This book is published by The Property Council of Australia, ^ Level 26, Australia Square, 264_27g George Street, Sydney NSW 20OO P PERTY Telephone: (02) 9252 9111 COUNCIL Facsimile: (02) 9252 g1O3 of With the generous support.of the Victorian Australia property Division of the Council of Austratia August 1999 PRESIDENT'S MESSAGE CONTENTS President's Message 1 The Property Council of Australia believes good matters' lt does so because quality urban design lntroduction 2 urban space can provide substantial economic returns to property investors as well as being Pyrmont's Point Street 4 enjoyable places to live and work. This principle is Tyne Street Development 6 clearly demonstrated in "The Design Dividend" - a term which will headline any future property Hastings Street Noosa 7 investors dictionary. Moore Park Gardens I The Design Dividend project tested the proposi- 10 tion that good design pays handsome dividends. Park Hyatt Hotel Furthermore, it also helps promote the efforts of KPMG House 12 many property owners and developers in pursuing and incorporating good design within the built The Queen Victoria Building 13 The Design Dividend Proiect environment, Darling Park & Cockle Bay 14 wos conducted in colloborotion On behalf of the Property Council, I thank all East Perth 16 w¡th The Property Council's sponsors and collaborators who contributed to the project. Their support has assisted the Property Australian Technology Park 18 Notionol ond Urbon Council in promoting the benefits derived from Victorion Postcode 3000 19 good urban design and the resulting dividends to Plonning Committees. investors. RMIT University 20 Above all, the Design Dividend project demon- East Rundle Street 21 We grotefully ocknowledge the generous support of our sponsors strates tangible industry commitment to quality in Geelong Waterfront 22 development and the urban environment. Victoria Park 23 Urban Carol Schwartz President, Design , t Property Council of Austratia Gore Hill Freeway 24 (NEAIII]G DEII¿N PIACES IO IIVE AND WONX Advisory A 0tuhtø. ot Døpoilr.rt ot Ul* tnmg Service lncluding the NSW INFRASTRUCTURE NSW Dept of Urban DEPARTMENT OF PUBLIC Victorian DePt of lnfrastructure Affairs & Planning WORKS AND SERVICES 1 E industry have come to realise that good urban and Methodology architectural design spells competitive advantage. Nation-wide call for nominations of leading examples Good urban design enables developers to tackle difficult of good urban design in the built environment sites which would make others capitulate. lt allows projects to general market. lt value and Development of urban design selection criteria rise above the bestows trademark it heightens a developer's, owner's and tenant's market status. Comprehensive review of the nominated sites It positively shapes public perceptions and it helps anchor, by the Selection Team safeguard and even increase property values through enhanced performance, amenity and image - all important Rigorous selection process based on direct features of urban development projects. application of selection criteria Does excellent design cost more? We found that the Selection Team requested further information opposite can be true. By and large, the design fee component from lop twenty chosen sites of chosen projects does not vary greatly from general industry standards. And, judging from the information Best eight sites across a range of categories were available to us there is little evidence that better design takes then chosen based on further information received longer to produce, in the sense of delaying the time required These eight sites were then scrutinised by an for good general development planning and project independent development finance expert preparation. lndeed, when looking at the entire chain of the development delivery process, it proves to be a great A further eight sites were chosen as important LEADERS IN PROFITING FROM URBAN DESIGN potential lever for financial success: the return on the right examples for feature stories kind of investment in this category can be extraordinary. Final in depth analysis of the chosen sites resulting in The urban design selection criteria we used included these eight a written report featuring eight case studies and SEVEN: feature stories 1. a high degree of community equity as measured in public space design and amenity quality, area accessibility and vitality, as well as diversity; 2. a high level of environmental performance, as measured DOES GOOD URBAN DESIGN PAY - and if so, projects these simply work better because they have been in tangible sustainability results, climatic responsiveness how? This was the simple question the Property Council of developed with a greater commitment to urban design orland other environmental improvements; Australia asked in supporting this research report. The answer excellence than their competitors in the market. While good is startlingly simple as well. The Design Dividend project set urban design by itself cannot guarantee positive financial 3. responsiveness to important qualities in the urban and out to link good urban design to good financial returns and it returns, and lack of attention to good design principles can still landscape context as well as valuable historical demonstrated a full correlation between the two factors. result in a financially successful project, it is also clear that it characteristics; substantially enhances a project's likelihood of becoming a relevance present future, via a high The Property Council called for nominations of well 4. clear to the and financial winner. To further illustrate this very point we also degree of purposeful innovation; designed projects from across Australia. A national design picked from the remaining nominations eight interesting selection team was formed. From the pool of nominations 5. the ability to change over time; feature stories about how companies, governments and received, the team chose eight leading developments across institutions succeed in their broader objectives through the 6. a positive impact on public life and community a range of categories, on the strength of their urban qualities purposef ul application of urban design. These are perception; alone - working through a series of rigorous design study and documented in the second half of this report. professional excellence inputs, especially in selection rounds. These were then scrutinised by an 7. in all development concept, planning, architecture and design, independent development finance expert. Why this focus on good urban design, as opposed to just facility management and development upkeep. Peter Droege, good architecture? Because good urban design enhances a Project Leader All of the finally selected projects also showed above project's performance in itself as well as within its surround- The financial evaluations too, followed consistently applied average financial returns when compared with the rest of their ings. Good architecture can mean greater longevity, better steps throughout. Wherever possible, the last five years of per- respective markets. Can this powerful correlation alone internal performance and higher symbolic and aesthetic formance were assessed, or, in recent development absolutely prove that good urban design pays? Certainly not. value, but in itself cannot guarantee that the project connects projects, the development period. Returns were arrived at As science philosopher Karl Popper observed, theories can well with its surroundings in the sense that it utilises the wider from derived cash flows over the period of the analysis, and never be verified, only disproved. A number of factors may be setting as an asset - and becomes an asset to its context in calculated on a present value approach, ie. as internal rates of involved. For example, good urban design may simply be turn. return. the sign of an excellent developer - part of a firm's compara- tive advantage - and hence mask success in exceptional sales Good urban design can provide a competitive edge in a flat All figures were provided by the owners or managers.of the technique, service level or prestige achieved through image economy, and it can advantage a building in a bearish market. properties and projects and were taken at face value. The making. Location, market position and accounting aspects Good urban design, like good architecture, is also a sign of Property Council could not audit the accuracy of the may be at play. the times. Whereas during periods marked by tight supply and figures. a consumer community with limited choice it is possible to However, we do not believe that it is likely that such other show good financial returns on almost any investment, urban ln some instances, only indexed data was provided and in factors explain the great consistency in superior performance. Australia has now reached a point where many of its most all cases the Property Council guaranteed to treat the We believe, and seek to explain through these cases, that successful players in the residential and commercial property supplied information with absolute confidentiality. 2 3 Cotegory: Residential Dole Completed! 1997 Client/Developer: Walker Corporation Designer: Angelo Candalepas in association with Wilkinson Candalepas & Architects Pty Ltd, Janet Grey Architects Sile Areo: 2,000 m2 Controct Vqlue: $22 million Awqrds: 1997 Building Design Professions Urban Design Award h I _ßt Ð PYRMONT'S POINT STREET ;ßlI H DEVELOPMENT SYDNEY H Úl SENSE OF PLACE YIELDS HIGH RETURN H of the site.