"Apartment buyers increasingly attracted to high amenity communities": Five minutes with Frasers Property Australia's Cameron Leggatt
Since 1924, Frasers Property Australia has created stronger, smarter, happier neighbourhoods. It has developed residential land, housing, and apartments and delivered over 140,000 homes.
It seeks to work sustainably to ensure the places we create leave a positive environmental legacy and enhance the way people live life together.
Frasers Property in Australia has certified over 5.6 million square metres of Green Star space across our communities, and their commitment to reduce carbon has been approved by the global Science-Based Targets initiative.
Urban recently caught up with Cameron Leggatt, Executive General Manager, Development at Frasers Property Australia, to discuss the off the plan apartment market.
JC: How have you viewed the performance of the off the plan market in 2021, and what are the strongest positive and negative factors that will influence outcomes in 2022 and 2023?
CL: In new communities, while the market for land and townhomes has dominated growth, off the plan apartments have also performed with considerable strength in 2021. The pandemic has legitimised working from home and this has meant select regional and coastal locations have led the way.
In particular, apartment markets such as the Gold Coast and Sunshine Coast have performed well, while for Frasers Property Australia, the Shell Cove community on the NSW South Coast that we are creating with Shellharbour City Council has enjoyed strong conditions.
Obviously the CBD and near-city markets in Sydney and Melbourne have experienced greater challenges, with the lack of migration and students being felt most sharply. Nevertheless, sales are still occurring and both owner-occupiers and investors are active.
In Sydney, we’ve experienced strong sales at Midtown MacPark in Macquarie Park and at Ed.Square in south-west Sydney, while in Melbourne the final stage of our Carlton project and the final two stages of Burwood Brickworks have been met with a strong response from buyers.
Looking ahead, much will hinge on the continuance of the low interest rate environment and the return of migration as a demand factor, including the return of international students. Affordability will remain a concern and with the coming election, the market awaits firm policy options in this area.
As long as rates remain low, as the Reserve Bank has suggested they most likely will through 2022 and 2023, demand will be supported. More recently there has been speculation that the Reserve Bank’s hand may be forced earlier, but to date they have indicated they intend to maintain the course unless macro conditions shift significantly.
The increased gap in values between houses and apartments, exacerbated through the 2021 boom, makes apartment living more attractive to owner-occupiers, including first home buyers and families. This is being complemented by the return of investors to ensure demand for quality projects remains diverse, which is especially advantageous for apartments in areas of low supply.
Should values moderate this could impact investor appetites, with areas subject to increased supply potentially most impacted.
Most important is the need for communities offering apartments to also offer complementary lifestyle amenities, to create a point of difference and a unique value proposition. Connected communities which provide a high level of amenity with a masterplan emphasising positive urban design outcomes can be expected to continue to achieve strong sales in the years ahead.”
JC: What trend (short term or long term) has prompted your greatest enthusiasm for the apartment market, and what is the issue of most concern to you and or your buyers?
CL: Apartment buyers are increasingly attracted to high amenity communities which offer choice, quality, lifestyle and sustainable outcomes. Sites and opportunities in which we can apply a community development and place-making focus to create belonging are those we’re most attracted to.
Of course, the potential for ongoing disruption resulting from COVID-19 remains a concern for the industry, as it does for all industries. The impacts of border closures in reducing investor demand, shutdowns impacting schedules, and supply chain blockages that increase price and ultimately put pressure on the commercial viability of future stages and projects, are all potential concerns as we embark on the long-term recovery.”
JC: Has urbanisation stalled amid the rush to the regions and what will it look like over the decade ahead?
CL: Closed borders aside, population growth is still a reality and as this growth continues over the coming decade, so will further urbanisation.
The evolution of flexible working is here to stay and provides people with greater housing choice further from capital cities but the innate desire for people to live in vibrant urban environments, with easy access to amenity in locations with strong lifestyle attributes and access to good infrastructure, still remains.
This will continue to drive urbanisation and regentrification. We may see urbanisation become more competitive, with certain areas and projects needing to elevate their desirability as a housing destination, which would be a positive outcome supporting better mixed-use outcomes.”
JC: How important do you view the push for sustainability practices in the apartment market, and what initiative has seized your interest or focus?
CL: Through fostering resilient communities, carbon-reducing initiatives, responsibly sourcing services and materials, providing clean energy, using green finance and being accountable to ourselves and our customers using independent tools and ratings, we contribute to a better, cleaner future.
We have established a roadmap to target net zero by 2028 and this will require a coordinated series of measures and initiatives, with our apartment projects to play a pivotal role.
All our buildings are Green Star certified and we have a range of recent projects to draw learnings from. For instance, we recently completed the first certified Passive House by a volume developer at Life, Point Cook in Melbourne. At Minnippi Quarter in Brisbane, we devised a formula to calculate embodied carbon to offer customers an offset option in another industry-first initiative, called Build Neutral.
Real Utilities, Frasers Property Australia’s licensed energy retailing business, provides Climate Active-certified carbon neutral energy to residential, commercial, and retail customers, while in Melbourne we’ve created the world’s most sustainable shopping centre, the Living Building Challenge® Petal-certified Burwood Brickworks.
Customers expect better sustainability outcomes in an environmental and social sense, and this aligns with our holistic view of sustainability and our commitment to maintain our global leadership in this space.