Adrian Pozzo, like everyone else, was struggling to get back to normalcy. Based in Melbourne, the boss of Cbus Property was more resigned to the foreclosure than the people of Sydney; you could tell by a certain tone in his voice.
Nonetheless, the man who currently manages a $ 4 billion development pipeline is optimistic and very much supported by the enthusiasm of Sydney buyers for the company’s high-end apartment offering on the site of the former. David Jones store at 111 Castlereagh Street. And other projects.
Sales are going well; they would have been even better if people could feel free to inspect the showroom.
The fifth state (in a rare outing) witnessed the project launch just before the current lockdown and we can confirm many luxury finishes and high end design. The sales agent at the time was suggesting stratospheric selling prices and we thought, wow, that must be at least partly unexpected.
Surely no one could have guessed what would happen to the resi market during Covid, given that all the numbers are calculated perhaps a few years in advance.
Pozzo, speaking by phone in a tight time slot last week, said that in fact the penthouse and the two sub-penthouses together fetched a sale price of $ 66 million, with the penthouse reaching over $ 30. millions of dollars.
That’s a pretty good turnover, from the seller’s point of view, and equates to $ 70,000-75,000 per square meter, but a far cry from the $ 112,540 per square meter made in the Sirius building, where the penthouse grossed $ 35 million. By the way, Sirius is a former social housing building that the state government wanted to demolish at one point, no doubt leaving a bitter-sweet pill in the mouths of the passionate group of people who wanted the place to be. Safe.
For comparison, most regular housing projects tend to be between $ 2,500 and $ 3,000 per square meter, with $ 5,000 per square meter considered luxury (for mere mortals) according to a regional award jury. architecture. The fifth state was recently honored to be a part of it.
Other projects are progressing well as well.
“We have an apartment [left to sell] at 17, rue Spring [in Melbourne] out of 73.
The company was on the verge of launching a new business in Melbourne’s South Yarra called Como Terraces with 39 joint venture residences with Sterling Global when Covid struck for the second time.
“When Melbourne closes, they close everything,” says Pozzo.
In Brisbane, at 443 Queen Street, which is by the river, there are 264 apartments with about 20 to the left.
“They have become gangbusters since Christmas. Brisbane has gone mad ”.
NSW was also successful with the large project at Randwick in the eastern part of Newmarket development town.
When the first stage came out three years ago, almost all of them were sold on the first opening weekend. And people are buying again since Christmas with 70 sales out of a total of 120 so far.
But it’s the 111 Castlereagh that attracts all the glamor.
“You sit there and you think there’s a lot of money around; some very rich people, ”says Pozzo.
But it is not easy to capitalize on this appetite. Delivering a suitable product is a bigger challenge than normal in a top of the range. Especially one as steep as this one.
Right now, why would someone sell a healthy development site at today’s prices when the cost of ownership is 1-2%? The longer they wait, the bigger the sale.
It’s a very different scenario than when interest rates were 15 percent, he says.
Development opportunities do not exist and people think two to three times before starting a project. There are also concerns about another possible variant of Covid.
“When you think about it, it can take anywhere from 12 months to three years to get approvals and designs, and then another two to three years to build. It is not a treadmill.
The company is planning 3 to 5 years, but there is nothing new to come at the moment.
But he stresses that the housing market is not a single entity. “When people say the market is in surplus, it’s in Docklands but not in East Melbourne.”
The future is still not fixed, it is a rosy certainty. At the end of the lockdown, Pozzo expects “we’ll all be pulling out the guns because we can smell the fresh air, but the pace won’t be as fast as it used to be.”
There is the changing feeling to consider.
Especially in the office market.
In the company’s large office project at 435 Bourke Street at the corner of Queen Street, which has yet to begin, the Pozzo team are set to reinvent the entire building.
Bates Smart’s new designs, which are expected to be submitted by the end of November, will address the expectations of the post-Covid world and emerging customer preferences.
It will end up being a completely “new generation” office, says Pozzo.
It won’t do much just yet, but think about more “wellness, for lack of a better word”… and “whatever we need to get people back to CBD”
“Fun”, we suggest.
This building will have amenities such as gardens at the top or in the middle of the building. People can work at level 10, but maybe they can go to level 12 where there won’t be a frontage for some fresh air and could be filled with greenery and outdoor sofas.
“You will feel like you are in a different place. “
It’s not about making the tenant happy, he says, it’s about making the employees happy. They are the ultimate customers.
Certainly, a coffee will no longer cut it. But of course there will be end-of-trip facilities, larger and brighter than before; it is not yet sure to have a swimming pool.
The concept of interesting public spaces has also already taken root with the company building at 447 Collins Street, which is part of the Collins Arch district, which includes a new park developed in collaboration with the City of Melbourne and which may be an auditorium, an art space or other. that people may want.
Everyone is working together, more than ever – landlords, local councils and advocacy groups to figure out how to attract people to the city, says Pozzo
If you make it entertaining people will want to come three days a week and maybe more, thinking goes.
There is no question of strong sustainability of office assets, but what about the luxury side of the residential sector? How do frequent travelers take into account sustainability which has a fundamental notion of simplicity and no overindulgence about it?
Pozzo says the rich want it all – luxury finishes (like what appears to be 100 Shades of Marble) more triple glazed windows and energy efficiency.
“The high-end people watch it too,” says Pozzo; sustainability helps the sales process, he says, but they’ll quickly be asking what else.
In future apartments, the Pozzo team is trying to find a way to stop using gas.
“In offices, it’s potentially not difficult. Offices are fairly easy where we own the building, compared to the apartments we sell.
The Apartments at 443 Queen Street in Brisbane are the country’s first 6-star Green Star and As Built apartment complex.
“You can get a flow through the breezes back and forth. It’s not often that you will need to turn on the air conditioning. The most likely buyers are locals accustomed to the air passing through the apartment.
The building is actually made up of two separate buildings where the separation allows breezes to pass through.
What about building for rent? Long-term ownership may argue for better inclusion of sustainability due to the same factors that attract tenants to six-star buildings.
But this company is not involved in BTR. Pozzo is also not enamored with coliving.
The notion of tiny private spaces where people during confinement were forced to work on their beds, makes him uncomfortable. We shouldn’t be encouraging this way of life, he says.
As for the next step on the sustainability radar, Pozzo names the flagships as materials and carbon incorporated.
“As a developer, we should tell people throughout the supply chain what we want. And they will price the materials accordingly.
Which is not necessarily a problem. “Looking at a sales office first, if it costs more today, it will go through the long haul.
“A lot of tenants are listed and for them climate change is the most important. “
When NABERS and Green Star arrived, it was the flight to quality, says Pozzo. “So the materials and the use of the materials will go the same.”
Someone has to pick it up as a long term catch.
“We see ourselves as leaders. And as long-term holders of commercial property.
“As a pension fund custodian, the responsibility is to manage the funds for 40 to 45 years. Members want constant feedback and state-of-the-art buildings, whether it’s 6-star Green Star or next-gen materials that will provide a return.