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1 POP 2 INF 3 EMP
BICYCLE AND PEDESTRIAN FRIENDLY
STATE THEATRE CENTRE OF WESTERN AUSTRALIAWILLIAM STREET NORTHBRIDGE
Stirling Precinct accommodates all three of the Urbis economics and research fundamentals that make a sustainable suburb – Population, Infrastructure and Employment.
SUSTAINABLE TRANSPORT OPTIONS ABOUND IN THIS HIGHLY ACCESSIBLE SUBURB
INNER PERTH HAS A PROUD CULTURAL PAST, PRESENT AND FUTURE
AN ECLECTIC AND MULTICULTURAL MIX OF RETAIL, DINING AND NIGHTLIFE IS OFFERED IN THE DISTRICT
ACCESSIBILITYServiced by two train stations and highly serviced by buses. The Stirling Precinct is only 300 metres to 850 metres from the GPO / Pg 03
DEMOGRAPHICSA growing local population, popular among couples without children who have a higher average discretionary income / Pg 04
INFRASTRUCTURE & EMPLOYMENTAround 10,500 new jobs forecast to be created in Inner Perth between 2013 and 2018 / Pg 05
SALES ANALYSISThe median apartment price in the Stirling Catchment increased by 6.9% over the three years to August 2014 / Pg 06
RENTAL MARKETThe Perth Catchment records a premium for new rental stock compared with older, existing stock / Pg 07
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A CONTEXT ON BUSINESS, CULTURE, LIFESTYLE AND RESIDENTIAL
OUTLOOK STIRLING PRECINCT
The Stirling Precinct is serviced by major public transport infrastructure whilst being walking distance to the city’s main business and entertainment districts, as well as offering direct access to other key metropolitan retail and employment nodes.
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36ELIZABETH QUAYPERTH CITY LINK
McIVER
PERTH
CITY WEST
ESPLANADE
WEST LEEDERVILLE
PERTH UNDERGROUND
KWINANA FREEWAY
MITCHELL FREEWAY
NIB STADIUM (8-10 MIN)
OSBORNE PARK OFFICE MARKET (15 MIN)
CROWN CASINO & PERTH STADIUM (8-10 MIN)
PERTH AIRPORT (15 MIN)
STIRLING PRECINCT
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Key L
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1 Myer
David Jones
Murray Street Mall
Hay Street Mall
Brookfield Place
King Street
Watertown Brand Outlet Centre
William Street, Northbridge
James Street, Northbridge
Perth Modern School
Scitech
Central Institute of Technology
Alexander Library
Curtin Graduate School of Business
Mercedes College
The University of Western Australia
Indian Ocean
Royal King's Park Tennis Club
Kings Park
Jacob's Ladder
Swan River
Supreme Court Gardens
Stirling Gardens
City of Perth
Royal Perth Hospital
WorkZone (27,900 sqm office space)
Perth CBD (1.6 million sqm office space)
Mount Hospital
QEII Medical Precinct
Parliament House
West Perth (420,000 sqm office space)
Subiaco
Subiaco Oval
Perth Arena
Cinema Paradiso
Rooftop Movies
State Theatre Centre of Western Australia
Art Gallery of Western Australia
WA Museum
His Majesty's Theatre
Perth Convention and Exhibition Centre
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© URBIS.COM.AU
ACCESSIBILITY & WALKABILITYStirling Precinct
The Stirling Precinct is the northern precinct within the suburb of Perth and is next to the metropolitan area’s premier entertainment and cultural district of Northbridge, just a short walk from the Central Business District. It is serviced by two train stations and is only 300 metres to 850 metres from the GPO. The area’s emerging, gentrifying profile adds to the excitement of what it will ultimately offer residents, workers and visitors.
2 URBIS STIRLING PRECINCT OUTLOOK - FOR THE EXCLUSIVE USE OF STIRLING CAPITAL
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36ELIZABETH QUAYPERTH CITY LINK
McIVER
PERTH
CITY WEST
ESPLANADE
WEST LEEDERVILLE
PERTH UNDERGROUND
KWINANA FREEWAY
MITCHELL FREEWAY
NIB STADIUM (8-10 MIN)
OSBORNE PARK OFFICE MARKET (15 MIN)
CROWN CASINO & PERTH STADIUM (8-10 MIN)
PERTH AIRPORT (15 MIN)
STIRLING PRECINCT
108
© URBIS.COM.AUURBIS STIRLING PRECINCT OUTLOOK - FOR THE EXCLUSIVE USE OF STIRLING CAPITAL 3
RetailNumerous retail strips exist in Perth, including the Hay and Murray Street Malls, King Street and Northbridge’s William, James, and Beaufort Streets. North of the railway, boutiques and local artisans create a unique shopping experience.
Food and BeverageFood and beverage options are varied, from high-end premises at Brookfield Place, to celebrity chef Jamie Oliver’s Italian restaurant,to less formal eateries in Northbridge.
The choices are highly multicultural, serving dishes from every corner of the world.
NightlifePunters are offered an array of bars, nightclubs and live music venues in Northbridge. Furthermore, according to Pollstar, nearby Perth Arena was ranked 22 in the world in 2013 for number of ticket sales. The venue staged seven of the world’s top ten music tours that year.
Perth CBDPerth’s Central Business District (CBD) comprises around 1.62 million sqm of office space. Assuming an average workspace ratio of 18 sqm, the market could supply around 90,000 office jobs. The retail and hospitality sectors provide additional job opportunities.
CultureNorthbridge forms Perth’s cultural heart, boasting venues, attractions and schools including the Perth Institute of Contemporary Arts, Art Gallery of Western Australia, State Theatre Centre of Western Australia, Western Australian Museum and Cinema Paradiso.
Swan RiverRecreational opportunities abound on and along the Swan River. High-quality pedestrian and cycle paths run along the River, also facilitating opportunities to sail and fish. A Rottnest Express ferry terminal is located at Barrack Street’s Pier Two.
The broader Stirling Precinct Catchment is the City of Perth (LGA) which saw population increase by 5,388 residents (20% growth) between 2008 and 2013, or 1,078 residents per annum. Perth ranked second behind only Melbourne (24% growth) as the second fastest growing capital city Local Government Area over this period.
According to the Department of Planning, the City of Perth is forecast to record annual population growth of 4.5% to 5.5% per annum and a total of approximately 20,100 people between 2014 and 2026. Rising levels of demand to live near the city and new development in East Perth and Perth (particularly north of the railway line) are expected to form the key drivers of this population growth within the Catchment. To accommodate this population growth will require over 10,000 new dwellings by 2026.
With activity fostered by the young student and professional demographic, 48% of the Catchment’s residents are aged between 20 and 34 years (compared with 22% across the metropolitan area). Home to a large proportion of couple families without children, at 71% of households, these residents place a greater emphasis on lifestyle and enjoy a higher level of discretionary income.
The income distribution for the Catchment highlights a higher proportion of residents in top tier brackets, with 10% earning between $1,500 and $1,999 per week and 17% earning over $2,000 per week. This strong income profile can be credited to a high proportion of professional residents in the Catchment, with 54% of employed persons classified as professionals or managers.
These statistics show that the area will experience particular demand for apartments from Generation Y renters and owner-occupiers. Inner urban areas, in particular, are residential markets of choice for Generation Y.
POPULATION & DEMOGRAPHICS
GREATER PERTHSTIRLING PRECINCT CATCHMENT
0%
3%
6%
9%
12%
15%
18%
21%
00-0
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PRO
PORT
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POPU
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AGE DISTRIBUTION
AGE DISTRIBUTION - 2011
Prepared by Urbis, Source: ABS Census 2011
0
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PERTH CATCHMENT POPULATION PROJECTIONS
Prepared by Urbis, Source: Department of Planning 2012 - Band C (median forecast)
THE PERTH LIFESTYLE
The lifestyle amenity within the Stirling Precinct Catchment has positioned it
as one of the metropolitan area’s most dynamic and exciting urban addresses.
4 URBIS STIRLING PRECINCT OUTLOOK - FOR THE EXCLUSIVE USE OF STIRLING CAPITAL© URBIS.COM.AU
LIFESTYLE & DEMOGRAPHICS
EMPLOYMENT FORECASTS
EMPLOYMENT NODESWITHIN OR NEAR THE STIRLING PRICINCT
According to projections prepared by the Australian Department of Employment (2013), Inner Perth (including the Perth CBD and fringe areas) is forecast to record employment growth of 10,500 jobs, or 10.5%, between 2013 and 2018. The key contributing sectors and their level of growth will be Professional, Scientific and Technical Services (13.3%), Health Care and Social Assistance (14.3%) and Education and Training (12.5%).
Perth’s Central Business District Perth’s CBD offers diverse employment opportunities. Employment sectors include White Collar (1.6 million sqm of office accommodation), Retail and Food and Beverage (Hay, Murray, Barrack, King and William Streets), Education (Central Institute of Technology, Curtin Graduate School of Business, Mercedes College), Health (Royal Perth Hospital, Mount Hospital) and Tourism (hotels, Perth Convention and Exhibition Centre).
Queen Elizabeth II Medical Centre According to the QEII Medical Centre Trust’s 2013/14 Annual Report, the precinct employs 8,000 people. This number will grow in the near future, following the completion of the Children’s Hospital, Ronald McDonald House, Mental Health Unit and Neuroscience Research Facility. The precinct is benefitting from state government health sector framework which promotes the centralisation of services in key locations.
West Perth West Perth comprises 422,000 sqm of office space, in addition to government (Dumas House, Parliament House), residential, retail (Hay Street, Watertown) and short-stay accommodation uses. Among office tenants, the market is particularly popular among small to mid-sized mining and oil and gas companies. Like the Perth CBD, it is well-serviced by public transport including the free Central Area Transit buses.
Perth’s Eastern Industrial MarketPerth’s eastern industrial market is located south of the Swan River, north of the Canning River and largely surrounds Perth Airport. The industrial markets proximity to the Perth CBD, Perth Airport, major regional and interstate roads and railway lines makes it favoured among tenants related to transport and logistics.
Historically home to larger-scale construction projects, including the largest amount of new metropolitan supply over the last ten years.
Major drawcards for the inner Perth area will be Elizabeth Quay and City Link – to be enjoyed by residents, workers and visitors alike.
Perth City LinkLinking the CBD and Northbridge, City Link is Australia’s largest TOD (transport orientated development) project which will ultimately comprise around 1,900 apartments providing a home to 3,060 people. It will also create 244,000 square metres of office/retail space providing opportunities for 13,500 new workers. Another major component has been putting the Fremantle railway line below ground. The government is investing $752 million in the precinct.
Elizabeth QuayLinking the Swan River and CBD, Elizabeth Quay is a $2.6 billion project which will comprise around 800 apartments, 400 hotel rooms, 225,000 sqm of commercial space (opportunities for 10,000 workers) and an impressive public realm upon completion (staged, from 2015). Another major component has been the creation of a sizeable river inlet. The government is investing $423 million in the precinct and is expecting $2.2 billion of private sector investment.
New MuseumLocated within the Perth Cultural Centre, the $428 million finished product (delivery in 2020) will allow curators to present innovative and contemporary displays. The New Museum site will be around 23,000 sqm which will include a new building, the refurbished existing heritage buildings and public space. The expanded floor space will enable an increased number of international exhibitions to be accommodated.
INFRASTRUCTURE INVESTMENT
© URBIS.COM.AUURBIS STIRLING PRECINCT OUTLOOK - FOR THE EXCLUSIVE USE OF STIRLING CAPITAL 5
INFRASTRUCTURE & EMPLOYMENT
CURRENT EMPLOYMENT EST.
2018 FORECAST
GROWTH TO 2018 (#)
INNER PERTH EMPLOYMENT GROWTH
10,500
TOTAL
99,600
110,100
Prepared by Urbis, Source: RPData Suburb ScoreCard
The broader Stirling Precinct Catchment (comprising the City of Perth LGA) is one of the metropolitan area’s premium residential markets, bordered by the Swan River, Kings Park, the sought-after western suburbs and trendy inner northern fringe suburbs. The Catchment was one of the first to embrace the benefits and lifestyle of low maintenance inner city living, with 88% of dwellings classified as apartments. With a long history of apartment development in the area, the Perth Catchment is an established market enjoying strong ongoing demand.
The remaining 2% of single detached dwellings and 8% of semi-detached or townhouse dwellings in the Catchment are therefore considered a limited commodity, and command a strong premium on top of their inner city price points. The median house price in June 2014 was $823,000, based on 95 settled sales over the preceding 12 months. The strong median house price sets a benchmark for the Catchment’s apartment market, where prices for apartments/units are 23% higher than metropolitan Perth’s equivalent price.
Apartments in the City of Perth recorded a median price of $545,000 over the 12 months to June 2014, based on 1,037 settlements. This reflects stable prices over the last 12 months, three-yearly annual growth of 7.2% and five-year growth of 20% per annum.
Apartments in the Perth Catchment have historically shown consistent and strong price growth since the early 2000s, with the median sale price increasing by 6.7% per annum over the preceding decade, only slightly below the corresponding 8.2% recorded for the metropolitan area. The slightly lower growth in apartment prices in the City of Perth is partially offset by higher yields as shown in the rental analysis.
Moving forward, this proven market is soon to experience further transformation, with a number of new developments to enter the market and particularly connect precincts north and south of the railway line. This will greatly enhance the urban benefit for residents and those who visit this vibrant and diverse precinct. The liveability and vibrancy of the City will be further enhanced by the major re-development projects of Perth City Link and Elizabeth Quay. Importantly for the Stirling Street Precinct these developments will greatly enhance the north south connectivity of the city.
Metropolitan Perth median house price Metropolitan Perth
Median Price Growth
Metropolitan Perth City of Perth
City of Perth Median Price Growth
Metropolitan Perth median unit price
Stirling St Catchment median house price
Stirling St Catchment median unit price
PERTH CATCHMENT KEY STATISTICS JUNE 2014 MEDIAN ANNUAL PRICE GROWTH – APARTMENTS
AVERAGE HOLD PERIOD
JUNE 2004-2014
The median apartment price in the City of Perth increased by 7.2% over the three years to June 2014
$540,000
$440,000
$823,500
$545,000
8.2% 6.7%
8.6 years
9.2 years
8.0 years
6.2 years
Prepared by Urbis, Source: RPData Suburb ScoreCard
Prepared by Urbis, Source: RPData Suburb ScoreCard
Northbridge will be a big beneficiary of the major urban renewal and infrastructure projects that which are currently under way within the City of Perth
6 URBIS STIRLING PRECINCT OUTLOOK - FOR THE EXCLUSIVE USE OF STIRLING CAPITAL© URBIS.COM.AU
SALES ANALYSIS
MEDIAN ASKING RENTS – 12 MONTHS TO JUNE 2014
RENTAL PREMIUM: NEW VERSUS EXISTING
Prepared by Urbis, Source: RPData Suburb ScoreCard
Prepared by Urbis, Source: RPData Suburb ScoreCard August 2014
Perth rental yields are recording a premium over those in the wider metropolitan area
The suburbs within the City of Perth all show a premium for apartment/unit rents compared to the Greater Perth median rent. The Stirling Precinct is within the suburb of Perth which is showing the greatest premium with median rents of $575 per week. Being next to Northbridge, the rents in the Stirling Precinct also follow Northbridge’s rents which are lower than other suburbs in the City of Perth but still above the median for Perth. As the Stirling Precinct sees further redevelopment and becomes a more attractive precinct, the rents are expected to rise.
An analysis of new and near-new apartments within the Catchment provides a more appropriate benchmark for new apartments. As at November 2014 for apartments being advertised for rent, premiums of 43.9% for two bedroom apartments and a lower premium of 4.8% for one bedroom apartments were seen compared with older established stock. The weekly premium for apartments within the Catchment highlights the value attached to location, lifestyle and quality. As more supply is added to the inner city, renters in the area have more choice and are choosing to upgrade to more modern buildings. The large difference in rents for two bedroom apartments is reflective of this.
During the recent mining boom, inner city rents were pushed up considerably by strong corporate demand. Rents have now softened and are coming back to more sustainable longer term levels. According to RPData, all suburbs within the City of Perth LGA recorded rental declines over the 12 months to August 2014. The declines in rents ranged from 13.8% in East Perth (most influenced by corporate demand) to 5.0% in Northbridge. West Perth (8.3%) was less influenced by corporate activity and the mining boom.
From a rental return aspect, the Perth suburb showed an indicative gross rental yield of 5.9% return for investors for the 12 months to June 2014. This was above the median for greater Perth (5.2%) and higher than the other Catchment suburbs. It highlights that whilst rents have softened, investors are still obtaining attractive returns from inner city apartments.
Other Catchment Suburbs
Greater Perth
RENTAL YIELDS – CATCHMENT SUBURBS (12 MONTHS TO AUGUST 2014)
CITY OF PERTH5.9%
5.0-5.4% 5.2%
© URBIS.COM.AUURBIS STIRLING PRECINCT OUTLOOK - FOR THE EXCLUSIVE USE OF STIRLING CAPITAL 7
RENTAL MARKET
$400
$420
$440
$460
$480
$500
$520
$540
$560
$580
$600
Perth(Including Stirling
Precinct)
East Perth
West Perth
Northbridge
Greater Perth
MEDIAN ASKING RENT (12 MONTHS)
$440
$600
$420 $420
ONE BED TWO BED
NEW AND NEAR NEW APARTMENTS IN CATCHMENT SUBURBSESTABLISHED APARTMENTS IN CATCHMENT SUBURBS
PERTH Level 1, 55 St. Georges Tce
Perth WA 6000 08 9346 0500
This publication is prepared on the instruction of Stirling Capital and is not suitable for use other than by the party to whom it is addressed. As the publication involves projections and assumptions it can be affected by a number of unforeseen variables. The forecasts and assumptions are a prediction and whilst Urbis has made every effect to ensure that the forecasts and assumptions are based on reasonable information, they may be affected by assumptions that do not necessarily eventuate or by know or unknown risks and uncertainties. It should
be noted that past performance is not necessarily a reliable indication of future performance. The information in the publication does not represent financial advice and should not be regarded as such. It has been prepared without taking into account your financial situation or investment objectives. You should consider the appropriateness of the information in regards to your current financial situation or needs. Urbis accepts no responsibility for the accuracy or completeness of any such material. The information is subject to change without notice and
Urbis is under no obligation to update the information or correct any assumptions which may change over time. This study has been prepared for the sole use of Stirling Capital and is not to be relied upon by any third party without specific approval from Urbis. This publication is subject to copyright. Except as permitted under the Copyright Act 1968, no part of it may,
in any form or by any means (electronic, mechanical, photocopying, recording or otherwise) be reproduced, stored in a retrievals system or transmitted without prior written permission. Enquires should be addressed to the publishers.
