MELBOURNE | Projects & Construction

[colemonkee]

To get back on topic, Goods Shed and Yarra Terrace are two of my favorites. And I actually like Exo. Reminds me of the building in Dubai with the concrete exoskeleton. Any pictures of some of the under construction projects from Melbourne forumers would be greatly appreciated.

[mello]

Tayser can you comment on the economic situation in Melbourne and on the land costs, construction/labor costs etc? I would like to get a dialogue going as to how Melbourne is able to do all of this... Obviously Toronto is doing more but that is a bigger metro area so I will not compare TO to Mel. Are developers getting financing more easily than here in the US?

[tayser]

land and labour costs would be higher in Melbourne - and Australia in general. Australia doesn't have a nice little (read 180 million) country to the south full of low-skilled labour seeking a better life across the Rio Grande!

Although no-one in the development industry is on them, Australia has the 2nd highest minimum wage in the world (and it's national - no regional variances) and flows through to everything up the chain - look at the Big Mac index for a crude, but accurate comparison.

re: construction financing. 10 years ago, banks would require 50% pre-sales for projects to get the go ahead, post-GFC it's more like 70-80% for residential construction and probably the same for commercial development.

Docklands has been a plus and a minus for the city as its soaking up all the commercial tenancies as big tenants can get their own building to manage on huge floor plates and that's the key difference between this boom and the one 10 years ago - more of Docklands is becoming more attractive hence you get massive "groundscrapers" - like ANZ (bank), Aurecon (engineering), NAB (bank - they're already starting on the 2nd!), Myer (retailer (head office, not retail shop)), Fujitsu (consulting), Ericsson (telco) et al.

Banks like RBS, BNP, BoA, Citi and HSBC used to deal a lot in development financing, they're mostly still in the game but have cut back to repatriate capital back to the Northern Hemisphere for obvious reasons.

A new twist these days is S.E. Asian developers - particularly from Malaysia - are getting in on the gig, Fulton Lane is a good example, first tower primarily sold to Malaysian owners, 2nd tower more domestic focus - both are going ahead.

I think the best way to differentiate Australia (actually Victoria because this doesnt apply across Australia) and say California is that the local councils where most people are elected on anti-development campaigns - local councils are just that, the City of Melbourne only has about 100k people living in it, but it's also only about 75 square kilometres - they're overruled by a powerful central state government planning somewhat frequently. For example any proposal which has a gross floor area over 25,000 square metres is automatically sent to the state government's Department of Sustainability of Environment for approval and the local council area is only advised or asked for opinion. Ultimately this works because the state government has a far bigger picture in its head rather than just a tiny region like a local council. That probably wouldn't be the best way for California to go given that the state is 1.5 times the size of Australia and has two massive urban areas to potentially implement that policy in... just wanted to highlight how different is.

As I understand it, local councils in the US (and Canada) have far more power and from my own observation in LA, I noted that if you're in the city of Santa Monica, you pay a different rate of sales tax compared to a neighbouring city!!! That doesn't happen here and is a prime example of how most of the strategy and power lies in the state government (and effectively the federal government - although they're very light on city policy like in the US etc).

[tayser]

Collins Square marketing has ramped up: http://www.collinssquare.com.au/animation.asp

Nothing really extravagant or jaw-dropping, but the integration of this type of development in Docklands will be welcomed and the retail section is likely to do very well given the lack of that type of amenity in the area right now.

[colemonkee]

Thank you for the detailed explanation, tayser! That's very helpful. Of the gaggle of proposed projects, which ones appear at the moment to have the best shot of moving forward?

[tayser]

anyhow, this threads yet again out of date, myself and two other forumers from SSC have launched www.urbanmelbourne.info in particular and relevant to this thread is the projects section: www.urbanmelbourne.info/projects and if you want to fully grasp the projects across the whole metro, have a look at the project map: www.urbanmelbourne.info/projectmap

To date weve got just over 200 in the project DB - after 3 weeks of launching, with about another 100 to go - only residential and only projects which are at a Planning Assessment, Approved or Rego & Sales stage (some are U/C).

Most of the big stuff which is U/C is in the forum: www.urbanmelbourne.info/forum and we're gradually grouping projects by suburb and linking directly to forum threads.

I'll probably casually update construction pics over here (and SSC) but the main focus: cos it's much easier to manage in one place is on UM.

Note to mods: not attempting to boost traffic/what not - just that there is limited interest in stuff happening in Australia on SSP, and just trying to point out getting the info/data for those that want it is now a hellavu lot easier, if I've majorly broken any rules - no qualms if you delete this post

cheers.

[tayser]

One of the first planning applications for the enormous Fisherman's Bend area has hit our site: http://urbanmelbourne.info/developme...outh-melbourne