MIRVAC BOSS: The Wave Of Foreign Investors Buying Apartments Could Kill The Vibrancy Of Sydney's CBD

Mirvac group executive commercial, David Rolls.

David Rolls has shaped more of the Sydney’s skyline than most.

Before he was Mirvac’s group executive of commercial development, Rolls was at Lend Lease. His portfolio includes the Barangaroo development, 1 O’Connell Street, Aurora Place, 8 Chifley, 126 Philip Street, Darling Park, Darling Quarter and 200 George Street which is still under construction.

He believes cities will continue to be the workplaces of the future and that in the age of increasing remote working and satellite offices there still needs to be a hub of interaction.

“There needs to be a rethinking of what the city’s meant to be because it’s an economic driver,” he told Business Insider.

Driving the growth of residential spaces in the CBD is demand from overseas investors, particularly Chinese-based investors who are snapping up property at speed.

“We’re in the middle of this massive debate and massive confluence of a lot of offshore capital coming in all wanting residential, happy to pay big bucks because residential is worth more per square metre than office. But a lot of them are lock-and-leaves and there’s no life, whereas office is vibrancy,” he said.

Sure, the Sydney CBD is a bustling place during the day but the city has long struggled to sustain that energy past a certain time of day when the majority of the city’s office workers retreat to the suburbs.

The city has made various attempts to get more people to live in and around the CBD in the hope that one of Australia’s most expensive parcels of land is used to greatest effect.

Part of this is the drive to transform commercial spaces within the CBD into residential towers.

But the wave of foreign investors and the current planning set up, Rolls says, could lead to some unwanted, unintended consequences and the heart of the Harbour City will struggle with relevance as a result.

“It’s very rigid and in fact the current planning rules almost force people to convert their buildings to residential,” he said.

“For Sydney I worry about the city and its relevance going forward, in that a lot of the older style buildings are being converted to residential and you just lose the heart and soul of the business district.”

Part of the idea behind Mirvac’s 37-storey 200 George St redevelopment is opening it up to the public, creating a meeting space and an area which entices people to that part of the city.

Mirvac’s $229 million redevelopment of 200 George Street is expected to be completed in mid-2016.

“The city’s transport systems are all radial, it brings people in so it’s the natural place to have your growth but if we just leave planning the way it is we’re going to look back in ten years time and go: ‘what the hell happened?’.”

But he says there needs to be more flexibility around planning and office spaces.

“If you don’t change floorspace ratios or allow dispensation and some merit based argument around higher density then the city will be redundant by that very nature.”

Using Vancouver as an example, Rolls said it’s one city which has managed to strike a balance between residential and commercial land use in its CBD.

“They got their planning right, it encourages a certain amount of residential and a certain amount of office,” he said.

Sydney has some of the highest rents in the country. Part of that is because the city is on a peninsula and the amount of development is limited naturally by the space available.

“The city’s a peninsula and it can only really grow south now because Barangaroo has stopped it growing any further west, we can’t go any further east because we’ve got the Botanical Gardens and we’ve got Circular Quay to the north,” he said.

Going up is one of the solutions that needs to be taken seriously, he says.

While there are discussions going on with both the State government and Sydney City Council, it remains to be decided how tall Sydney could get.

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