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Good urban design boosts cash flow

A PROPERTY Council of Australia report has found that good urban design can boost economic returns for property investors as well as improve the quality of the built environment.

WA Property Council Executive Director Joe Lenzo launched the

findings in the landmark Design Dividend in Perth this month.

Mr Lenzo said: “Standards have been set through the design dividend project. This is a watershed in the greening of the property industry. Intolerance of diversity in the name of efficiency is now a thing of the past.

“While the East Perth Redevelopment was the only WA urban design to earn a place on the national Design Dividend Honour Roll launched with this project, we can certainly anticipate more WA developments coming on-stream, such as SubiCentro and some unique developments in the Fremantle area.

“Sales in the East Perth Redevelopment have been 100 per cent in the residential releases of North Cove, Constitution Hill and Belvidere.

“Growth in the value of East Perth’s riverside property has outpaced Perth’s famous ‘millionaires rows’ in Peppermint Grove, Dalkeith and Cottesloe.”

Led by respected urban design specialist Professor Peter Droege, the project examined a raft of urban developments across Australia, selecting sixteen sites as design dividend case studies.

An independent development financial expert and the project committee scrutinised the sites, using seven benchmarks including investor returns, ability to change, environmental

performance, accessibility, public space design and the development’s impact on the community.

Mr Lenzo said the selected projects achieved above average financial returns when compared with other developments in their respective

markets.

“While good urban design cannot guarantee a project will be financially successful, our report clearly demonstrates that it increases the chance of a development becoming a winner,” Mr Lenzo said.

“The mere fact that a quality urban space can have a financial spinoff and improve public amenity will ensure the design dividend principle enters the property developer’s lexicon.

“Paying greater attention to design excellence will ensure our cities boast urban space that add to the quality and enjoyment of our built environment.”

Mr Lenzo said ordinary investors would be the big winners from the improved financial returns from projects that adhere to the design dividend principle.

“More than nine million Australians with superannuation rely on property investments to provide a healthy nest egg in their retirement,” Mr Lenzo said.

“The design dividend concept can therefore enhance the financial returns flowing to ordinary investors from superannuation-funded property developments.”

Project leader Peter Droege added that there was no proof that excellent design costs more.

“We found that the opposite can be true,” he said.

“By and large the design fee component of chosen projects does not vary greatly from general industry standards.

“Judging from the information available to us there is little evidence that better design takes longer to produce, in the sense of delaying the time required for good general development planning and project preparation.

“Indeed, when looking at the entire chain of the development delivery process, it proves to be a great potential lever for financial success – the return on the right kind of investment in this category can be extraordinary.”

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