Beller

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Beller's Head of Business Development and Leasing, Luke Spence recently provided Urban.com.au with an insight into Melbourne's rental market, which shows no signs of cooling down, despite the winter months.

He discusses the impact of population growth on low residential vacancy rates in Melbourne, in addition to which suburbs are the most popular for particular buyers. 

Spence is an experienced young real estate agent who has recently been shortlisted as a finalist for the REIV Awards for Excellence ‘Outstanding Young Agent of the Year 2017’ and ‘Business Development Manager of the Year (Property Management)’ in the nationally recognised 2017 Real Estate Business Awards. 

Frequently publicised as the tightest rental market within Australia, Spence has observed that Melbourne’s metro market has experienced another drop in vacancy rate statistics.

According to Spence, the first quarter of 2018 demonstrated a drop of 0.3% from December 2017, and the second quarter appears to be following suit.

Additionally, the statistics show that January and February 2018 saw vacancy rates steady at 1.9%, while March displayed 1.8%, and April dropped another 0.1% to 1.7%.

Spence says areas with very low vacancy rates (typically sub-2%) are often referred to as ‘tight’ rental markets where rents are more likely to be increased, providing landlords with their pick of tenants, in what is otherwise known as a landlords market.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public//pictures/article-images/44en6z.jpg" rel="gallery-all" title="Suburbs like South Yarra average between 1,400 and 1,500 views per listing. Image: Ryan Seychell"><img alt="" class="image-article-full-width-580px" height="357" src="/sites/urban.melbourne/files//styles/article_full_width_580px/public/pictures/article-images/44en6z.jpg?itok=Hhi3ZVsH" title="Suburbs like South Yarra average between 1,400 and 1,500 views per listing. Image: Ryan Seychell" width="580"></a>

<figcaption>Suburbs like South Yarra average between 1,400 and 1,500 views per listing. Image: Ryan Seychell</figcaption></figure>With 110,000 people relocating to Melbourne each year, this has driven down the city's vacancy rates, making it the population growth leader of Australia. 

Spence names Fitzroy, Carlton &amp; St Kilda with at least 1,800 listing views per property, as among the best performing suburbs in Melbourne. St Kilda East is next with at least 1,700 views per listing and suburbs like Elwood, South Yarra and North Melbourne average between 1,400 and 1,500 views per listing.

For units and apartments specifically, Clifton Hill is leading the charge with 1,800 views per property listing. Albert Park and Fitzroy North are also popular with 1,700 views and 1,400 views respectively, while Hampton East and Caulfield also average 1,200 – 1,300 views per listing.

Spence believes that despite it being a landlord’s market, that doesn’t necessarily mean that little effort is required on their part to attract tenants, with prospective tenants citing cleanliness and presentation as the top priorities.

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So, it’s a landlord’s market, right? Well, this may be good news for investors, but it doesn’t mean you are immune to the scrutiny of tenants.

The rental statistics in Melbourne are favourable for landlords, but it doesn’t mean you can take your foot off the accelerator when it comes to ensuring your investment performs the best it can. Tenants call the shots when it comes to dictating the success of your investment.

After each tenancy, it is vital that your property is clean and presentable to maximise tenant interest (even if it means putting in some elbow grease yourself). I've been leasing homes for over 11 years, and the top things every tenant looks for when choosing their next home is cleanliness and presentation – no matter how low the vacancy rates are!

- Luke Spence, Head of Business Development and Leasing, Beller
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Laurence Dragomir

Beller's Luke Spence provides an update on the Melbourne rental market

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Real Estate Agency Beller recently appointed Jeremy Gruzewski as a Director, bringing with him 11 years of experience and knowledge as National Director Metro Market Auction and Investment Services at the highly respected Colliers International.

Now part of the Beller Commercial team, Gruzewski sees market opportunity for developers who are now looking at commercial office developments due to the cooling of the inner-city residential market. Strengthening rents are supporting these developments, says Gruzewski, underpinning the large number of applications and approved permits for office spaces currently in the market.

Urban.com.au asked Jeremy about his thoughts on the state of the commercial market and what's in store for the year ahead.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/image17_12_0.jpg" rel="gallery-all" title="Development's like SEEK's new HQ are becoming more common in the inner ring. Image : HASSELL"><img alt="" class="image-article-full-width-580px" height="359" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/image17_12_0.jpg?itok=iLxK5EYj" title="Development's like SEEK's new HQ are becoming more common in the inner ring. Image : HASSELL" width="580"></a>

<figcaption>Development's like SEEK's new HQ are becoming more common in the inner ring. Image : HASSELL</figcaption></figure>Urban.com.au: There is a significant pipeline of commercial developments either under construction or on the horizon in the CBD, Docklands etc. Beyond the core where do you expect to see a shift towards more commercial development?

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Jeremy Gruzewski: There has been unprecedented supply of residential apartments in Melbourne’s core and suburbs over the last 10 years to the point that the commercial market has been left alone with minimal to no supply of office developments other than in the Docklands, which is a new market.

All other areas have seen the opposite with perfectly good office buildings replaced by residential towers.

These displaced tenants have had to find new homes and now that the CBD and city fringe are at record low vacancy rates (circa 2% for the fringe), rents are starting to rise considerably, making office developments viable.

Employers are setting the trend and demand for the location of office developments on the fringe of Melbourne with Cremorne and Richmond being two hot spots. These employers are chasing the same talent pool and this talent pool wants to work and live in the same area and not travel to Melbourne’s East (Clayton, Mulgrave) to get to work.

We have seen the most permit approvals and permit applications for office development in Melbourne’s prime City Fringe. This is in direct correlation with tenants demand and briefs for office space.

UM: We're seeing companies like SEEK looking to develop a head office just on the doorstep in Cremorne and further developments proposed along Church Street, Richmond. Similarly Hickory is pushing ahead with an office development on Clarke Street South Melbourne. Do you expect to see more of these types of commercial developments?

JG: Hickory’s development in Clarke Street is phenomenal and will set a new standard for office accommodation. It goes beyond carpet tiles and ceiling grids and becomes a place where you want to live! I believe many new developments will replicate this new look and approach.

There are approximately 25 city fringe sites that have been earmarked for office development, 90,500m2 has been approved and over 400,000 are proposed and awaiting approval. Melbourne City Fringe currently has just over 900,000m2 of office supply so if everything gets approved it is a significant amount of potential new supply.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/hickory_market_lane.jpg" rel="gallery-all" title="Hickory Group's Market Lane will set a new standard for office accommodation says Jeremy Gruzewski. Image : Hickory Group"><img alt="" class="image-article-full-width-580px" height="356" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/hickory_market_lane.jpg?itok=H79cdaG3" title="Hickory Group's Market Lane will set a new standard for office accommodation says Jeremy Gruzewski. Image : Hickory Group" width="580"></a>

<figcaption>Hickory Group's Market Lane will set a new standard for office accommodation says Jeremy Gruzewski. Image : Hickory Group</figcaption></figure>UM: What do you think would make a commercial development more attractive in the current market than say a residential? What factors do developers need to consider?

JG: Without a doubt the major factor has been the growth in face rents; this coupled with a slowing of residential apartment sales has seen the desire increase for commercial sites.

Well-situated sites close to public transport, food and beverage outlets and entertainment venues providing a work and life balance will be the key. No surprises that Cremorne, Richmond and South Melbourne are hot spots.

UM: What impact do you think start-ups and co-working spaces are having on the Commercial market?

JG: Co-working spaces have certainly had an impact, but in a positive way. They have set a new benchmark in the quality of space and added “extra” offerings that an office needs to have. They have shown that tenants will pay extra for good quality designer spaces.
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Generally start-ups are smaller lease deals in relation to tenancy size but the sum of all the little deals makes their presence significant. This allows these startups to grow, and as they grow they venture into the traditional office markets.

UM: Do you think there are areas with a lot of untapped potential for both new commercial developments but also adaptive re-use?

JG:The market continues to grow and develop and with Melbourne’s continued population growth and urban sprawl we will see new areas develop. Generally activity hubs will be the most desirable.

We believe we will see supply of new office development with smaller floor plates of circa 500 m2. This more compact size is in hot demand with the highest number of enquires.

Tenants want their own brand identity and have a whole floor rather than share, and is generally the size required from the start-ups coming out of the co-working spaces. As the world changes, so do its working habits.

Commercial real estate has a ‘push and pull’ force influencing demand with more people working from home and mobile work forces, therefore, office space is shrinking.

Tenants just want better quality that creates a high-end home environment.

UM: And lastly do you think 2018 will be the year for commercial to drive forward?

JG: Yes, 2018 will definitely see an increase in commercial developments and a decrease in residential developments as proven by applications and permit approvals.

2018 will see continued investment in commercial property; we have strong enquiry from multiple buying groups and across all price ranges. Volatility in the stock market and low bank interest rates make commercial property a feasible and proven investment option.
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Beller Group's New Commercial Director Jeremy Gruzewski on 2018's commercial prospects

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Located just one kilometere from Brighton’s Bay Street retail strip, MAST is the latest apartment development to take advantage of Brighton's bayside location and cosmopolitan lifestyle, which includes a vibrant and diverse mix of restaurants, cafes, bars, nightlife and shopping.

Developed by Graceland and LOI Projects, and designed by The Buchan Group, MAST will comprise 15 boutique residences set across three levels within Martin Village, at 123 Martin Street.

The residences are available in one, two and three-bedroom configurations, with large terraces overlooking the village and providing views to the bay and city skyline. A number of retail spaces are located on the ground floor.

MAST has been designed to take advantage of Brighton’s bayside location and surroundings which include a large range of high-quality services and amenities and with the bay just a short stroll down the road.

<blockquote>
Having a sensitively to the scale and heritage of the village architecture, retaining an existing shop front and the streetscape’s grain and materiality. The building form steps back from the street to mediate scale, and in doing so, creates a sequence of deep terraces and balconies.

A robust design aesthetic is adopted for the apartment building using brick, patterned concrete and zinc cladding, providing a contemporary expression with local authenticity.

The apartment interiors are inspired by the theme of stillness and sanctuary. Soft blue-­‐green undertones, textural elements and natural light evoke a calm, tranquil luxury, delivering a timeless design that acts as a canvas upon which residents can make the apartments their own.

- David Forbes, The Buchan Group Project Principal
</blockquote>

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/martin_street_-_bedroom.jpg" rel="gallery-all" title="The apartment interiors are inspired by the theme of stillness and sanctuary says David Forbes of The Buchan Group. Image : Supplied"><img alt="" class="image-article-full-width-580px" height="157" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/martin_street_-_bedroom.jpg?itok=71MJwYtU" title="The apartment interiors are inspired by the theme of stillness and sanctuary says David Forbes of The Buchan Group. Image : Supplied" width="580"></a>

<figcaption>The apartment interiors are inspired by the theme of stillness and sanctuary says David Forbes of The Buchan Group. Image : Supplied</figcaption></figure>Beller Director of Project Marketing, Heath Thompson cites MAST's spacious open plans, generous storage and luxurious finishes as major selling points, describing the dwellings as "homes more than apartments.” Thompson further outlined the appeal for apartment living in Brighton in a Q&amp;A with Urban.com.au below:

Urban.com.au: Do you expect to see further developments like MAST in Brighton?

Heath Thompson: With council planning regulations, land values and developer funding restrictions, these sorts of developments are becoming harder to come by.

In saying that, the marketplace certainly has a strong appetite for apartments with generous living spaces in quality locations, so we hope that more are able to be produced.

UM: Do you think Brighton is an untapped apartment market?

HT: In Brighton, we tend to see very high-end penthouse style residences which can carry some exorbitant price tags. MAST is designed to provide spacious living zones, high-quality fixtures, ample storage solutions, excellent public transport and a Bayside lifestyle without being overly expensive.

UM: Obviously Brighton's bayside location is a major selling point but what are some of the other key aspects of Brighton that make it attractive for developers and prospective purchasers?

HT: The Martin Street village has really developed a cult following. It¹s a quiet strip with fantastic cafes and shops as well as the convenience of the train station. This area hasn¹t reached its peak yet.

UM: What type of buyer demographic will apartment developments such as MAST attract? The down-sizer market or young families? 

HT: MAST is perfectly suited for the down-sizer, professional couple or aspiring first home buyer. The key to this project is the large kitchens and living spaces.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/martin_street_living_3.011.jpg" rel="gallery-all" title="The key to MAST is the large kitchens and living spaces says Beller's Heath Thompson. Image : Supplied"><img alt="" class="image-article-full-width-580px" height="335" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/martin_street_living_3.011.jpg?itok=gqh4aJaU" title="The key to MAST is the large kitchens and living spaces says Beller's Heath Thompson. Image : Supplied" width="580"></a>

<figcaption>The key to MAST is the large kitchens and living spaces says Beller's Heath Thompson. Image : Supplied</figcaption></figure>UM: Beyond the apartments, there will be retail to the ground floor - what sort of retail tenants is the development hoping to attract?

HT: We expect the retail tenancies to be occupied by speciality shops and potentially a café.

UM: How do you see Martin Street evolving over time?

HT: It's well located adjacent to Gardenvale station with the foreshore and bay trail basically down the street. Martin Street has largely been a forgotten gem until the last four or five years.

Now the village has a great feel and has become a destination strip for those seeking an experience away from the hustle and bustle of Bay and Church St. There isn't a great deal of opportunity for future development on Martin Street so there is a good chance that the village will retain its charm over the coming years.
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Brighton's latest development embraces bayside living

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Located at 999 Whitehorse Road and designed by Hayball, 999 Box Hill is a 12-storey development of 90 apartments which seeks to add to Box Hill's expanding apartment market. The development also continues the expansion of Hayball's Box Hill portfolio, and shares DNA with a number of other Hayball-designed projects in the area.

The liberal use of textured concrete is very much characteristic of a minimalist aesthetic and restrained material palette, both inside and out, with the warm tones of the timber soffits softening the robust, heavy concrete exterior. The exterior also provides a sense of movement across its facades with staggered concrete panels which appear to shift along one axis, juxtaposed with weaving glazed ribbons along the balconies which provide moments of transparency.

999 Box Hill's general form from street level is largely in the guise of a 'tower' and 'podium' typology, although at a smaller scale. Rebates extend along the height of the building and provide separation between four cubic elements of glazed and concrete faces, rotated 90 degrees with each repetition, then stacked and arranged in a manner which seeks to break down the mass of the building, but also read as complementary parts of a single composition.

As is customary with all their projects, Hayball have ensured each apartment in 999 Box Hill is provided with adequate natural light and ventilation.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/1947_whitehorse_rd_v06_s.jpg" rel="gallery-all" title="Views with and beyond. Image: Supplied"><img alt="" class="image-article-full-width-580px" height="350" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/1947_whitehorse_rd_v06_s.jpg?itok=rcP1ITj1" title="Views with and beyond. Image: Supplied" width="580"></a>

<figcaption>Views within and beyond. Image: Supplied</figcaption></figure><blockquote>
In an area undergoing rapid change and renewal, 999 is designed to provide a refined and luxurious living experience. The finely crafted architecture will draw light deep within the interiors, where there is an emphasis on wellbeing and tranquillity.

Timber and natural stone finishes take hues from the interiors of a luxurious spa retreat and the healing power of the earth’s rich mineral assets. A minimal design palette of warm gold and bronze tones further reinforces the sense of wellbeing and peacefulness throughout.
<cite>Eugene Cheng, Director, Hayball</cite>
</blockquote>

The development adds to the area's rapidly growing skyline and street wall, ensuring Box Hill is well on its way to becoming a satellite city of Melbourne. Urban.com.au recently spoke with Beller Associate Director, Heath Thompson, to provide some insight into the Box Hill market and 999 Box Hill in particular.

Urban.com.au: Hayball have a strong legacy of projects in Box Hill and an understanding of the market. Is this something buyers are aware of and does it influence their purchase?

Heath Thompson: It's fair to say they’re the go-to architect for Box Hill apartments. Hayball have a fantastic reputation in Melbourne as a whole, adding to this the fact they have completed a lot of work in Box Hill makes them an ideal choice.

The market is certainly aware of Hayball as an architect that provides excellence in design from an aesthetic point of view but also as a designer of quality living spaces. The market always recognises good quality property.

UM: What do you think the appeal of Box Hill is for potential buyers and likewise 999 Box Hill?

HT: Box Hill definitely has a distinct community feel that provides a natural attraction in the marketplace. Box Hill provides residents with CBD-like facilities including, shopping, dining, transport and entertainment options all within a short walk and also provides excellent access to the amenities of broader Melbourne.

UM: What is the target market for 999 Box Hill? Owner-occupiers? Investors? And what are the expectations?

HT: All of the above; investors, owner occupiers, first homes buyers and down sizers. The project caters at almost everyone. Unlike in many other projects, the developer didn't have significant acquisition costs to pass on to purchasers, which has meant the apartments are really well priced with lots of room for growth.

This, along with the significant appeals of the area, make it an attractive proposition for all buyers. The design of the project has also attracted interest from owner occupiers, with loads of natural light, ample frontage, wide liveable spaces and bathtubs (which are very rare in apartments but very handy for families with young children).

UM: And final thoughts on Box Hill? Would you say it's booming?

HT: Box Hill is like it’s own economy, and a fast developing satellite CBD. I think it is already booming and will continue to do so for some time to come. Investment in Box Hill is astounding and provides a very exciting opportunity.

<figure><a class="colorbox colorbox-insert-image" href="https://res.cloudinary.com/dz9xllyip/image/fetch/q_auto:good/https://s3-ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/pictures/article-images/1947_whitehorse_rd_v04_s.jpg" rel="gallery-all" title="999's living areas reflect the muted material palette. Image: Supplied"><img alt="" class="image-article-full-width-580px" height="322" src="/sites/urban.melbourne/files/styles/article_full_width_580px/public/pictures/article-images/1947_whitehorse_rd_v04_s.jpg?itok=H4DMXuhz" title="999's living areas reflect the muted material palette. Image: Supplied" width="580"></a>

<figcaption>999's living areas reflect the muted material palette. Image: Supplied</figcaption></figure><h2>Project quick facts</h2>

<ul>
<li>Architect: Hayball</li>
	<li>Number of Apartments: 90 total. 7 x 1 bedroom, 72 x 2 bedroom and 11 x 3 bedroom</li>
	<li>Number of Levels: 3 basement + Ground + 11 levels</li>
	<li>Construction Start: 2017 End: 2019-20</li>
	<li>Common Areas: Level 1 courtyard with BBQ, pergola and seating areas</li>
</ul>
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