Off-the-plan market showing signs of COVID-19 resilience

Off-the-plan market showing signs of COVID-19 resilience

The coronavirus crisis is making ripples in the property market, but surprisingly, the off-the-plan sector, so far, appears to be weathering the storm.  March data from reveals a 6.8 per cent increase in searches for new homes compared to the same period last year, which chief economist, Nerida Conisbee, says is “surprising”.

COVID-19: What will happen to property prices in Australia?

“When this all started, I expected everything to go into freefall, but it seems to be far more robust than I expected,” she says.

Conisbee adds, the effects of the pandemic are complicated and there will be winners and losers.

“There seems to be a lot of blanket statements out there about what’s happening in the property market and how it’s all bad,” she says. “But the reality is, we’re seeing a lot of difference across Australia in terms of how property is being viewed. Some markets seem to be far worse impacted than others.”

Confidence rebounding

Search results for off-the-plan homes dipped through the latter half of March after social distancing restrictions kicked in, but even accounting for the drop in activity, the results are a positive indicator of the sector’s resilience.

Conisbee says the rebound in weekly search activity is in line with broader consumer sentiment data.

Man building

Searches for new homes are up year-on-year. Picture Getty

“ANZ released their consumer sentiment and that picked up as well last week,” she says.

“What I think is happening is people are obviously not feeling great, overall, about things. But there was a lot of stimulus announced last week. That third level announced by the government last week seems to have made people feel more confident.”

Buyers still active in Sydney

Metrics used to measure buyer engagement, interest and interaction with new home projects at have also shown strength in many markets across the country, especially in Sydney.

Sydney house and land was showing a lot strength before the pandemic kicked in, but through March leads per listing in Sydney were up 35% for apartments and 66% per land estates, which Conisbee describes as “incredible.”

Sydney data for new homes in Sydney has been robust. Picture: Getty

Director of sales and marketing at Thirdi Group, Luke Berry, says despite the challenges in the current market, his group is still planning to launch new projects, lodge Development Approvals and make sales in Sydney.

“If I was to compare this quarter to the same last year, we’re doing better, which is amazing with the corona cloud,” says Berry. “I think if you have good projects in good areas, they are always going to be supported.”

Gentry Alexandria

Gentry Alexandria recorded a $2.2 million sale last weekend. Picture:

Last weekend, a $2.2 million sale was made at Thirdi’s Gentry Alexandria project at 29-41 William Street in Alexandria. Berry says the project, which only has five apartments left, has conducted an average of 11 private tours over the past month with a similar number lined up for the next fortnight.

Berry adds, the property’s target market is owner-occupiers who are making long-term lifestyle-driven purchasers. He suggests this demographic is a bit more insulated to the financial impact of the crisis than other buying groups, such as investors.

“We’re in this weird little bubble where things aren’t too bad,” he says. “I’m definitely having to do deals, but I’m not compromising the value of the project. I think that’s a combination of timing, good luck and the right product,” he says.

Online engagement a key

The use of digital tools has been a key factor in off-the-plan projects continuing to appeal to buyers, according to Berry.

“We’ve had to innovate and really use our social media platforms,” he says. “We’re working really hard on video content and engaging with buyers through our site.”

Conisbee believes the sector’s embrace of digital tools, such as virtual inspections, are a factor in its relative strength compared to the established property market.

“Where developers have an edge is, when you’re selling a new home you’re selling something that doesn’t exist with great graphics, videos or 3D,” she says. “It’s very different to an existing home where people would typically come and walk around the property.”

In Sydney, more than $8 million in sales have been notched up at the Gentry Alexandria development during the past month.

Gentry Alexandria, Thirdi Group_Display suite terrace
A balcony at the Gentry Alexandria display suite. Photo: Thirdi Group

In Sydney, more than $8 million in sales have been notched up at the Gentry Alexandria development during the past month. Luke Berry, co-founder of developer Thirdi Group, said an ongoing negotiation for a $2.2 million townhouse may ratchet up the total to more than $10 million.

“When you combine all the DNA of our product, it’s really attractive to the most active person in the market right now and that’s the cashed-up downsizer who is looking to exit a $3 million to $4 million home,” he said.

“They want to leave a bit of money in the back pocket, but they still want to live in luxury in a beautiful home with all the bells and whistles.

“That’s why I think we’re doing well.”



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This Senior Moment is a Good Thing

By Rohan Clarke
Small rather than large residential gold estates is the new trend in golf-course living. And seniors living developments are at the forefront for many clubs that wish to secure their long-term future. Australian Golf Digest spoke to three experts about the phenomenon of ‘Retiring On The Fairway’.

Seniors Living: The Merewether Experience
Merewether Golf Club in Newcastle has taken advantage of zoning legislation in NSW to create a seniors living development in exchange for course improvements and a clubhouse redevelopment. However, Merewether will retain ownership of the land to be used for the retirement complex. Merewether is leasing a 1,400sqm parcel of land for 99 years to property developer Thirdi, which is building six floors of apartments for over-55’s.
A minimum of 150 units is planned, depending on the development approval. Private golf clubs that own their own land are subject to state planning legislation. In NSW, seniors living complexes designed for over-55’s are permitted on golf courses even if the zoning is non-residential. The NSW government actively encourages these properties for pensioners or older couples under State Environment Planning Policy Number 65 (SEPP65) whereas Victoria and other states don’t make allowances. Therefore, in some cases, it’s actually beneficial to have zoning as RE2 (recreational private) as opposed to general residential because it provides greater scope to undertake development.
For example, Merewether is able to pursue a development with unlimited height restrictions. Whereas if its land were zoned residential it would have a limitation of say, two floors. Merewether put its development plan to tender on the open market to identify who had the best offering. The value of the land was placed at $16.5 million, which is the total amount the club will receive from Thirdi. Merewether has allocated $9 million for the construction of a new clubhouse. At least $1.5 million will be spent on course renovations as a consequence of the seniors living development. That provides for relocation of the maintenance shed and ensuring the course remains as an 18-hole layout and at least a par 70 during the construction period. Another $500,000 has been set aside for temporary facilities while $3.5 million will be invested into income-generating assets.
Rather than selling off part of its course Merewether is actually leasing the parcel of land to Third over a 99 year period. The developer has the right to put a seniors living development in place. The golf club earns an income off the lease and Merewether also receives a percentage of the deferred management fee (DMF). The contract accords the golf club a percentage of any apartments sold under the banner of that development. So Merewether collects 2% of the value of apartments that are sold to members (for instance, $20,000 on $1million unit). The developer wishes to minimise costs in the marketing of the apartments and similarly the golf club wants as many members as possible to buy into the units. Then every time an apartment is re-sold, a management fee is applied to the sale price. This is typical of all seniors living or aged-care units. For example, a person buys a seniors living apartment for $1 million.
The person lives in that unit for 15 years before its sold for $2 million. In the Merewether instance, the DMF is 25% of the $2 million which is $500,000 and the golf club gets a share of that DMF. All the risk is with the property developer rather than the golf club. Merewether retains ownership of the course but still gets the benefits of being able to utiliser it, says Aaron Spalding captain of Merewether Golf Club.
“Everything has been funded by the developer. We don’t do anything until we’ve either got the money from the developer or there is an approval stage which says we’re going to get the money.” Off the back of what’s occurring at Merewether, Spalding formed a company (Valentem Consulting) to advise golf clubs. he figured that private golf courses have become targets of developers because they are asset-rich in terms of land. Because of the nature of club cards, they don’t necessarily have the knowledge to equally negotiate with developers. With a background in finance and general management, Spalding says: “I have seen clubs not receiving full value from developers, in some cases outright predatory behaviour, so I’m seeking to help them out where I can.”
While development deals exist for private golf clubs that own their land, there are still opportunities for ‘public’ courses that lease land from a council, water utility or other landlord. Spalding says it’s worth examining the terms of the lease and what it allows.
For instance, if a club has a 50-year lease and the lease allows building on that land. It may be a case where it requires a renegotiation with council to say this is what needs to happen to ensure the ongoing viability of the golf club.
As long as council wants to ensure the ‘green space’ is maintained and isn’t seeking to replace the golf course with sporting fields, there is still scope to renegotiate a longer-term lease. And the longer the timeframe that is available, the more attractive the return from a developer’s viewpoint. Additionally, the prospect of a seniors living development integrated with the course delivers increased rates revenue to council.
Thinking laterally, senior residents have the potential to be the lifeblood of a golf club. A seniors living operator has a legislative requirement to provide food to all of its residents. So if a golf club puts in a caveat for food/beverage across the entire area, suddenly the club is in a position of authority to control the pricing and generate revenue. Golf clubs need to think outside the square rather than “next year we’ll get 25 new members”. First National Real Estate’s Ellis says golf clubs may need to make brave decisions with regard to their land use: “It comes down to how a golf club is going to maximise their investment. Their strategic
plan is to get more members. Well, how are they going to get more members if golf is a dying sport? How are they going to protect their asset?”

Thirdi Group Lists Development Site in North Sydney

By Ted Tabet

Sydney-based developer Thirdi has listed a mega development site—comprising five buildings in North Sydney— which could pave the way for a $330 million mixed-use development.

The site comprises the consolidation of a series of residential apartments across five buildings—located at 2-4 Blue Street and 1-5 William Street— a few hundred metres from North Sydney’s bus and rail interchange.

The deal took more than a year to complete including three apartment blocks that were company-titled, while the other two were strata-titled.

The 2,326sq m site is being listed by CBRE and JLL, potentially paving the way for a circa $330 million office or residential project with eventual views of the city skyline, Harbour Bridge and Barangaroo.

“We saw a massive opportunity, regardless what type of development we ultimately delivered to maximise its strategic location in North Sydney’s CBD core and also take advantage of the outstanding views of Sydney Harbour, the CBD and Barangaroo,” Thirdi Group’s Robert Huxley said.

“Even with the unsolicited offers, from our point of view, it’s business as usual.

“We will continue to work with our architectural firm Woods Bagot and other consultants to create an outstanding building.”

North Sydney’s CBD has benefitted from major office developments including 100 Mount Street, which was close to fully leased when it completed recently and 1 Denison Street, which has pre-commitments from major corporate tenants moving into the market including Nine Entertainment Co. and Microsoft.

CBRE’s Scott Gray-Spencer and Ben Wicks in conjunction with JLL’s Paul Noonan, Rob Sewell and Mitch Noonan have been appointed to gauge market interest.

“The size of the project means a nimble developer could capitalise on the current strength in the North Sydney office leasing market and potentially deliver a new office building by 2021 to coincide with a forecast spike in tenant demand,” Gray-Spencer said.

“North Sydney’s ongoing revitalisation — underpinned by the new Victoria Cross Metro Station and council-driven infrastructure improvements and public domain – is attracting significant interest from office occupiers.”

Thirdi, known for its inner-city Sydney apartments, has recently made a foray into retirement living and aged care development.

The developer will now aim to submit a development application with North Sydney Council by the end of October.

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Buying off the Plan

Glen James and John Pidgeon of My Millenial Money sat down with our own Luke Berry to talk about buying off the plan.
We know it can be a scary thing buying a property, but we have absolute confidence in our abilities.
Glen and John asked Luke some important questions for all you need to know about buying off the plan.
Give it a listen to find out more!

Sydney developer lists $330m North Sydney project

Su-Lin Tan

Sydney developer Thirdi has pulled together an ambitious office project in North Sydney after amalgamating a series of apartment blocks and listing for sale the Blue Street site, slated to be home to a $330 million development.
The move represents a further diversification for Thirdi, best known for its inner-city Sydney apartments. The developer has also made a foray into retirement living and aged care development, as well as Specialist Disability Accommodation units supported by the National Disability Insurance Scheme (NDIS).

Sydney developer Thirdi makes a breakthrough with commercial diversification, listing its office project for $330 million (render). Supplied
In North Sydney, Thirdi, with the support of commercial agency PropertyFox’s Tim Fox and Michael Wydeman, amalgamated 40 apartments across five apartment blocks under strata renewal laws to put together a 2326sq m office development site at 2-4 Blue Street and 1-5 William Street.
The complex deal took more than a year to execute and comprises three apartment blocks that were company-titled, while the other two were strata-titled. While only 75 per cent owner agreement is required to force the sale of the units, Thirdi has achieved full control of the site.
Its key location near North Sydney’s bus and rail interchange, as well as the future Victoria Cross metro station, has drawn the attention of several institutional investors, including developers and the listed REITs keen to access premium office space in the scarce North Sydney market.

Following unsolicited offers, the group has launched an official expressions of interest campaign for a buyer or joint venture partner through CBRE’s Scott Gray-Spencer and Ben Wicks and JLL’s Paul Noonan, Rob Sewell and Mitch Noonan.

The group initially explored the site for apartments but consultations with local council indicated a commercial or mixed-use project better meets the North Sydney CBD expansion plans.
The soft housing market was another reason for the group’s commercial detour.
“There were a few levers that pulled back investor-driven apartment sales in 2016 to 2017, when we then moved onto aspirational owner-occupier apartments and now we are thinking outside the square, a diversification that started 18 months ago,” Thirdi’s Luke Berry said.
The completion of the project in 2022 will be timed to mop up unmet demand ahead of other projects, according to Mr Berry and the agents.
“The size of the project means a nimble developer could capitalise on the current strength in the North Sydney office leasing market and potentially deliver a new office building by 2021, to coincide with a forecast spike in tenant demand,” Mr Gray-Spencer said.
The new property will yield about 15,000sq m of net lettable area. It will join other new office developments, the Nine-anchored tower at 1 Denison Street by Winten Property Group and Dexus’ new 100 Mount Street block. Other groups such as Mirvac have also used the strata renewal strategy to access commercial sites in North Sydney.

Thirdi’s Robert Huxley said that as the company considers its options through the EOI process, it will proceed with the planning process, appointing architects Woods Bagot to design a scheme ahead of a development application submission by the end of October.
While the company considers other commercial sites in Sydney and Melbourne, it has also established its first retirement village project under the ThirdAge Villages brand in Newcastle, NSW, through the redevelopment of the Merewether Golf Clubhouse and its associated Seniors Village.
The group’s interest in Newcastle expands from its apartment projects in the new West End precinct in the city’s CBD. Within those projects, the company has also built its first 20 NDIS-assisted living units.


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Thirdi Group invests in two wheelchair-accessible vans as part of GoGet car-sharing initiative in Wickham

By Max McKinny

Development company Thirdi Group has doubled down on its GoGet car-share partnership, investing in two wheelchair-accessible people movers.

The purpose-built vans will be available to the public through GoGet but have been purchased by Thirdi Group to serve the 20 NDIS-designed apartments within its Stella and Eaton developments in Wickham.

Thirdi Group and GoGet announced a partnership earlier this month that will see up to 20 cars housed in the basements of Stella and Eaton.

“Our commitment to delivering the best possible NDIS apartments in Newcastle doesn’t start and stop at the front door of our apartments,” Thirdi Group director Luke Berry said.

“Residents and their families will quite literally be able to catch a lift to their basement and our [vans] will be full of fuel and ready to drive.”

Peter Hojgaard-Olsen, who with his son inspired GoGet to develop its first shared vehicle for people in wheelchairs, said it was pleasing to see they would soon be hitting the road.

“Shared vehicles like these make it possible to get transportation to where you need to go,” he said.

“Flexible transport options can also benefit an ageing population.”

NSW Minister for Families, Communities and Disability Services, Gareth Ward, commended Thirdi Group and GoGet for the innovative initiative.

“This service will provide people with disability or limited mobility another transport option to help them lead active and fulfilling lives,” he said.

Thirdi Group’s decision to build 20 NDIS-designed apartments in Wickham came after a similar initiative at one of its developments in Belmont almost seven years ago, when the company delivered 10 NDIS units in The Belle Apartments.

Mr Berry said the Stella and Eaton developments were now at a stage of development where, if there was demand, standard residential apartments that were yet to be sold could be transformed for NDIS needs.

He said he hoped the company’s investment to incorporate disability-based housing within its standard apartment developments could inspire other developers.

“Our bathrooms are typically bigger, the toilets are bigger to allow for wheelchair accessibility, but even what we call care automation,” he said.

“Our properties will allow people with disabilities to open and close doors by touch activation, we can even design our kitchen and bathrooms to have bench tops that rise and go forward.

“They’re able to be customised based on the tenant.”

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Wheelchair Market Size Worth US$ 6,388 Million by 2026

LOS ANGELES, Sept. 30, 2019 (GLOBE NEWSWIRE) — The global wheelchair market is expected to grow at a CAGR of around 5.6% from forecast period 2019 to 2026 and reach the market value of over 6,388 million by 2026.

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The global wheelchair market is studied across the region of North America, Europe, Asia Pacific, Latin America and Middle East and Africa. North America accounts for the largest market share in the year 2018. The region is likely to maintain the dominance over the forecast period owing to rising incidences of chronic diseases due to changing lifestyle in terms of long working hours, high consumption of junk food and sedentary lifestyle. Along with this, the strong presence of major manufacturers in the regional market is further propelling the market value. The wheelchair market is experiencing positive growth, owing to the increasing number of individuals suffering from disability diseases, which are enabling them to opt another mode for mobility. Also, the rising number of obese people due to the increasing consumption of unhealthy and packaged food coupled with the changing lifestyle trends are further accelerating the demand for a wheelchair in the global market.

On the basis of product, the wheelchair market is segmented into manual and powered wheelchair. The powered wheelchair is dominating the product segment with a maximum market share in the year 2018, and the segment is also expected to maintain the dominance over the forecast period. The benefits associated with the electric or motorized wheelchair include lightweight, easy operation and customized features that are contributing to the segment growth.

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On the basis of function, the market is segmented into basic, standard, bariatric, and sports among others. From the aforementioned entities standard type of functionality is holding the major share in the year 2018, and the segment is also anticipated to continue with the same pace over the forecast period. The standard wheelchairs are mainly gaining positive growth owing to the benefit of convenient operation in daily life events.

In terms of end-user, the market is segmented into institutional use, and personal use among others. The personal use segment accounted for the largest market share in the year 2018. The segment is also anticipated to augment demand over the forecast period owing to increasing geriatric population suffering from diseases including spine injury, osteoporosis, and rheumatoid arthritis, where the use of a wheelchair on daily basis can improve the quality of life. The use of a wheelchair in old age population can reduce the dependency on others, and can increase the ability to move and operate on their own.

Some of the key players operating in the wheelchair market include 21st century Scientific Inc., Drive Medical, GF Health Products Inc., Hoveround, Invacare Corporation, Karman Healthcare, Ottobock, Permobil, Pride Mobility Products Corp and Sunrise Medical LLC. The major manufacturers are involved in R&D activities for developing more convenient mobility devices.

Some key observations regarding the wheelchair industry include:

  • A flexible brain-machine interface or BMIs is developed by researchers for controlling powered wheelchairs. The major target for the new technology product is the people suffering from spinal injuries
  • The Thirdi group and GoGet announced a partnership in Sep. 2019, where Thirdi Group is investing in two wheelchair-accessible people movers
  • Abu Dhabi international airport, UAE has started the trial of autonomous wheelchairs for the travelers who require assistance in moving on the airport. It’s the first regional airport, which has started trial of such technology
  • The rising government initiative for various mobility diseases to drive the demand for wheelchair. For instance, in September 2019, Indian Spinal Injuries Centre (ISIC) organized a rally on the 4th spinal cord Injury day in association with the Indian Spinal Injuries Centre (ISIC). The motive of the rally was to spread awareness among people about the spinal cord injury; this initiative created a demand for more than 200 wheelchairs.
  • The researchers of biomechanics and rehabilitation engineering from Technische Universität Wien, Vienna have developed a new wheelchair with an advanced drive system. The wheelchair can move through a newly designed hand gear instead of the hand rim on the wheel.

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