When environmental features are worth paying for

We recently saw an interesting presentation from Hillam Architects on emerging technologies and environmental efficiencies.

Often you hear the statement that people will not pay more for environmental initiatives.  But based on what we saw in the presentation, this cutting edge science would undoubtedly draw a niche market that could and would pay for this revolutionary design.

Swisstech Convention Centre has employed solar panels, but rather than being on the roof, they have been used in the facia of the building as a design element.

These Grätzel cells, in addition to being translucent, can be deployed vertically without any loss in efficiency. They not only produce renewable energy, but they also shade the building from direct sunlight, reducing the need for air conditioning.

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This technology has also been applied to louvre windows.

April environmental blog 2016

Furthering from this, the 214,000-square-meter Pearl River Tower redefines what is possible in sustainable design. The soaring tower’s sculpted body directs wind to a pair of openings at its mechanical floors, where traveling winds push turbines that generate energy for the building. Other integrated sustainable elements include solar panels, a double-skin curtain wall, a chilled ceiling system, under-floor ventilation, and daylight harvesting, all of which contribute to the building’s energy efficiency.

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In addition, Arup has introduced the concept of the live microalgae wall in Hamburg which provides shade and generates renewable energy at the same time.  It also provides an interesting and attractive design element to the building!

algae-building april 2016

And finally we were shown a 10 storey timber apartment building being constructed by Lend Lease in Melbourne.

Built from CLT or Cross Laminated Timber, this is a durable and strong, sustainable, solid-wood alternative to conventional structural materials.

CLT was developed in Europe and has been used in cutting-edge constructions overseas for more than 10 years.

CLT keeps your apartment warmer in winter and cooler in summer and once again offers a natural, alternative which is also more cost effective.

april envionmental blog wood construction

With these new technologies in play, it is time that Perth also took this evolutionary leap and create a niche for designs that optimise on our natural resources.  These are the kinds of elements that will differentiate your design from the competition and truly demonstrate innovation.

We hope that we have stimulated future thought processes!









Perth apartment market looks positive in medium term

Samantha Reece attended the Property Council’s multi-unit development conference yesterday and came away with some great learnings that we will blog about over the forthcoming weeks.

But of the highest level of interest was the presentation from David Cresp of Urbis who spoke about Perth’s apartment market.

We are certainly hearing from clients that they are having to work harder to secure sales and the data outlined in the presentation indicated factors that were contributing to this current state.

Firstly David outlined the fact that Perth has the lowest proportion of apartments nationally at 9% of the housing stock, whereas Melbourne has 15% and Sydney 26%.  While this is a trend that will alter over time, Perth is certainly behind the other national cities when considering density.

And this is even more evident, with Perth’s apartment approvals in 2015 at the same level as it was back in 2008.  And while there are 44,000 apartments in total in Perth, 25,000 of these were constructed before 2000 and hence represent older stock.

There is no denying that WA needs 50,000 more dwellings to match underlying demand and this indicates that there is no oversupply of housing stock, especially as there were only 23,000 dwellings undergoing construction in 2015/16.

And while there is an expected delivery of 4000 apartments in Perth in 2017, if demand increases from the current 20% to 30% then there will be a need for 5500 apartments.  Once again this is an indication that there is not an oversupply in this specific market either.

The presentation also outlined that in 2012/13 Perth experienced an undersupply in apartments and that is why the market appeared to be moving faster, than current times.

And while there were 13 projects and 1300 apartments launched in the last quarter, not all will proceed.

As was stated, demand is continuing but Perth is now witnessing a condition where supply is currently exceeding demand – but this is just a short term situation considering the ongoing demand for housing stock.

The data also demonstrated that in 2015 there was $1.5 billion in apartment sales.  Of this 86% of the completed projects are sold, 65% under construction are sold and 31% in presales are sold.

In addition 50% of buyers are owner occupiers, 20% investors and 23% FIRB.

As such the current situation, where supply does exceed demand, is just temporary and there is no denying that CBD located properties are achieving better sales than outer suburbs.  On that basis it is more important than ever that your sales team are clear about your project’s unique selling proposition and ultimately are proactive in closing the sale!

If you would like to brush up on your sales team’s selling skills then contact Samantha Reece on 0452 067 117 – we can guarantee to give your project that elusive competitive edge.

The Premier has a vision for WA

Samantha Reece of PropertyESP attended the Premier’s lunch last week with the UDIA and it was clear from the outset that Colin Barnett is definitely on the campaign trail 12 months out from WA’s next State Election.

Appearing both frank and succinct, the Premier reminded the audience that the State had just come out of an unprecedented period, which had allowed Perth to bloom.   He talked about the gold rush in the 1890’s and post war construction of Japan in the 1960’s and now the 2000’s which had created the State that we live in today.

And as Barnett reiterated, Perth has now become a vibrant city with the Perth Link, Elizabeth Quay as well as Brookfield Plaza, the State Treasury Building and the St George’s Cathedral precinct.

But with WA coming out of that boom, it is now time to consider new areas of opportunity.

As would be expected, tourism, agriculture and science were the three areas that the Liberals will be focused on as they head into the next election and beyond.

But as Barnett stated, there is now a focus on making Perth even more liveable and that can primarily be achieved by increasing density.

In a bold move, he stated that Donna Faragher’s first role as the newly appointed Planning Minister would be to visit all 29 metropolitan LGA’s and ask them to identify locations for high density and if the LGA did not comply, then the State Government would mandate locations.

The Premier also indicated that there was quite a strong focus on relocating Government departments to the outer suburbs, including Joondalup, Fremantle, and Cockburn, to assist these areas with their economic growth.

And he spoke about capitalising on the location of QE2 to UWA by creating a centre of innovation on par with the Texas Medical Centre.

However, next on the Government’s hit list is public transport and the Premier gave an indication that the contracts for the underground rail to the airport and Forrestfield would be signed off in the next couple of weeks.

It is quite clear through these kinds of actions that infrastructure within greenfields development is certainly not on the Government’s priority list.

The Premier also spoke about expanding tourism opportunities in Kalgoorlie, Albany, Bunbury and the Coral Coastline.

And he indicated that the State Government would be happy to consider abolishing stamp duty and instead increase personal and company taxes by 1%.

There is no doubt that the current Government has hit some home runs in the past eight years, delivering a suite of new experiences to Perth which has transformed our everyday lives.

In the post boom economy, it is fitting to remind ourselves that WA has already received tangible benefits from those years of economic growth. But as we head into the future, the State still needs a plan to meet the needs of our growing state.  The Premier has shared his vision for that future.

The next 12 months will certainly be an interesting time for the State in the run up to the election, and we at PropertyESP will be watching avidly!

Has WA hit rock bottom?

Samantha Reece of PropertyESP attended an interesting lunch this week with Mark Pownall of WA Business News.

The topic of the lunch was WA’s current business scene and how the state was positioned in the current economic climate.

Certainly some of the information on property sales and building pipeline that Mark shared with us showed that Perth was coming off a relatively strong high.

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But the signs are there that we are once again moving through a cycle.  We reached a peak in 2014 – and we believe the trend will improve again in the medium-term.

Although population growth has slowed from the highs of 2011/2012, in the past ten years Perth has grown from a city of 1.5 million to over 2 million. Mark was confident that some of those migrants would stay regardless of the changes to the mining sector and look for work in other sectors.

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There was further good news, with commodity prices for iron ore having risen in recent weeks. Gold is also once again championing the cause for WA, as is LNG.

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WA has come a long way in the past decade and we are now poised for the next cycle.

With the skyline filled with cranes and $24 billion of Government infrastructure being built, there are positive signs that we will come out of this downturn relatively unscathed.

In terms of future economic opportunities Mark, cited a number of key areas for us to ponder.

Firstly, he believes that agribusiness will come to the fore and Mark quoted Bannister Downs $40 million investment with their new dairy as one example.

Secondly, Mark felt that this was the time for innovation.  At PropertyESP we strongly agree with this point.  If you continue to do business in 2016 as you have for the past 10 years, then you will undoubtedly falter.

Mark felt WA’s saving grace would be gold and the apartment market as key drivers for our economic recovery.  In particular, Mark reinforced that there was a need to tie public transport to infill living, something we at PropertyESP have also been emphasising over the past 12 months.

At the end of the day, WA is cyclical because of its heavy reliance on the resources sector.  But as we all know what comes down, will always go up!

Interested in what we might have to say about the WA property sector? Then contact us at info@propertyesp.com.au. We make sense of property!











































Project marketing needs to dig deeper than the surface

Last week Samantha Reece presented REIWA’s first Project Marketing Course.

Speaking to 30 sales professionals, who all had projects underway, Samantha spoke about a number of key activities that PropertyESP undertakes when conducting research , which we always do before creating a marketing strategy.

Firstly, we look at the demographics of an area, particularly looking at changes over time. This tells us how many of the residents own their homes outright; which age groups are earning the most income; whether the suburb is a young family area, or is undergoing transition with the influx of new residents; and how the occupational profile of the area is changing. All of this helps us determine the key customers for the project.

When we look at this kind of data over the past 11 years we can see trends. For example, the chart below shows the increase of professionals and managers in Success and Atwell, and at a greater rate than the increase in the Perth Greater Capital City Area, while the percentage of professionals and managers in Ellenbrook has stabilised. This data helps to identify which customers we will target in an area.

March project marketing blog

Next, PropertyESP looks at sales trends over time. We believe that if you look at data over 10-20 years you can see a trend in sales and capital gains.

For example, the chart below shows the capital growth for the Murdoch area suburbs, which is useful in determining what sorts of price points might be acceptable to buyers who are now looking to purchase in the area.

March 2 2016 blog

And then we look at the competition and often phantom shop other sales offices to determine what the sales agents are saying about their projects, so that we can then determine a point of difference for our client’s project.

It was evident from the presentation and resulting feedback, that many of the sales agents were not undertaking the full gamut of research before developing their project marketing strategy.

It is important that before you appoint a sales agency you determine:

  • Who are your potential customers? (ABS data)
  • What has happened in the market place to date and how will this affect your pricing? (REIWA sales data)
  • What is your competition offering? (Phantom shop/web search)

If you would like to discuss these points in more detail, before you launch your next project, then contact PropertyESP on 0452 067 117 or info@propertyesp.com.au.














WA will weather 2016 and succeed

Samantha Reece attended the Property Council’s Australian Property Index breakfast held at Lavan Legal’s offices on Thursday.

Speaker Anthony De Francesco of MSCI spoke about the overall Australian market before then breaking down to WA on the basis of residential, retail, industrial, commercial, healthcare and tourism growth.

What was interesting was that from December 2014 – December 2015 all these sectors posted growth across Australia.

In particular Anthony spoke about the increase in overseas investors that were fuelling large asset purchases. He explained that it was Australia’s yield plus the cost of capital, which all contributed towards ongoing overseas investment.

However, looking at a state by state analysis it is clear that WA and QLD are tailing the other states and in particular NSW and Victoria. But it was also noted that just two years ago, it was the reverse.

When the rest of the States were experiencing a GFC – WA was not – but our shortfall was that we didn’t highlight this fact and hence create a mini boom, as the likes of which we have just witnessed in Sydney.

In the commercial sectors Perth is certainly suffering an oversupply. With Prime CBD sites we are seeing vacancy rates sitting at 17% when the average is 7% and vacancies for Secondary CBD sites are sitting at 22% when the long term average is 12%.

However on the upside – the retail sector certainly is showing signs of growth in WA and that is because for so long there have been caps on floor sqm and these are now lifting. As a result the retail sector is playing catch up with the residential population growth we have witnessed over the last 4-5 years. And this population growth is anticipated to continue – albeit at a slower rate.

By far it is evident that residential property growth has significant flow on effects with other sectors – especially in retail with household and white goods – and in the East it is this activity which has propelled the rest of the economy.

In terms of what action can be taken here in WA – it simply is a matter of supply and demand.

As Anthony stated, if there is an oversupply of commercial offices, then consider turning some of these into residential. And that is the key for the next 12-18 months – being flexible so as to ride out this current cycle.

There are plenty of upsides to the WA market and this current status will allow for upgrading of old office stock, introduction of premium hotels (which should attract the overseas tourists) and an expansion of the overseas student market.

The fact is, private enterprise will need to invest, but this is in keeping with our current revitalisation and will certainly leverage Perth even further as a city which has finally found its vibrancy.

Perth and WA have benefited from unprecedented capital investment and now it is essential to keep this wave moving so as to counter balance the adjustments we are witnessing in the mining sector.

But if we all stay focused on action, then this should be an easy task to fulfil.