Marshall White Projects Newsletter Edition 8

Projects Review Edition 8. 2016

Adele Bates: Apartment Design

Think Locally and Act Globally The Challenges and pitfalls of Asian Developers

The Vital Ingredients Proper Start Up Essentials

5 Minutes With...

Predictions for the Next Financial Year

Qualitas Creates a Fund to Bridge the Finance Gap

Contents

Projects

1

3 Reserve

A Word From the Directors

2 Spotlight

3 Gardiner

6 Apartment Design

4 308.

8

Think Globally and Act Locally

13 The Vital Ingredients 14 5 Minutes With...

5 Autun 9 Lonsdale Past Project Profiles

17 Qualitas Creates Fund to Bridge Finance Gap

10 Alton 11 Olor 12 Norfolk Park 18 Teri 19 Leopold

Contributors 6

8

Adele Bates Design Adele Bates P +61 3 9686 0852

Cover Photo: THE LONSDALE 27 Scott Street, Dandenong

BHC Property Jian Zhou P +61 3 9813 1863

13 Nash Construction Chris Nash P +61 3 9866 7702 14 Chun Group Matthre Chun P +61 3 9081 1611

M etro Property Development David Steele P +61 3 9804 5049 Buxton Group Nolan Stevens P +61 3 8527 7100 Bensons Property Group Elias Jreissati P + 61 3 8602 0800 SMA Projects Robert Murphy P + 61 3 9529 8855 17 Qualitas Andrew Schwartz P +61 3 9612 3950

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

Disclaimer: Information provided is believed to be accurate as at the date of printing, no responsibility is taken for any errors or omissions.

It is your responsibility to obtain independent, professional advice.

A Word From the Directors The popular press of today are salivating at the thought of a potential downturn in the residential property space - it sells papers. Topics 'on trend' also include 'what's happening to property prices within the CBD'?

Blazing headlines of a '30-40% decline' or 'one offs' including the seven years following an apartment purchase when the same apartment then sells for less may be attention grabbing headlines, however it doesn't address the inherent strength demonstrated by Melbourne's middle ring, outside of the CBD. Over the last three years Marshall White Projects have made a conscious decision to stay away from projects within the CBD - in other words we like to stick to what we know sells and sells well, in every economic climate.

Interestingly a number of the 'big players' in town are now taking a lower risk profile (settlement stress, financing etc.) and are looking outside the CBD to the city's fringe and now favourably considering boutique developments (sub 50 apartments) throughout Melbourne's 'wealth belt' of Stonnington, Boroondara and Bayside. They recognise that in recent times, these developments days on market can be measured in weeks not months.

During 2015, 85% of all Marshall White Project's transacted project sales were to a local market, coincidentally 85% were also to owner occupiers. The 'empty nester' or 'downsizer' accounted for 13% of all sales, however early signs show were tracking for at least double this number throughout 2016.

Again in 2015, we assisted over 120 owner occupiers own a property off the plan at a purchase price of over $1,500,000. This is a direct correlation to the strength of

the residential market as buyers reinvest their recently realised capital growth into a new luxury town residence or apartment.

At Marshall White Projects we are fortunate to have access to a number of both Victoria's and Australia's leading developer clients, most of whom have been around long enough to witness first hand the vagaries of any development cycle.

They've graciously provided us with their comments for a new series that will run throughout our 2016 newsletters titled '5 minutes with...' providing a number of fascinating insights - turn to pages 14-15 for our first instalment.

As Marshall White Projects forecast 2016, we confidently believe we will have a year of stability, we don't compete with the plethora of stock within the CBD and as a result we're not directly linked to any fluctuating economy of a bank or the offshore buying market.

November 2015 saw us celebrating the successful 'sell out' of Marshall White Project's 50th residential project, within three years of us commencing our projects division.

We've noted that despite a number of leading financial institutions' cooling' towards acquisition leading for developments sites, these unimproved land opportunities are still being aggressively pursued in an open market - this tells us that 2016 and into early 2017 should be business as usual.

For a discussion on how to get your own project to stand out from a 'noisy' market place, then we'd welcome your call on the numbers below.

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

Stavros Hadhiyanni

Stephen Edwards

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.

Focused and driven by nature, Stavros is absolutely committed to helping his clients achieve their property goals.

Making the most of his academic achievements in financial planning and experience of more than a decade in the retail, financial and real estate sectors, he goes above and beyond to ensure a smooth, professional experience from start to finish.

An appreciation for the life-changing nature of an off the plan real estate transactions trains Stephen’s focus on the human aspects of the real estate industry, ensuring his clients are comfortable throughout each transaction. A huge advocate for excellent communication, Stephen makes every effort to establish a pleasant and enjoyable experience for his clients looking to own their new apartment or town home.

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.

Stavros maintains transparency throughout every campaign using clear, open and detailed communication and tailors his approach to each client. Never one to become complacent, he maintains vigilance in developing his knowledge base and refining his skills as he strives to ensure his clients receive worldclass service on every occasion.

Stavros’s personality aligns well with the vibrant locales of Stonnington and Boroondara. In close proximity to bustling cafes and scenic parkland, he feels completely at home. Making the most of his moments of downtime, Stavros enjoys keeping active and taking advantage of everything Melbourne has to offer.

2

Stephen’s twelve-year journey as a business owner has provided him with a rich understanding of the importance of community spirit and hard work. Having bought and sold numerous properties and blocks of land himself over the years as well as renovated and managed his own development projects, Stephen’s ability to demonstrate real empathy has become a predominant part of his negotiation style.

281 281 Tooronga Road Malvern East 281tooronga.com.au

Gardiner Cnr Paxton Street and Burke Road Malvern East gardinerapartments.com.au

3

No. 308 308 Carlisle Street Balaclava 308carlislestreet.com.au

Autun 72 Serrell Street Malvern theautunestate.com.au

4

The Lonsdale 27 Scott Street, Dandenong thelonsdaledandenong.com.au

5

Apartment Design With the increasing popularity of apartment living, there is a growing public awareness of the importance of interior design and how it can enrich our daily lives.

Our approach to apartment design involves creating a subtle layering of textures, depth and balance between materiality and form in apartments.

A fairly neutral palette allows the resident to inject their personality into the space.

This creates a more enduring and sophisticated palette, which isn’t dominated by strong colouration.

With residential furniture trending in pastels, navy and greys, a neutral and warm interior palette is sympathetic and complimentary to pieces in the space.

Joinery is increasingly treated as an aesthetic feature in apartment design rather than just a purely functional aspect of the home. The range of finishes and materials available to designers is constantly evolving and expanding. Designers are increasingly pushing what is possible in apartment design when it comes to joinery detailing and material palettes. Bespoke details such as leather handle pulls, matt textured cabinetry, timber veneer accents and feature tap-ware are finding their way into the multi-residential industry. Attention to

6

detail is important and something buyers now expect.

Likewise, innovative storage within apartment design is becoming the norm. People are opting to purchase apartments over houses for lifestyle reasons, which means ease of living within these spaces is of paramount importance. It is no longer enough to merely offer linen storage. Simple considerations for items such as bikes and market trolleys are now expected from the market looking to purchase.

Tactile and natural looking materials are very sought after at the moment. Matt and brushed surfaces are taking precedence over chrome and highly polished tap-ware and light fixtures. Timber, concrete, natural stone, hand glazed tiles and artisan light fittings and fixtures are used throughout apartment interiors on all different budgets. Elements more commonly found in house design applications are increasingly being used in apartment design to achieve a real ‘home feel’.

At Adele Bates Design design we pride ourselves on maximising space through well considered spatial design.

Maximising living, kitchen and bedroom spaces and creating a good flow of space contributes significantly to a good apartment lifestyle.

We incorporate storage cabinetry where possible, in spaces such as bathrooms, laundries and entry hallways.

6

Something as simple as integrating some shelving over the washing machine space can provide invaluable storage space, while adjustable shelving throughout the apartment provides storage flexibility.

Galley and island kitchens are preferable over L-shaped kitchens to avoid awkward corner storage spaces.

We like to incorporate a wide pantry that also provides space for appliances such as the microwave, freeing up usable benchtop space.

We always integrate storage into our bathroom designs, with wall mounted shaving cabinets and under vanity drawers. Clever design details such as a cut out in the shaving cabinet for the hair dryer cable maximises the use of bathroom storage.

Adele Bates Design is a multidisciplinary design practice, specialising in interior design and working collaboratively with architects, landscape and graphic designers, artists and artisans to fashion apartments that are beautifully resolved.

The practice applies residential thinking to their bespoke, detailed and finely crafted interiors for boutique and multi-residential apartments. This holistic design approach and attention to detail culminate in an apartment that’s architecture and location appropriate, furniture friendly and investment astute.

Principal Adele Bates has over 12 years of experience across a diverse range of projects.

P +61 3 9686 0852 E studio@adelebates.com.au W adelebates.com.au

7

Think Globally and Act Locally

The Challenges and Pitfalls for Asian Developers Australia's stable political environment, low inflation, clean air, high standards in education and a relatively relaxed lifestyle are listed as some of the most attractive features of our country. Two of the top five most liveable cities in the world are located in Australia, with Melbourne sitting on top for the last five yearsa. Additionally, Australia's population is projected to grow at 1.3% per year reaching 39.7 million in 2055 b and with historically low interest rates; it has spawned an avalanche of offshore capital influx into the property market for supply (developments) currently mirroring demand (investors and predominately owner occupiers).

the property market. Chinese developers and investors pumped more than $8 billion into the residential property market in a period of 12 months with another $60 billion forecasted over the next six yearsd.

More than three decades ago well-heeled developers from South East Asia started the capital flow, dabbling in the odd large-scale commercial development. It was not until a decade ago that significant funds were channelled into the residential segment of the market, only this time from North Asia. Within this period, China has grown to become the biggest source of approved foreign investment in Australiac, topping the US in

Business models proven effective in offshore markets may not be directly transferable.

Many Asian developers find it a challenge to adapt their processes and skill-set to the local market resulting in lack lustre if not negative returns. Chinese developers have built their empires on large-scale developments centred in the CBD precinct in China and many choose to do likewise in Australia. This misaligned strategy has caused financial pain

Below: Norfolk 346 Canterbury Road, Surrey Hills

Given this, the question we are often get asked is: "What experience can we draw from more than three decades of Asian developers in the Australian property market?"

We believe focusing on a segment, knowing your market, position for the long-term and be adaptable are some of the answers. It's only with these that a developer will succeed in Australia. Unfortunately some of our Asian developers here are yet to recognise them.

for many new entrants as then opportunities presented by Australia's urban sprawl are often overlooked.

It is trending very clearly here in Melbourne.

Fifty new suburbs were added since 2006 and the population of Melbourne alone is predicted to double by 2051 e. This projected 2% population growth per year will translate into 1.57 million dwellings most of them being developed outside the CBD precinct. Over 1.7 million jobs will be created with business and knowledge services forecasted to be the drivers of prosperity in the city f. Lifestyle emphasis will be a work/life balance creating living and working hubs away from the CBD precinct. We need to be tuned into this imminent change if we want to sustain our businesses in Melbourne. Housing this new population demands that we as developers understand this trend and prepare accordingly.

Factoring in Australia's changing demographic, new markets are emerging from the ageing population. Baby boomers are trending away from retirement homes

Despite the massive challenges and pitfalls, which await new entrants, the Australian property sector is now the new focus for the Chinese business diaspora, which commenced more than 160 years ago. In the 1800s the Chinese came to Australia for the prospect of gold and now they are here to invest in land development. Success factors then were: strength in the number of workers and simple grit and determination, but after this time they are now replaced with substantial financial backing and a proven ability to sustain a long-term business. Adapting and contributing to the local environment is a vital key to achieving sustainability.

We should think long-term and replace the often shown ubiquitous mind set of a fast return. It is only with this long-term approach to developing that we can truly build a sustainable business in Australia.

Once a long-term approach is internalised we will automatically adapt to the local market and in doing so create our unique competitive edge. We then become transcultural, arming ourselves with the ability to appeal to both the Australian market as well as our respective offshore markets.

Above: Norfolk Park 346 Canterbury Road, Surrey Hills

"Chinese developers have built their empires on large-scale developments centred in the CBD precinct in China and many choose to do likewise in Australia. This misaligned strategy has caused financial pain for many new entrants as then opportunities presented

by Australia's urban sprawl are often overlooked. "

At BHC our team of multi-lingual professionals are hand-picked for each project. We partner with reputable architects, engineers, planners, builders and Project Markets such as Marshall White Projects, as all our alliance partners share our vision. Collectively we know that each project must be not only purpose-designed for the market but also bring value to any projects location.

to downsized apartments often located in the same suburb but closer to amenities.

Developers aligning their strategies with these insights are often more likely to capitalise on their projects than those fixated on a CBD-driven strategy.

I would say that the key ingredient to be successful as an Asian developer in Australia is to "Think globally and act locally".

The Asian business diaspora in the second millennium needs to chorus a different mandate. We will need to re-assess any misaligned business strategies and redirect our energies and capital into activities that will enable us to learn, adapt and finally contribute to the local environment. This is the only way to inoculate ourselves from both the challenges and pitfalls that await Asian developers in Australia.

We believe that whilst core leadership capabilities can be cross-cultural, leadership styles are on the whole strongly culturally based. From experience we are cognisant that, the more egalitarian Australian employee or supplier will resist an authoritative top-down style of management adopted by an Asian firm. Asian developers should understand and accept that Australian workers and/or suppliers see pragmatism as a key attribute in getting a job done, as apposed to protocol or hierarchy.

Trying to deliver a project with an alien corporate culture in Australia is compared to competing in a regatta with an anchor still overboard. Empirical evidence has indicated that many of our Chinese developers have not adapted successfully. They have relied on a China-led project management style creating apartment blocks that are out of sync with the Australian quality-conscious buyers and the needs of an active local community. The result is a market driven “reverse� strategy and selling these apartments back to less discerning offshore buyers.

The Economist Survey, Intergeneration Report 2015, c Annual Report 2015 - The Foreign Investment Review Board, a

b

Jian Zhou, Director BHC Property P +61 3 9813 1863 E jzhou@bhcproperty.com.au W bhcproperty.com

Credit Suisse Report 2015, Plan Melbourne May 2014, f "State of the Cities" Plan Melbourne d

e

9

Past Project Profile

Alton 114-116 Balcombe Road, Mentone altonmentone.com.au

10

Apartment Type

Apartment No.

% of Total

Average Size per m2

Average Price per m2

Average Price

1 Bed, 1 Bath

15

44

59.2

$6,879

$407,833

2 Bed, 1 Bath

7

21

76.1

$6,559

$499,786

2 Bed, 2 Bath

12

35

82.1

$6,846

$562,500

Past Project Profile

Olor 306-312 Swan Street, Richmond olor.com.au

Apartment Type

Apartment No.

% of Total

Average Size per m2

Average Price per m2

Average Price

1 Bed, 1 Bath

13

39

44.4

$9,030

$390,571

2 Bed, 1 Bath

6

18

62.3

$9,183

$582,004

2 Bed, 2 Bath

12

36

62.4

$9,429

$587,589

3 Bed, 2 Bath

2

6

132.0

$9,920

$1,309,500

11

Past Project Profile

Norfolk Park 348 Canterbury Road, Surrey Hills norfolkpark.com.au

12

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

$8,899

$628,471

2 Bed, 2 Bath, + Study

1

4

91.0

$9,066

$825,000

3 Bed, 2 Bath

3

11

111.0

$9,962

$1,106,667

Above: Autun 72 Serrell Street, Malvern East

The Vital Ingredients As client side project managers, Nash Project Management see a broad range of development proposals and the lack thereof proper start up essentials.

From the outset of a new development, there needs to be a project plan. This plan can be created by either your project manager or inhouse should the knowledge be readily available.

Objections to planning permits and VCAT involvement seems more and more common now, but a good architect, town planner and project manager can help negotiate these hurdles right from the outset. Time is money, so your team selection is vital.

Step 1 – Site Characteristics / Concept / Block and Stack Plan As project managers the first thing we do is review the site for its characteristics; identify an accurate survey to ensure boundary accuracy and evaluate items such as heritage overlay and trees of significance etc. From there, the identified site elements are incorporated by the project architect into a concept ‘block and stack plan’ that eventually will lead to the developed end concept plan.

Step 2 - Real Estate Agent - Advice Input No.01 (i.e. Marshall White Projects) Advice sought from your Agent will be as to the target markets, demographics, apartment configuration and bed / car numbers that should be incorporated into the development for best mix, best use.

Step 3 – Floor Plate / Spatial Layout Architect procures the floor plates and ensures the best use of saleable space, aspects and common areas for the site.

Step 4 – Real Estate Agent – Advice Input No.02 This step will provide some invaluable advice as to floorplate design and if, or how the floorplate meets the requirements of the current local trends of the market to ensure end sales. Architect to update.

Step 5 – Quantity Surveyor - Costing Plan / Feasibility At this point of the development, your quantity surveyor needs to work up a high level cost plan and realistic feasibility study to ensure financial success.

The cost plan measures and applies market researched cost rates to the measured areas. This once completed, delivers and elemental cost plan of your development to represent the anticipated build cost.

The feasibility study is also completed by your quantity surveyor and requires inputs from the developer, project manager and agent to cover off data such as site purchase, sales expectations, finance, authority costs, construction costs, construction durations, various contingencies and other such financial model information to verify your development.

Financial institutions these days require you to evaluate your development and therefore a registered quantity surveyor should complete this cost plan and feasibility study for a number of reasons, but first and foremost it is about the liability and 3rd party interrogation of the product and the numbers provided that makes this step vital to the development.

Step 6 – Procure Design Team and Progress to Tender From this point, it is time to procure the balance of your design team, develop documentation to tender and seek market pricing with the aim of achieving your target financial outcome As all of the above steps are completed, there are proactive measures completed by your project manager and design team to massage items along the way to best enhance your development model. The earlier you get your project manager involved the more value they can add to the process. They use IP and value from other such developments to finesse project outcomes and ensure project success.

Chris Nash Principal Director P +61 3 9866 7702 E cnash@nashmanagement.com.au W nashmanagement.com.au

13

5 Minutes with...

At Marshall White Projects we're privileged to work with a selection of some of the best people in the project space, both locally and offshore.

Our quarterly newsletters for 2016 will contain snapshots of their first hand view of the market place and importantly what direction we're all heading towards for the 2016/2017 financial year.

The first comments below relate to our first two questions; namely, look back to 2015, what did and didnt work well for you? and secondly do you believe the value of development sites have peaked?

Robert Murphy

Matthew Chun

Development Manager SMA Projects

Director Chun Group

1.

1.

"In the markets that we operate 2015 was dominated by a two tier type of market in apartments. This being 'inner city/ investor' type product which was well received by overseas buyers in particular and 'owner occupier' product within the inner city fringe (say 10kms) where anything that was 2 and 3 bedrooms with well designed and appointed apartments sold extremely well. In regards ti developments sites it was a strong year of permitted site sales with some prices paid well above our view of value, Will be interesting to see how the sites are developed and funded through 2016!"

2.

"Not sure if it has peaked but it's certainly between 11 and 1 on the property clock.

Nonetheless the market has been surprisingly strong this year and due to continued growth, low interest, volatile stock market and low $A it is likely it will remain at around 11-1 for some time yet."

2.

14

"2015 was an interesting year, shares seem to rise as quickly as they fell and fall as quickly as they rose. The Australian Dollar reverted back to its more traditional place and I believe that property did very well for both these reasons. There seemed to be no stopping house and land developments, not only to the city fringes but extended strongly into satellite cities and regional areas of Victoria. Middle ring townhouse developments are going to become harder to come by due to planning law changes and strengthening off the back of this is the apartment market. The number of cranes in the sky is a testament to the growth of the 2015 apartment market."

"I think every site needs to be considered on its individual merit and if you do so there will always be something available that contains intrinsic value dependant on your requirements for acquiring such. With that said those who have purchased sites purely for development purposes would want to be, or be surrounded by very experienced people."

Elias Jreissati Group Chairman Bensons Property Group

David Steele Nolan Stevens General Manager General Manager Metro Property Development Buxton Group

1.

"2015 was an interesting year. It was extraordinarily busy and active in the first half, whilst the second half saw the beginning of that long awaited resetting of activity in the market place."

1.

2.

"We thought it peaked three years ago, We think that almost every development site sold over the past three years has been grossly overpriced. We did not participate in that market and we are just now starting to see some good land coming into the market without silly price tags."

2.

"2015 saw the rise in popularity and broad market acceptance if the attached townhome as a genuine alternative to traditional housing in more mature suburbs. Buyers are not fully aware that this form of dwelling can provide the same (or even greater) accommodation, with lower maintenance requirements and a much more affordable price"

1.

"From our perspective, projects targeted at the local owner occupier market have delivered superior returns, especially the downsizers."

2.

"It has looked that way for the last 5 years, but Buxton Group and others we consider to be smart developers continue to buy good sites."

"I believe there will always be strength in the values of development sits in A grade locations, however the B and C grade locations are likely to be most affected by market sentiment and funding constraints. We've seen many sites transacting at figures that would never stack up in feasibility with even very optimistic revenue propositions"

15

16

Qualitas Creates Fund to Bridge Finance Gap Qualitas, the real estate private equity firm backed by high-net worth investors, has launched a new$200 million Opportunity Fund to invest in residential and commercial projects.

Already, $100 million pipeline of potential investment opportunities has been identified according to a fund document provided to The Australian Financial Review.

Group managing director and co-founder Andrew Schwartz said a pull-back by banks from lending to property developers had opened up

Founded in 2008 by former Babcock & Brown executives Andrew Schwartz and Mark Fischer, Qualitas has invested in or financed over

the market to alternative capital providers who can provide ‘‘gap funding’’.

$2.6 billion of real-estate assets, including Aqua Apartments in Bondi Junction with Leighton Properties and Bouverie Apartments in Melbourne with Grocon.

‘‘[Funding of development projects] is not a deep market in Australia.

The banks control 94 per cent of the commercial mortgage market so there’s not a lot of choice for developers,’’ Mr Schwartz said. ‘‘We aim to fill the funding gap not being provided by banks or super funds.’’

But he said Qualitas would steer clear of investing in development sites, which he said were a no-go zone at cur-rent pricing levels. ‘‘Development site values have peaked as part of the current cycle, which is why a lot of developers are looking to flip their sites. They have done the maths and figured out it would be hard to make them work,’’ Mr Schwartz said.

He added the lower availability of bank debt, higher costs of capital and increased construction costs were adversely affecting the value of development sites and meant values would have to fall. ‘‘We would avoid open equity risk in a market like this, because there are better, de-risked alternatives available offering premium returns,’’ he said The new fund, targeting $200 million and capped at $300 million, would provide mezzanine debt or equity for ‘‘high-quality commercial, retail and residential projects’’ focusing on value-added projects.

More recently, it has provided debt or equity for apartment projects on St Kilda Road in Melbourne, in Canberra's tallest residential tower being and for a housing project in Sydney’s south-west.

The new fund will be evenly split between mezzanine debt and equity. ‘‘There’s definitely an increased appetite for debt among property developers,’’ Mr Schwartz said.

While the first close was dominated by local investors, he said there was still strong interest from offshore investors in Australian real estate. ‘‘A combination of a continuing low interest rate environment, lower currency, positive market dynamics and good governance make Australia attractive to overseas investors,’’ he said.

Andrew Schwartz Group Managing Director Qualitas P +61 3 9612 3950 E andrew.shwartz@qualitas.com.au W qualitas.com.au

The first close of the fund saw a predominance of local investors and some from offshore participating alongside Qualitas. Mr Schwartz said the response from investors indicated ‘‘very strong appetite’’ for property, driven by the global uncertainty and concerns about the sharemarket and some sectors of the property market.

The fund has a two-year window to identify opportunities to provide either mezzanine debt or equity for projects with patient investors to be rewarded with returns ‘‘in the high teens’’.

Opposite: VANGUARD 807 Dandenong Road, Malvern East

17

Past Project Profile

Teri 85 Market Street South Melbourne terisouthmelbourne.com.au

18

Apartment Type

Apartment No.

% of Total

Average Size per m2

Average Price per m2

Average Price

1 Bed, 1 Bath

54

4

48.3

$9,605

$463,750

1 Bed + Study, 1 Bath

3

3

52.0

$9,026

$470,000

2 Bed, 1 Bath

91

46

57.0

$9,668

$551,500

2 Bed, 2 Bath

38

43

66.9

$9,511

$640,579

2 Bed + Study, 2 Bath 1

1

74.2

$9,569

$710,000

3 Bed, 2 Bath

2

102.9

$10,569

$1,087,500

2

Past Project Profile

Leopold 18-20 Leopold Street Glen Iris leopoldstonnington.com.au

Apartment Type

Apartment No.

% of Total

Average Size per m2

Average Price per m2

Average Price

1 Bed, 1 Bath

1

6

48.0

$9,896

$475,000

2 Bed, 1 Bath

1

6

70.0

$9,643

$675,000

2 Bed, 2 Bath

9

50

72.5

$9,665

$701,111

3 Bed, 2 Bath

7

38

118.5

$9,874

$1,172,857

19

Celebrating 50 Successful Sell Outs in Three Years

+ 61 3 9822 9999 1111 High Street, Armadale VIC 3143