THE PROPERTY DEVELOPMENT REVIEW
we’re now placing greater emphasis on asset maturity. Existing unit blocks, for instance, offer a protective shield against escalating construction costs while benefiting from Sydney’s housing crisis. This perspective spans across all asset classes, signifying an evolved approach to our market understanding. Additionally, we’re witnessing a burgeoning demand for childcare and industrial assets.. This, coupled with government support, makes childcare assets a compelling investment. Meanwhile, the e-commerce boom and supply chain changes have fueled interest in industrial assets. Investors are attracted to their steady yields and potential for long-term growth, making these sectors strong contenders for increased demand in the coming months. As we continue navigating these market dynamics, we remain committed to delivering relevant, timely insights to our clients. Do you feel that associated factors like building costs, supply-chain challenges and market sentiment will improve for developers over the next 6-12 months? For instance, have building costs already peaked? We foresee a mixed outlook for developers. Current forecasts suggest that most trades have peaked and settled, yet labor and major supply chain components continue to pose challenges in the construction sector. While we don’t expect the extreme inflation seen recently to persist, we predict an ongoing
rise in delivery costs at a base inflation level. It’s also important to recognise that construction costs are unlikely to revert to pre-COVID levels. The industry, therefore, needs to adapt to these current rates. As we navigate these adjustments, our commitment is to keep our clients well- informed to aid their decision-making in this evolving market. What advice do you have for any prospective developers in the current climate? In this evolving climate, prospective developers should take a moment to revisit their portfolio and upcoming ventures. A significant consideration is the escalating holding costs, including land tax and council rates, which can significantly impact your bottom line. Therefore, it’s important to diversify assets and developments to minimise risk and spread out potential financial impacts. Being adaptable, understanding the cost implications, and identifying varied opportunities are pivotal in navigating our dynamic industry. As always, we’re here to provide expert guidance each step of the way. How have your marketing strategies changed, if at all, over the past 12 months? In our commitment to evolve with the times and effectively reach our target audience, we’ve recognised the immense potential of social media and passive marketing. Now, more than ever, we are
emphasising this powerful tool to broaden our reach and engage with potential clients on platforms such as Instagram, Facebook, TikTok & LinkedIn. We strongly believe in taking a more direct approach, capitalising on the strength of personalised connections. A significant part of this approach is leveraging our existing business relationships, which we consider to be one of our most valuable assets. The importance of these relationships in achieving mutual success cannot be overstated, and we remain committed to nurturing and growing these connections as we continue to work with our existing and future clients. A crucial part of this process involves thorough due diligence, providing ample materials to satisfy any queries and offer a clear picture of the opportunities at hand. We’re also putting a strong emphasis on repositioning assets with a flexible approach, aiming to reach the widest possible audience and cater to diverse purchaser preferences. It’s important to acknowledge that our overall marketing spend has increased. This is not an expense, but a crucial investment, ensuring market awareness of opportunities and working towards achieving the best possible outcomes.
July / August 2023 – 21
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