5. CAPITULO V: REPOSITORIO DE TEMAS DE TRABAJO DE GRADO DE INGENIERÍA
5.1. Determinación de los ejes de desarrollo
5.1.3. Eje De Desarrollo 3: Fortalecimiento A Una Formación Integral Para El Ingeniero
Within the immediate surrounding office precinct to the subject property (including the suburbs of Richmond, Cremorne, Abbotsford and South Yarra) we estimate that the current number of individual strata units within the market is approximately 350 suites.
Of the total strata units, over 90% are housed within buildings constructed after 2000. This has primarily occurred as a result of a number of newly constructed projects that have been developed along
Claremont and Yarra Streets in South Yarra, adjacent to the South Yarra Railway Station. Three of these projects were developed between 2005-2010, with an average of 47 office suites per development. Since 2010 a further four projects have been developed within this precinct, adding a further 150 units to the precinct’s overall stock level. These developments have typically been of high quality and have featured suites greater than 75 m².
The following graph highlights the age of the current stock within the immediate office precincts:
In order to provide an understanding of their design, sizing, scale and location, we provide over the following pages a summary of the most recently added purpose built strata developments within close proximity to the subject site. We note that a large stock of pre-existing buildings in close proximity to the subject are existing strata office buildings and developments. The developments shown below are all ‘new’:
Competing Strata Office Stock by Age
RICHMOND, CREMORNE, ABBOTSFORD, SOUTH YARRA
So urce : Urbis, City Sco pe - 20 40 60 80 100 120 140 160 1980's 1990's 2000-2005 2005-2010 2010+ N u m b e r o f S tr a ta O ff ic e U n its
DEVELOPER Michael L Yates & Co COMPLETION DATE 2010 RETAIL SUITES 3 OFFICE SUITES 97 50 - 2,000 CAR PARKING 225 PRE-COMPLETION 77 79% POST COMPLETION 20 21% PROPERTY DESCRIPTION PROJECT ASSESSMENT
LOCATION EXPOSURE ACCESS AMENITY
EXCELLENT GOOD EXCELLENT EXCELLENT
DEVELOPER COMPLETION DATE RETAIL SUITES 3 OFFICE SUITES 23* CAR PARKING 126 PRE-COMPLETION 18 78% POST COMPLETION 3 13% PROPERTY DESCRIPTION PROJECT ASSESSMENT
LOCATION EXPOSURE ACCESS AMENITY
EXCELLENT GOOD EXCELLENT EXCELLENT
SIZE RANGE
25 - 816
PROPERTY PHOTO
9 Yarra Street, South Yarra
TRANSACTION ANALYSIS SALES % STOCK
UNITS SIZE RANGE IMPROVEMENT SUMMARY
TRANSACTION ANALYSIS SALES % STOCK
An 18 level building comprising retail and commercial space over the ground level, together with commercial space on levels 8 to 16. Car parking is provided for 255 cars over 9 split levels. The building was completed by Michael L Yates & Co in 2010.
The upper levels of the office building provide views of the Melbourne CBD, while public transportation and retail amenity are provided nearby.
An 8 level building comprising seven upper office suites, three ground floor retail suites and a basement car park over three level providing 126 car spaces. The building was developed by Walton Constructions and has as a 4.5 Australian Building Greenhouse Star rating.
The building is the last completed major strata office building completed in the South Yarra, after a number of similar buildings were developed over the preceding five years.
Walton Constructions 2010
10 Yarra Street, South Yarra
PROPERTY PHOTO
DEVELOPER COMPLETION DATE RETAIL SUITES OFFICE SUITES 33 CAR PARKING 88 PRE-COMPLETION 14 42% POST COMPLETION 19 58% PROPERTY DESCRIPTION PROJECT ASSESSMENT
LOCATION EXPOSURE ACCESS AMENITY
EXCELLENT FAIR EXCELLENT EXCELLENT
DEVELOPER COMPLETION DATE RETAIL SUITES 2 OFFICE SUITES 35 CAR PARKING 121 PRE-COMPLETION 32 91% POST COMPLETION 3 9% PROPERTY DESCRIPTION PROJECT ASSESSMENT
LOCATION EXPOSURE ACCESS AMENITY
EXCELLENT FAIR EXCELLENT EXCELLENT
Brycorp Pty Ltd
25 Claremont Street, South Yarra
PROPERTY PHOTO 2005
IMPROVEMENT SUMMARY UNITS
TRANSACTION ANALYSIS SALES % STOCK
AVG SIZE RANGE
70-145
SALES % STOCK
A five-storey building comprising 35 individual strata office suites over four upper levels, together with car parking for 121 over three basement levels, as well as a ground floor showroom and a retail unit.
The building was designed by both Fender Katsalidis and SJB Architects, and is linked via an arcade to the building at 15-19 Claremont Street. The building is located in close proximity to South Yarra Railway Station, as well as retail amenity along Toorak Road and nearby Chapel Street. A five level strata office building developed in 2005, providing approximately 1,500 sq.m of office accommodation. The building comprises 33 individual office suites as well as 88 car spaces in the basement and on three levels to the rear of the ground, mezzanine and first floors. The majority of the units were sold with 2-4 car spaces.
9-11 Claremont Street, South Yarra
Private Developer
PROPERTY PHOTO 2007
IMPROVEMENT SUMMARY UNITS
TRANSACTION ANALYSIS
AVG SIZE RANGE
DEVELOPER COMPLETION DATE RETAIL SUITES - OFFICE SUITES 14 CAR PARKING 43 PRE-COMPLETION 8 57% POST COMPLETION 6 43% PROPERTY DESCRIPTION PROJECT ASSESSMENT
LOCATION EXPOSURE ACCESS AMENITY
GOOD FAIR GOOD EXCELLENT
DEVELOPER COMPLETION DATE RETAIL SUITES OFFICE SUITES 11 CAR PARKING 11 PRE-COMPLETION 6 55% POST COMPLETION 5 45% PROPERTY DESCRIPTION PROJECT ASSESSMENT
LOCATION EXPOSURE ACCESS AMENITY
GOOD FAIR GOOD EXCELLENT
SALES % STOCK
150 Chestnut Street comprises a four-storey strata titled commercial office building, providing accommodation via 14 individual units together with car parking for 43 cars on the ground level.
The building was completed and subdivided in 2001, and forms part of the Richmond Power Station site which was purchased by Walker Corporation in 1994, and redeveloped into several individual office buildings. The building remains the only strata titled building within the redevelopment of the site.
150 Chestnut Street, Richmond
Walker Corporation
PROPERTY PHOTO 2001
IMPROVEMENT SUMMARY UNITS
TRANSACTION ANALYSIS
AVG SIZE RANGE
60 - 160
127 - 135 Chestnut Street, Cremorne
Private Developer
PROPERTY PHOTO 1998
IMPROVEMENT SUMMARY UNITS
A three-storey office building comprising 11 strata units with ground floor garages and foyers, which was completed in 1998. The property is located in a side street off Church Street Richmond, some 200 metres from retail amenity and public transportation along Church Street.
TRANSACTION ANALYSIS SALES % STOCK
AVG SIZE RANGE
4.3
ABSORPTION
In assessing the market’s capacity to absorb the proposed development, we note the following: Sales transaction data within evidence suggests that the transactions often occur through a supply led process whereby, when additional supply has been added to the market, they have been absorbed by the market through heightened sales transactions. This would suggest a degree of ‘pent up demand’ and a market that has not efficiently developed the mechanism for developers to respond to tenant and occupier demand. We consider that this is a function of the relatively disparate nature of occupiers of Strata titled office accommodation, with occupiers generally being very small businesses, usually sole traders, and generally occupying relatively small areas. By contrast, larger tenants provide the gravity developers require to allow developments to be pre-committed and economically feasible. Such scale does not exist in the strata titled occupant market. This is not to say that demand does not exist, as the sale of recent developments clearly indicates the subject site sits in an area with strong demand. However, effectively gauging demand is difficult due to the markets characteristics noted above.
To this end, we have assessed the sales performance of the major recently completed strata projects in South Yarra, which have been detailed on the previous pages. In addition, we have also assessed the sale performances of the two other recently completed major inner city strata developments at the Tooronga Centre in Hawthorn East and 87 Gladstone Street in South Melbourne.
Stockland’s 4,000 sq.m strata office development at the Tooronga Centre was completed in 2012. The development sits a above the Coles supermarket and First Choice Liquor retailer in the mixed use development which also includes 300 dwellings and 22 other specialty stores. The office development contains 33 individual suites ranging from 77 - 240 sq.m in size. We are advised that only three of the suites were sold to investors, while all other suites were sold to owner-occupiers.
The Industry Business Hub at Gladstone Street South Melbourne was developed by MAB. The
development comprises 70 individual smaller sized warehouse style office spaces together with a ground floor café . The site sits within an area dominated by commercial uses, with virtually no residential uses in the adjoining streets.
Detailed below are the results of the sales process of these developments:
Based on the above analysis, the following is evident:
The majority of the developments were able to sell over 60% of the units prior to project completion.
Major Newly Completed Strata Office Sales
% OF SALES BY YEAR
So urce : City Sco pe, Valuer General Victo ria, Urbis
9% 80% 74% 61% 82% 46% 39% 20% 4% 31% 18% 31% 15% 8% 23% 36.4% 21.7% 0% 20% 40% 60% 80% 100 % 25 Claremont Str eet, Sou th Yar ra 9 - 1 1 Clar emont Street, So uth Ya rra
10 Yar ra S tre et, S outh Yar ra
9 Yarra Stree t, S outh Yar ra
Tooron ga Cen tre 87 Gla dstone Street, Sou th Melbou rne
Of fic e U nit Sales (%)
Within one year of project completion all but two of the developments had sold all of the building’s office suites.
Nevertheless, those units which did remain unsold in 25 Claremont Street and 10 Yarra Street may have been so as a result of the developer’s choice to hold a number of units and lease them to the market in order to derive income.
Despite the significant strata additions to the market in South Yarra over a relatively short period of time, the market showed a sustained appetite for the product offered, highlighting the supply led dynamic within the city fringe strata market.
Taking into account the market’s reaction to the above developments and the characteristics of the proposed project, we believe that a strata office development featuring a similar office to apartment ratio, would be well sustained in the current market and achieve similar sales levels of the analysed comparable projects.
4.4
NEW SUPPLY
In regards to known potential and approved strata developments within the immediate locality of the subject property, we note the following:
A town planning application has been submitted for the construction of a seven storey commercial building at 13 Cremorne Street, Cremorne some 400 metres from the subject site. The application proposed a building comprising 11 individual office suites and 18 car spaces as well as a ground floor restaurant.
A town planning application has been submitted for the development of a five storey commercial office building of 1,500 m² at 96-102 Cubitt Street, some 300 metres from the subject site.
A town planning application has been submitted at 24 Risley Street, Richmond, some 2 kilometres north of the subject site, for a studio style free standing offices on a Commercial 2 zoned site of 3,400 m².
A further application for the development of a seven storey commercial office building at 19 William Street, Cremorne, on a site of 436 m².
Approved applications for the development of six storey office building at 17 William Street, Cremorne on a site of 195 m² and at 44 Gwynne Street, Cremorne for another five storey development.
Most notably however, it was recently reported that the owner of a major site within the Botanicca Corporate Park, on the border of Richmond and Burnley is set to develop a five-level strata office building, providing 6,200-m² of office accommodation, If the project proceeds, it will be the most significant Strata office development in the inner city since the development at the Tooronga Centre in 2012. The project is reportedly set to be announced in April.