Projects Review Edition 6. 2015
The Preferred Residential Growth Zone Recognising development opportunities
Development Finance Finishing the Job Styling your apartment or townhouse
What apartment sizes are you actually offering?
Managing Development to Maximise Profit
Project Profiles Past and Present
Paul Fridman interview
What’s around the corner?
Alternative Funding Options
Contents
Projects
1
3
A Word From the Directors
High and Spring
2 Spotlight
3 Hanke
6 Managing Your Development to Maximise Profit
4 The Lincoln
10 What apartment size are you actually offering?
9 Norfolk Park
15 Paul Freedman Interview
Past Project Profiles
16 Finishing the Job. Styling Your Apartment or Townhouse
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17 Development Finance. Alternative Funding Options to Banks
13 Saxon
18 The Preferred Residential Growth Zone. Recognising Positive Development Opportunities.
5 Highbury Townhouses 9 Leopold Stonnington
Grace
12 Acacia 14 INQU 20 Maison 21 Arbor
Contributors 6 Chun Group Mathew Chun M: 0418 107 533 10 Charter Keck Cramer Craig Kilby T: +61 3 8102 8888 15 Fridcorp Paul Fridman T: +61 3 9823 2777 6 Coco Republic Ming Wang M: 0457 185 894 G resham Investment House 6 Stuart Skerman M: (03) 9664 0385
Cover Photo: Vanguard 2-4 John Street, Malvern East
Every effort is made to provide accurate and complete information in Marshall White’s (trading as Marshall White Projects) technical and regulatory newsletters. However, Marshall White cannot guarantee that there will be no errors. Marshall White and its contributors to the newsletter make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of the newsletters and expressly disclaims liability for errors and omissions in the contents of this newsletters. Neither does Marshall White and its contributors to the newsletter assume any legal liability for any direct, indirect or any other loss or damage of any kind for the accuracy, completeness, or usefulness of any information, product, or process disclosed herein, and do not represent that use of such information, product, or process would not infringe on privately owned rights.
+ 61 3 9822 9999 1111 High Street, Armadale VIC 3143
A Word From the Directors
It never ceases to amaze us how quickly the market ‘turns on a dime’ with regard to buyer demand for a certain product type and specification. This time last year, the request from investors and single professional buyers for one and two bedrooms, 44-54m2 apartments kept pace with the ‘empty nester’ looking into 90130m2, 3 bedroom or 2 bedroom plus study, single level opportunities. Today however, given the phenomenal strength shown by the residential market, the ‘empty nesters’ have gone ahead with a voracious appetite for off the plan apartments, that they can ‘bespoke’ and in doing so add their own taste and designs. There is an inherent risk however, should you design your next project to cater solely to this resurgent demographic, in that, should the residential market shift downwards this will be the first buying group to go back into hibernation. We often recommend a safer path to planning and look for consolidation opportunities on both the ground floor (grandkids and pets) and top floor (views) after a planning permit has been issued. It’s yet to see if the major banks decision to increase rates on investment borrowing will significantly slow what it currently an active section of the market. The demand for 2 bedroom, 2 bathroom products (60-70m2) is currently underpinned by not only the investment market (including those migration investors introduced by our referral partners) but also professional couples looking for both an affordable entry and stepping
stone to future upsizing, in locations centered around Melbourne’s private schools and strong retail shopping. With inner city locations such as Whitehorse and Banyule only having ever decreasing opportunities for house and land packages, it’s not surprising that Metro’s townhouse offerings at Banool Road, Balwyn and Tate Street, Ivanhoe (12 and 11 townhouses respectively) were sold at better than one per day. Our summary is on page twelve and thirteen. ‘Arbor’ at 3 Petty’s Lane, Doncaster defies the trend from a suburb that offers buyers the luxury of choice. Boutique in number (overall 42, consolidated down to 36), these well designed apartments offering above average specifications, were sold out in week’s – an exceptional achievement with the Doncaster buyers continuing to be tempted by volume. Marshall White Projects have seen sales increased by 220% in relation to the same April- June quarter in 2014. With an average sale price of $843,000, we continue to focus on retail sales, allowing us to be insular from the vagaries of the offshore buyer – with around 200 qualified buyers a month visiting our in house Projects room, the remainder of 2015 continues to look bright. As always, we invite your call regarding your projects needs, often an early call, prior to submitting to planning allows you to get the design right the first time, reducing your days on market and ultimate cost per sale.
Leonard Teplin Director
Mark Dayman Director
T: 03 9832 1191 M: 0402 431 657 leonard.teplin@marshallwhite.com.au
T: 03 9832 1193 M: 0409 342 462 mark.dayman@marshallwhite.com.au
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Spotlight
Michael Ryan
Ranko Cvjeticanin
Sam Dodimead
A native of the eastern suburbs, Michael has a genuine love for area which shines through when he is promoting the location’s many attributes. Enthusiastic, diligent and knowledgeable, he has already established an enviable reputation among his peers.
With over twenty years of real estate experience, Ranko has a proven track record of achieving outstanding sales results in the industry. During this time period, Ranko has seen substantial change in the real estate profession but his professional approach to every facet of every transaction hasn’t wavered.
With a career spanning over eight years in Project Marketing, Sam has assisted hundreds of astute owner occupiers and investors into their new off the plan property. Accomplished in working with developers to secure an array of development projects, including numerous land subdivisions aided with an intimate knowledge in site feasibility, acquisitions, planning and effective sales and marketing strategies affords Sam the reputation of being able successfully sell out projects from pre planning to the last sale.
A background in carpentry has given Michael valuable knowledge when it comes to expanding the attributes of your development. It is a huge asset for vendors to have someone representing their development who combines negotiating skills with a thorough knowledge of their property’s construction. Michael’s first priority, as echoed by his many past vendors, is to ensure that his clients’ real estate experience is stress free and above all rewarding. He maintains an open line of communication at all times, keeping his clients in the loop and informed throughout the campaign. His honesty, friendly nature and down to earth approach have won him many fans. Living in Boroondara, Michael enjoys being active in his spare time. You may well spot him playing a round in the areas many golf courses. He also loves spending time with his family and friends.
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Part of the project development team at Marshall White, Ranko’s natural positive energy and enthusiasm and ability to relate to people from all walks of life has been invaluable. His genuine integrity and personal service style quickly makes clients feel at ease. Balance has always been and continues to be crucial to Ranko’s consistency throughout his career. Away from the office he spends time with his son and family and he is dedicated to keeping fit and physically active.
Sam’s genuine interest in property and a continuing commitment to professional development in Real Estate and Property places buyers in safe hands. In his free time Sam enjoys spending time with his Fiancée Anita and dog Milo, keeping fit and playing the occasional game of golf.
High & Spring 1271 - 1273 High Street Malvern www.highandspring.com.au
Hank 5-9 Hanke Road, Doncaster www.hankapartments.com.au
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Contemporary Design Meets Classic Style The Lincoln 15 Cromwell Road, South Yarra
Set amongst the leafy canopies and grand heritage terraces of Cromwell Road, The Lincoln welcomes you to South Yarra in style. Located on the corner of Cromwell Road and Motherwell Street, the buildings comprise 38 architecturally designed 1, 2 and 3 bedroom luxury apartments. The creative vision of renowned architects Rothelowman, together with clean and sophisticated interiors by Nexus Designs has resulted in a contemporary, yet classic building that will stand the test of time. www.thelincolnsouthyarra.com.au
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Confident & Pragmatic with Modernist Forms The Highbury Townhouses 41-49 Robbs Road, Footscray
The Highbury Townhouses embody the confidence and pragmatism that contemporary multi-residential Melbourne architecture is known for. The townhouses combine clean modernist forms with hints of West Footscray’s residential vernacular, its industrial heritage as well as the site’s parkland context. Angled roofs mimic a classic saw tooth warehouse roofline while familiar materials such as brick, weatherboard and colourbond add warmth and blend with the residential surrounds. Each townhouse is designed to provide maximum amenity taking advantage of the parkland views and featuring generously proportioned full height living areas that flow out to a courtyard or terrace. Large bedrooms, built in storage and the provision of ground floor home office spaces or built in study nooks provide further livability and convenience. www.highburytownhomes.com.au
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Managing Your Development to Maximise Profit Planning Risk
neighbouring properties etc). All of
can deliver lucrative investment
Achieving a planning permit can be
longer and more expensive build
rewards to those who respect and
a major hurdle to overcome and is
times and should be factored into
plan for its potential pitfalls. In the
probably one of the more difficult
any initial feasibility assessment.
past, and well into the future, there
risks to minimise due to the vagaries
will always be scores of aspiring
of our planning and appeal system.
developers attempting to wade
Typical issues that arise here revolve
through the cumbersome procedure
around time (inevitably securing a
and market data only to fail brilliantly.
permit takes longer than originally
Through every property cycle, residential property development
Throughout the life a property development, every project encounters a range of risks that need to be managed carefully and methodically in order to maximise return and deliver a successful
and numbers impacted by a various range of Council desires including set-back to neighbouring property, over shadowing, privacy and neighbourhood character).
project.
Ensure you have a well versed
At Chun Group, we think of development
town planner and a capable and
as a series of stages to be managed to
innovative architect who can provide
ensure that risk is minimised at every
you with solid foundations to deal
level. Each of these risks require a
effectively with council to achieve a
unique set of expertise and it is up to
permit that satisfies these conflicting
the Developer to pull them together in
perspectives.
sequential order. We categorise these risks into the following stages:
»» Planning Risk »» Site Risk »» Market Risk »» Construction Risk
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budgeted) and yield (dwelling size
Site Risk Identification of site risks and understanding their potential implications are critical to ensuring
»» Settlement Risk
costs are controlled. Issues to
If a project is well planned from its
(impacting footing design), rock,
infancy, many of these risks can be
water table issues, contamination,
mitigated well before they appear
topography of site and access (ie.
on the horizon.
main road, narrow street, sensitive
be investigated include soil type
these type of issues can lead to both
Market Risk Having a deep understanding of who your target buyers are and effectively designing your project to accommodate these drivers is a far harder task than it sounds. The shift in demographics from suburb to suburb can make it difficult to understand who your buyers are. Different locations and site attributes can dictate its appeal to buying groups such as young professional couples, investors or older active couples without kids. All purchasers have different requirements in apartment size, facilities, car parking and price point for example and it cannot be emphasised strongly enough that as a developer, you must know your target purchaser. Naturally, there are a number of distracting factors that can tempt Developers into designing a product that isn’t well received when your selling agent takes it to market. These can include trying to maximise dwelling numbers (to the detriment of amenity), not catering for adequate parking, poor aspects or views, the wrong choice in interior
design colours or appliances and inefficient internal layouts. On the other hand, there can alternatively be a tendency to over design the building so that it looks beautiful,
Above: Camberwell XI, 594 Riversdale Rd, Camberwel
Right: Conservatory 5 Winton Road, Malvern East
but can’t be built for your budget construction price. This natural balance takes significant experience to execute and it is critical during this design phase to appoint an experienced sales agent who is a specialist in “off the plan sales� to ensure that robust analysis on the target market is undertaken.
Throughout the life a property development, every project encounters a range of risks that need to be managed carefully and methodically in order to maximise return and deliver a successful project.
Collaboration with an agent such as Marshall White Projects, the architect and developer is crucial to ensure the project released to the market has instant appeal to your target buyer segment. This allows pre-sales to be completed within the shortest possible time frame, at a price point that is closely in line with initial feasibility forecasts.
Construction Risk Once the project is largely sold it is imperative that the project can be built in line with your budget cost. Engaging with a builder or quantity surveyor from the outset can help provide input into the planning and design aspect of the project and ensure that the project can be built within time and budget.
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When appointing a builder there are a number of areas you need to be comfortable before formal engagement: »» they have a strong track record of similar sized projects »» the builder is not currently in construction on too many other projects, »» they have a financially sound balance sheet. A competitive tender is often only based on the available design documentation so building a relationship early with a builder who can help you value manage your design can have distinct advantages. Better still, engage a suitably qualified Project Manager who can work to manage savings opportunities with the builder and design team. Having a team of people with the technical ability to navigate cost minimisation strategies whilst ensuring that there are no shortcuts on quality of construction will significantly de-risk construction. The construction contract is one of the most important documents in removing risk from your development. An experienced construction lawyer will be able to put in place a balanced building contract and outline to you the areas of construction that will leave you exposed, and other risks that need to be directed to the builder. Ongoing management and problem solving will also be crucial during construction. A regular dialogue between the project team and builder should ensure that any issues that arise are dealt with quickly.
Settlement Risk Ensuring that all of the purchasers settle at the end of construction is the last piece of the jig saw (and obviously the most important one). A robust off-the-plan sale contract document stipulates what the purchaser will be delivered in respect of their apartment. This document needs to be annexed to the construction contract with the builder which ensures that the built form is consistent with the purchaser’s expectation. An appropriate deposit of either 10% cash or a Bank Guarantee from an Australian Bank is also critically important. We also highly recommend that developers keep the purchasers informed of the project as it is being built. This will enable customers to be informed about the progress of the construction of their apartment and understand the timing of settlement when the project is nearing completion. Quarterly updates to all purchasers as a minimum throughout construction, and increasing frequency as you approach settlement will give your purchasers adequate time to arrange finance and conduct inspections. One of the biggest failures developers make is to have construction complete, yet still be unable
to be settled with purchasers due to poor organisation of the settlement process. This can be a critical process to manage when your debt facility is at its peak!
Summary Whilst property development is not for the faint hearted, it is extremely satisfying to deliver a project that has so many elements that need co-ordinating and managing. The key though is ensuring the right team is appointed from the start, who have an experienced track record in delivering projects that are of similar size and complexity to your project. At Chun Group we are focused on delivering boutique residential projects in urban Melbourne. We have a deep belief that our cosmopolitan city will require a significant amount of medium density living alternatives in established locations to cater for our increasing population and affordability issues that will continue to be underlying drivers of demand for apartment living. Chun Group is currently developing and managing 14 projects throughout Melbourne and Sydney comprising in excess of 500 apartments with an estimated value in excess of $300m.
Mathew Chun M: 0418 107 533
Above: Conservatory, 5 Winton Rd, Malvern East
Whilst property development is not for the faint hearted, it is extremely satisfying to deliver a project that has so many elements that need co-ordinating and managing.
Norfolk Park 348 Canterbury Road, Surrey Hills www.norfolkpark.com.au
Leopold Stonnington 18-20 Leopold Street, Glen Iris www.leopoldstonnington.com.au
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What Apartment Size Are You Actually Offering? There is no doubt that the structure of the Melbourne housing market fundamentally shifted since the mid 1990s through the advent of contemporary apartments becoming a legitimate, and increasingly, preferred form of housing for a broadening array of households. This change is reflected in the current policy discussion about the potential introduction of new apartment design guidelines and minimum apartment sizes. The maturity of Melbourne’s suburban apartment market has become particularly pronounced since 2010 as supply has grown from 37,000 apartments to 77,000 by the end of 2015 and to almost 103,000 by 2018. A number of regulations and industry practices have however failed to keep pace with the changing housing market. Amongst other issues, it is inconceivable that there is still so much inconsistency in something as seemingly simple as measuring the internal area of an apartment! Developers, real estate agents, architects, land surveyors, financiers and valuers each have different rules and approaches to interpreting the size of an apartment. Despite numerous attempts, there is no agreed approach to measurement with differences of up to 10% between the various methods. Sometimes balconies are included or measurements can be taken from the middle, inside or outside of a wall. These differences can have a material impact firstly upon the price at which an apartment is purchased and secondly, upon the assessment of value at the time for those apartments bought by off the plan. At settlement, the difference in the internal area of an apartment is not the only consideration that that must be reconciled. The value, as distinct from the initial purchase price or an agency appraisal,
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of an apartment is determined with reference to the financier’s instruction to the valuer incorporating a range of factors including internal and external areas, features, specification but also comparable sales evidence from apartments in the surrounding established (resales) market. Importantly, resales of apartments bear the full stamp duty cost as compared to apartments purchased off-the-plan which have dual benefits of reduced stamp duty assessed on the land value at contract date and delayed settlement (up to 3 years) which provides an inherent financial advantage to off the plan purchaser. For these reasons, it should be anticipated that settlement valuations for finance purposes may not always equal the off-the-plan contract price. In some instances, when the resales market has risen during the construction period, settlement valuations may exceed contract prices. Alternatively during periods of market weakness, or when there is high localised supply pressure, settlement valuations may be lower than contract price which will have a range of implications for financiers and purchasers. Property values are inherently dynamic and will move in response to market forces and are therefore reflective of a range of market forces at a point in time. Professional valuers should be well-informed about the prevailing demand, supply, economic and policy factors as well as local comparable sales evidence of similar properties that can all have an influence upon your property values.
For further enquiries about property valuation matters please contact Craig Kilby T: +61 3 8102 8888 or visit www.charterkc.com.au.
Sometimes balconies are included or measurements can be taken from the middle, inside or outside of a wall.
Past Project Profile
Grace 1555-1559 Malvern Road, Glen Iris www.gracegleniris.com.au
Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
1 Bed, 1 Bath
5
10
51.2
$9,285
$475,280
1 Bed + Study, 1 Bath
4
9
55
$9,622
$529,168
2 Bed, 1 Bath
14
30
61.1
$9,439
$576,940
2 Bed, 2 Bath
21
46
75
$9,318
$700,731
3 Bed, 2 Bath
2
4
90
$9,772
$879,500
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Past Project Profile
Acacia 37 Banool Road, Balwyn www.acaciabalwyn.com.au
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Townhouse Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
3 Bed, 2 Bath
11
91
200
$6,740
$1,350,455
4 Bed, 2 Bath
1
9
226
$6,350
$1,435,000
Past Project Profile
Saxon 8-10 Tate Street, Ivanhoe www.saxonivanhoe.com.au
Townhouse Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
3 Bed, 2 Bath
6
55
185.0
$5,803
$1,073,333
4 Bed, 2 Bath
5
45
207.0
$5,606
$1,161,000
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Past Project Profile
INQU 140-142 Cotham Road, Kew www.inquapartments.com.au
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Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
1 Bed, 1 Bath
6
19
49.4
$9,654
$476,750
1 Bed + Study, 1 Bath 2
6
51.6
$9,981
$515,000
2 Bed, 1 Bath
19
59
58.2
$9,565
$555,316
2 Bed, 2 Bath
5
16
73.5
$9,387
$689,600
EVE by Fridcorp Macdonald Street, Erskineville, Sydney www.fridcorp.com.au
Paul Fridman Interview Marshall White Projects were pleased to recently interview Mr Paul Fridman, (Founder and Director of Fridcorp) responsible for a number of Melbourne’s most dynamic developments and sought his advice on a number of topics relative to now and future development markets; ‘’Since I began my career in the property development industry some time ago, there have been some significant changes to the development space, particularly in Melbourne. We’ve seen a shift from larger-scaled apartments to smaller ones and this has become quite a contentious issue. Further to this, the market has become more competitive and price sensitive, and more developers have had to lift the finish level of apartments. There has been quite a major shift from owner-occupiers with investors now the majority in the space. Amenities have also become much more important for developers these days. There was a time where a swimming pool was a massive plus but now we’re seeing unique features such as karaoke bars, fitness centres, communal movie theatres among other elements as key features of residential projects. This is primarily due to the competitive nature of the industry. We now have to cater for both indoor and outdoor aspects of apartments, with residents opting to include outdoor activities as part of their residential routine. Some of the key fundamentals I stand by when sourcing a new project include location consideration, which is something that should never be underestimated. Location is obviously a key concern when looking to purchase, invest or develop – I cannot stress this enough. I believe you should also never build a product you don’t want to live in yourself. You need be selling a product that reflects your core values and I personally
always provide Fridcorp’s purchasers the type of standard I value myself. You should also always value the purchaser and their contribution to your project, as this is generally one of the biggest investments of their life and shouldn’t be taken lightly. Their feedback and attitude towards the development is a reflection upon the brand’s qualities and value. Developers should be following strict disciplines when it comes to acquisitions. On a more aesthetic fundamental, apartments must be able to achieve natural light and ventilation to each and every room. This has become a key feature for purchasers and should not be overlooked when planning any project. I’m no forecast analyst but if I had to make some predictions, in my opinion Melbourne seems to be heading for an unprecedented over supply of apartments, with the last 3-5 years seeing a migration towards city living. There’s some concern for rental market vacancies, which will ultimately have an effect on yields too. As a company we also aim to gain exposure to other markets in various states in order to expand accordingly and with purpose. Our recent project Eve by Fridcorp in Sydney’s Erskineville was an incredible success and gave locals the opportunity to experience something never before seen in the suburb. At the moment we’re also looking to Brisbane for opportunities. Due to a current undersupply, I believe markets like Sydney in particular have a few more years left for residential development. Inner city markets are generally stronger markets for developers too, especially areas within the 3-5km mark from the city. This is due to planning regulations and thus the reason why oversupply is not an issue.’’
Paul Fridman +61 3 9823 2777
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Left: Furniture; Oly, San Francisco. Styling by Coco Republic Top: Modern Talitha Credenza. Styled by Jonathan Adler Above: Coco Republic Home Decor
Finishing the Job. Styling your apartment or townhouse with timeless flair The focus on the home year round balances comfortable, cosy spaces in the cooler months and alfresco areas that enhance outdoor living in warmer times. Coco Republic’s Ming Wang, shares her top tips for creating an inspiring Melbourne home that transcends seasonal trends. Ming begins, “Invest in a bar cart. Entertaining at home is definitely more appealing than ever and the dinner table is the centre of activity. Think rich slow roasted dinners in winter or delicious barbeque spreads in the summer, shared with friends or family over wine year round. Complement a curated dining space with a statement bar cart, such as the Jonathan Cheval Bar Cart from Coco Republic featuring beautiful brass and mirror. It’s opulent and sophisticated.”
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lighting pieces and the only Australian store is located on Church St in Richmond. It’s well worth a browse.” “We’ve seen an influx of Lucite pieces coming through from overseas into Australia. It’s such a luxurious finish in furniture and Jonathan Adler has really embraced this style in particular. Traditionally it is a very difficult material to build with and so the meticulous techniques to produce these pieces can be reflected in the price however it is definitely worth it in a luxury Melbourne home. First used in design in the 1920’s, the beauty this material brings to a room is timeless,” Ming comments.
“Steer clear of cliché seasonal tones in favour of classic gold or brass for a timeless statement that will never date. Instead of an accent colour, complement neutrals with gold to make an interior pop,” she continues.
She finished, “I think everyone should consider adding personality at home and having fun with decorating. It’s more appropriate now to add punch with quirky accessories. In Melbourne, we love to entertain and show off our homes. If you are wowed by a piece then there is a fair chance others will be too. Personality goes a long way.”
Continuing, Ming says, “I cannot highlight enough how incredible the right accent lighting can be at home. Beautiful table lamps and floor lamps on dimmer switches work a room wonderfully and add ambience throughout the year. Use pendant lighting or chandeliers to accentuate a room. Often people will think of their lighting piece last once the room is almost complete, however I think designing a room around a light can be key to aesthetic success. Timothy Oulton is renowned for statement
For all Interior Design and Property Styling inquiries, please contact Ming Wang T: 0457 185 894.
Development Finance. Alternative Funding Options to Banks While the major bank’s provide most of the available funding for property developments in the current environment, their funding parameters are limited to providing 70-75% of a project’s total development cost. The major banks are also often hesitant to permit subordinated mezzanine debt into the project’s funding structure and require the 25-30% of total project cost to be injected by the Borrower as upfront equity. Depending on the location and size of the project, the bank’s usually require that close to 100% of their loan is covered by presales with 10% deposits and a limitation on the number of sales to overseas purchasers. Long-time fund manager Gresham Property has recently launched a $400 million institutional-backed fund, the “Flexi Capital Debt Fund”, targeting property developments and investments with debt
requirements between $20-$100 million. The Flexi Capital Debt Fund offers a broader and more flexible funding arrangement than that offered by the traditional senior banks, and aims to provide solutions to borrowers for whom banks alone do not provide the best outcome. The Fund will consider higher leverage, or more flexible covenants and conditions precedent than offered by the major banks. The Fund will offer an innovative "stretch senior" debt product, up to 90% of the total project costs, which basically mixes senior debt that banks usually provide with mezzanine debt which second tier financiers usually provide, into a single source of debt with a single facility agreement between lender and borrower. This will save borrowers paying two sets of legal fees under a separate senior and mezzanine debt structure.
The Flexi Capital Debt Fund offers a broader and more flexible funding arrangement than that offered by traditional banks.
»» Since its establishment in 2001, Gresham Property has invested capital in projects worth $3.5 billion. This will be Gresham Property’s fifth debt Fund. Gresham Partners Limited was established in 1985 and is partly owned by its foundation investor, Wesfarmers Limited. »» Gresham Property is currently working with a number of the Marshall White Project Marketing client base and would be pleased to meet with you to discuss your financing requirements. »» The Gresham Property team in Melbourne is headed by Executive Director Stuart Skerman, who has over 16 years’ of experience in property finance and advisory.
For more information or to discuss any of your development finance needs contact Stuart Skerman T: (03) 9664 0385 E: sskerman@gresham.com.au
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Left: Summerhill 1150 Toorak Rd, Camberwell
Below: Solstice 138 Camberwell Rd, Hawthorn East
The Preferred Residential Growth Zone. Recognising the Positive Development Opportunities. The gradual implementation of the new residential zones over the past two years has created much angst and uncertainty within the development community. The concern has centred on the perception that the majority of suburban Melbourne has been locked away from residential development. However, this has to some degree been offset by investors recognising the opportunities presented by the Residential Growth Zone (RGZ). The opportunities stem, in part, from the planning controls within the RGZ, allowing for greater certainty of development outcomes. Height controls are generally mandatory, and built-form and amenity requirements are, to a large extent, codified by ResCode. Investors can thus anticipate what a realistic development outcome looks like, thereby reducing the risk profile of the project, particularly when compared to sites with speculative development potential. Perhaps the only key element of uncertainty lies in the existing neighbourhood character of the rezoned areas, which often comprise single-storey, detached dwellings on large lots. The existing character contrasts with the development typology envisaged by the Residential Growth Zone, which encourages development at increased densities up to and including four storeys. The planning scheme has addressed the issue by enabling proposed development to respond to the existing or preferred character. It is thus legitimate for decision makers to assess higher-density developments against the preferred character of an area, not the existing character. Despite such clear guidance, some Councils are yet to fully acknowledge their obligation, with the issue often complicated by existing residents within the RGZ who agitate against the prospect of abuttal by four-storey development. Our recent involvement in a project within the RGZ on Malvern Road, Glen Iris, highlighted this issue. The project involved the consolidation of three lots fronting Malvern Road – a high-amenity transit corridor close to local services, but with an existing neighbourhood character defined by single-storey dwellings on large lots with varied architectural styles and notable landscape quality.
Council’s initial position sought to reduce the proposal to respond to this existing character, particularly in relation to height and the provision of significant boundary setbacks. However, through an engaged and informative process, Council officers came to accept that the purpose of the RGZ (unlike the GRZ or the NRZ) makes no reference to respecting the existing neighbourhood character. While the consideration of amenity impacts on adjoining single-storey dwellings was still important, the RGZ anticipates significant future change and places a distinct emphasis on preferred character. Such positive outcomes require an informed application process to ensure continued approvals provide increased medium-density housing choices in inner-city locations with excellent access to amenities. The growing number of positive RGZ outcomes has promoted a market of willing owner-occupiers and investors, which demonstrates a healthy demand for what is evidently a valued product by virtue of an agreeable lifestyle.
Hugh McKenzie 0403 844 026 hugh.mckenzie@pro-urban.com.au im Ryder T 0404 025 602 tim.ryder@pro-urban.com.au proUrban Suite 105, 12 Yarra Street, South Yarra, VIC 3141
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Past Project Profile
Maison 9-15 Somers Avenue, Malvern www.maisonmalvern.com.au
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Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
2 Bed, 1 Bath
7
23
89.4
$10,825
$972,142
2 Bed, 2 Bath
7
23
115
$11,361
$1,308,571
3 Bed, 2 Bath
10
33
129
$11,077
$1,429,000
3 Bed, 3 Bath
6
20
202
$11,045
$2,210,883
Past Project Profile
Arbor 3 Pettys Lane, Doncaster www.arbordoncastor.com.au
Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
2 Bed, 1 Bath
6
14
62.6
$7,424
$465,333
2 Bed, 2 Bath
31
74
74.4
$7,567
$563,112
3 Bed, 2 Bath
5
12
95.4
$7,501
$715,500
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