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‘No demand’: Urban designers reject push to convert empty offices into apartments

Melbourne’s glut of empty CBD offices and apartments could be used to revive the inner city’s ailing creative sector, which has left the area in droves over the past 20 years, according to a leading urban designer.

Hodyl and Co managing director Leanne Hodyl, who conducted a built form review of the CBD for the Victorian government, said there was more empty office and student apartment accommodation in the city than there was demand for either.

Ms Hodyl poured cold water on previous proposals to convert empty office space into residential accommodation, saying without international students there was little call for more apartments.

“There’s definitely not a high demand for apartment living in the city at the moment, we’ve lost international students, we’ve lost immigration, obviously. So there’s actually not a demand – you could convert them, but I don’t know who would be moving in.”

Office vacancy rates hit 13.2 per cent in March, according to Macquarie.

And more than a year after international borders shut and much of Melbourne’s thriving international student population was forced to abandon the city, apartment vacancies are also high.

Urban designers

Leanne Hodyl says empty offices could be transformed into creative hubs.CREDIT:DARRIAN TRAYNOR 

A one-bedroom flat in the CBD recently sold for $180,000, 30 per cent less than its owners paid for it 15 years earlier.

NSW chief economist Stephen Walters this week called for empty offices to be converted into residential apartments in Sydney – in a similar push to those undertaken in London and New York – to reinvigorate that city’s CBD.

But there is little industry appetite for retrofitting office buildings into apartments, which the Property Council estimates could cost 20 to 30 per cent more than ripping down office buildings and creating purpose-built apartments.

Urban designers

Property Council chief Danni Hunter says repurposing commercial offices into apartments is too costly.CREDIT:PAUL JEFFERS 

The council’s Victorian executive director, Danni Hunter, said the government and opposition had sought industry advice about the idea, but “I just don’t think there’s much appetite for it”.

“If you were to refit, things like ceiling heights and plumbing add a lot of cost – the expense comes from having to retrofit the entire building,” she said.

Simon Stockfeld – the Victorian regional development director for property and funds investment company Charter Hall – also had little appetite for the idea.

“We’re pretty bullish on offices and occupancy of offices in Melbourne and we don’t think there’s a great requirement to convert offices,” he said.

“We’re seeing a really strong trend to go back to the office.”

Ms Hodyl said modern offices had large “footprints” between lifts and windows, which would make conversion into residential use impractical given the need for windows and light in residential buildings.

Centralised toilets, kitchens and and kitchenettes would also require significant retrofitting to align them with new apartments, she said.

Rental apartments in Victoria are required to adhere to minimum standards governing a range of aspects including kitchens, structural soundness, windows and lighting, ventilation and heating.

“You can pretty easily convert hotels and student accommodation into longer-term apartments, but I’m not very excited by it as a solution because we don’t actually have really high vacancy rates for residential in the city,” Ms Hodyl said.

Two “really exciting” alternatives could be transforming student accommodation into affordable or crisis housing, and using spare office space to rejuvenate the city’s diverse cultural creatives, she said.

“Over the last 20 years a lot of our creative artists, studio spaces, jewellers and whatever have had to move out of the city because it got too expensive.

“And so actually I think the real opportunity here is … to bring some of that life back into the city, which is more diverse; so it’s not just the residents and retail and entertainment, it’s a real richer fabric to the city level, there’s different people back in, and it would be really super exciting.”

Urban designer Andy Fergus said relaxed rules in London that have allowed commercial sites to be transformed into residential spaces with few restrictions have led to poor outcomes for those living there. “These new residential conversions … basically become like an illegal boarding house-type arrangement in terms of the standards, so they fall between the cracks,” he said.

“If they were to be assessed against residential dwelling standards, there is no office building built in recent history that could be converted into an acceptable standard of apartment because the floor plans are too deep to achieve an acceptable standard for living. Research has shown that this experiment in deregulation has yielded neither affordability nor acceptable standards of living.”

He called for landlords sitting on empty office spaces to consider dropping rents to make them available for artists and people in the creative industries.

“I think we have the opportunity of a lifetime to recapture Melbourne’s suffering creative sector, which has been priced out of the central city in the past decade,” he said.

“We need to think strategically about how we’re going to use those spaces to enable a range of positive social and economic outcomes from them.”
Article Source: www.brisbanetimes.com.au
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Brisbane

Brisbane Housing Market Insights: May 2021

BrisbaneBrisbane Housing Market Insights

Brisbane housing market insights for May reveals increased demand for houses and approvals for new units has been underpinned by increasing consumer sentiment and a surge in interstate migration.

This resource, to be updated monthly, will collate and examine the economic levers pushing and pulling Brisbane’s housing market.

Combining market research, rolling indices and expert market opinion, this evolving hub will act as a pulse check for those wanting to take a closer look at the movements across the market.

Brisbane’s typically slow-moving property market has continued to rise as part of a once-in-a-decade boom that experts say could fuel a further 10 per cent rise in house prices in the coming year.

Brisbane house prices have soared to record heights for the seventh consecutive quarter, with tight stock levels and strong demand across all demographics increasing competition.

Investors have also made their way back into the market and competition is heating up.

The latest Corelogic home value index shows Brisbane dwelling prices have risen by 1.7 per cent on a rolling four-week basis.

Brisbane house prices advanced a further 1.8 per cent during April, pushing it up 6.2 per cent for the recent quarter and 9.6 per cent for the year to date.

The current median value for dwellings is $558,295 which is $10,000 higher than just a month ago.

 

Type Month Quarter Annual Median
All 1.7%▼ 5.6%▲ 8.3%▲ $558,295▲
Houses 1.8%▼ 6.2%▲ 9.6%▲ $621,806▲
Units 1.0%▶ 3.0%▲ 2.4%▲ $405,902▲

^Source: Corelogic Hedonic Home Value Index – April

The resurgence of buyer interest in the Brisbane property market has meant that auction clearance rates have consistently been in the 70 per cent range.

Clearance rates across April notably higher for houses compared to apartments, reflecting broader trends.

Hot spots included Brisbane’s inner city, inner east, inner west and the inner north – where house prices skyrocketed by 13 per cent over the past year to $1.2 million, 13.2 per cent to $1.053 million, 10.4 per cent to $1.17 million and 13.1 per cent to $1.1 million.

Brisbane auction clearance rates

Week Clearance rate Total Auctions
Week ending 11 April 2021 80.9% 123
Week ending 18 April 2021 72.7% 104
Week ending 25 April 2021 76.2% 105
Week ending 2 May 2021 76.0% 104

^Source: Corelogic Auction Clearance Rates – April

Brisbane is experiencing one of the tightest rental markets in a decade on the back of high demand coupled with extremely low supply.

Across April, Brisbane’s rental markets are experienced a tightening of supply, with vacancy rates currently sitting at 1.8 per cent.

Rental returns and yields have significantly increased in Brisbane, with rents soaring from 5 per cent to 15 per cent.

Gross rental yields sit at 4 per cent for houses and 5.2 per cent for units—much higher than other capital cities such as Sydney and Melbourne.

Some of the tightest vacancies across the capital’s suburbs include Anstead (0.5 per cent), Birkdale (0.3 per cent), Capalaba (0.2 per cent), Ferny Hill (0.3 per cent), Gumdale (0.4 per cent), Manly West (0.5 per cent), Rothwell (0.2 per cent), Sandgate (0.5 per cent), Shailer Park (0.4 per cent), Thornside (0.3 per cent) and Wakerley (0.4 per cent).

Brisbane residential rental vacancy rate

 

City April 2021 vacancy rate Monthly % change
Brisbane 1.4%▼ 0.1%▼

^Source: SQM Research – April

Rental stock on market

City April 2021 vacancies Vacancy net loss
Brisbane 4780▼ 627▼

^Source: SQM Research – April

Brisbane rent prices

Type Rent Monthly % change Annual % change
Houses $489.10▲ 0.5%▲ 6.8%▲
Units $386.60▲ 0.5%▼ 2.8%▲

^Source: SQM Research – April

Brisbane’s housing market has remained particularly unaltered by the closure of international borders, where historically high demand from overseas migrants has been disrupted.

Tight stock levels and strong demand across all demographics have made it incredibly difficult not only to find a property to buy but to also secure something at a reasonable price.

Loan data shows investors have started coming back into a housing market they had largely vacated and the boom is being driven overwhelmingly by established owner occupiers.

Another big part of the demographic buyer base helping drive demand in Brisbane has been first homebuyers.

Brisbane’s proportion of home loans that remained on deferral at the end of March was just 0.7 per cent, indicating a very very low likelihood of distressed selling.

The seasonally adjusted estimate for total dwelling units approved in Queensland in March was 4547, 12.1 per cent up on February’s figures.

Queensland building approvals

^Australian Bureau of Statistics, (Suspension of trend series between May 2020 and Jul 2020 due to Covid-19)

Dwelling Approved Monthly % change
Houses 2792▲ -4.0%▼
Units 4547▲ 12.1%▲

Queensland home loan lending indicators

 

Region First home buyer loan commitments First home buyer ratio – dwellings First home buyer ratio – housing
Queensland 3437▲ 36.6%▼ 32.3%▼

^Source: Australian Bureau of Statistics – March

Region September (quarter) 2020 arrivals September (quarter) 2020 departures September 2020 quarter net
Queensland 22,317▼ 15,080▼ 7,237▲

^Source: Australian Bureau of Statistics – September quarter 2020

Brisbane’s housing market: policy updates

Australia’s central bank will maintain low interest rates to support the country’s ongoing economic recovery and surging housing market, buoyed by its busiest Easter auction market on record.

Strong tailwinds will bolster the Australian economy through the second half of the year, but macro-prudential measures are likely to be introduced to ease house price pressures in 2022.

Queensland faces a “hard road” during the next four years as the state recovers from the coronavirus pandemic, Treasurer Cameron Dick says.

Brisbane housing market forecasts

ANZ economists forecast Brisbane house prices will rise by 9.5 per cent next year, as low interest rates and government stimulus flow through the economy while Commonwealth Bank updated its forecasts, projecting a strong rebound in prices across the second half of 2021.

CBA now expects Brisbane house prices to increase by 16.6 per cent to December 2022 compared to 13.7 per cent in Sydney and 12.4 per cent in Melbourne.

Westpac has also updated its property forecasts, with Brisbane real estate prices tipped to surge 20 per cent between 2022 and 2023.

 

 

Article Source: www.theurbandeveloper.com

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Brisbane

Subdued Office Occupancy Underpins Need To Support CBD

Brisbane

The latest results of the Property Council’s office occupancy survey show that Brisbane’s CBD activity levels have remained flat during April, as the Property Council ramps up efforts to encourage workers to return to the city.

The survey revealed Brisbane’s CBD occupancy level had stagnated at just over 60 per cent in April, marking the fifth consecutive month of little movement in the return to workplaces.

The Property Council’s Queensland Deputy Executive Director, Jen Williams, explained that while flexibility will continue to be a major feature of workplaces and there remains a small risk of future lockdowns, there is still a long way to go until the CBD reaches the level of occupancy anticipated in the new ‘normal’.

“Activity levels in Brisbane’s office buildings not only affect workplaces and office landlords, but the thousands of small businesses and retailers that rely on high levels of foot traffic to turn a profit.

“All businesses in the CBD are interrelated and largely reliant on office workers. From dry cleaners, to take away outlets, to electronic scooter companies, everyone relies on the consistent foot traffic that workers generate.

“As a direct result of the state’s success in tackling the health pandemic and the relatively low level of restrictions remaining, Brisbane was an early mover in the return of workers to the CBD.

“Unfortunately, we have seen the number of workers heading back into the CBD stagnate over the past five months. To position Brisbane for the future and capitalise on the generations of investment that have gone before, we must break the habits of COVID and get our people back together.

“In other parts of the world where employees have been forced to work from home for longer, businesses are desperate to get back to the office, as they have seen their productivity stagnate.

“With the likes of Google and Apple announcing major return to the office plans once the vaccine rollout allows, Brisbane and Australian businesses will risk losing their first mover advantage if they don’t get their teams back to together.

“This is why the Property Council is working with Brisbane City Council on a campaign to not only attract workers back into the office, but to ensure they make the most of what local retailers, cafes, restaurants, and bars have to offer.

“The State Government and Brisbane City Council’s Brisbane Holiday Dollars initiative is welcome recognition of the important role the CBD plays in contributing to the broader state and economy.

“While much is being done, there is still a long way to go until CBD activity levels return to ‘normal’. The Property Council is keen to work across all levels of government and industry to bring activity back to our city centre.”

 

Article Source: www.miragenews.com

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Brisbane

Major new tenant for Brisbane’s fast growing Airport City

Airport City

The list of tenants at Brisbane Airport (BNE) will soon include the world’s largest distributor for home-brewing brands such as Still Spirits, Mangrove Jacks, and Grainfather following the sod-turning ceremony for a new facility at the gateway.

Bevie’s 2,600sqm state-of-the-art unit will be located within a Warehousing Industrial Duplex Facility on Grevillea Place in Export Park.

Martin Ryan, Brisbane Airport Corporation’s executive general manager for commercial, joined John van Rensburg, CEO and president of Bevie, and more than 20 Bevie delegates on site to mark the commencement of construction.

Airport City

Van Rensburg noted that a number of Bevie delegates were able to take advantage of the trans-Tasman travel bubble and fly in from New Zealand for the event.

He enthused: “We are looking forward to calling Brisbane Airport home to our soon-to-be constructed, custom facility, and I cannot wait to see the look on everyone’s face when we move in at the end of the year.

“Our existing facility in Banyo has served us well but providing our team with a modern home will allow us to serve our retail partners across Australia more efficiently.”

Ryan said the addition of Bevie is a perfect example of BNE’s evolving Airport City and our ability to attract non-aviation related businesses to Brisbane Airport.

“Bevie’s arrival is very exciting for all of us at Brisbane Airport as it diversifies the mix of industries we have here on site,” noted Ryan.

“We have a number of exciting projects underway and a property assets portfolio exceeding A$1.7 billion. Bevie is a part of BNE’s exciting future, which includes the opening of the BNE Auto Mall in 2024.”

The remaining portion of Brisbane Airport’s new Warehousing Industrial Duplex Facility is a 1,900sqm site that is still available for lease.

“These two units will complete the last piece of real estate available on Grevillea Place, but we have plenty more sites available for everyone’s needs,” added Ryan.

The project is generating more than 30 construction jobs and is expected to be completed by December 2021.

 

Article Source: airport-world.com

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