Sales of mixed-use developments are escalating as developers look to increase residential offerings, but also accommodate demand for retail and commercial sites.
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Mirvac recently paid $121 million for the CIMIC towers in St Leonards, and plans to redevelop them into apartments. Investors are pleased to buy into these projects as they are close to all amenities and include cafes, supermarkets and office space.
The mixed-use site at 472 and 486 Pacific Highway also has space for retail and commercial tenants. The two existing towers will be leased by CIMIC until late 2016.
Mirvac also developed the Era site at Chatswood, in Sydney's north, where it took deposits for 94 per cent of the 295 apartments within hours of coming on to the market.
According to CLSA analysts, the the housing market, particularly in Sydney, has continued its price momentum.
Recently the Australian Prudential Regulation Authority sought to apply some brakes on the runaway housing market with some macroprudential policies. These included putting increased pressure on banks by tightening housing credit lending standards, particularly investor lending, aimed at softening certain parts of the housing market.
Shares in Stockland and Mirvac have been sold off on these concerns, but analysts at CLSA said they continue to believe these risks are overstated, with diverse buyer pools and record pre-sales providing good near-term visibility around earnings.
"We believe both Stockland and Mirvac have limited downside risks and have been oversold. We expect any impact to be immaterial to both these stocks," the CLSA analysts said.
"Both Stockland and Mirvac are highly leveraged to a strong housing market, but differently. Stockland has no apartments, 47 per cent exposure to Queensland and only 20 per cent investors. Mirvac has 49 per cent exposure to apartments, 38 per cent exposure to NSW and 33 per cent investors."
Another new development potential is The Mint, Willoughby, which will comprise 104 apartments, two commercial offices totalling 770 square metres, a 550-square-metre retail showroom, and 154 parking bays on a prominent 4,660-square-metre site fronting Mowbray Road, Willoughby Road and Penshurst Street.
Ceerose founder, Edward Doueihi, says the location has the right combination of attributes to ensure a successful development.
"Willoughby is a suburb where demand far exceeds supply, and property here is tightly held," Ged Rockliff, the head of residential project marketing for Savills, said.
"Our research shows just 55 apartments changed hands in the past year, and the median unit price increased by 12.15 per cent."
Plans show that The Mint, Willoughby, comprises two buildings linked by a central open-air atrium, with frontages to the three major thoroughfares. Each building has a separate entrance and two high-speed lifts.
Ceerose was founded by Mr Doueihi in 1998, and has expanded to become a full-service property development and construction company. The licenced builder continues to maintain a hands-on approach, delivering such award-winning apartment developments as Jade in Sussex Street, CBD, Eden at Chippendale, and DNA at Camperdown.
