Projects Review Edition 7. 2016
Selecting an Owners Corporation The responsibilities of an Owners Corporation Manager
Architectural Trends new design trends, key mistakes & industry changes
Planning your next boutique apartment Variations to the plan of subdivison Are you jeopardising your presales?
Developing property for financial gain is not a simple exercise
Design Trends, New innovations and New design Trends
Project Profiles Past and Present
Building Relationships The Selection of your Builder
Contents
Projects
1
3 Hello
A Word From the Directors
2 Spotlight
3 Courtyard
6 Selecting an Owners Corporation Manager
4 Alton
10 Planning Your Next Boutique Apartment
9 Fellow
15 Variations to the Plan of Subdivision, Are you Jeopardising Your Presales?
Past Project Profiles
16 Developing Property for Financial Gain is not a Simple Exercise 17 Design Trends. New Innovations and New Designs 19 Building Relationships: The Selection of your Builder
5 One Ascot 9 Olor
11
High and Spring
12 Lincoln 13 Magnolia 14 Norfolk Park 20 Highbury 21 Bloomsbury
Contributors 6 National Sterling Strata Management Fabian Secatore P: + 61 3 9533 8555 8 Cht Architects David Carabott P: + 61 3 9417 1944 10 M einhardt Group Tom Harrington P: + 61 3 8876 1320 15 Pointon Partners Ted Vlahos P: + 61 3 9614 7707 16 S EMZ Project Management Ken Santamaria P: +61 3 9663 5505 17 Kate Roach Kate Roach P: + 61 3 9867 4555 19 Trio Construct Andrew Suttle P: + 61 3 8459 6804
Cover Photo: OLOR 306-312 Swan Street, Richmond
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.
9822 9999 1111 High Street, Armadale VIC 3143
A Word From the Directors With end of year holidays now a fond memory for most, 2016 has began with vengeance this week seeing both the local and offshore buyers. Looking back to 2015, November was another month of achievements for Marshall White Projects, including the sell-out of its 50th development since our inception in January 2013. During that time, the buying market continues to change its demands for the various types of product we have offered on behalf of developer clients. We must continue to demonstrate our ability to forecast market trends. Usually from the time we are presented an initial concept plan for a prospective site, to many months later when floor plates receive planning approval, a project often needs to be then optimised to cater to the buying market at launch time. Townhouses, or house and land packages as the market recognises them, continue to do well at all price points. The local market relished the opportunity presented by “Highbury” in Glamis Road, Footscray West, which saw 49 townhouses sold in 40 days at an average price point of $635,000. “Palamon” at 12 Dudley Pde Canterbury, has been embraced by six active down-sizers, with an average sale price in excess of $2,000,000. Many boutique projects are launching today with either minimal (3- 5% in total) or no one- bedroom apartments. Those that are created are optionally 45-50m2 internally to a price sensitive sector of the market, where often an additional $10,000 to $15,000 is deemed too much by these buyers. Predictably, quality locations continue to attract significant premiums in the current market, with pressure from offshore buyers continuing unabated despite the ‘sabre-rattling’ from both the state and federal governments. The good news is that these premiums can be passed on to the end-user with the coveted target market of a empty-nester selling their own home and then accepting that an extra 5 to 10% in their purchase price will be palatable if the development looks and feels the part.
Despite relying almost exclusively on down-sizing purchasers, projects such as “High & Spring” at 1271-1273 High Street, Malvern and “Lincoln “at 15-17 Cromwell Road, South Yarra have sold out in weeks, in contrast to the months previously forecast. See pages 11 and 12 for these Development Summaries. In comparison to 2014, the 2015 calendar year saw a rise of our average off the plan purchase price of 11% (to just over $800,000), reflecting the increased activity of a maturing owner-occupier market. During the same period, the number of owner occupiers purchasing Marshall White Projects off the plan projects increased by 7 percent. Throughout 2015, 85 percent of the apartments and townhouses we sold were to people looking to live in them. This might reflect a shift in policies of the four major banks to target investors at higher interest rates and also their desire to move away from residential finance for SMSF’s. 2016 will continue to see Marshall White Projects focus on our local market, greatly assisted by the strength of our brand throughout the "wealth belt" of Melbourne, namely the councils of Stonnington, Boroondara and Bayside. Whilst other parts of the world, particularly Asia, are seeing a downturn in the property markets, our local centric business will continue to be well insulated from the variable sentiments of an offshore market. This quarter will see the launch of six new projects by Marshall White Projects to our local market including “The Rise” in Blackburn Road, Doncaster East and “Paxton” at 82 Burke Road, Malvern East. These projects will find a ready audience in locations that are noisy with competing developments. If you would like to know how we make our projects stand out and be heard then we would welcome the opportunity to speak with you about your forthcoming project. The Directors and the team at Marshall White Projects take this opportunity to thank our valued clients and customers for working with us during 2016.
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
1
Spotlight
Lawrence Yan
Brian Lewin
Michael Ryan
Lawrence is a talented communicator. Fluent in Mandarin, Cantonese and Malay, his personal enthusiasm for property investment motivates Lawrence to help his clients find suitable investment property, appropriate to each individual need.
An emphasis on a personal approach to matching a purchaser with their new apartment or town home underlines Brian’s focus on cultivating clients for life rather than a single transaction. Years of experience selling real estate off the plan throughout the city of Melbourne combined with an acute drive to maintain world-class market knowledge makes for a pleasurable client experience.
Michael’s commitment to Project Marketing is based on a simple philosophy of hard work. With a genuine love and passion for real estate, along with his extensive knowledge of the industry, Michael’s key focus is to provide his purchaser customers with a stress free and highly rewarding buying experience.
With a bachelor’s degree in mechanical engineering and after years of experience overseeing the provision of mechanical building services for the construction of high-rise towers and mega-malls, Lawrence now directs his skills to off the plan residential project marketing. Alongside his intention to assure hassle-free transactions for his clients, Lawrence’s willingness to listen makes doing business with him a pleasure.
2
With communication at the top of Brian’s agenda, as a skilled negotiator he strives to simplify the challenges involved in buying off the plan. Over the years, residential project developments have become Brian’s specialty and passion. A Bayside resident his entire life, Brian loves the proximity of the area to the city and the beach in addition to the Mornington Peninsula, where he likes to relax with his family and friends or enjoy a hit of golf. A family man through and through, he loves nothing more than taking a vacation together with his wife Linda and their two children.
Previous experience in the field of construction now provides Michael with a greater understanding of the processes around developments. Michaels highly developed communication skills, allow him to relay this invaluable knowledge to customers, greatly assist them when they’re considering one of their most important assets. Michael has been involved in some of Melbourne’s most iconic and successful developments. His skill set facilitates his ability to assist buyers into a range of developments from as few as 12 to over 400. In his down time, Michael enjoys being active, having a hit of golf and getting down to the coast, spending time with his fiancée Naomi, family and friends.
Hello 82 Hawdon Street, Heidelberg helloheidelberg.com.au
Courtyard 832 Doncaster Road, Doncaster thecourtyardapartments.com.au
3
The Best Decisions Reward you for Life Alton 114-116 Balcombe Road, Mentone
The one-time seaside resort town blends the best of Melbourne’s boutique lifestyle with a distinctly local vibe, imbuing an independent spirit that’s truly Mentone. At Alton you’re in prime position to make the most of it. These low-maintenance, highly-rewarding 1,2 & 3 bedrooms apartments are designed by Perkins Architects to make a statement as the new kids on the block in Mentone. Bright balconies connect with spacious, airy living spaces to bring the outside in, and ultra-contemporary finishes reflect modern Mentone life. It’s time to make your home on Balcombe. altonmentone.com.au
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There's Only Ever Been One Location in Malvern One Ascot 1 Ascot Street, Malvern
Ever since the celebrated nineteenth century horticulturalist Thomas W Pockett was appointed to design Malvern Gardens, Ascot Street has been the suburb’s most sought-after address. Six exclusive residences are almost enveloped in the verdant canopies of National Trust-listed trees; a pocket of natural splendour just 11 kilometres from Melbourne’s city centre. Conrad Architects’ insightful use of space, light and nature inspire these luxurious homes that draw inspiration from the heritage of the address and build upon a vision of an illustrious future. Offering 3 or 4 bedrooms, 3 bathrooms, 2 living areas, private lift and double garage. A lush rooftop terrace and intimate courtyards link the exclusive residences to the neighbouring gardens, while every luxury within ensures tranquil, effortless living. oneascotmalvern.com.au
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Selecting an Owners Corporation Manager With high density living gaining increasing popularity, we are seeing an influx of new Owners Corporation Management companies entering the market – some offering a higher level of service and experience than others. The responsibilities of an Owners Corporation Manager are complex and wide-ranging. Some of the day to day tasks of an Owners Corporation Manager include, organising Annual General Meetings and issuing relevant documentation to the Owners, arranging the repairs and maintenance of common property, ensuring the property is adequately insured, preparing financial statements and annual budgets, maintaining the Owners Corporation Register and ensuring that the Owners Corporation complies with the Owners Corporations Act 2006, the Owners Corporations Regulations 2007, and the Rules. With this in mind, it is essential that an Owners Corporation Manager with high levels of experience and integrity is appointed to manage your Owners Corporation. One of the most important roles of an Owners Corporation Manager is the setting of the annual budget for the Owners Corporation, specifically in the first year as a deficit in this period can have continual effects on subsequent budgets, especially if significant expenses are missed.
If budgets are ill prepared or grossly inadequate, a number of large special levies will have to be raised in order to cover the deficits in the budget, and to pay for outstanding invoices. This often leads to the Owners being resentful of developers and real estate agents for not warning them about these additional charges in the first instance. While it might seem tempting to engage a Manager that sets the lowest budget (often unrealistic) for the Owners Corporation in an attempt to keep fees low, it can end up costing Owners a lot more in the long run, especially as an inaccurate budget may end up causing issues such as non-compliance with mandatory legislation and demised financial stability. Selecting the right Owners Corporation Manager for your development from the beginning has the potential to save the Owners a lot more than a few dollars in the long run. Mismanagement in just one area can have knock on affects into other areas, leaving the Owners left to pick up the tab. If you would like further information on this article or any other matters relating to Owners Corporations, please don’t hesitate to contact National Sterling Strata Management for a confidential discussion on 03 9833 8555.
National Sterling Strata Management is frequently approached to assist in the preparation of budgets for new Owners Corporations. Our experience has shown that it is important that actual costs be obtained in order to prepare the most accurate budget possible. Some of the items that need to be factored into the initial period may include: »» Initial setup fees »» Utilities such as electricity, water, gas and telephone lines for lifts and fire panels; »» Caretaking and lawn/garden maintenance; »» Management fees and meeting expenses; »» General repairs and expenses;Appropriate levels of insurance; »» Waste Management;
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Fabian Secatore National Sterling Management Marissa Ulliana Senior Owners Corporation Manager
»» Roof maintenance and anchor system;
Helen Megas Assistant Owners Corporation Manager
»» Maintenance of items such as car stackers, garage doors, lifts, mechanical ventilation and essential services;
*This article is not intended as Legal Advice.
Above and Right: Teri 85 Market Street, South Melbourne
7
This year has seen the expanding architectural and property development industry witness a range of new design trends, key mistakes and industry changes. These elements are influencing the design of multi-residential and mixeduse developments throughout Victoria and interstate and will continue to influence the industry through 2016 and beyond. We can notably see a tougher VCAT process recognising significant apartment development faults associated with the size of bedrooms, the idea of the ‘saddle-bag’ apartment in addition to problems with both borrowed light and the quality of light internally. With the increasing availability of welldesigned, contemporary apartment dwellings there is a consequent demand for high-quality designed interiors and this new appreciation for design is in turn influencing the buyer’s choice. The desire for good design is not limited to each dwelling itself, but further extends to the development as a whole, including elements such as common spaces, high-end foyers, dining, lounge, home office, well-being centres and communal gardens, which offer the ability to foster a sense of community. There are a number of key changes that are beginning to influence the design and development of apartments throughout the Melbourne metropolitan region. One such influence is the increasing consumer demand to combine multiple units together, consequently creating multi-storey apartment dwellings. This desire for a certain degree of flexibility to customise apartments, is in turn adding a qualitative and quantifiable value to these developments. The unique qualities of these personalised dwellings ensure these contemporary developments cater for the unique needs and aspirations of the client. These new design trends and industry changes are accompanied by a number of additional trends including:
»» Apartment buildings are increasing in size; complexes now include 200+ dwellings. Some of these developments are also leading towards overseas trends. One advantage of these larger complexes is evident as the costs of community facilities are distributed across all residents »» ‘Convenience Factors’ – e.g. concierge, storage of deliveries »» Designs should be reflective of the identity of the occupier and the ‘owneroccupier’ design trend – functional, fit-out, well designed »» Materiality changes – honest & low maintenance materials »» Additional amenities – Refrigerated storage, parcel storage spaces for convenience »» Joinery features – A seamless integration »» ESD features – Rainwater harvesting, ‘third pipe’ (treated water pipe), outdoor garden spaces including vertical and rooftop gardens, solar panels »» Apartment buildings now seen as public and prominent buildings and are inclusive of a retail component or association
David Carabott P:+ 61 3 9417 1944 chtArchitects.com.au
Above: Conservatory, 5 Winton Rd, Malvern East
"The desire for good design is not limited to each dwelling itself, but further extends to the development as a whole, including elements such as common spaces, high-end foyers, dining, lounge, home office, well-being centres and communal gardens, which offer the ability to foster a sense of community."
Charlemont 92 Hawthorn Road, Caulfield North charlemont.com.au
Olor 306-312 Swan Street, Richmond olor.com.au
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Planning Your Next Boutique Apartment The Minister for Planning shocked many with recent announcements limiting the development potential of new towers within the Melbourne CBD. With the planned urban renewal of places like Fishermens Bend and E-Gate likely to take time, will this place greater pressure on our suburbs to accommodate a growing population in the short-term? Melbourne's inner east offers many opportunities. There is strong demand for boutique apartments and new homes which benefit from access to the best schools, shopping centres, parks and gardens, and transport choice. When turning our minds to where development opportunities in Melbourne's inner east are likely to exist – we offer the following: »» Residential Growth Zone – Particularly land that can be consolidated on main roads and corners where sensitive interfaces are less of a factor. »» “Substantial change areas” – Most Councils have completed housing strategies identifying areas they want to focus growth and change. »» Commercial / Former industrial corridors – These areas typically contain larger floorplates and enable a vertical mix of new uses. Commercial Zones also now offer a broader range of uses which were previously prohibited. »» Council owned car parks – Developers are approaching Council's with profit share arrangements which do not trigger traditional competitive tendering requirements on at-grade car parks. The uplift in value of land is something that can deliver win-win for all. »» VicRoads/VicTrack land – Government coffers are bare. There is increased desire to cash-in under utilised land and enable the development industry to create higher and better uses. A new process has been established to consider such opportunities. There are hundreds if not
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thousands of examples across Melbourne. »» Master planned renewal – Is there a net community benefit that can be generated on a key development site? Is there a current problem that can be eradicated if development were to occur? When development sites are scarce, it is this type of thinking outside the square that is seeing a 4 storey development become 8 and development contributions reduced. Heritage, Neighbourhood Character, and Landscape are often fundamental to decision making at a local Council level in Melbourne's inner east. An established suburb of Malvern is very different to an emerging place like Sunshine with its industrial origins. Even within the City of Stonnington the lower density characteristics of Glen Iris are very different to the higher density environment of Chapel Street South Yarra. An informed understanding of the different nuances which exist in planning policy from one place to the next provides significant advantage to developers and reduces the risk associated with site acquisition and development. For more information contact Meinhardt Planning:
Jon Brock, National Director P: +61 3 8676 1310 M: +61 411 237 789 Tom Harrington, Planning Manager P: +61 3 8876 1320 M: +61 419 006 014 or visit www.meinhardt.com.au
Above: Arbor 3 Pettys Lane, Doncaster
"There is strong demand for boutique apartments and new homes which benefit from access to the best schools, shopping centres, parks and gardens, and transport choice."
Past Project Profile
High & Spring 1271-1273 High Street, Malvern highandspring.com.au
Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
1 Bed, 1 Bath
5
19
60.0
$10,421
$622,600
2 Bed, 1 Bath
3
11
65.0
$10,830
$706,666
2 Bed, 2 Bath
9
33
76.3
$11,104
$847,222
3 Bed, 2 Bath, 2 Car
7
26
115.1
$12,074
$1,388,571
3 Bed, 3 Bath, 2 Car
1
4
119.0
$12,563
$1,750,000
3 Ben, 3 Bath, 4 Car
1
4
172.0
$11,512
$1,980,000
3 Bed, 2 Bath, 4 Car
1
4
177.0
$13,559
$2,400,000
11
Past Project Profile
Lincoln 15 Cromwell Road, South Yarra thelincolnsouthyarra.com.au
12
Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
1 Bed, 1 Bath
6
16
50.0
$10,772
$528,917
2 Bed, 1 Bath
2
5
60.5
$12,534
$759,500
2 Bed, 2 Bath
27
71
77.0
$11,364
$875,333
3 Bed, 2 Bath
3
8
101.0
$11,956
$1,208,333
Past Project Profile
Magnolia 20-24 Hepburn Road, Doncaster magnoliadoncaster.com.au
Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
2 Bed, 1 Bath
102
57
71.1
$7,775
$553,029
3 Bed, 2 Bath
76
42
104.5
$8,022
$838,237
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Past Project Profile
Norfolk Park 348 Canterbury Road, Surrey Hills norfolkpark.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
1
4
48.0
$8,323
$399,500
1 Bed, 1 Bath + Study
4
15
54.0
$8,465
$457,125
2 Bed, 1 Bath
1
4
67.0
$8,545
$572,500
3 Bed, 2 Bath
17
63
70.5
$8,903
$628,471
2 Bed, 2 Bath, + Study
1
4
91.0
$9,066
$825,000
3 Bed, 2 Bath
3
11
160.0
$10,029
$1,115,000
Variations to the Plan of Subdivision - Are You Jeopardising Your Presales? Securing presales is a critical aspect of any property development project - but that’s only half the battle. The trick is making sure they settle. Long construction lead times and project delays mean settlement may not occur until up to several years after a purchaser signs a contract. The occurrence of an economic downturn during that time or a change in the purchaser’s circumstances may cause the purchaser to seek to avoid their contract. A purchaser has various bases for avoiding their contract. One such basis that is becoming an increasingly common cause for dispute between purchasers and vendors is in respect of variations to the plan of subdivision prior to settlement. Section 9AC of the Sale of Land Act 1962 (Vic) deals with what happens if the plan of subdivision has to be amended. It broadly provides that the purchaser may rescind their contract at any time prior to settlement where an amendment “materially affects the lot to which the contract relates”. This section is critical to off the plan sales. Recent Court decisions have demonstrated the Court's continuing shift towards protection of "vulnerable purchasers" in property transactions and emphasises the narrow scope for a developer to amend a plan of subdivision prior to settlement without jeopardising existing contracts. 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.’’ While there is no definitive answer as to what constitutes a ‘material’ change, leading cases in this area have provided some guidance. It is important for developers to be aware of the following
Above: Alton 116 Balcombe Road, Mentone Above Left: Summerhill 1150 Toorak Road, Camberwell
»» An amendment which does not adversely affect a purchaser, and even objectively benefits them, may still be considered a ‘material’ change that gives the purchaser a right to terminate. »» An amendment does not need to necessarily affect the physical lot in order for it to be considered ‘material’. A purchaser’s rights and entitlements associated with ownership of a lot cannot be separated and thus, a change to a purchaser’s lot entitlement and liability, including changes to common property, may materially affect the lot. »» Changes which may be seemingly minor or insignificant may still be considered ‘material’. »» The Courts have held that in assessing materiality, the whole development and the context of what the purchaser has invested in, including the development scheme and arrangements, must be taken into account. In particular, the Courts consider it artificial to look at each contract on a standalone basis when considering the impact of any amendment. To avoid settlement risk, developers/vendors should ensure plans of subdivision are finalised as much as possible prior to entering into contracts of sale. Any subsequent changes should be kept to a minimum wherever possible. Additionally, if changes must be made, legal advice should be sought before implementing them to ensure all statutory requirements are complied with. The contract of sale used to secure presales should be carefully drafted to ensure loopholes that purchasers can exploit are avoided and the vendor has sufficient flexibility to make any necessary amendments, subject to the statutory rights of the purchaser. Written By: Ted Vlahos, Director P: + 61 3 9614 7707 E: tv@pointonartners.com.au
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Developing Property For Financial Gain is Not a Simple Exercise There is a common misnomer, and there are numerous examples, where a financial gain has been achieved without employing a specialised Development / Project Management’s skill sets. Unfortunately in the majority of cases these examples have occurred; a) with an unidentified risk profile which, if known, may not have been initiated and/or b) due to an uplift in property market conditions effectively providing a gain, which could have also been achieved in a parallel ‘do nothing’ scenario.
These fundamentals are often common sense. Identify the risks planning, site characteristics, construction, sales and financial - and thereafter be fully informed regarding the possibility and consequence of events occurring. In other words, undertake a feasibility study and price the risks accordingly. For “wiser heads”, years of experience dictate that deploying the above risk management procedures is now second nature. However, I am constantly surprised by the trend of new sites that are purchased with the intention of being developed without an informed feasibility or a decent understanding of the risk management issues outlined above.
A successful development providing for an identified and acceptable risk profile is almost always established within the pre purchase due diligence phase. Successful property developers know only too well, to obtain a wide range of specialised consultant advice during the pre-purchase phase, ensures their project feasibility is as realistic and deliverable as possible. Understanding project risks, and thereafter being able to price them appropriately within any feasibility, is what offers a successful developer a clear competitive advantage.
Any feasibility is critical for successful developers to determine an appropriate site value and therefore avoid over paying for land. Any developer’s success is often determined by not only that have been implemented but also by those projects (or site acquisitions) that have failed to launch through lack of the fundamentals in risk management.
From a site yield perspective, good planning and architectural advice will provide an indication of what the most probable and profitable built
b) establish your desired implementation principles, objectives and targets and;
form outcome should be for any site. Planning advice will also provide an insight into the likely obstacles from the subject site’s overlay provisions. For example, if a site has an environmental audit overlay, early stage environmental testing would allow the developer to price this risk more accurately and effectively mitigate future unforeseen budget overruns. In practice, this testing should indicate if a $50,000 allowance for a statement by an environmental auditor is required or if a $750,000 allowance is more likely required for the disposal of Category B contaminated soil. Advice from Marshall White Projects is critical for forecasting the achievable sales rates of the end product. Services engineers advice provides further certainty around likely service infrastructure implications (i.e.; will a substation be required, are there any street assets which will require relocation or protection). Contractor, Quantity Surveyor and Project Managers can provide a likely indication of construction costs.
My best advice for those just starting out is; a) set up a reliable feasibility framework
c) find experienced and trusted industry experts to provide up front, pre purchase, delivery phase advice. Your challenge will be to maintain the discipline to stick to your newly established principles and objectives because if you can, your development enterprise has the best chance of longevity. For mine, longevity is what defines my success, as in my experience, these common sense practices aren’t that common amongst others.
Ken Santamaria Director P: +61 3 9663 5505 E: www.semzgroup.com.au
Below: Lennox 25 Belmont Avenue, Glen Iris
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Design Trends. New Innovations and New Designs The high tech, super-connected, urgent and impulsive world around us has seen a need for considered design that allows for calm, comfort and visually uplifting interiors.
Above: Charlemont 92 Hawthorn Road, Caulfield North
Taking cues from the natural world, design trends favour comfortable luxury. With a desire for natural and authentic, softer finishes, we are using materials and finishes in more simple ways in order to appreciate their beauty. A growing trend seen in tapware to furniture and lighting, and in interior design details generally is the use of metal accents in tones of copper, pewter and brass in preference to stainless steel, particularly when used in their exposed and natural forms and paired with timber and stone. Aligned to our growing love of raw woods, there has been a shift from ‘clean’ stones to those with more expressive textures with rich colours and tones. We have seen great innovation with the evolution of man-made materials that mimic natural products including large format porcelain tiles that present the look of marble but offer incredible performance against heat, stain, scratching and porosity. Influenced by global fashion, layering textures, patterns and styles have been a strong design trend in 2015 and is likely to continue. The mixing and matching of these adds unexpected impact to a space and achieved through mixing woods and metals, worn leathers and crisp contemporary fabrics.
Kate Roach P + 61 3 9867 4555
Combining true classics with contemporary styles create unexpected and inspired spaces.
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Building Relationships: The Selection of your Builder It’s not often enough we hear business stories where the client and the contractor (be it construction or any other business) are aligned in the attainment of their goals. It’s too often we hear of poor relationships arising from the misalignment of goals, leading to one or more of the project stakeholders being dissatisfied with the project outcome. The tendering process is often undertaken incorrectly and can mean a contractor and client are directly opposed in their goals for the outset of the project. A client may be expecting the highest possible quality at the lowest price whilst the contractor is expecting to meet the minimum acceptable quality level and the have largest possible price. The resultant misalignment means stakeholders can often be left dissatisfied with the outcome. Clients want a specified quality, certainty on time and certainty on cost. Contractors on the other hand, generally want to ensure they have costs fixed, a certain amount of margin, to build faster and enhance their business reputation.
5.
Explain your vision for the project again and go over the detail contained in the project documentation. Do this over more than one meeting.
6.
Ask the contractor to explain the project to you and how they intend to go about the constructing of the works. It’s better to flush out any surprises now prior to executing the contract.
7.
If the need arises to change the things prior to commencement, then at least you are only paying costs given the contractor has already agreed to a fixed dollar quantum of margin. This enables you and the contractor to work transparently in relation to any amendments required.
8.
Once you are comfortable and have agreed a fixed overall price, contract and time frame (including the fixed quantum for margin and overhead) then sign the agreement and get going!
Whilst it’s not guaranteed, the above steps are certainly a great way to start ensuring the goals for the project are aligned. The client has a locked in agreement, the contractor enters the project knowing they have a reasonable margin and are 100% incentivised to build the project faster in order to save money on their fixed overheads.
So what is the best way to procure a contractor, building or otherwise and ensure there is an alignment of outcomes? The first priority for both client and contractor should be compatibility. Are both parties able to communicate and work together? If just one of the parties doesn’t have confidence that communication is possible, then press the stop button then and there.
It’s all based on the foundation of being able to openly communicate and having a working compatibility. Over the last twenty years of working in property and construction, there is no doubt that these foundations have been the basis of the most satisfying and successful projects I have been involved with. They have not only built some fantastic buildings but some also fantastic relationships.
From experience, the best project outcomes for both the client and the contractor have come from a combination of both a tendered and negotiated process. The steps through the above process might look something like this; 1.
Find a couple of contractors you feel you can work with (are compatible with).
2.
Explain your vision for the project and have the builders provide an estimate of cost based on all the project information including key contract terms. As part of this process, have the builders provide the following: a. a fixed dollar quantum of margin, b. a fixed quantum of overhead and preliminaries (the contractors site costs as opposed to the sub trade costs) and c. a fixed time frame for the project.
3.
While the information from above the selection process is more involved and requires more effort, the benefits of setting the project up correctly will more than outweigh the involvement of this process. Armed with all this information, you can then select a builder to work with.
4.
Once you have selected the most appropriate contractor for you, take your time to meet with the contractor (on more than one occasion) and ensure your understanding of the project is aligned.
Enjoy your project.
Andrew Suttle +61 3 8459 6804 andrew.suttle@trioconstruct.com.au trioconstruct.com.au
Opposite: Vanguard 2-4 John St, Malvern Below: Newry Lane 69 Newry St, Prahran
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Past Project Profile
Highbury 4-9 Glamis Road, West Footscray highburytownhomes.com.au
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Townhouse Type
Townhouse No.
% of Total
Average Size per m2
Average Price per m2
Average Price
3 Bed, 2 Bath
31
63
141
$4,447
$627,516
4 Bed, 2 Bath
18
37
132
$4,978
$653,611
Past Project Profile
Bloomsbury 6-8 Manningtree Road, Hawthorn bloomsburyhawthorn.com.au
Apartment Type
Apartment No.
% of Total
Average Size per m2
Average Price per m2
Average Price
3 Bed, 3 Bath
8
89
208.0
$7,606
$1,583,750
4 Bed, 3 Bath
1
11
206.0
$8,508
$1,750,000
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