Mark Gray

18 August 2012  – The big driver in residential development of the future will be the workforce of the future, Gen Y, and Gen Y wants to live centrally and to have great public transport, Leighton’s Mark Gray says. But first Australia needs to cast off its 20th century shackles and embrace its inherent innovative spirit. Lynne Blundell reports.

Until Australia gets out of its early 20th century transport mindset and commits to spending on quality public transport, sustainable residential development in our cities will not progress as it should, according to Leighton Properties managing director Mark Gray.  But governments, planners and developers will be forced into change by the new purchasers of urban property – Gen Y, Gray says.

“In Australia we are back in a mindset that is a hundred years old when it comes to transport. We have got to lift the public transport game – it is abysmal in Australia. We need to be more dogmatic about reducing reliance on cars,” Gray says in an interview with The Fifth Estate.

The reality is all Australian cities need more effective metro systems to enable the higher density living governments and planners aim for.

“If we increase the density in cities like Sydney, Melbourne and Perth we must have the transport systems to support it,” Gray says.

Developers must also take on the challenge by limiting the number of car spaces in inner city residential developments and providing for car share and rental schemes such as GoGet.

Leighton has been proactive in commercial green development. Its Eclipse building in Parramatta  aims for five star NABERS energy rating. At the launch of the building earlier this year Mark Gray emphasised the company’s commitment to sustainability, pointing out that all its new buildings were five and six star rated.

The 19 storey Eclipse building, designed by Fitzpatrick + Partners is due for completion this month and will provide 25,700 square metres of new space in Parramatta’s CBD.

Already 80 per cent leased, with pre-commitments from Deloitte, QBE Insurance and Landcom, it is the only A-grade commercial building under construction in Parramatta, despite a low vacancy rate of only two per cent

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Residential is the next frontier
But it is in residential that Gray sees the most potential and the where there are also the biggest barriers.

“Residential is where the opportunity lies. We had BASIX some time ago but not a lot has happened since. Where people are really going to make a difference is in precinct developments,” says Gray.

“There’s a lot of work being done in this area but it is in the formative stages.”

Sydney precinct-style developments such as Green Square and the Frasers/Sekisui House Central Park project will make a significant impact but until there were legislative changes and attitude shifts decentralised energy networks and technology such as tri-generation would be held back.

“Body corporate and strata law still doesn’t allow for a single energy provider. We need to open this up to more possibilities,” says Gray.

Traditionally energy provision has involved an arrangement between government and the power companies where the government underwrites the provision. In commercial developments there is more willingness to take risks but in precinct developments the issues become more complicated and current legislation does not allow for enough flexibility.

“A lot of work is being done but if we are going to solve the wider issues of power through the network we have to resolve these things. The City of Sydney has been focusing on this, as has Leighton, and governments are being pushed to do so. It is a long term issue.”

Leighton is committed to pushing the sustainability envelope in residential and mixed use development, Gray says.

Green Square

In addition to Green Square, where the company is in a development partnership with Mirvac and Landcom, Leighton last year won the contract to develop the second stage of the Boggo Road Urban Village project in Brisbane, situated alongside the heritage-listed Boggo Road Gaol and the new EcoSciences precint in the city’s inner east.

The company intends to create a mixed-use development at Boggo Road, which incorporates residential apartments, retail offerings and office space. There is a strong focus on transport, with the site well connected in terms of pedestrian walkways, bicycle lanes, buses and trains and earmarked for a possible train station within the Cross River Rail Project.

Also in Brisbane, Leighton is building one of the city’s first residential towers in the inner city suburb of Fortitude Valley, Mosaic, which will incorporate green rooftop areas and communal garden plots.  A mixed use development, the 18 storey tower includes a 48-room hotel, retail and commercial, as well as 21 apartments. It is being promoted as a sustainable residential development with a focus on technology and the use of passive elements such as cross ventilation.

Mark Gray points to another development in Sydney’s inner city suburb of Erskinville as one that embodies the challenges developers must embrace when developing urban sites. Located in a densely populated area where residents are vocal and vigilant about maintaining the current village atmosphere, the development is a sensitive one.

Joint venture partner in the site is LaSalle Investment Management through its Asian Opportunity Fund III. The development sits on a 1.6 hectares with access to both MacDonald and Bridge Streets and will include 300 residences – a mix of one, two and three bedroom apartments and townhouses.

Mark Gray said the development will bring together the best elements of sustainable and architectural design, and was a good example of Leighton’s strategy to develop urban precincts in well located areas adjacent to transport and lifestyle amenities.

In line with the company’s active support for the City of Sydney Competitive Design Policy, which encourages property developers to carry out a competitive design competition process, the Erskineville design will be prepared by three architectural firms. Through this process Leighton is aiming for high levels of social and environmental sustainability of the development, and diversity for the staged project, Gray says.

“Erskinville has a very tight-knit village atmosphere and it is vital that a new development embraces that. Residents don’t want to lose the attributes of the village.

“In a planning sense it is a matter of trying to balance development of the sprinkling of industrial property remaining in the inner city and respecting what is there. It is about getting the balance right. If we can achieve that, the whole community benefits and it is essential that the development benefit the wider community,” says Gray.

Getting it right, says Gray, revolves around transport and traffic issues. For too long Australian cities have been stuck with outdated transport systems, particular public transport.

It is inevitable that these changes will take place, as demographics will force it, the push coming from Gen Y who are looking for sustainability beyond just the built environment. They are looking at sustainability in terms of lifestyle including access to transport and more leisure time.

“Gen Y want to live in inner urban areas and that’s where we’ll see the big frontier.

“Gen Y want to live in inner urban areas and that’s where we’ll see the big frontier. Urban high density is not traditional in Australia and there are other countries we can learn from about this.

“But in terms of innovation Australians have always been leaders and we do have a regulatory environment that generally encourages innovation. Regulatory authorities and developers are thinking that way – there are incentives there,” says Gray.

But the most powerful driver will be demand from Gen Y, the new purchasers of inner city property and the workforce of the future.

“To attract and retain staff commercial property is focusing on these issues of transport and accessibility. Residential will be the same. Gen Y is demanding it and older generations are following.”

Gray points to the comments of UK architect and presenter of the highly popular television series Grand Designs, Kevin McCloud, on his recent visit to Australia. Speaking at a Green Building Council of Australia sponsored event, McCloud, well known for his passion for sustainability and affordable, relevant housing, was complimentary about Australia’s innovative spirit, comparing it to the UK’s resistance to change.

“Kevin McCloud would say we are more much more innovative than the English. There is the added issue of heritage in the UK. The psyche there is not to change anything because they want to live like they have for hundreds of years. The Australian framework is much more flexible.”

Gray is hopeful that outdated planning laws – “an archaic system that was set up for development more than 50 years ago” – would be brought up to date.

“They are all under review as they no longer apply. There are great challenges in all this but it is a very exciting time to be in property.”

lblundell@thefifthestate.com.au