Have you noticed that the industry seems busier than ever at the moment, but few are reaping the benefits?

No, you’re not imagining it. It’s been touted as ‘The Profitless Boom’ and there’s really no better way of encapsulating the current market.

The industry has found itself in a sticky situation. Construction costs are soaring at a rate that has now well surpassed the commercial rental rates or residential sale values on the other end.

Like a seesaw – the property industry is flying sky-high on one side and it’s struggling to get the other off the ground.

Without the right balance between cost and profit, it’s becoming extremely difficult to stack up commercial projects, and nearly impossible to do so in the regions.

So why is the cost to build so high? I think it comes down to these factors:

• The result of massive COVID-19 stimulus funds injected into infrastructure by all levels of government both during and after the pandemic.

• Supply chain disruptions due to COVID and international turmoil.

• ·A lack of skilled trades in Australia.

• Our country’s migration policy.

This period we find ourselves in is very different to what we saw during the GFC. When we look retrospectively at the 2008 boom, it was focused on private equity and commercially based development.

Now, we’re looking at a boom that’s based on infrastructure and government-back projects.

So how do we fix it?

The bad news is, there’s no easy way to get that seesaw back to where it needs to be.

Builders are falling over left, right and centre off the back of fixed-price contracts, extended construction programs and failing cashflows.

Right now, the industry is experiencing pain, but if we want to see some gain in the future, I suggest we:

• Look at migration through a sustainable lens. We need to focus on skilled migration that targets areas that need it most. By addressing the current migration policy, we can slow down housing demand to try to regain our footing.

• Review and redirect government infrastructure funding. It’s time to stop spending on opportunistic ‘ribbon cutting’ projects and start focussing on building long-term, useful and sustainable infrastructure for our future generations.

• Focus more on investment and education in Australia’s skilled trade supply.

It might feel off-balance at the moment, but with the right steps, there’s always a chance of recovering the equilibrium of the industry.

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For many investors, property is the final piece of the puzzle. Not only is it a key market for capital growth, but for a portfolio built on shares or bonds, it’s vital for diversification. 

 However, managing a property portfolio can be a massive task. Not only do you have to choose where to invest, but once you’ve entered the real estate market, there are ongoing decisions to make. 

Whether it’s what property to choose, whether or not to renovate or reposition, or when to sell, getting expert advice can be invaluable. 

 A property portfolio analysis can offer you performance insights, risk management and strategic planning for each asset as well as for your overall portfolio. 

By exploring properties on an individual level, you gain the power to make informed decisions about how to optimise your returns through strategies that focus on adding value rather than taking it away.

And why stop there? With the right analysis and advice, you can carve out a strategic plan that will keep you on the right path by identifying emerging opportunities that align with your overall objectives.

 When you look to the future, accurate asset allocation will drive capital growth to ensure your portfolio is constantly expanding into the right markets. 

 And above all else, a property portfolio analysis can take care of the finer details. From ensuring regulatory compliance to maintaining accurate records and mitigating legal risks, you can confidently move forward with your portfolio knowing all the right boxes have been ticked. 

At Rosel Sherwood, we know that the right portfolio analysis can take an investment strategy to the next level. We’ve always promoted a transparent line of communication with our stakeholders so they’re confident that they’re in the right hands. 

 By leveraging data-driven insights, we work alongside clients to optimise real estate investments, navigate the market effectively and ultimately, assist them in achieving their financial goals. 

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The Catalyst for Urban Renewal: The Crucial Role of Property Development

Urban revitalisation stands as a testament to the dynamic and ever-evolving nature of cities. Among the myriad factors contributing to this transformation, property development emerges as a pivotal force reshaping the urban landscape. The interplay between property development and urban revitalisation is a complex dance, with each influencing the other in a symbiotic relationship that holds the potential to breathe new life into aging cityscapes.

Property development serves as a catalyst for urban renewal by addressing the dual challenges of aging infrastructure and changing societal needs. Through strategic planning and innovative designs, developers can transform vacant or dilapidated areas into vibrant, functional spaces that meet the demands of contemporary living. This process not only rejuvenates neglected pockets of the city but also attracts new businesses, residents, and investments, thereby fostering economic growth.

One key aspect of property development in urban revitalisation is adaptive reuse. This sustainable practice involves repurposing existing structures for new uses, preserving historical and cultural elements while adapting to modern needs. Adaptive reuse not only enhances the character of a city but also promotes sustainability by reducing the environmental impact associated with new construction.

Furthermore, property development can act as a driver for community engagement and social cohesion. Thoughtful planning that includes mixed-use spaces, parks, and cultural amenities creates environments where people can live, work, and socialise. This integrated approach not only enhances the quality of life for residents but also attracts a diverse population, contributing to the vibrancy and diversity of the urban fabric.

However, the role of property development in urban revitalisation is not without its challenges. Striking a balance between progress and preservation, addressing affordability concerns, and ensuring equitable development are critical considerations. The success of property development in revitalising urban areas lies in its ability to harmonise economic, social, and environmental aspects, fostering a sustainable and inclusive urban future. As cities continue to evolve, property development remains a potent force, steering the course of urban revitalisation towards a brighter and more resilient future.

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After its success in Europe, Australia is trying its hand at the Build-to-Rent (BTR) model. But will it be enough to end the country’s crippling housing crisis? In short, probably not.

BTR is a concept where dwellings are built by developers who will then hold onto ownership to rent directly to tenants rather than sell them off. 

In today’s cutthroat rental market – it seems like a great idea. But BTR on its own, simply won’t be enough to tackle the housing crisis. Instead, it’s just one piece of a very complicated puzzle.

Here is a flow chart showing how housing stages move within the Australian market.

This shows where BTR can be implemented as a strong rental option for those struggling to find somewhere to lease.

On the plus side, BTR projects can provide more security both for tenants to live in a residence they know the owner won’t take off the rental market and for the developer in terms of tenure. Plus, it helps add to the dwindling supply of available rental stock in Australia.

But what it fails to do is aggressively address rental affordability. It can also make the transition up the ladder towards homeownership even more difficult with rent making up a greater portion of average pay.

While everyone’s circumstances vary, where possible, we should still be encouraging people to move up that ladder.

And once they’ve reached the top, we need to make it attractive to top-tier homeowners without mortgages to get back into the property market to boost private rentals.

Private investors can be a key supply source for affordable rentals, particularly when they avoid turning to short-term stay options such as Airbnb.

In the 2021 census, 66% of Australians were owner-occupiers. This is down from the traditional 70% mark that we’re used to seeing with glaring economic factors and funding restrictions to blame.

The housing crisis has been brewing silently for years and now we’re paying the price. There’s no easy fix, except for long-term strategic change that requires us to roll up our sleeves and start now. But one thing is for sure – the four-year political cycle ribbon-cutting exercises simply won’t do the job.

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To build or not to build, that is the question. If you’re looking for the answer, then you’ll likely need a project feasibility analysis.  Unfortunately, a full assessment and understanding of how a project might work in the real world is a complicated process.   

But with the right development manager at the helm, you’ll be able to get a robust understanding of factors such as market demand analysis, site selection, design, cost, rental, debt structure, valuation, marketing strategies and more.   

In its most simple form, a property development feasibility analysis generally has three core principles that are essential for determining the success rate of a project.   

These core principles differ between commercial and residential projects.   

For a commercial feasibility analysis, the three core principles are:   

1. Cost: How much will the inputs cost including land, approvals, consultants, construction, and finance?  

1. Rent: How much rent can you negotiate from your tenants?  

1. Capitalisation Rate: How attractive is the project to potential buyers in terms of tenant strength and location in the current economic climate?  

For a residential feasibility analysis, the three core principles are:   

1. Cost: How much will the inputs cost including land, approvals, consultants, construction, and finance?   

1. Sale Prices: What is the market willing to pay for the product, location, and amenity?  

1. Marketing: How will you market the project to the potential buyer? This is particularly important for owner-occupier residential projects.  

Once you have the core principles down pat, there’s no shortage of factors that can further benefit the analysis including but not limited to:   

• Funding structure  

• Site selection  

• Pre-commitment due diligence  

• Design team  

• Consultant team  

• Efficient and fit-for-purpose design  

• Construction procurement methodology  

• Program efficiency   

The devil is always in the detail. But if you find yourself getting caught up in the fine print, you can always take yourself back to the core principles to make sure you don’t lose focus on bringing a clear and succinct project feasibility analysis to the table. 

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Sustainability. In the property world, it’s always been one of those lovely sentiments that would be nice to have, but it’s not really a necessity. Until now.  

As legislation directives and consumer demand take a step forward, sustainability is becoming more and more relevant to what we do.   

There’s plenty that goes into creating a sustainable project. It’s no longer just a ‘feel good, nice to have’ attitude.   

The industry is finally taking the issue seriously with the understanding that achieving sustainability can directly impact the project’s overall feasibility and ongoing success.   

Environmental Strategies  

First and foremost, we all know that the environmental impact of new developments can take a toll. But planning early with sustainability in mind can help to reduce the carbon footprint of construction by choosing the right materials and site locations.  

Taking a sustainable approach to design can also allow room for ongoing operational environmental efficiency in projects for years to come.  

Social Strategies  

For the consumer, sustainability is quickly climbing the list of priorities when it comes to newly built buildings.  

Sustainable projects are engaging with consumers’ carbon-neutral expectations as well as helping to support the overall health and well-being of occupants for years to come.  

Economic Strategies  

And finally, sustainability will reduce ongoing building operational costs by ensuring the materials are set to last.  

Having a strong environmental strategy will also boost the capitalisation rate and the valuation of property assets.   

Not to mention, an environmental strategy gives you access to green loans and other social strategies being pursued by debt and equity funders.  

So don’t get stuck in the past. If you want projects that last, it’s time to start prioritising a sustainable approach to make sure your next project will stand the test of time. 

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These days it seems like builders are going into liquidation left, right and centre. To some extent, we can blame it on the shift in the industry pushed forward by the pandemic and overseas turmoil. 

With a significant undersupply of trades and turbulent peaks and troughs in supply prices, there have been some major disruptions in the traditional, hard-dollar way of running development projects. 

Right now, it’s riskier to get involved in a fixed-price contract procurement process because of how builders are pricing in the current market. 

And rightly so, with no stability or guarantees at the moment – it can be hard to lock down a fixed price without at least one party coming out the loser. 

But surely there has to be a way to mitigate the risk before it gets to this boiling point, right?! Well, there just might be. 

It’s called Early Contractor Involvement (ECI) and it works by engaging transparency, trust and early intervention to build a more malleable way of running the industry. 

By ECI, I don’t mean a design and construct process where consultants are novated. This already has inherent risks of reducing the scope and fixing prices too early. 

What I mean is selecting a builder based on reputation, financial stability, experience and suitability for the specific project. In other words, all the things that matter. 

The builder would be engaged as soon as development approval is received and the detailed design starts. They would become a part of the design team where they could review plans for cost-effectiveness and buildability with a keen eye and wealth of knowledge. 

In partnership with the principal, the builder would then work up a construction cost on an open-book basis that considers all angles and potentially benefits all parties. 

Before construction, like any other consultant, the builder would be engaged on a fee for their service – again taking away the risk of the hard dollar tender. 

And then, just before construction starts, the contract would be locked in as a fixed price to satisfy principal debt funding requirements. 

Even though there are still institutions and developers that back a hard dollar tender, the concept is clearly becoming outdated. 

With so much turbulence, we have to adapt to survive in this industry. 

So rather than getting back to the cutthroat ways of business, maybe it’s time we shift our focus to fostering working partnerships to create an opportunity for everyone to be a winner again. 

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It’s no secret, the cost of living is up. And it’s not just the price of buying a house that’s increasing, but rent, grocery bills, electricity bills and everything in between.   

With little to no reprieve since the beginning of the pandemic, it’s time we start to think about ways around rising costs rather than hoping to stick it out until it eases.   

Generational Staged Residence, or GENSTAR as we call it, could become a solution for families who are looking to share the load of living all while achieving their dream home.  

The concept takes heed from European and Asian cultures where families stay together under one roof through generations.   

In Australia, it’s become increasingly common for ‘nuclear' families to live independently. And while this has worked for many years, the crisis of living affordability paired with access to and cost of aged care has forced many families to revert to traditional ways of living.   

Under a GENSTAR living model, couples or young families could theoretically achieve their dream home in several construction phases.  

The idea is that you could design a full four-bedroom, two-car dwelling with the design strategically structured so you can build in stages as affordability permits.   

The original design considers future separate living areas that cater for older independent children to later migrate into, as well as areas to support older generations.  

Under this model, grandparents, parents, and older children can help share bills, building costs and even childcare responsibilities.   

And with multiple stages of expansion within the home, rather than cramming everyone in under one roof, families can keep a level of independence all while achieving the goal of becoming a homeowner.   

It’s a model that might take some getting used to, but as times get tough, it just might be the thing that saves the Australian homeownership dream from fading away. 

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More than three years after Australia’s first hit of Covid, office workers are still reaping the benefits with many choosing to work from home indefinitely.  

With the flexible work-from-home lifestyle becoming more culturally acceptable and convenient for workers, employers are looking for new and innovative ways to entice people back into the office.   

In Brisbane CBD, there’s still a 12.9% vacancy rate in offices when compared to pre-Covid levels, according to the Property Council of Australia’s Office Market Report.    

This shows that despite the ongoing efforts to return to traditional office culture, many are choosing to maintain a flexible work-life balance.   

With such a drastic change underway, it begs the question: should offices start adapting to the new ways of working?  

For me, the best and most constructive meetings have always taken place in coffee shops. Meeting in a more informal environment seems to put people at ease which then creates a space for ideas and discussion to flow more freely.   

It’s about bringing this concept to the office.  

Giving workers private spaces where they can take their laptops and focus on a single idea without being interrupted is critical to productivity.   

With the option to compartmentalise their time, and more freedom to work in new and innovative spaces, workers might just want to come back to the office, rather than being dragged back kicking and screaming.  

It’s time to adapt or die if offices want to protect the sanctity behind CBDs and make sure office culture and watercooler chat live to see another day. 

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In some industries, nine years might seem like a lifetime. But in the property world, less than a decade will go in the blink of an eye.  

Brisbane 2032 Olympics and Paralympics Games is inching closer every day, with government bodies, businesses and investors scrambling to consolidate projects in time to reap the benefits. 

For those who are yet to start the lengthy development process of securing a site, finalising a design and getting plan approvals – it’s time to light the proverbial fire to speed things up. 

As a large-scale example, the state government announced its $2.7 billion complete rebuild of the Gabba stadium on Brisbane’s southside. 

The colossal project, from start to finish, is expected to take 7 years with 3 years of design, planning and land acquisition, then construction starting in 2026 and wrapping up just in time for the Games in 2030, according to the Queensland Government. 

Smaller projects without government pull might take even longer. 

For instance, a midsized shopping centre or village could take: 

• 12 to 18 months for design, planning approval and leasing commitments and;

• A further 18 months to two years for building approval and construction. 

Alternatively, a unit project with around 59 units could take:  

• 9 to 15 months for design and planning commitments and;

• 15 to 20 months for building approval and construction.  

And that’s only if the site has already been acquired. In some cases, it could take a year or two to secure a site, bringing the total project timeline to five and a half years in particular instances. 

So, with the walls of the Olympics starting to close in on the state, there’s no time to waste. 

Whether it’s kicking off a new project or pushing forward with existing work, developers need a high level of expertise and experience in their corner to avoid wasting time on unnecessary mistakes and missteps. 

And as the first point of call when things start to go awry, a quality project manager can go a long way in ensuring the job runs smoothly, meets deadlines and brings in as much economic benefit from the Games as possible.  

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Property finds itself in nearly every industry. And if done right, it’s an easy way to expand an organisation and build opportunity.  

But for those who aren’t familiar with all the moving parts involved in the property machine, it can be tricky to get the cogs turning. 

A property strategy is key to making sure things are running like a well-oiled machine that avoids costly malfunctions and mishaps that waste both time and money.

Why do I need a property strategy? 

While a property strategy might be a household term in the development world, many organisations that don’t have property as a key component of their business might have never come across it. 

If property isn’t directly at the core of a business, it’s easy to lack the formal focus and strategy that’s so detrimental to staying on track. 

Property is an expensive, illiquid capital asset with high holding costs that aren’t easily or cost-effectively transferred in and out of operation. 

So, it’s no surprise many organisations aren’t prioritising it in their day-to-day workload. 

But securing and implementing a property strategy isn’t as daunting as it seems. In fact, with the right help, it can be as easy as one, two, three. 

1. Strategy 

   At Rosel Sherwood, we work with organisations to co-create their effective short, medium and long-term strategies. With a general goal of maximising value and efficacy, we also keep it in line with the organisation’s strategic direction. 

2. Implementation 

   Once that strategy is outlined, we can work on which effective processes need to be implemented to maintain the plan. We’ll present them in a format that can be applied directly by key stakeholders, with KPI settings and milestone targets to set achievable and meaningful outcomes. 

3. Review 

   At agreed intervals, we’ll review the strategies, processes, and procedures to make sure we’re staying in line with the organisation’s current strategic intent. We’ll also make sure the processes continue to be effective and current, and the value and efficacy of each asset are maximised. 

As a part of the strategy, we’ll outline the client’s purpose and strategic intent, collect the relevant data, identify risks and opportunities, analyse stakeholders to understand their motivations and purpose, and assess the physical due diligence. 

We’ll also complete the financial due diligence, understand the capital expenditure, and review all operating costs and revenue streams. 

And finally, in the short, medium and long-term strategies, we’ll review the tenancy mix, lease terms and operating risks as well as evaluate operational sustainability, review and improve asset value, and provide property options and recommendations. 

Then once we cross the finish line, after one final buff, we hand you back the completed strategic, intentional, and well-oiled machine that is your property component. 

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Close your eyes and imagine a close-knit community, where everything you need is a 15-minute walk or ride away.

It’s the urban-planning concept that would theoretically avoid sprawl, reduce road congestion, and improve mental well-being. But how realistic are 15-minute communities, and how far off is Queensland from reaping the benefits?

The idea is simple – if everything you need, from grocery shops to the doctors, gyms, and coffee shops, are all within a 15-minute walk or ride away, there’ll be fewer cars on local roads and major transport routes.

Take inner city Brisbane suburbs like West End, South Brisbane, or Fortitude Valley for example. There’s everything you need tightly tucked in the suburb, meaning you could theoretically run all your errands, get lunch, and relax in the park without even getting in the car.

And now, with more people taking advantage of pandemic-induced flexible working hours, the chance to work from home has pushed the idea of 15-minute communities even further forward.

New developments such as the Aura project in Sunshine Coast have started to reflect the concept by creating a community hub that gives residents everything they need in their little bubble, located just half an hour from the main drag of the coast.

But there are glaring obstacles stopping parts of Queensland from taking advantage of close-knit communities. In southeast Queensland, the urban layout is hard to reverse and has already fallen subject to sprawl between Brisbane and its coastal hotspots.

With sprawl comes more reason to travel, which is why motorways between Brisbane, Sunshine Coast and Gold Coast tend to look like a car park most days. Restructuring these areas could take years and would require plenty of long-term planning.

As for north Queensland and most other rural or regional areas, public transport needs to be improved substantially before people can even think about leaving their cars at home. For now, many Queensland cities don’t come close to the idyllic New-York-style walking epicentre.

But with the theory starting to gain traction across the globe, and new local developments already implementing components, there’s still hope for 15-minute communities in the Sunshine State.

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After three tedious years, the world is finally eclipsing the pandemic and starting its journey past one of the most complicated economic periods in history.

So, what better time to get the crystal ball out and take a look forward to see what’s in store for the decade ahead. 

(Just a forewarning - this prediction doesn’t account for Russia, China or the US deciding that a full-blown war is a good idea.)

With Australia’s inflation rate hitting a 32-year high in the last quarter of 2022 at 7.8 per cent, it’s no wonder there will still be concerns going forward about the ongoing rise of cost of living both this year and next. 

But in 2023 and 2024, the world will also be watching the debt ceiling in the US closely as well as the war in Europe and Southeast Asia tensions, all of which will result in a slowing economy and a stronger focus on consolidation.

Assuming we can get through the next two years relatively unscathed, there’s likely to be light at the end of the tunnel with Australia’s economy expected to steadily improve. 

The prediction is that Queensland in particular will see a steady rise in economic activity from 2025 through to 2027, with the main flurry of activity happening from 2028 to 2032 just in time for the Olympics. 

This is backed by the massive figures put forward by Premier Annastacia Palaszczuk in her summary report for the Brisbane 2032 Olympic and Paralympic Games where she suggested the quantifiable social and economic benefits could reach $8.1bn for Queensland and $17.61bn for Australia. 

But as always, what goes up, must come down. Will there be an Olympic hangover? Probably.

So might as well make hay while the sun shines!

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As southeast Queensland bursts at the seams following a population boom and housing crisis, commercial attention is now turning to more spacious regional Queensland towns. 

At the centre of it all is sunny Townsville, where affordable housing, diverse economy and population growth is quickly making it the future commercial hub of the state. 

Townsville is now the largest regional city in Queensland with the population booming into the 200,000s. But despite the growth and plenty of pandemic-induced market volatility, the housing market has managed to remain affordable and inviting to newcomers and locals.

According to realestate.com.au, the median cost for a unit in Townsville sits around $360,000, which other than some dips and rises in the past three years, is about the same average cost it was pre-Covid. This is compared to southeast Queensland tourist hotspots including Noosa where the price has been on a constant rise since well before the pandemic, with the median cost for a unit now spiking to more than $1.6m.

The promise of new jobs in North Queensland will also continue to draw investors in, with the Albanese Government’s recent announcement of a $70m hydrogen hub set to open in Townsville.

Guidelines for The Townsville Hydrogen Hub were released this month with Prime Minister Anthony Albanese saying a thriving hydrogen industry in North Queensland was “critical” for the country’s overall renewable energy plan thanks to Townsville’s port facilities, workforce capacity, and proximity to Asian trading partners. 

So, with all of this, paired with Townsville’s diverse, yet stable local economy based on education, health, state and federal employment, it’s no wonder all eyes are regional Queensland going forward.

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Generational Living design options are a key resource in the fight for sustainability within the property development world, but it takes a change in our beliefs about what constitutes a household in modern times.

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Much has been written about sustainability and much of what has been written is either viewed from a marketing perspective (look at our token gesture to sustainability), or from a green perspective (builders and developers should be doing all these things that are not economically viable). Neither of these approaches solve the problem, but what if we can find some middle ground…

Generational Living designs can provide some solutions, especially in the following 3 areas -

• Urban Sprawl – The continued loss of high quality agricultural land and native habitat, as the need for more and more traditional housing continues. Generational Living raises the density of each household whilst maintaining the need for privacy and independence.

• Power – The cost of power is rising exponentially. When combined with an increasing social conscience and reducing costs of Solar and Batteries, the way we generate our individual power needs is quickly getting to the stage of micro grids and energy neutral solutions.

• Water – It is politically difficult to get approvals for new dams, and saltwater purification is expensive. There is much talk about grey and black water reuse, but that is also expensive and needs to be done at scale. So what is a small step that everyone can take that is cost effective and simple…capture rainwater, capture and reuse in toilets and for irrigation. Simple and effective.

Generational Housing is not just about having Grandma living in the basement, it encompasses aspects of design, living standards, expectations for independence, and environmentally and socially sustainable outcomes.

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COVID-19, rapidly rising interest rates, and continuing supply chain issues have caused all sorts of confidence issues across all sectors of the market. So how will Queensland residential property hold up in 2022 and beyond?

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The regions have struggled since the GFC through a lack of infrastructure investment and a centralisation of employment, whether that be government departments or FIFO mine workers. All roads lead to South East Queensland.

There are some major infrastructure programs proposed for regional Australia, but these need to be backed up with political and investment support for living in regional communities.

Australia is a big country and it is a simple argument to have more people living in one location than spread across the state. The cost of roads and infrastructure to support a regional population in our country is large and unique. Urbanisation is happening all over the world, so why not here?

Over the next decade, sub-regional towns (less than 20,000 population) will be a mixed bag. If they have a unique offering or industry, that attracts and maintains employment.  Small growth will be evident, but for many their growth may be stagnate at best.

For larger regional towns such as Cairns, Townsville, Mackay, and Rockhampton I see a level of growth from the migration from sub-regional areas, especially in industries specific to those areas – Tourism, Government, Armed Forces, Mining, Agriculture and Grazing.

I believe SEQ will be the backbone of the country’s growth (despite some cautions), not just Queensland’s, and specifically for the reasons I will outline in future blogs.

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Working from home has always been a dream that has been resisted by employers for a long time. COVID-19 has brought the concept forward and has shown it can work.

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Working from home has been a concept that few people have enjoyed until COVID19 came along. It has been resisted by employers for a long time based on the adage that if staff are not supervised then they won’t work as efficiently or as hard. What has been proven now is that efficiency actually goes up because there are less interruptions to a worker’s day.

Employees now realise the social and lifestyle benefits that working from home brings, and employers have now realized the enormous cost savings in office rentals that comes from this approach, and also now realise, with the experience of COVID, that working from home really does work.

Now it doesn’t work for all employees or industries but with the right HR strategy and technology, it can work for a vast majority. What is critical is a proper office/work environment within the home. A place that separates home from work and provides a level of discipline. Working from the kitchen table is a short term solution at best.

Generational Housing Design provides the ultimate home office environment that can be expanded into wealth creation residential at a later date.

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The two key pillars of property investment are cash flow and capital growth, but they are not mutually exclusive, although sometimes it would seem that is the case.

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Both cash flow and capital growth are dependent on similar key attributes including -

• Location

• Repeatability

• Quality of the tenant

• Lease terms (WALE)

• Stage of the asset lifecycle

• Gentrification of the locality

• Planning parameters and zoning changes

These categories can be broken down into many more sub-topics but these form the basis of the approach.

As with all investment analysis, try and keep it as simple as possible. As such, in my opinion, the key attributes for ensuring maximum capital growth are –

• Repeatability – Is the location of the property, the access, visibility, suitability for use, topography etc easily repeatable? The less repeatable, the more scarce that resource is, and hence the greater chance of capital value increase over time.

• Gentrification – Look for areas that are gentrifying. Areas that are changing perhaps from industrial to residential, or to higher impact retail uses.

• Planning Parameters – Look at the city plan and especially where councils see the future growth corridors. This often goes hand in hand with gentrification.

Of course the basics of WALE and tenant quality are key to consistent capital growth through cash flow and capitalisation rate, but the items listed above are where greater than market growth can be found…provided you have patience.

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The directors of Rosel Sherwood have over 35 years of experience in the analysis of property asset portfolios. A Portfolio of Assets is an investment entity on its own and individual properties must be assessed against the desired outcomes of the portfolio and the ownership entity…not as standalone assets.

So what are the steps we take for Portfolio Analysis?

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We are your trusted advisor. We analyse the performance of all aspects of the property component of your business and deliver Solutions and Outcomes and provide Assurance and Comfort to you that your property assets are efficient, cost effective, and profitable.

We take the time to understand your strategic direction and the needs and goals of your business. We complete a full Due Diligence on every property asset under your control.

We identify Risk and Opportunity and create a strategic action plan for strategic implementation which includes the following key elements –

• Understand Risk

• Identify Opportunity

• Realign with Strategic or Corporate Vision

• Consolidation and Cash Flow Generation

• Productivity & Space Rationalisation Analysis

Get in touch today to see how we can help.

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Everyone wants to be a property developer. Back in the late 80’s and early to mid-90s there were many “mum and dad” developers who owned a quarter acre property with a house on it and were demolishing it to build “6-packs” of units and making a nice 15% to 20% profit.

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This was being ably supported by the investors following the Jan Somers negative gearing philosophy and investing for capital growth.

Those days could not be more gone! 

People tend to blame the GFC for the structural changes in the marketplace. The real issue is the GFC was a symptom of years of unchecked capital growth. In 1987 when I was with one of the major banks, we were doing home loans at 18% and commercial loans at 21%. I was getting 13% interest on my savings account and CPI was over 10%.

The structural change that has arisen from those years of growth has limited access to capital and has hence focused property development into those who are strongly capitalised. There is little capital growth in the regular market and the risk for return is simply not palatable anymore unless you have a unique property, or you have economies of scale.

As I’ve alluded to, access to capital is the major stumbling block. Access to debt funds has tightened which has subsequently meant the requirement for real equity has increased dramatically.

Having said all that, Property Development will remain a cornerstone of our economy for many years to come. People have to live somewhere, they have to work somewhere, and they want to socialise somewhere. What is changing however is that the structural change as discussed above, plus technological advancements, are and will have an enormous impact on what property development will look like as we move further into the 21st century.

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Don’t forget to check out our services page for more information.

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