Brisbane's property developers are strategically adapting to the current residential climate, controlling entire projects from end-to-end, retaining management rights and pushing for boutique projects they would be "proud to walk their families past in 20 years time".
While retreating foreign buyers, credit curbs, increased supply and affordability constraints have all played their part in slowing Brisbane's apartment market, experts have agreed that buyers have "woken up" and developers need to "disrupt" and "redefine" property development and management in order to keep pace.
Speaking at this year's residential property summit held by The Urban Developer in Fortitude Valley on Friday, some of Brisbane's residential developers said that the apartment market had done a lot of "growing up" over the last decade, stepping out of the shadows of Sydney and Melbourne and shifting focus more recently from quantity to quality, and from investors to owner-occupiers.
Developers finding success in the current climate revealed that moving away from large construction projects towards more specialised boutique offerings had enabled them to retain more control and in doing so "exceed buyers expectations" such that finished projects "feel like five-star hotels".
As unpredictable market conditions continue to halt potential inner-city and fringe-city projects, top-end developers shared a positive outlook on the Brisbane market buoyed by an extensive infrastructure pipeline and an influx of southerners heading north.
Responding to the market, many developers are now downsizing projects to meet market demand and achieving pre-sales requirements by targeting an increasingly selective purchaser, the owner-occupier.
Developers who have become known for high-density projects are now taking the “less is more” approach with a focus on luxury and boutique developments.
Azure Development Group director Trent Keirnan said the company's strong pipeline was made possible by diversifying its approach to location, being flexible and able to move with the market moves, while always striving to better the final product.
“We think there is a completely unserviced proportion of the Brisbane and south-east Queensland market place for a really good quality product,” Azure Development Group director Trent Keirnan said.
“There will be a level of sophistication that continues to evolve and come to Brisbane while maintaining the core essence that makes Brisbane a relaxed placed to live.”
Mosaic chief operations officer Marina Vit said the company had remained true to its product offering, opting for design-led liveable products, which was increasingly boutique and high end.
“We remain committed to fine-tuning everything that we do, to stay in touch with consumers,” Vit said.
“We will always focus on owner-occupiers, depending on what policy changes happen, the most important thing to an investor is selling to an owner-occupier.”
Aria Property development director Michael Hurley said Brisbane's weakened apartment market had undergone significant changes and a "real flight to quality” had consumers questioning developments and projects being built across the city.
“There was a period where a lot of junk was getting built, and I think consumers have woken up to that,” Hurley said.
“I think there was such a difference between render and reality that people started questioning developments and projects.”
“A lot of buyers now are saying show me a render and show me reality.”
Hurley said that brands with strong reputations had weathered the storm thanks to the reception of previously delivered projects with repeat and referral purchasers accounting for half of the tenants in Aria's developments.
“If you compete on price you are going to be doing some pretty bad stuff, but if you are focusing on quality, that will allow you to stand out,” Hurley said.
“Our product speaks for itself, but we do spend a tremendous amount of time making sure that we are exceeding people's expectations.”
Developers vying to stay ahead of the curve are now heavily consumer-focused, repositioning their brand offerings to meet the market.
Projects now hold fundamental focuses on wellness, placemaking, high-end retail and ongoing hotel-styled services all made possible by developers retaining the management rights over their buildings and controlling the "experience" of the finished project.
“In 2014 we made the decision to retain the management rights of everything we developed as well,” Azure Development Group director Trent Keirnan.
“It was not a decision because we were looking for an accentuating profit centre, it was a decision based around, if you’re really committed to the consumer, you have to do those things.”
“There has been a very strong focus over the past five years to really understand what the consumer wants and making sure we are developing a brand and committing and reinvesting into ensuring we are delivering on the promise.”
Keirnan said that the process of buying a block, undertaking a feasibility, enlisting a builder, selling and moving was detrimental to Azure's brand identity, instead opting for more micromanagement of the development process as well as removing the risk of outsourcing property management.
“Consumers align themselves with brands. We have our name on our projects, it's about legacy and we are there forever,” Keirnan said.
“Every time you dilute the core vision and core principals of your development business you get a substandard result and we feel that the market is very tuned to that now.”
Keiren said that Azure now managed all aspects of its projects from care-taking and letting of units, to landscaping and maintenance.
“That’s a huge capital commitment, a huge resource commitment, but it’s what we feel we have to do in this market,” Keirnan said.
Mosaic chief operations officer Marina Vit reaffirmed the need to connect with the greater community, helping those who were "confused" or far removed from the process by encouraging an open dialogue, leading to better outcomes.
“We’re also focused on the communities in which we develop within,” Vit said.
“We have a community engagement team within Mosaic as well, who make sure they’re in touch with neighbours and stakeholders so people understand what we’re trying to do.”
“It’s been a great thing for us to have that because it allows us to have good relationships with the people within the neighbours we develop in.”
Aria Property, who have grounded themselves in the philosophy of placemaking, strategically retain control over completed projects, from managing the properties to including high-end retail and restaurants, no matter the cost.
“Once we sell out, then the hard work starts,” Hurley said.
“We want our buildings to get better in time and we felt that there was a massive disconnect between selling your management rights to someone who has a completely different philosophy or business mindset to us.”
Hurley also underscored the importance of retail to add to the lifestyle offerings of their projects by enlisting and partnering with leading restaurateurs and retailers around the country.
“The best operators in Brisbane and Australia are the best because they deliver the best product and if they deliver the best product they will be successful.”
“We have always seen the four walls and roof that you're buying is about 25 per cent of what you get when you buy from ARIA.”
“The other 25 per cent is the residence rooftop and amenities, while the next 25 per cent is the public realm and finally 25 per cent towards retail.”
Hurley highlighted that the smallest details within ongoing property management made the longest lasting impressions with buyers.
“From the amenities, the services, the yoga, the personal training, the French apples, the water bottles, the newspapers, the umbrellas when it is raining - it all ensures people have a consistent experience,” Hurley said.
“It is all about the owner-occupier. When emotion gets involved people are willing to meet the market, people will pay what the market dictates it is worth.”