realogic - Green Square Sydney

ReaLogic
REALOGIC
REsearch Report
GREEN SQUARE URBAN RENEWAL PROJECT
October 2010
ReaLogic
TABLE OF CONTENTS
Executive Summary
1
Green Square Urban Renewal Project
2
Green Square Town Centre 6
Victoria Park
10
The Importance of Open Space in the Urban Renewal12
Supply
www.realogic.com.au
14
Demographics
18
The Broader Sydney Market
19
Important Information
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REALOGIC RESEARCH REPORT
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
EXECUTIVE SUMMARY
Major Urban Renewal Project
Green Square is considered to be the most important urban redevelopment project in Sydney and is one of the most exciting
and largest urban renewal projects in Australia. The planned urban structure of Green Square Town Centre is a key defining
characteristic of the project. This distinguishes it from many other urban centres of Sydney, which have evolved in an ad-hoc
manner. A commitment to building a contemporary ‘urban village’ community underpins the design of Green Square Town Centre.
European-style piazzas, parks and entertainment facilities will encourage al fresco dining, markets and street festivals.
The New Chatswood
The Green Square area is set to become a major employment hub comparable to Chatswood but situated in a far
superior location:
- 4km south of Sydney CBD/ 2km north of Sydney Airport
- Within 2km of Sydney University, New South Wales University and UTS
- Surrounded by parklands (Moore Park, Centennial Park, multiple world class golf courses, Sydney Cricket Ground,
Fox Studios, Randwick Racecourse)
- Only 4.5km to Coogee Beach and 5.7km to Bondi Beach
Environmental imperatives have driven the vision of Green Square, which will set new standards in sustainability and will be
showcased as one of the nation’s leading eco-villages, setting new benchmarks for design and architectural excellence.
Major Employment Hub
Population growth predictions means 55,000 new homes are allocated to the City of Sydney Local Government Area (LGA) and
58,000 new jobs, with 14,000 new jobs specifically identified for Green Square (or 24% of total jobs).
Excellent Transport Accessibility
Green Square Town Centre is also conceived as a model of transport-oriented development, driven by its connection to Green
Square Railway Station and proximity to other forms of transport such as main arterial roads, Sydney Airport and multiple bus
routes connecting it to all parts of Sydney.
Residential Trends
Research shows that units are fast becoming the preferred choice of accommodation and have outperformed housing in capital
growth in recent times due to several factors including affordability, lifestyle choice, low maintenance and environmentally
sustainable design principles incorporated into new builds. For example, older style two bedroom terrace houses without
parking would currently sell for over $700,000 in surrounding suburbs, whereas it is possible to purchase a brand new luxury
apartment with parking for under $700,000 within Victoria Park. This has driven demand as thirty-something owners and
tenants seek to move closer to the CBD and live in modern accommodation.
Capital Growth
Victoria Park grew at a staggering rate of 17.8% over the last 12 months (RPData) and has an extremely low vacancy rate of only
0.4% (SS Realty). BIS Shrapnel have predicted Sydney to grow by 20% over the next 3 years which puts it ahead of Melbourne
(9%) and Brisbane (15%). Prices are expected to rise, underpinned by a deficiency of dwelling stocks across most capital cities,
leading to tight vacancy rates and solid rental growth, flowing through to increased investor demand
New Shopping Centre
A common strategy for investors has been to buy where Coles and Woolworths decide to build new stores. Consent for a retail
development has been granted at Victoria Park opposite the Apex development and Audi showroom, 4,000m2 of which has been
provisioned for a Coles or Woolworths. The well regarded Supa Centa is also increasing retail space by 6,500m2.
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
GREEN SQUARE URBAN RENEWAL PROJECT
OVERVIEW
Green Square is seen as the most important urban redevelopment project in Sydney at present and is considered to be one of
the most exciting and largest urban renewal projects in Australia comprising 278 hectares of land in Sydney’s oldest industrial area.
The area is projected to be home to a resident population of more than 33,000 and more than 28,000 people are expected to
work in the area by 2021. Green Square has a rich history and is socially, culturally, economically and physically diverse.
Location
The Green Square area includes the suburbs of Zetland and Beaconsfield, and parts of the suburbs of Alexandria, Rosebery and
Waterloo. Its heart will be the new Green Square Town Centre, a site of about 14 hectares, centred at the Green Square Station
on the Airport Link Railway.
Located just 4kms south of Sydney CBD with its world class attractions such as the Sydney Opera House and the Harbour Bridge,
as well as Chinatown, Star City Casino and the plethora of shopping that comes with Sydney being recently voted in the top 10
cities to live in the world. The beaches of Bondi, Coogee and Clovelly are close by, as are the magnificent parklands of Centennial
and Moore Parks, Sydney Cricket Ground and Randwick Racecourse.
Vision
The vision is to transform Green Square into an attractive, vibrant and sustainable urban community. Four key objectives
sustain the vision: diversity, connectivity, interdependency and long term growth. Planning for the renewal of the Green
Square area began in 1995 with approvals happening in April 2006. There is a constant review of planning for the area to
ensure the area delivers on these four objectives. This is in the form of on-going implementation, evaluation and
refinement of planning controls, site-specific development applications and site redevelopment to ensure product and build
quality is of the highest standards.
Key elements of the Green Square Urban Renewal Project:
1. Strategic location between the Sydney CBD, Port Botany and the Airport.
2. Excellent transport system.
3. Viable employment-generating industrial and commercial businesses.
4. System of open space corridors, providing links to regional parklands including Moore Park, Centennial Park
and Sydney Park.
5. Integration of existing traditional residential neighbourhoods of Zetland and Beaconsfield, and emerging
neighbourhoods such as Victoria Park and Crown Square.
6. Range of building types, from traditional Victorian terraces to warehouses, industrial and public buildings,
many of which contribute to the cultural and heritage diversity of the area.
7. Topographic features including the hilltops of Zetland and Beaconsfield and view corridors providing distant
and local vistas.
8. Rich cultural and artistic base of diverse residents.
9. Network of tree lined streets, parklands, urban design water features.
10. Activity centres and focal points, such as Danks Street in Waterloo.
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
GREEN SQUARE URBAN RENEWAL PROJECT
Green Square Urban Renewal at a Glance
Projected resident population at 2021
33, 148*
Projected workforce population at 2021
28, 392*
Total No. of projected dwellings
13,076*
Total projected residential floorspace
1,310,000 square metres*
Total projected commercial and other non-residential floorspace
854,000 square metres*
Total projected retail floorspace
46,000 square metres*
Proposed major retail and commercial centre
Green Square Town Centre
Projected No. of affordable housing units
479
Registered Affordable Housing Provider
City West Housing
Estimated new residential units approved at June 2004
4,100
Estimated new residential units occupied at June 2004
2,500
* Source: HillPDA (2003) South Sydney LGA Resident and Workforce Population Projections. South Sydney Council
Location Map
The Green Square Urban Renewal Area is located between the Sydney Central Business District (CBD), the Sydney
International (Kingsford Smith) Airport and Port Botany, within the City of Sydney Local Government Area (LGA).
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
MICRO map
Philip Street
Young Street
Buckland Street
McEvoy Street
Fountain Street
O’Dea Avenue
Bourke Street
Joynton Avenue
Harley Street
Botany Street
Portman Street
Bourke Road
Queen Street
Green Square Area
Green Square Town Centre
Victoria Park
4
Eastern
Distributor
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
MAJOR EMPLOYMENT HUB
The main predictions for the metropolitan area are for a
growth in population from 4.2 million to 5.3 million by 2031,
with 640,000 new homes required and 500,000 more jobs.
Of these, 55,000 new homes are allocated to the City of
Sydney Local Government Area (LGA) and 58,000 new jobs,
with 14,000 new jobs specifically identified for Green Square
(24% or total jobs).
INFRASTRUCTURE
TRANSPORT
Victoria Park is perfectly located for accessibility to all parts
of Sydney.
Road Access
A slip road allows immediate access from Victoria Park to the
Eastern Distributor (South Dowling Street) which allows access
to the CBD and North Sydney through the harbour tunnel and
south towards the airport.
AIR
Sydney Airport (Kingsford Smith) is located 2kms south west
south of Victoria Park
Transport
Initiatives are in progress to encourage greater use of public
transport, walking and cycling in favour of private vehicles,
including:
(a) an increase in train services from around 8 to 16 trains
per hour on peak;
(b) reducing the impact of the existing pricing impediment
on rail patronage of the Airport Link line;
(c) improved pedestrian access to the train station;
(d) improved cross regional bus feeder systems, bus priority
measures and public transport information display boards;
(e) increased pedestrian and cyclist facilities;
(f) restrictive car parking policy.
Bicycle Strategy
The proposed bicycle networks for Green Square are an
important element of the street and open space network
hierarchy encouraging community interaction, health and
reduced car dependency. New large developments in Green
Square including Victoria Park in Zetland and Crown Square
(the ACI site) in Waterloo have provided an extension to the
cycle network in their new streets and parks.
BUS
Buses are available within 20 metres of Victoria Park on Joynton
Avenue and routes are available to CBD and Bondi Junction.
There is currently a proposal for a future bus corridor along
Defries Avenue which will improve even further accessibility for
residents.
Train
500m from Victoria Park is Green Square railway station on
the City Rail Airport and East Hills line and is located on the
northern edge of Zetland. Central railway station is the next
station to the north and Mascot railway station is the next
station to the south.
Schools
Green Square Public School ABC Rosebery (Childcare and Pre-School) Alexandria park Community School Gardeners Road Public School
1.15km
1.55km
1.77km
2.2km
Universities
New South Wales
Sydney University
UTS
1km
2km
1.4km
Emergency Services
Police Station
Fire Station
2km
6km
Hospitals
Prince of Wales Hospital
RPA Hospital
2.6km
3.2km
Parks
Alexandria Park/ Tennis Courts
Centennial Park
Moore Park
1km
0.8km
0.2km
Restaurants/ Cafes/ Bars – various on:
Danks Street, Waterloo
Crown Street, Surry Hills
Oxford Street, Paddington
0.6km
1.9km
1.5km
Groceries
Jones the Grocer (Danks Street)
IGA (Rosebery)
Cellebrations (Rosebery)
Coles (Surry Hills)
ALDI (Eastlakes)
Meriton Coles
Spar (Alexandria)
0.6km
1km
1km
1.2km
4.5km
0.3km
2km
Shopping
Surry Hills Shopping Centre
Eastlakes Shopping Centre
Westfield Eastgardens
Moore Park Supa Centa
1.2km
1.9km
4.5km
0.1km
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
GREEN SQUARE TOWN CENTRE
With overarching themes of interaction, sustainability and community, Green Square Town Centre has been envisioned as a
planned major centre for residential, commercial and cultural activities. Comprising approximately 410,000sqm of mixed use floor
space, it will accommodate some 7,000 workers and 5,500 residents.
Mixing thriving green spaces with plazas and piazzas, it will become a social hub for residents. Green Square Town Centre will be a
place for living, working and entertainment. It embodies the Lord Mayor’s vision for Sydney as a ‘City of Villages’ promoting interaction within a vibrant, urban community. A new civic plaza will be created as a venue for markets, events and community gatherings.
Piazzas will become places to pause, relax and absorb the ambience and passing scenes. Adjacent parklands will provide open
spaces to play, picnic or relax outdoors.
Green Square Town Centre is also conceived as a model of transport-oriented development, driven by its connection to Green
Square Railway Station and proximity to other forms of transport. Environmental imperatives have driven the vision of Green
Square, which features progressive environmental initiatives to conserve water and reduce greenhouse gas emissions. It will set
new standards in sustainability and will be showcased as one of the nation’s leading eco-villages, setting new benchmarks for
design and architectural excellence.
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
GREEN SQUARE TOWN CENTRE
The core objectives The Green Square Town Centre are:
1.To establish the Green Square Town Centre as the major commercial, retailing, cultural and entertainment centre for the
Green Square area.
2.To allow for a mix of land uses that will:
a. ensure that there is an appropriate balance between residential, retail, commercial and other land uses within the town centre.
b. encourage the provision of a range of services and facilities to help meet the needs of the population and users of the town centre.
c. generate employment in the town centre.
3.To facilitate the development of buildings and works that are of a scale, character and design quality consistency that
contribute positively to the amenity of, the public spaces they adjoin.
4.To protect the amenity of parks and community places.
5.To promote the vitality of the public domain by encouraging the location of active retail, food and beverage, entertainment
uses and community and cultural facilities at ground level, particularly to the edges of the new public plazas.
6.To accommodate a vibrant residential, commercial, retail and cultural heart of Green Square.
7.To provide for a well balanced structural layout of public spaces and built areas within the Green Square Town Centre.
8.To establish a significant new people-oriented public town square, interconnected streets and other vibrant public plazas
and public open spaces that are designed to be safe, functional and visually interesting places for a range of people and varied
social activities.
9.To allow for equitable access for pedestrians, cyclists, public transport and other vehicles.
Urban Structure
The planned urban structure of Green Square Town Centre is a key defining characteristic of the project. This distinguishes it
from many other urban centres of Sydney, which have evolved in an ad-hoc manner. Central to the design of Green Square Town
Centre is an east-west spine, incorporating a landscape boulevard and major public plazas within this hub of commercial and retail
activity. This spine links closely with Green Square Railway Station and supports the surrounding development. The most intense
development and activity will occur within the ‘Town Core’, built around the new public plazas and creating the commercial focus
for the Town Centre.
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
Commercial
Green Square Town Centre will be built according to a modern, cutting edge design. Combined with its important strategic
location at the heart of the booming CBD to Airport corridor, this will attract a high calibre of commercial tenants. The Town
Centre will provide new, state of the art buildings with all the supporting infrastructure required by a diverse array of businesses.
Its thriving urban environment will also engage customers and keep employees happy.
Retail
The reinvigorated, modern environment and diverse transport options of Green Square Town Centre will attract a sophisticated,
cosmopolitan customer base and a broad range of retail tenants. It is expected that the retail mix will ensure a vibrant and active
Town Centre, both day and night.
Residential
Green Square Town Centre’s design elements and convenient location will combine to make it a highly liveable and desirable
environment within the Inner South. It is expected to provide 2,500 homes when it is completed, with residents drawn by its
unique lifestyle offering.
Public Domain
A commitment to building a contemporary ‘urban village’ community underpins the design of Green Square Town Centre.
European-style piazzas, parks and entertainment facilities will encourage al fresco dining, markets and street festivals. Green Square
Town Centre’s larger Civic Plaza and more intimate Neighbourhood Plaza will form a strong focus for many of these cultural,
entertainment and retail aspects. Further ambience will be created by an urban stream that will flow through these parks –
inspired by Shea’s Creek that once ran through the area.
Heritage
Despite the significant physical changes Green Square Town Centre will bring to the area, care is being taken to preserve Green
Square’s heritage such as the former Royal South Sydney Hospital.
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
Part H: Green Square Town Centre - South Sydney Development Control Plan 1997
New Streets
Plaza
Residential
Plaza - Lower Ground Retail (Development Site 19)
Residential/Commercial
Plaza - Potential Threshold Elements
Commercial/Retail
Below Ground Level Communal Car Parking and Retail Facilities
Commercial
Residential/Commercial/Retail
Public Park
on Of Desired Activities
Figure 3.1 - Land Use and Public Domain
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
VICTORIA PARK ( www . vicpark . com . au )
Overview
Part of a Grand Plan for South Sydney, the 25 hectare Victoria Park site in Zetland was a Naval supply depot, a car manufacturing
plant and a racecourse at various times. It will be a model for successfully transforming overused and decaying inner city precincts
and act as a catalyst for the development of the rest of the Green Square Town Centre.
Victoria Park will consist of up to 2,500 dwellings and a mixed use development consisting of;
• 150,000sqm of residential uses
• 25,000 sqm of commercial uses
• 10,000sqm of retail uses
• 8,000sqm of commercial community uses
This will create a new, vibrant community in Inner Sydney.
Recent History
Located to the east of the Green Square area adjacent to South Dowling Street the site was subject to an initial masterplan,
approved by the former South Sydney Council in February 1999, with subsequent amendments approved in December 1999
and November 2003.
The maximum heights permissible on the site under the masterplan is in the western part range from 2 to 9 storeys, increasing
towards the eastern part, with a few towers of 15 storeys and one of 20 storeys along Defries Avenue.
The 2003 amendment gained approval for three towers along South Dowling Street – two of 22 storeys in the southern part
and one of 26 storeys at O’Dea Avenue - and an increase in the residential floorspace on the eastern precinct.
The masterplan provides for predominantly residential uses, with up to 25% non-residential floorspace to be located primarily
in the eastern commercial precinct, along South Dowling Street.
Shopping Centre
Consent has been granted for a full line supermarket and associated retail on the north-eastern corner site of Victoria Park
opposite the Apex development and Audi showroom. The owners of the site, Payce Consolidated, have approval for 10,000m2
of retail on the ground floor, 4,000m2 of which has been provisioned for Coles or Woolworths. The remaining space will be
offered to specialist shops to provide a similar feel to the fashionable James Street Precinct in Brisbane. The current approval is
for commercial space above the retail and Payce is currently considering options for residential versus commercial.
Across the road towards Moore Park, the well regarded Supa Centa is undergoing a major renovation provide more homemaker
& lifestyle shopping options. They commenced in October 2008 and are anticipated to be completed by mid 2011. The renovation
will include an addition of up to 6500sqm of retail space, to include furniture, electrical, homewares & lifestyle options; the
introduction of JB Hi Fi and re-configuration of Harvey Norman’s tenancy; an upgrade of internal & external appearances including
new amenities, terrazzo flooring, ceilings, shop fronts and vertical transportation to provide an improved shopping experience.
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
VICTORIA PARK
22
21
14
13
15
17
16
P
10
18
12
1.
Apex
2.
Audi Head Office
3.
Meriton
4.
VSQ1
5.
Over 55’s Accommodation
6.
Nest
7.
Arc
8.
Eco 1
9.
Eco 2
10. Centric
11. Airia
P
12. Nova
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13. Prominence
19
14. Affordable Housing
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8
15. Garland Terraces
1
20
P
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16. Garland*
17. Meriton
7
6
18. Shopping Centre**
5
19. ESP
P
4
3
20. Form
P.
PARKLAND
21. Viking
*There is a proposal in council at present to have a fresh food market on ground floor.
** In council at present awaiting approval.
22. Divercity
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
THE IMPORTANCE OF OPEN SPACE IN THE URBAN RENEWAL
Providing parklands and open space is core to the redevelopment of Green Square. There are strict controls in place to avoid
overdevelopment and it is estimated that 40% of the land is open space which counters general belief that there is potential for
the area to be overly built up.
The Open Space and Recreation Needs Study 2007 was adopted by Council in March 2007. The study advocates the need for a
recreation precinct in Green Square including an aquatic centre, multi-use recreation centre and outdoor facilities.
The Strategy identifies nine open space catchment areas within Green Square where open space is required A total of 73,000sqm
of open space is identified across these sites, plus a further 24,340sqm within the Green Square Town Centre.
The study considers the accessibility of open space and aims to provide public open space within 500m of all residents.
The redevelopment of the two major sites in Green Square, Victoria Park and Crown Square, has generated new parks. These
catchment areas or precincts are identified in the map opposite as being:
Area A
Area bounded by Wyndham Street, McEvoy Street, Bowden Street and Mandible Street – providing for 10,000 sqm of open
space with one park minimum 5,000 sqm
Area B
Area bounded by Wyndham Street, McEvoy Street, Bowden Street and Mandible Street – providing for 5,000 sqm of open space
with one park minimum 4,000 sqm
Area C
Area bounded by Wyndham Street, McEvoy Street, Bowden Street and Mandible Street – providing for 6,000 sqm of open space
with one park minimum 3,000 sqm
Area D
Epsom Road between South Dowling Street and Dalmeny Avenue – providing for one park of a minimum 5,000 sqm minimum
to be configured for stormwater detention. Other parks would make up a total of 8,000 sqm.
Area E
North of Epsom Road and south of the proposed East-West Boulevard, between South Dowling Street and Joynton Avenue –
providing for a 20,000 sqm district park associated with the recreation precinct and providing stormwater detention.
Area F
Area bounded by South Dowling Street, Lachlan Street,O’Dea Avenue and the ‘Sydney Gate’ site on Bourke Street – providing
for a 4,000 sqm park for stormwater detention, and a 2,000 sqm park along Gadigal Avenue. A further two parks of a total area
of 5,000 sqm are identified for the ‘Sydney Gate’ site.
Area G
Area bounded by Bourke, Danks, Young and McEvoy Streets – providing for one park minimum 5,000 sqm for stormwater
detention.
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Copyright ©2006 City of Sydney Council, All Rights Reserved
Copyright ©2006 Land and Property Information, All Rights
Reserved. This map has been compiled from various sources
and the publisher and/or contributors accept no responsibility
for any injury, loss or damage arising from the use, error or
omissions therein. While all care is taken to ensure a high
degree of accuracy, users are invited to notify Council’s
GIS Group of any map discrepancies. No part of this map
may be reproduced without written permission.
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Thurlow
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Kettle St
Phillip St
Surrey St
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Lyne St
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Nelson rry St
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Raglan St
Telopea
Telopea
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Henderson Rd
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Cope St
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South Sydney Development Control Plan 1997: Urban Design - Part G: Special Precinct No.9 Green Square
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
0 50 100
200
300
400
Meters
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REALOGIC RESEARCH REPORT
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
SUPPLY
Green Square is also set to play a major role in the achievement of the housing targets for the City of Sydney. There is a significant
shortage of supply in Sydney with underlying demand running at well above supply. Recent figures released show that Sydney
construction starts next year will total 19,000 when demand is closer to 29,000 units (Westpac Research).
COMPARABLES
Development Name
VSQ1
Apex
Divercity
Completion
2010
Completion due
2012
2013
# Units
319
148
700+
Area
60
75
54
Price
$584,000
$532,000
$465,000
$/m2
$9,733
$7,093
$8,611
Parking
1
1
1
Area
58
75
46
Price
$483,000
$493,000
$450,000
$/m2
$8,327
$6,573
$9,783
Parking
0
0
0
Area
83
86
79
Price
$743,000
$643,500
$595,000
$/m2
$8,951
$7,483
$7,531
Parking
1
1
1
Area
92
90
81
Price
$876,000
$690,000
$655,000
$/m2
$9,522
$7,667
$8,086
Parking
1
1
1
Area
110
127
99
Price
$950,000
$974,000
$770,000
$/m2
$8,636
$7,669
$7,778
Parking
2
2
2
1 Bed (parking)
1 Bed (no parking)
2 Bed/ 2 bath
2 Bed/ 2bath/ Study
3 Bed
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REALOGIC RESEARCH REPORT
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
DEMAND
MAJOR EMPLOYMENT HUB
The main predictions for the Sydney metropolitan area are for a growth in population from 4.2 million to 5.3 million by 2031,
with 640,000 new homes required and 500,000 more jobs.
Of these, 55,000 new homes are allocated to the City of Sydney Local Government Area (LGA) and 58,000 new jobs, a
strong percentage of which are specifically identified for Green Square.
Employment Estimate
2001
2006
2011
2021
2031
16,092
17,090
19,135
21,316
21,794
Population Growth
In terms of dwellings, the Metropolitan Strategy for the City of Sydney allocates 55,000 new dwellings to be provided across
the LGA by 2031. The City estimates that approximately 20,000 new dwellings may be achieved in Green Square with 2,500
of these in the Town Centre. This would provide for a residential population of Green Square Urban Framework approximately
33,500 persons (assuming 1.67 residents per dwelling) by 2031, up from 3,105 in 2001.
City estimates of residential population for the entire Green Square area:
Residential Population Estimate
2001
2006
2011
2021
2031
3,105
10,155
19,069
31,409
33,514
Historic Population Growth
On the back of urban renewal and prospects of strong job growth, the Green Square area has become an attractive
destination for young professionals wanting to live close to the CBD, and as a result has experienced very high population
growth over the last decade.
Zetland/
Victoria Park
Waterloo
Alexandria
Rosebery
Beaconsfield
2001 Population
574
3708
3707
8052
n/a
2006 Population
2611
8525
5848
7422
n/a
% Growth
355%
130%
58%
-8%
-
The country of origin for residents within this area is for the most part Australia, with the largest contingent of residents being
born overseas coming from UK, Vietnam, NZ, China and Lebanon.
Born Overseas - Top 5
Zetland/
Victoria Park
Sydney
United Kingdom
4%
5%
Vietnam
3%
2%
New Zealand
3%
2%
China
2%
2%
Lebanon
1%
1%
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REALOGIC RESEARCH REPORT
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
Capital Growth
HISTORIC GROWTH
Victoria Park enjoyed strong capital growth over the last 12 months, with median prices increasing at a rate of 17.8% (RP
Data). Demand for affordable property close to the CBD is high and its supply is low. This should have a positive effect on its
capital value in the coming years.
This area has experienced steady capital growth and can continue to expect this growth based on the high owner-occupier
ratio, its prime location, sense of community and its affordability as city-fringe property.
Year of Growth
City of Sydney
Zetland/
Victoria Park
Waterloo
Alexandria
Rosebery
Beaconsfield
2010
14.3%
17.8%
8%
11%
4.4%
19.8%
2009
3.3%
0.1%
4%
5.1%
0.5%
8.9%
2008
0.5%
6.4%
4%
2.6%
11.6%
-6.4%
2007
5.2%
-2.4%
8%
9.2%
14.4%
34.1%
Median Prices
The median price for units in Victoria Park is $520,000 which is slightly higher than the other suburbs that make up Green
Square (see chart below). This could be linked to the superior location of Victoria Park which has attracted strong rentals
and capital growth has followed.
Growth in Zetland has been based on solid fundamentals such as population growth, infrastructure and employment.
Year
Zetland/
Victoria Park
Waterloo
Alexandria
Rosebery
Beaconsfield
2010
$520,000
$500,000
$450,000
$480,000
$470,000
Forecast Growth
The drastic undersupply of new stock being brought to market has caused vacancy rates to plummet to record low levels, with
rents increasing significantly over the last 12 months.
Sydney is providing neutral to positively geared investment in units now which again is attracting more investors back into the
market as holding costs are reduced. This will push more buyers into the market in coming years, in turn driving competition
and prices look set to increase dramatically.
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REALOGIC RESEARCH REPORT
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
RENTAL MARKET
Drastically low vacancy rates have driven investors back into the property market, replacing the void left by first home owners.
The Real Estate Institute of New South Wales issued a warning last week that NSW now faces a rental crisis.
Vacancy Rates
Vacancy rates across most of Sydney fell in August with no long term recovery in sight. The overall vacancy rate in Sydney fell
0.1% to 1.5% for August 2010.
Vacancy rates dropped 0.3% to 1.3% in Sydney’s Inner Suburbs (0-10km to CBD) and fell 0.2% to 1.8% in Sydney’s Middle
Suburbs (10-20km to CBD). Current estimated vacancy rates in Victoria Park are standing at 0.4% (source: South Sydney
Realty). This is an excellent signal for investors looking to minimise risk of vacancy and maximise return through strong yields.
Yields
Units within Victoria Park are expected to achieve superior yields to surrounding suburbs due to ease of access to amenities
and transport, a limited supply of units to rent and the community experience enjoyed by tenants.
Rental market conditions
A comprehensive analysis of all existing units purchased for investment purposes has shown that units within Victoria Park
command higher yields than the Australian benchmark average.
The average gross yield currently being achieved by a unit within Victoria Park is 5%.
This significantly higher yield reflects that financially able tenants are willing to pay market prices for quality units set in a
prime location.
Given the continuing trend of tightening vacancy rates, a further increase in yields could be expected in the short term.
Indicative Price
Current Rent (p/w)
Gross Yield
Expected Rent in 2012
(p/w)
Gross Yield
$400,000
$400
5.2%
$440
5.7%
$530,000
$530
5.2%
$580
5.7%
$650,000
$650
5.2%
$715
5.7%
$900,000
$750
4.3%
$830
4.3%
Source: CPS Property
RENTAL PRICES AS AT September 2010
There are currently 6 units available to rent at Victoria Park which indicates severe undersupply. Rents have been rising and
Victoria Park is experiencing higher rates of growth when compared to other areas. Analysis of actual unit rental returns is
showing very strong 5% per annum compound growth since 2002. Source: PRD Nationwide Research
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REALOGIC RESEARCH REPORT
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
demographics
Victoria Park displays similar demographic traits to Zetland due to it being located within the Zetland suburb
Accommodating Sydney’s Growing Population
Over the next three decades, Sydney will need an extra 640,000 homes to cater for its population growth. The majority of
those will be created by redeveloping existing areas, putting Green Square Town Centre in a strong position to benefit from
this growth.
The evidence suggests the demographic mix will be dominated by young professionals, with figures from the 2001 Census
showing this group is growing within the South Sydney locality. The area had a relatively young median age of 33, while the
number of residents who were professionals was up 3.5 per cent on the previous Census.
These household typically have high incomes and are seeking appropriate retail and leisure facilities as part of their
cosmopolitan lifestyle. The Green Square Town Centre will tap into this demographic as the drivers for retail and residential
development.
While there is strong demand for units in the area, the tenants may not necessarily have the funds to purchase the
properties themselves. It is for this reason that the percentage of tenants to total residents is more than 50% which illustrates
a very strong rental market.
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REALOGIC RESEARCH REPORT
ReaLogic
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
THE BROADER SYDNEY MARKET
DEMAND IS STRONG
Expectations of continued job growth (34,500 new full time jobs created in NSW during 1H 2010) and State Government
incentives to buy new properties has lifted investor demand in the latter period of 2010. Lower than expected CPI, plus concerns
around European sovereign debt refinancing led to a change in view to limited rate rises until 2011 which adds to this demand.
The surprise was demand from owner occupiers, which continued to fall into early 2010, before picking up gradually in the second quarter.
SUPPLY STILL 10,000 SHORT PER ANNUM IN SYDNEY
The dearth of new development has been well publicised and despite an improvement in 1H 2010, dwelling approvals remain too
low for the population growth, let alone any structural change in the demographics. In 1H 2009 some 9,700 dwellings were approved. This was similar to the previous six months and the highest since the mid 2000’s. Once again units were the driving factor,
and continues the trend of the past ten years. However, although the 12 monthly figure of 19,600 was the highest since 2005, it
remains too low. Population growth in Sydney in the year to June 2009 was 85,400, around 71% of NSW population growth. Even
allowing for slower population growth in 2010, over 80,000 people are likely to have moved to Sydney, generating a need of over
29,000 dwellings.
POPULATION GROWTH REMAINS SOLID
Prediction of slowing international immigration appears to finally be eventuating, slowing to 39,000 people in 2H 2009 from
almost 45,000 people in the previous two half years and 47,000 in 1H 2008. However, as the gap between NSW median house
prices and other States narrows, fewer people are leaving. In 2H 2009 a net 5,300 people moved interstate, the lowest half yearly
total since 1997. Although slower than the record 27,000 in 2H 2008, natural increase has achieved growth in excess of 20,000
people in nearly all half years since 2005. The exception was 1H 2006. While the slowdown in international migrants is expected
to continue as tighter immigration rules apply, the improving economy will continue to ensure that a high level of immigration is
required. If the net loss interstate can remain low NSW population can continue to grow in excess of 100,000 per year.
INVESTORS CHASING STRONG CAPITAL GROWTH
Sydney’s recent entry into the top 10 cities in the world (AT Kearney Study 2010) is likely to increase demand dramatically.
With room to grow and considerations of an improving economy, particularly around job growth, we expect investor activity to
continue to grow during 2H 2010, despite rising interest rates. Three monthly moving totals for investor finance in May is some
12% higher in nominal terms and 10% higher in price adjusted terms. Strong March and May figures have boosted recent data,
and evidence suggests that investors are considering NSW property again. Part of the attraction may have been the strong price
growth experienced in the past year and the attractive yields with an undersupply indicating further pressure on rents.
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ReaLogic
GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
THE BROADER SYDNEY MARKET
RENTS RISING - VACANCY LOW - AFFORDABILITY AN ISSUE
Vacancy tightened in Q1 2010 to 1.1%, down from 1.3% of the previous year. Rental growth of $10 per week in Q1 2010 was the
first increase in rents for five quarters and amounted to an increase of 2.5%. With continued undersupply and a healthy level of
population growth, rental growth should continue through 2010, particularly in the absence of any short term incentives to move
into home ownership. However, affordability in terms of renting also needs to be monitored and at 27.4% in Q1 2010, it is one of
the highest in the country. While affordability will remain an issue, continued low vacancy, and rising interest rates should result in
rental growth rising over 2010 and into 2011.
YIELDS STABLE - MINOR LIFTS EXPECTED
Gross yields for a two bedroom unit steadied at around 5.2% in March 2010. This was as expected. Rental growth re-commenced
in Q1 and given the shortage of accommodation should continue through 2010. With limited price growth, further increases in
yield are likely, although a significant jump is not expected. Affordability for both rents and prices should place a cap on how high
yields may rise, although with vacancy down at 1.1% choice for tenants who may want to move is limited, which suggests the
potential for upside for rents is high.
CAPITAL GROWTH FOLLOWING PAST TRENDS
Price growth momentum continued into Q1 2010. House prices rose by 1.4% in Q1 2010 while unit prices rose by 1.6%. However, over the twelve month period median prices have risen by 14% and 12% respectively. This has taken prices above the peak
reached in 2004. ABS data suggests that house price growth has continued into Q2 at around 5%, with annual growth of just over
20% in Sydney. With limited rate hikes expected in 2010 and early 2011 upward pressure may continue on prices.
AFFORDABILITY DECREASES AS RATES AND PRICES RISE
Not surprisingly affordability has been weakening as interest rates and prices (and thus loan size) increase. As at March 2010
some 34.5% of average household income was being used to service an average mortgage in NSW of just over $305,000. This is
somewhere between the average 5 and 10 year proportions. Should a further 6% be added to average loan size in the final three
quarters of 2010 the proportion of income servicing the loan would rise to 37%, allowing for around 5% growth in household
income. In 2011 we believe that interest rates will rise again. No shift in loan size would lift the proportion to almost 38%, but a
4% rise in loan size would take it over 39%. This means more people will decide to rent, increasing competition for rental
accommodation, and the ensuing increase in yield will attract investors back into the market.
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REALOGIC RESEARCH REPORT
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GREEN SQUARE URBAN RENEWAL PROJECT - October 2010
IMPORTANT INFORMATION
REFERENCES
The specific documents of relevance to Green Square, and which have been
summarised and considered in this paper include:
• Retail Development Potential – Green Square Study Area 2000 prepared by Thomas Consulting;
• Retail Market Assessment for the Green Square Town Centre 2002 prepared by Thomas Consulting;
• Draft Green Square Public Domain Plans 2005 prepared by McGregor + Partners;
• Zetland Area Traffic Study 2005 prepared by Maunsall Australia Pty Ltd;
• Draft Urban Design Opinion – Building and Public Domain Works in the South Dowling Street Corridor 2005
prepared by Hill Thalis;
• Review of Zoning and Land Use in the Green Square Urban Renewal Area 2006 prepared by the City of Sydney;
• Green Square Built Form Review 2007 prepared by Architectus Sydney;
• City of Sydney Social Plan 2006-2010;
• City of Sydney Open Space and Recreation Needs Study 2007;
• City of Sydney Cycle Strategy and Action Plan 2007-2017; May 2008
• City of Sydney Green Square Urban Renewal Area Background Paper
DISCLAIMER
Whilst this information has been carefully compiled, no warranty or promise as to its correctness is made or intended. REALOGIC
believes the statements, information, recommendations, calculations, data and tables contained herein to be correct and not misleading, but gives no warranty in relation thereto and expressly disclaims any liability for any loss or damage which may arise from any
person or organisation acting or deciding not to act partly or wholly on the basis of such statements, information, recommendations,
calculations, data, or tables.
Information outlined within this report also represents subjective interpretation by REALOGIC and should not be relied upon for investment decisions. Interested parties should undertake independent inquiries and investigations to satisfy themselves that any details
herein are true and correct. Past information about capital gains does not imply that such gains or growth will be made in the future.
The material in this publication is copyright. This document cannot be reproduced without the express permission of REALOGIC.
Date compiled 13 October 2010. It is particularly important to consider the risk factors that could affect the financial performance of
an investment, and one should carefully consider these factors in light of particular investment needs, objectives and financial circumstances. All financial amounts in this report are expressed in Australian Dollars ($AUD) unless otherwise stated.
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