include residential apartments, build-to-rent, aged care, retirement living, education, health care services, indoor sport and recreation, child care, offices, shops, shopping centre, showrooms and theatre.</p><p>It is an elevated site with two street frontages: Breakfast Creek Road (about 69m of frontage) and Dunlop Street (about 44m).</p><p>Savills’ Peter Tyson, Will Carman and Robert Dunne are marketing the site.</p><p>The <a href="https://search.savills.com/au/en/property-detail/aus4rt039302s">expressions of interest campaign</a> closes at 3pm on July 15, 2021.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><em><strong>The Urban Developer</strong></em><strong> is proud to partner with </strong><a href="https://www.savills.com.au/offices/brisbane.aspx"><strong>Savills</strong></a><strong> to deliver this article to you. In doing so, we can continue to publish our free daily news, information, insights and opinion to you, our valued readers.</strong></p></div></div></div></div></div>

Held by the same family for 60 years, Savills is marketing a site in one of the Queensland capital’s most popular development locations…

▲ Workhouse by Harry Seidler has hit the block. Image: Terrence Yong Architecture

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Iconic Australian architect Harry Seidler’s first commercial project in Sydney, “Workhouse”, is on the market. </p><p>The 8-storey boutique workplace at 398-402 Sussex Street in the heart of Haymarket received a sensitive $2 million makeover in 2019 and expresses the much-loved modernist Bauhaus movement in a new age.</p><p>The building sits on top of a 177sq m site, and offers 1097sq m of net lettable area, 88 per cent of which is tenanted. </p><p>Savills Australia agents Andy Hu and Jordan Lee are marketing the property, which when fully leased provides a net income of $849,000 per annum. Hu said the location was “second to none”.</p><p>“Just 230m to Darling Square and 500m to Darling Harbour, the property benefits from the bustling activities in the retail precinct with a number of local landmarks including Paddy’s Market, University of Technology, Darling Quarter Precinct, Central Park and World Square. It is just over 1km to Sydney Tower,” Hu said.</p><p>“Furthermore, Sydney’s Haymarket precinct is undergoing an extensive regeneration that will underpin its appeal as one of the most vibrant districts in Australia and will only be enhanced further with the completion of various developments.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/04d69a37-ca23-4aac-98fa-e424fd584cd5.png" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ A recent $2 million renovation reinstated the modernist charm of the Seidler era. Image: Terence Yong Architecture</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Seidler is lauded as one of the most-awarded Australian architects and leading exponents of Modernism in the country. He focused on three main aspects of Modernist design including social use, efficient building construction methods, and visual aesthetics.</p><p>Lee said the rejuvenation of the building brought it back in line with its Modernist beginnings to create a boutique workplace.</p><p>“Today Workhouse leverages the mid-century aesthetic of the building and the growing trend towards a domesticated workplace by reimagining the building into a mid-century home-away-from-home,” Lee said.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/15a0b3c0-1aab-444a-bf85-fa464051a0c4.png" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ A disused rooftop was converted into breakout space and end of trip facilities. Image: Terence Yong Architecture</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Hu said it was one of the first Haymarket freehold offerings in 2021 and said he expected the iconic Seidler building to attract domestic and international attention.</p><p>398-402 Sussex Street, Haymarket is being offered for sale via Expressions of Interest closing Thursday, 8 April 2021 at 2pm (AEST).</p></div></div></div></div></div>

Seidler Haymarket Treasure Hits the Block

Brisbane’s office market remains relatively unscathed by Covid-19 as office vacancy grew slightly from 12.7 to 12.9 per cent in the six months to July.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Brisbane’s office market remains relatively unscathed by Covid-19 with office vacancy growing slightly from 12.7 to 12.9 per cent in the six months to July.</p><p>Office vacancy in south east Queensland performed better than Sydney and Melbourne which <a href="https://theurbandeveloper.com/articles/property-council-office-market-report-july-2020">increased </a>1.7 and 2.6 per cent according to the Property Council of Australia’s Office Market Report.</p><p>The Gold Coast also performed relatively well in Queensland with vacancies moving from 12.8 to 13 per cent. Brisbane fringe suburbs jumped from 13.6 in January to 14.2 per cent in July.</p><p>However the extent of Covid-19’s impact on the future of office space in the region is unclear, according to office leasing experts. </p><p>Knight Frank partner Mark McCann said the Brisbane office market is experiencing, like all markets, a general downturn in transactional activity as many corporates come to terms with the current crisis and navigate their business going forward.</p><p>“With the exception of [Dexus&#x27;] The Annex at 12 Creek Street, there has been no new supply additions in the CBD and as such we do not anticipate significant fluctuations in the overall vacancy rate for the CBD,” McCann said.</p><p>“The extent of sublease space has not yet been realised in Brisbane but we do anticipate pockets of sublease to emerge over the coming months as corporates begin to finalise their new workplace designs post-Covid-19. </p><p>“The current average re-occupancy of most CBD building is between 50 to 60 per cent.”</p><p>Savills state office leasing director David Howson said that with the uncertainty in the market, tenants are continuing to review their office space requirements, with many no clearer as to the longer-term effects on their occupation.</p><p>“Those facing imminent expiries are looking for opportunities to extend or hold over their current leases, or re-set in better quality accommodation at terms similar to current passing rates,” Howson said.</p><p>“Current market murmurings foreshadow an influx of fitted space—both sublease and backfill—within the prime and secondary markets, with prime seen as potentially witnessing the greatest change in vacancy.”</p><p>McCann added that the focus of most owners during the first half of 2020 has been the implementation of capital works programmes on building and lobby upgrades, along with new wellness and hygiene initiatives to future-proof their assets going forward.</p><p>“While transaction volumes are low, we have not seen downward shifts in asking rents across the prime grade; incentives continue to be the trigger to increase marginally for any active tenants in the current market wanting to transact now. </p><p>“The B-grade market continues to be the most volatile, with higher tenant demand levels, but for space of less than 500 square metres.”</p><p>Earlier this month, Charter Hall <a href="https://theurbandeveloper.com/articles/charter-hall-60-queen-street-brisbane">lodged plans</a> for a 35-storey office tower in the CBD while Cornerstone Properties submitted <a href="https://theurbandeveloper.com/articles/cornerstone-251-wickham-street-fortitude-valley">plans</a> for a commercial tower in Brisbane&#x27;s Fortitude Valley fringe.</p><p>Sekisui House recently <a href="https://theurbandeveloper.com/articles/sekisui-house-lodges-plans-for-west-end-office">lodged</a> plans for a commercial building in West End.</p><p>Meanwhile investors and developers are looking for opportunities to <a href="https://theurbandeveloper.com/articles/offshore-investors-circle-commercial-assets">obtain </a>new assets while the market is down or <a href="https://theurbandeveloper.com/articles/global-companies-to-downsize-office-footprint-covid-19">revamp </a>older stock to meet new tenant demands. </p></div></div></div></div></div>

Brisbane’s office market remains relatively unscathed by Covid-19 as office vacancy grew slightly from 12.7 to 12.9 per cent in the six months to July

Bushfires and coronavirus COVID-19 set to hit Australian Hotel Market according to Savills report.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The full force of the bushfires and coronavirus are yet to hit the hotel market with strong results recorded for 2019, according to Savills.</p><p>Bushfires could lead to a 40 per cent drop in bookings taking a marked toll on the on the $61 billion tourist industry.</p><p>The effect of the COVID-19 was also yet to be seen with Chinese tourists making up 15.4 per cent share of total visitors to Australia at 1.33 million guests in 2019.</p><p>This was followed by New Zealand 14.7 per cent, USA 8.9 per cent, UK 7.7 per cent, Japan 8.8 per cent and Singapore 4.8 per cent.</p><p>Related: <a href="https://theurbandeveloper.com/articles/fourth-crown-hotel-planned-for-one-queensbridge-melbourne">Crown Eyes Fourth Hotel at One Queensbridge</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><h2><strong>Australian Hotel Market Results 2019</strong> </h2></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>STATE</th><th>Occupancy (capital city)</th><th>Average Daily Rate (capital city)</th><th>Total Visitor Growth YOY</th><th>Share of International Market</th><th>Share of Domestic Market</th></tr></thead><tbody><tr><th>QLD</th><th>72.0%</th><th>$157.18</th><th>12.2%</th><th>31.9%</th><th>22.2%</th></tr><tr><th>NSW</th><th>82.5%</th><th>$220.50</th><th>11.1%</th><th>50.7%</th><th>33.1%</th></tr><tr><th>VIC</th><th>80.3%</th><th>$186.11</th><th>12%</th><th>36.1%</th><th>25.4%</th></tr><tr><th>TAS</th><th>83.1%</th><th>$184.10</th><th>8.1%</th><th>3.4%</th><th>2.7%</th></tr><tr><th>NT</th><th>55.9%</th><th>$146.20</th><th>6.7%</th><th>3.6%</th><th>1.4%</th></tr><tr><th>WA</th><th>73.2%</th><th>$164.40</th><th>10.8%</th><th>4.5%</th><th>11.4%</th></tr><tr><th>SA</th><th>80.4%</th><th>$155.55</th><th>18.2%</th><th>2.2%</th><th>19.3%</th></tr><tr><th>Total</th><th>73.9%</th><th>$185.58</th><th>11.6%</th><th></th><th></th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sup> (note: market share exceeds 100pc due to visitors going to multiple states)<br>Source: Savills Hotels Market Update - TRA, STR</sup></p><p>Savills hotels managing director Michael Simpson said the number nights spent by international and particularly domestic visitors continued to grow last year.</p><p>“Of the 10 Australian key markets reviewed, five markets achieved occupancy in excess of 77 per cent, reflecting the continuing growth in international and domestic visitors,” Simpson said. </p><p>“Growth in demand for rooms was achieved in seven markets; however, three of those markets were impacted by increased new room supply, resulting in an overall decline in RevPAR for those markets, as compared to the previous corresponding period.”</p><p>According to the results “beyond the constant barrage of news, property investors are sanguine and their capital appetite remains high for investment grade hotel stock”.</p><p>In 2019 a number of hotels were sold including Vibe North Sydney, Ovolo Nishi Canberra, Best Western Lake Kawana and Paradise Resort Gold Coast.</p><p>Since peak transaction levels in 2015 at $3.5 billion for 73 transactions, volume and value had decreased significantly. </p><p>In 2019 total hotel transaction value approximated $2.1 billion arising from 48 transactions “due to a number of properties being sold to and held by long term, inter-generational Asian investors who typically do not trade their assets”. </p><p>According to the market update this was causing yield compression, with high net worth investors actively seeking Australian assets due to the strength in the market and favourable net yields compared to other classes.</p></div></div></div></div></div>

The full force of bushfires and COVID-19 are yet to hit the hotel market with strong results recorded for 2019 from Savills.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="ci cl"><p>An office building in Sydney’s Haymarket will test demand for inner-city assets as it comes to market this month with price guidance around the $75 million mark. </p><p>The 191 Thomas Street asset, is an eight-storey office building located in Sydney CBD’s southern precinct—the city&#x27;s growing innovation and technology precinct.  </p><p>Vendor the Community and Public Sector Union says it will divest its long-held asset due to Sydney’s robust office market conditions with plans to “diversify its asset base”.</p><p>The building incorporates ground floor retail and basement parking for 16 cars with a net lettable area of 4,797 square metres. </p><p>Sydney CBD is currently in the midst of <a href="https://theurbandeveloper.com/articles/office-megadeals-see-record-year">low vacancy rates and rental growth</a>. </p><p>Related: <a href="https://theurbandeveloper.com/articles/infamous-scruffy-murphys-site-for-sale">Sydney Development Site Hits the Market for $130m</a></p><p>Savills Australia and Colliers International are managing the expressions of interest campaign, describing demand for commercial assets in the CBD from both offshore and local capital as “unprecedented”. </p><p>The building is for sale exclusively through Colliers International’s Vince Kernahan, Steam Leung, Joseph Lin and Tom O’Neill of and Savills Australia’s Jordan Lee, Andy Hu and Tim Grosmann.</p><p>Kernahan said <a href="https://theurbandeveloper.com/articles/sydney-central-station-tech-hub-includes-atlassian-anchored-skyscraper">Atlassian’s announcement</a> to occupy a 50,000sq m building on Lee Street in Broadway was a boost for the precinct. </p><p>“We are seeing unprecedented demand from both offshore and local capital for commercial assets in the Southern CBD” he said.</p><p>The building is 100 per cent occupied, on a current net passing income of circa $2.7 million. </p><p>The expressions of interest campaign closes in March. </p></div></div></div>

An office building in Sydney’s Haymarket will test demand for inner city assets as it comes to market this month priced around the $75 million mark.  

Sydney CBD Office Vacancy

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Despite a wave of new supply on the horizon, Sydney’s CBD office vacancy rate has demonstrated continued strength, according to the Property Council of Australia.</p><p>In its latest Office Market Report — which looks at the six months to July — the Sydney office market recorded vacancy rates not seen since the late 1980s, helping to take the national rate to its lowest level in the past eight years.</p><p>The overall Australian office vacancy rate decreased by 0.2 per cent over the period to 8.3 per cent.</p><p>In the Sydney CBD, the combination of a net withdrawal of ­office space and little new development has put a lid on the take-up of office space. Sydney’s CBD vacancy rate sits at 3.7 per cent, down from 4.1 per cent in January.</p><p>The contraction has been due to withdrawal of stock from the market. Most of that vacancy was a result of listing withdrawals rather than absorption, with 32,039sq m of space withdrawn in the past six months.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/ce1d645f-7ce1-40a7-84fe-bbc46be2af4a.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Earlier this year, UBS forecast that Sydney net effective rents would rise by 12 per cent after jumping 15 per cent last year.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Sydney over the next year will see another 63,000sq m coming online by the end of 2019, and over 131,000sq m entering the market in 2020 with the completion of seven new buildings.</p><p>A projected 200,000sq m is due to come online post 2020.</p><p>While, analysts have predict a combination of pent-up demand and high pre-commitment levels could absorb both the new space and back-fill created this year and in 2020, net tenant demand has seen  minimal pick-up.</p><p>Net tenant demand for CBD office space grew at its lowest rate in over four year with a lift of just 0.1 per cent over the six months, the lowest growth in over four years.</p><p>The growth in demand was 0.4 per cent for non-CBD markets. Those growth rates compare with 0.7 per cent and 0.2 per cent in the previous period.</p><p>“With the lowest vacancy rate since 2008, space is again tight in the CBD although demand is subdued,” Property Council of Australia NSW executive director Jane Fitzgerald said.</p><p>“The office market in the CBD needs a release valve – low vacancy and rising rents will increasingly impact our competitiveness as a global city with Melbourne benefitting, as they add more supply over the next four years.”</p><p>The data has underscored a mixed picture with demand from the co-working office sector, offsetting some of the decline in other white collar job sectors.</p><p>Savills Australia state director Tom Mott said that in the 2,000sq m plus market, the strongest and continual source of demand in the Sydney CBD was from co-working and flexible space operators, despite only making up 2.5 per cent of the market.</p><p>“This clearly indicates demand in general at the larger end of town isn’t as strong as it seems,” Mott said.</p><p>CBRE associate director Ben Martin-Henry noted that the Sydney leasing market appeared to be in a state of flux as tenants delayed relocation strategies ahead of new supply entering the market.</p><p>“This has resulted in more lease renewals as opposed to new lease deals and has meant that rental gains have been more muted than in previous years.”</p><p>“A divergence in vacancy between prime and secondary stock would be one trend worth watching on a national basis.” </p><p>Melbourne’s CBD vacancy rate was 3.3 per cent, up slightly from 3.2 per cent in January.</p><p>New supply and withdrawals accounted for the biggest changes in Melbourne’s vacancy rate, with positive net tenant demand accounting for just 0.2 per cent.</p><p>Brisbane’s CBD <a href="https://theurbandeveloper.com/articles/brisbane-reaches-lowest-vacancy-in-five-years">vacancy rate fell</a> for the third consecutive period to 11.9 per cent compared with 12.9 per cent in January. The Perth vacancy rate tightened slightly to 18.4 per cent in July.</p></div></div></div></div></div>

Sydney's CBD office vacancy rate has demonstrated “continued growth and strength,” according to the Property Council of Australia.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A heritage building in Sydney&#x27;s southern CBD precinct has been listed for sale with price expectations of around $25 million.</p><p>The building located on a 350sq m site at 76-78 Liverpool Street sits strategically in the Darling Harbour precinct between Cockle Bay Wharf and Anzac Square. </p><p>The six storey building, split in to two retail spaces and four office levels, comprises 1,501sq m of lettable area and has undergone a full scale renovation since last trading for $6.3 million in 2010.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/0cfa64c2-5b99-4ae4-b3ae-e1872bff43df.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The six-storey building was completed in 1906 and used as warehousing facility for businesses associated with nearby Darling Harbour Goods Yard and Wharves.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The ground floor tenancy was designed and refurbished for three-decade-old restaurant BBQ King before they took the space in 2016. The legendary restaurant, a dining institution for all foodies and locals in the Southern CBD precinct, opened in Chinatown in 1983.</p><p>Savills Australia agents Jordan Lee and Andy Hu are marketing the property. Lee said the southern precinct is a lively sector of the Sydney CBD with its mix or retail, office, residential, entertainment, educational and hotel uses.</p><p>“76-78 Liverpool Street is strategically positioned to benefit from the master planned Barangaroo and Darling Harbour Live projects,” Lee said.</p><p>The location is convenient to the Darling Harbour precinct that includes the restaurants and bars at Cockle Bay Wharf, Chinatown, Darling Quarters, ICC Sydney and Barangaroo. </p><p>Public transport is readily accessible at Town Hall and Museum Stations as well as bus stops on George Street and the <a href="https://theurbandeveloper.com/articles/sydney-light-rail-project-undergoes-first-daylight-tests">Sydney Light Rail</a>.</p><p>“We expect interest from a range of buyers, both locally and offshore, looking for a safe haven investment, and a successful and popular tenancy such as BBQ King is just the icing on the cake for a property such as this,” Hu said.</p><p>Nearby, infamous Irish watering hole Scruffy Murphy’s at 43-49 Goulburn Street in Haymarket has also recently been <a href="https://theurbandeveloper.com/articles/infamous-scruffy-murphys-site-for-sale">listed</a> along with neighbouring sites 698-704 George Street and 51-57 Goulburn Street.</p><p>The building holds a <a href="https://theurbandeveloper.com/articles/developer-calls-on-architects-to-redevelop-prominent-chinatown-corner-in-sydney-cbd">stage one approval</a> that will allow the site to yield a hotel and residential tower or an office tower development with an end value of more than $300 million.</p></div></div></div></div></div>

  A heritage building in Sydney's southern CBD precinct has been listed for sale with price expectations of around $25 million.

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<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>A tighter <a href="https://theurbandeveloper.com/articles/post-election-glee-yet-to-translate">construction funding market</a>, high interest loans and a weakening residential demand has hit Melbourne-based residential and commercial property developer Steller Group hard.</p><p>The high-profile development company is now in the process of being unwound with rumblings the company is actively selling all remaining pipeline assets.</p><p>Signs of an impending sell down were made apparent earlier this year when company registration documents revealed that one of the company&#x27;s founding directors resigned from Steller&#x27;s construction-arm.</p><p>It is now understood that conveyancing and building works on Steller&#x27;s project have been put on hold, and three of its commercial development sites have already been sold off to new buyers.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4ba5c225-bb43-487c-badc-b337db904844.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Nicholas Smedley (right), the son of well-known Australian business leader Peter Smedley (who chaired Arrium and Spotless), pictured with Julian Gerner (left) outside the Continental Hotel in Sorrento.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Founded in 2006 by Melbourne businessmen Nicholas Smedley and Simon Pitard, the business rapidly expanded, building a $4.2 billion <a href="https://theurbandeveloper.com/articles/steller-settles-232m-worth-of-dwellings-in-45-days">pipeline</a> of residential, mixed-use and commercial projects across Melbourne’s southeast.</p><p>The development company strengthened with a spate of high-profile acquisitions and by 2016 had over 44 developments under its belt.</p><p>The company made a habit of targeting Melboune&#x27;s suburban residential growth zones with low-rise apartment projects — and very successfully opting for projects ranging from on three to five levels offering between 20-40 apartments per project.</p><p>Late last year, Steller made a play for the aged care sector, purchasing the Como Private Hospital in Parkdale.</p><p>Signs were positive for Steller last year when the developer <a href="https://theurbandeveloper.com/articles/steller-settles-232m-worth-of-dwellings-in-45-days">settled $232 million</a> in residential dwellings across 10 projects in a month-and-a-half, delivering a zero-default rate.</p><p>The developer also struck a deal with Chinese conglomerate Great Aim Group a year earlier to develop at least three residential projects in Melbourne, with an end value of about $300 million.</p><p>Over recent months however, Steller has actively listed a number of development sites in an attempt to expedite efforts to wind up the business, after the two men dissolved their partnership.</p><p>The spotlight is now on the financing raised to support Steller, which is reported to have been formed through an unconventional capital structure. It is believed to include a number of banks, hedge funds and cheques written by Asian credit-oriented investment and property fund OCP Asia.</p><p>There is ongoing speculation that the company had funding problems. <em>The Urban Developer</em> attempted to reach Steller representatives regarding their financial structure but the developer did not respond.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/3646f82d-3447-443a-a381-1c4bfea90d71.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The company which had a healthy portfolio of 45 completed developments has made 76 employees redundant. Image: Joint Venture Partner Julian Gerner (left) and Steller’s Simon Pitard (right)</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Sites listed include the 19-building Hampton Green project in Hampton Street, eight-storey complex at Brighton Road in St Kilda and 11-storey complex at Chesterville Road in Cheltenham.</p><p>While the developer stated it was planning to deliver its remaining projects under construction there are a number of projects up in the air in Carnegie, Glen Huntly, Highett, McKinnon, Frankston, Bentleigh, Moorabbin and Hawthorn East.</p><p>Steller acquired a number of residential development sites in 2016 and 2017, coinciding with the peak of that property cycle, including 200 Wells Street in South Melbourne, for which it paid $23.4 million, and a block in Hampton, costing $16.5 million.</p><p>It also acquired the former Greyhound Hotel site on Brighton Road in St Kilda, as a permit-ready apartment project, for $7.5 million. Steller moved to sell the asset last August, but has since paused the sales campaign and decided to retain the asset.</p><p>It is understood that Steller has also appointed Savills to sell its 1,543sq m site at 200-204 Wells Street in South Melbourne, which has an approved permit for a 20-storey development.</p><p>Three of its development sites have already been sold off to new buyers, including 520 Tooronga Road in Hawthorn East.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/08409970-6d2f-467d-abc4-c9a2609c4edc.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Colliers International’s Guy Wells and Trent Hobart have now been appointed to help offload the Continental Hotel in Sorrento.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Work on Steller&#x27;s <a href="https://theurbandeveloper.com/articles/vision-for-150-million-continental-hotel-redevelopment-revealed">$80 million redevelopment</a> of Sorrento’s 144-year-old heritage-listed limestone Continental Hotel has also halted with the future of the Mornington Peninsula landmark project unclear. </p><p>The developer also pulled out of a $2 million acquisition of a site adjacent to the Continental, 12 Riley Lane.</p><p>Prior to the halt, the joint venture project it started last year with Julian Gerner was well under way, to create a 100-room luxury hotel, dining and events centre.</p><p>Stage one included a new bar and bistro, fine dining and function area slated to open late-2019. The second stage featuring a wellness centre, hotel rooms, new lobby, cafe, swimming pool and whisky bar was anticipated early-2020.</p><p>Hotelier Julian Gerner is now looking to move away from the project listing the landmark site through Colliers by International Expressions of Interest closing 26 July.</p></div></div></div></div></div>

High-profile development company Steller is now in the process of being unwound.

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