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Unlocking value in the air

Unlocking value in the air

If you have been paying close attention to the strata title property market in recent years, you may have heard the term “volumetric subdivision”. If you haven’t heard of it you soon will.

As far as Canberra is concerned, property can come in two simple forms; either a single title piece of land or a unit in a strata titled block, known in our territory as a Units Plan.

In an uncomplicated world these two classes of property ownership are perfectly adequate. And so it has been the case for many decades here in our back yard. But the times they are a changing, and so must our way of thinking change.

The average apartment dweller is no longer satisfied to live in isolation from all the amenities of life. Consequently, developers are faced with market demand for dynamic mixed-use buildings and sprawling “campus” style precincts. We have seen a few notable examples in recent years, such as The Realm Precinct in Barton, New Acton and Kingston Foreshore. Each of these developments meets the brief, providing places for people to come together not only to live, but also to work, eat and socialise.

However, change never comes without a cost, and just as our desire for high density living increases, so does the challenge of managing these communities.

Up to this point developers have simply included commercial office and retail spaces as units in a strata titled building. The laws governing strata properties in the ACT make no distinction between commercial and residential units. In practice it is generally acknowledged that one size does not necessarily fit all. Commercial units have very different needs to those of the residential apartments and it is no surprise that these diverging interests can give rise to challenges and disputes. For example, apartment unit owners may not want to contribute to the cost of cleaning or grease trap maintenance etc. In turn, commercial unit owners may not wish to contribute to the maintenance of gyms and swimming pools for which they have no practical need.

The competing wants and needs of different uses can be addressed in a number of ways. One particular titling structure known as “volumetric” or “stratum” subdivision is gaining significant momentum in the ACT. In simple terms a property can be created with both horizontal and vertical boundaries resulting in a stacked or layered property title. For example, a building might have 2 retail levels at the bottom of a building and apartments above. The commercial space is on its own title and the apartments form a separate title. The apartments may form Units Plan in their own right, but that does not involve the commercial. Both groups share some infrastructure, which they manage jointly, such as building insurance.

By definition this type of titling arrangement can be a little tricky, however if done correctly and with the appropriate advice regarding ongoing management, it can be a powerful tool for creating living communities catering for a wide range of uses.

For further information, please contact Chris Miller, General Manager
M: 0400 376208
F: 02 6239 5711
The Griffin, Corner Giles & Jardine Streets, Kingston
PO Box 5044, Kingston ACT 2604

 

Vantage Building Trust

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