Industry Leaders Discuss Key Trends in Australian Property Sector
The Australia-Israel Chamber of Commerce hosted its 2017 Property Lunch at the Four Seasons Hotel, Sydney on 11 October 2017, sponsored by Macquarie Capital and Quintessential Equity.
Sky News Business Editor James Daggar-Nickson moderated a discussion among David Harrison, Managing Director and Group Chief Executive, Charter Hall; Crown Group Chairman and Group Chief Executive Iwan Sunito; and Deborah Coakley, Executive General Manager, Funds Management, Dexus Property Group.
Iwan Sunito considered Sydney still relatively affordable in global terms, despite the rapid price rises in recent years, pointing to excess demand over supply. He also noted the restrictions resulting from the time it takes to get approvals for major developments and to develop additional capacity, arguing that “local government needs to create less red tape and more red carpet”.
David Harrison pointed to the annual rental escalations in the Australian property market increasing its attractiveness relative to the U.S. and British markets. Deborah Coakley reiterated ongoing demand from offshore capital for a well-regulated and stable environment like Australia, noting the importance of transparency for offshore buyers entrusting their money to local developers.
Coakley also outlined that the push for sustainable development was now increasingly driven by tenants’ desire for a particular staff work environment and experience. Tenants were focusing on how they can control their environment, rather than control by building management, and Dexus was spending a lot of time on what the office and worker of the future would look like, she said.
Sunito pointed to a broader global shift in how people live, helping drive the move from suburban to more high-density urban living, and feeding through into how his company designs buildings to provide greater amenity. People were increasingly after high amenity, not just high-rise living, and wanted to be able to meet their friends and family and live their lifestyles in the complexes they live in, he said.
Coakley commented that her firm often gets asked about central business district parking spaces – “what are you going to do when there aren’t any cars”? In her view, there would be changes in usage of space. Rather than having one car parked all day, for example, the space could be used on a flow-through basis by Amazon delivery trucks. Coakley and David Harrison both pointed out that a lot of land in the Sydney CBD is tied up in car parking, and that the potential rents could be much higher from alternative uses of the space.