Vicinity Centres (VCX) Earnings Call Transcript & Summary

Great. Thank you. Well, good morning, everyone, and welcome. My name is Grant Kelley. I'm the CEO and Managing Director of Vicinity Centres. And for those of you who I haven't met, a special warm welcome, and I hope to meet up with you during the course of today. I'd like to begin by acknowledging the traditional custodians of the lands on which we meet today, the Wurundjeri and Bunurong people of the Kulin nation and pay my respects to the elders past, present and emerging. Well, thank you for joining us for Vicinity's first ever development showcase. Welcome to those of you here in the room in Melbourne. It's a reasonably good day by Melbourne standards in the month of June and a special welcome also to those of you joining us via webcast. The background to today's session was actually the conversations we had with many of you during our interim FY '22 results in February. There was clearly an appetite for more information on our priority projects, their time lines for delivery and their costs. And hence, we prepared today's development showcase. And this morning's presentation and the site tours over the next 2 days where we hope show you how we intend to create value for our communities, our customers and, of course, most importantly, you, our security holders. At Vicinity, we've been investing in retail development, obviously, throughout our existence for many years and in mixed use specifically since 2018. But with the onset of the pandemic in March of 2020, we took action in a number of ways which impacted the development business. The first was that, at a group level, we conserve capital in order to navigate the considerable volatility and disruption caused by the pandemic itself. And our balance sheet is in very good shape and provides significant capacity for the development pipeline that we will discuss over the next several days with you. But secondly, for the development business specifically, we shifted focus towards larger and more meaningful approvals and working hand in glove with both local and state governments. We wanted to be in a position to be shovel-ready once the market recovered. And the good news is that, in calendar '22, with the resumption of normality, we are in a position now to move swiftly into execution, thanks to the considerable planning work undertaken by Carolyn Viney and her team, and we'll talk about that more over the course of this morning. Now I can see several familiar faces in the room, but for anyone new to Vicinity, here is a snapshot of our business. First and foremost, we are the custodian of a very large and diverse portfolio of retail assets across Australia, and these attract approximately 340 million visitors per year, and they turn over about $17 billion, quite an extraordinary number, in retail sales annually. With over 7,000 partners, 23 JV partnerships and as managers of $23 billion of assets, of which $9 billion is for third-party capital, we believe we have very deep investment and property management capability. We also believe in driving long-term value both responsibly and, most importantly, sustainably. And I'll say a few words on that in a moment. And of course, we see robust governance as crucial for delivering good business outcomes. Our risk and compliance frameworks reflect this mindset, and this includes the control measures, which we adopt in respect of our development projects. Now as you'll see today, our portfolio is diverse, both in terms of geography and format, meaning we can be the partner of choice for retailers with growth ambitions across the complete sales channel. Importantly, our portfolio also provides access to significant parcels of developable land that are suitable for creation of mixed-use precincts. And there's about 1.5 million square meters of developable land in our business, which is not reflected in our current market valuation. So it's a very exciting opportunity for Vicinity. Now in addition to our physical assets, data and innovation are crucial to everything we do and remain at the forefront, of course, of the evolving retail landscape in terms of how and where consumers shop. And we pay significant attention to that. And our credit metrics are also a key focus. As many of you will be aware, we have a conservative credit culture and a strong balance sheet. Now finally, we have a consistency of approach to distributions, which we intend to maintain. Now as I mentioned earlier, our strategy is underpinned by our approach to sustainability. And throughout today's session, we hope that the integration of sustainability into our development pipeline will become readily apparent. In a nutshell, we see development as play smacking relying upon sustainable design. And we've, therefore, built towards outcomes which embrace the uniqueness of each local community in our projects. We therefore focus also on creating safe and reliable hubs for our communities in which we operate. And a key part of this is, of course, ensuring the physical asset -- the physical resilience, excuse me, of our assets are given changing climate conditions. Okay. So on to today's presentation. And without further ado, I'd like to shortly hand the session over to Carolyn Viney, Vicinity's Chief Development Officer. Carolyn joined Vicinity in 2016, bringing with her a wealth of experience over some 20 years in construction, property management and real estate investment. Prior to joining Vicinity, many of you may recall Carolyn as the CEO of Grocon. And prior to that, she was a property lawyer at MinterEllison. Now since joining Vicinity, Carolyn has led the origination and delivery of more than 40 development projects at a combined value of some $1.7 billion and has driven the master planning for a number of key assets, including Chadstone, Chatswood Chase, Box Hill, Victoria Gardens, Bankstown, and Buranda. And you'll be hearing more about the progress we've made on each of these over the next 2 days. Thank you, everyone. Have a great day, and over to you, Carolyn.

Thanks, Grant, and good morning, everyone. We have a full agenda over the next 1.5 days. We're beginning here, of course, at Hotel Chadstone with what we hope will be an interactive series of presentations. We'll be profiling 6 of what we think are our largest and most important assets. We'll be taking you through them individually and then pausing for questions. So please do take the opportunity to ask those. We'll be expecting to conclude our presentations at about 12 noon, at which time the live webcast will finish, and we'll commence our asset tours, starting here at Chadstone and then moving to Box Hill and Victoria Gardens throughout the afternoon. We're aiming to have you back here at 5:00 and back into this room for dinner at 5:30. We have an early start tomorrow morning for those of you joining us in Sydney with a flight and then visits to Bankstown and Chatswood Chase. Today, we're focusing on our 5-year development pipeline, which comprises our Vicinity share of $2.9 billion. This pipeline, 84% relates to the 6 key assets, which we'll be focusing on today. Around 3/4 of the pipeline relates to the creation of new mixed-use assets, which will not only deliver value accretion in their own right, but deliver a halo effect or a sales and income uplift for the retail assets with which they'll be colocated. Our mixed-use portfolio is weighted towards office in favor of residential. And you'll see, as we work through the presentations today, that our retail spend is being undertaken largely at Chatswood and Chadstone. Naturally, we have a very good estimate of the returns for our near-term projects. Having regard to the total pipeline and the slightly longer-dated projects within it, we're sharing with you our target returns across retail, office and residential build-to-rent projects. They are indicative and we'll adjust our hurdles in line with the risk/return parameters for a particular asset and a particular project, reflecting the defensiveness of a project and its cash flows. What you'll see today and tomorrow across the 6 key assets that we've referred to is that there are multiple opportunities at these sites and that our pipeline only reflects the initial near-term opportunities. Of note, the $2.9 billion figure ignores any future potential here at Chadstone, beyond the projects we expect to see approved in the next month or so. The Bankstown, Box Hill and Buranda, we're talking about the first 1 or 2 towers on sites that are capable of yielding anywhere between 6 and 19 towers in total over time. Or put another way, we see these 6 assets as income-producing land banks in increasingly urbanized locations with additional development beyond FY '27. Outside of the development pipeline, we have additional smaller tactical capital projects happening across the portfolio. They take the form of ambience upgrade, reconfigurations and tenancy remixing and the like. And they demonstrate our commitment to continue to invest in these assets also. As I've said, today we're focusing on 6 key assets and we're showing them on the slide there. We think these assets give you a good sense of how we're thinking about the future of our assets. The whole of site master planning approach that we've adopted in respect of them, the progress that we've made in realizing the resulting near-term projects and the value capture for our security holders. These 6 priority assets are among the larger assets in the portfolio, and you'll see that they have significant forward opportunity for mixed-use development, both now, in the near term and into the future. And as the team talks you through these projects, I think that will become increasingly clear to you. Introducing the team that you'll be hearing from today. Firstly, David Waldren. David leads our design team nationally. He's responsible for a lot of the master planning work that you'll be hearing about today. He then works with each of the project leads in obtaining the relevant town planning approvals. And as you'll see in here today, there's a number of very material approvals that have already been obtained. He then works with the teams to increase the design management that we put across the individual buildings that we are creating, and David leads a team of 6 design professionals nationally. Truman Dare. Truman leads our mixed-use function. He's ably assisted by our team of office, residential and other mixed-use professionals that he's assembled since joining Vicinity in 2018. Prior to Vicinity, Truman was at Cbus Property for more than 12 years and was responsible for origination of large-scale complex commercial office and residential projects. Josef Seidler, down the end. Josef leads our Chadstone and Victoria Gardens retailer hospitality projects, including the more extensive government stakeholder engagement we undertake in respect of Chadstone, and the reasons for that will become clear as the morning transpires. Hotel Chadstone, where we are today, is one of Josef's recent projects, where we've had the benefit of his deep experience in retail and hospitality and hotel both at Crown Resorts and Star Entertainment. Mark Kelley, Mark leads our New South Wales and Queensland projects, including the proposed major redevelopment at Chatswood Chase. And having successfully delivered the Stage 40 project at Chadstone in 2016, including the amazing [ picture route ] that you were seeing today. Mark is no stranger to project complexity or the luxury retailer universe. And again, that will become clear when we talk to Chatswood. Corrine Barchanowicz. Corrine leads our customer insight strategy across the CBD and premium assets in our portfolio, including Chatswood Chase. She has an amazing grasp on the ever-changing preferences of our consumers and the ways in which they will live, work and play into the future. And she brings with her experience working with both Centres in Australia and in the U.S. And of course, Peter Huddle, Vicinity's Chief Operating Officer. Peter has responsibility for the development team, of which I'm part, and all of our development projects. As you know, Peter has a long and distinguished career in retail and mixed-use businesses having worked with Westfield and Center in Australia and overseas. Peter has personally led or had management responsibility for some of the very best retail projects in the world, including Westfield Century City in Los Angeles, Westfield World Trade Center in New York, Westfield UTC, San Diego and Westfield Valley Fair, Silicon Valley as well as a number of large-scale mixed-use projects, and you'll be hearing from Peter later this morning also. We also have Adrian Chye in the room. Adrian give us a wave from over there in the corner, our Chief Financial Officer as well as members of our Investor Relations and Communications team. So welcome to all of you also. On that note, I'm going to pause. I'm going to hand you over to David and Corrine, who are going to talk you through some of the things that we're seeing, happening across Australia's major cities, what we think that means for our assets and how we're translating those things into the projects that we're conceiving. As I've said, this morning is intended to be interactive. So we'll be pausing and taking questions at the relevant points in time. Over to you, David.

Thanks, Carolyn. Some city planning theory and some demographics for you this morning. And let me start with a hypothesis. When I say the word city, you'll think of something singular, a business or a retail center within a metropolitan area. And indeed, up to a certain size before congestion breaks that model, your thought would be right. But you can have a number of cities within a metropolitan area. A city or a central business district is typically defined, and we would know it, as a place that has employment, dining, leisure, entertainment, high-density housing and, for travelers, accommodation. Prior to the pandemic, and indeed, in many cases, still today, most of us travel to the city to work, maybe shop, perhaps dine out for lunch or dinner, and then we return home. The traffic flow then is typically one way in the morning and the other way in the afternoon. Only half using the transport network. In Australia, this has been the model for decades, indeed centuries, and it's a hub-and-spoke model. But in the context, as this slide is showing, of a potential 27% growth in the Australian population over the next 20 years, that's nearly 7 million people, the infrastructure that enables our current hub-and-spoke model simply won't cope with that growth in density. To solve that problem, we'll need to adopt the approaches implemented in thriving international cities. In essence, Australia needs polycentric cities across our major states, where central business districts are supplemented by suburban mini cities. Our state-level planning authorities, particularly in the Eastern Seaboard, are already working on the infrastructure solutions that enable the transition to this new polycentric city model. The middle ring suburbs in metropolitan areas will be key to this as they must attract a higher share of the forecast population growth given the existing major investments in public transport infrastructure and the appeal of access to high-quality established amenities. This, of course, presents Vicinity with significant opportunity. Why? Simply because we have the best assets in the right locations, which importantly have substantial further development potential. We'll be showcasing some of these transformational projects a little later today. But let's dive into some of the detail of the specific planning policies in place, and we'll begin in Victoria, where opportunity exists to align what we do with the government's planned Melbourne strategy, and that's based on the concept of 20-minute neighborhoods. Plan Melbourne is specifically designed to enable Melbourne to grow from 5 million people today to a population of 8 million by 2050, a 60% increase, but without requiring that growth to only occur in our ever-expanding outer suburbs. Under Plan Melbourne, 70% of the new dwellings to be delivered over the next 30 years will be created in Melbourne's existing inner-ring suburbs. Therefore, in round numbers, 2 million of the 3 million additional people will be housed in existing, highly developed neighborhoods. To achieve this, there will be a focus on further developing sites with potential for high-density development so that the predominant neighborhood character of the suburbs can be maintained. With this level of growth, Plan Melbourne takes into consideration the provision of infrastructure and access to things like jobs, health services, training and education, open spaces and broader amenities. In short, Plan Melbourne covers everything you need to support the density increase adopting the polycentric city model. The 20-minute neighborhood then is a concept that assumes there is a mixed-use precinct that meets the communities' every day needs locally and within a 20-minute journey from home, whether you're walking, cycling, using public transport or driving. And Vicinity is already playing a key role in this evolution. So then how do we utilize our network of assets to contribute to the realization of the aims of Plan Melbourne and, importantly, leverage the significant investment the government is making into the Suburban Rail Loop. The Suburban Rail Loop is a project that is essentially a circumferential rail loop that crosses all of the existing rail lines that connect the center of Melbourne to the suburbs. It provides for movement between suburban centers without the need to first travel into the CBD. Fortuitously, we are the custodian of nearly 94 hectares of land across our centers that are proximate to the Suburban Rail Loop and its proposed stations, remembering that those stations become mini hubs. And you can see that relationship on the diagram on your screens. Another critical piece of the state government's planning is the identification of national employment and innovation clusters denoted on the map by the pale blue circles. What's instantly obvious is how close our assets are to these very important jobs and innovation hubs of the future. As we take you through our Melbourne projects today, you'll see that transport connectivity and the provision of the 20-minute neighborhood amenity are some of the site attributes upon which we are focusing. By aligning our projects with the state government's planning for the growth of Melbourne, we know that the demand for our assets that we are creating will be strong, and our communities will be well serviced by infrastructure and the amenity on site. Now up to New South Wales, where much like Victoria, the New South Wales government is expecting significant population growth over the next 20 years. And once again, the rising population will be concentrated in the Metropolitan Sydney region. In a similar context to Plan Melbourne, the Greater Cities Commission's plan for Sydney envisages the development of the Greater Sydney region to accommodate the expected population growth. The regions that you can see here on this slide are identified as the Western Parkland City, the Central River City and the Eastern Harbour City, where the major centers within each of these city regions will be connected by new rapid forms of public transport, particularly the Sydney Metro. This reengineering of the Sydney metropolitan area will result in the population's everyday needs being available within 30 minutes of any particular location, in this case, the 30-minute city. At a local level, these planning strategies and policies are channeling development proximate to major state infrastructure, education, training and health and around the rapid transport system, the stations and the interchanges. Once again, we have great assets in and around all 3 of these 30-minute cities. And naturally, our focus is on leveraging state planning strategies to deliver our retail and mixed-use development outcomes asset by asset. As an example, the Sydney Metro system is configured to provide major new infrastructure to Chatswood as well as to Bankstown, where the Metro literally comes to the very corner of our Bankstown Central site, bringing travel times from there to the CBD down to 28 minutes. Touching briefly on Queensland. In Brisbane, we're seeing the beginning of steps to emulate the planning principles and infrastructure investment happening in Victoria and New South Wales. There, the planners have begun to use phrases like a city of villages and suburban precinct planning. In time, they'll morph into a polycentric city model that extends from the New South Wales border in the south through the Gold Coast Brisbane and up into the Sunshine Coast. In summary then, the growth of Australia's major cities, 7 million new residents in 30 years is underpinned by polycentric cities strategies, policies and infrastructure investment. And as you'll see a little later, our assets are being master planned to realize that future. I'll now hand over to Corrine to discuss the evolution of changing demographics and the consumer demands within these polycentric cities.

As David highlighted, Australia is expected to experience steady population growth. Over 60% of the forecast population growth is expected to come from overseas migration to Australia, leading Australia to be one of the most culturally and generationally diverse countries in the world. Running parallel to the growth in population will be demographic changes that will reflect an aging population as millennials, currently the largest generation, begin to age, and all generations experience longer life expectancy, staying healthy, active and mobile longer. While younger generations will continue to be attracted to conventional and urban CBDs for their access to education, employment and social benefits, it is likely that as new immigrants arrive, they will capitalize on government incentives and increasing job opportunities in regional areas of Australia, changing the geographic distribution of income levels. Furthermore, the influx of new and more diverse immigration will likely shift to the cultural makeup of the communities that live and interact within and around our centers. And we must evolve to cater to further densification, urbanization and growing population sizes. We must also consider the customers' evolving perceptions around environmental and social issues and the community experience. And so how we position the retail proposition, public open spaces and the amenity needs to be specific to a precinct, its market and the customer. In other words, the solution at Bankstown cannot and will not be carbon-copied at, say, Chatswood Chase, nor would Victoria Gardens mimic Box Hill. As we look ahead, millennials influence or the millennial effect will continue to inform and influence the experience of future generations in how they live, work and shop in future years. Some of the mega trends this generation is already influencing and that are currently shaping our retail and mixed-use plans, include the consumer desire for experience. This is not a new trend. Since their teen years, millennials have valued experience over material possessions. The shift in mindset and values will continue to evolve as Gen Alpha and Gen Beta are raised by millennial parents and this value set is embedded. With experience comes the consideration of how time is invested, with consumers becoming more discerning as -- sorry -- as attention span is shortened -- that was mine just shortening -- and demands on the downtime continue to grow. The greater emphasis on time will shape how, where and when time is spent and, in turn, will be an even greater driving force of behavior and decision-making. Complementing the investment on how we invest our time is the focus on health and well-being, and this has been further reinforced on a global scale by the pandemic. From eating fresh to self-improvement, consumers are investing in their holistic health and well-being, mentally, physically, emotionally and in the way they engage in their relationships with each other and their surroundings. Our focus on health and well-being has a direct correlation to the growing trend of localization. After years of being restricted in our movements, consumers have found value and comfort in their ability to stay local for work, play and entertainment. This comfort has been reinforced by the benefits consumers have experienced in their local communities, from supporting their neighbors in their business, to the personalization of their own experience and knowing in more detail how their products are made, who's making them and where they're coming from. While more globally aware than ever before, the trend towards localization has opened consumers' minds to the importance of sustainability or conscious consumerism, with sustainability credentials becoming increasingly important. Consumers are openly asking and wanting to be informed of the efforts, initiatives and investment businesses are making to ensure their practices are sustainable and ethically support the community along with the health and wellness of people and the planet. Finally, digitization and omnichannel retailing are driving up expectations of convenience. From a retail experience, this is no longer physical versus digital or off-line versus online, but rather an expectation of a more seamless, efficient and frictionless digital experience that uses consumers' time to help them get what they want, where and when they want it. We are, of course, also playing an active role in engaging with traditional custodians of the lands on which our centers and developments are located. And it is through this engagement that we are creating meaningful opportunities to respect and acknowledge First Nation's people's culture, language and protocols in our developments and assets. Our master planning is the product of deep research into demographics to ensure the products that we deliver aligns with our communities today and into the future. And you will see this reflected in the projects that we'll share with you today.

Thanks, Corrine. So what we're seeing from government policy settings and evolving consumer preferences is that Australia's population will continue to grow and that a big proportion of that growth will be accommodated in the middle ring suburbs in which our centers are typically located. The magnitude of population growth expected and the desire for decentralization of the 20- and 30-minute cities to which David referred make the large land holdings we have in these middle suburbs amenable to a variety of new users. This enables us to co-locate new mixed-use assets at an existing retail center to provide a level of user experience for both the retail and the mixed user that's frankly very difficult to replicate elsewhere. Importantly, how our assets in these growth areas relate to their surrounding communities is also critical. And as Corrine discussed, we know consumers are increasingly discerning and that consumer behavior is changing. They place a lot of value on their time, and they want to experience life in a very fulsome way. And we know they also want amenity and connectivity. That's why it's important to recognize that our retail assets are already located in areas that are well serviced by public transport and other important government infrastructure like health and education facilities. And you'll see that when we visit the assets today and tomorrow. In short, our assets are already located in in-demand locations, and our development projects are completely aligned with the changes that we're seeing in consumer behavior and consumer preferences. And remembering also that in order to achieve our mixed-use pipeline, we don't need to acquire more land. All of the projects we're discussing with you today relate to land parcels we already own and from which we can drive more value for our communities, our customers and, importantly, our security holders. At Vicinity, when we think about mixed use, we think about co-locating new mixed-use assets with an existing retail asset. We know that when we build an office as part of a retail center, we introduce new customers who visit the center and do so midweek typically when the center is off peak. And we know that when high-density residential is at or near by the center, like we've done at The Glen, the center trades longer hours because of the frequency of visitation from the people who are on site or right next door. We know that mixed use drive stronger asset performance with higher retail sales growth and net income property outcomes. We know that high amenity is important to all consumers and don't need to invest in new high-quality amenity. This amenity already exists in our centers today. We're simply seeking, as David mentioned, to better leverage it to drive additional value. Accordingly, we see our mixed-use projects as a very efficient way of both diversifying and growing our income streams. It means our assets also have a competitive advantage in becoming the dominant asset or the dominant hub of community activity in each of the key suburbs in which they're located. So in summary, we see multiple advantages combining our retail assets with new mixed-use complementary forms. And that's why we've moved to the execution phase of realizing our mixed-use pipeline. And today's presentations will give you a good outline of the progress that we've made in commencing these projects, starting with the work that we've already done at Chadstone. Over to you, Josef.

Thanks, Carolyn, and good morning all. Chadstone has a long history of large and small projects. Since 2015, we've undertaken 7 projects, including a number of expansions across different retail categories, including first-to-market mini majors, luxury and flagship stores and the development of the West Piazza that introduced premium dining and services. The Tower One commercial office and Hotel Chadstone were also developed, both with connectivity to the main mall. And more recently, the expansion of Car Park A, where we added 850 car parking spaces and an expansive rooftop solar panel system. As one of our preeminent precincts, we've continued to upgrade the asset, responding to customer demand and enhancing experiences to meet the expectations of its many visitors, workers and tourists. Right now, we are expanding one of our entertainment and dining areas and redeveloping the existing Chadstone Place office building to accommodate our newest major tenant, Officeworks. Looking a bit further ahead, we have 3 projects with town planning approval, 1 being the Middle Road office project, a fresh food expansion and a further increase in parking capacity. We intend to commence the construction of these projects later this year. Starting with our entertainment and dining expansion, the project represents a $70 million investment in a 5-star Green Star winter garden-style environment that will incorporate a broad array of entertainment and dining offerings, the type you'd expect to find at Crown or in the city. It's a simple proposition really. It means the 1 million-odd customers of the southeast of Melbourne will be able to access these types of attractions much closer to home. The project reflects the continued evolution of Chadstone from predominantly a retail center into an integrated lifestyle destination. This development is expected to be completed this summer. The project is already 100% leased with a mix of high-caliber tenants. We've secured a stable of entertainment offerings, including mini golf, digital and interactive games for all ages, along with tipping our hat to the history of Chadstone, returning bowling to the center after a 7-year absence. There'll be 2 premium dining and bar offerings, both leveraging CBD views and adjacent garden spaces. The cuisines are quite complementary with one providing an elevated modern Australian menu and the other specialized in Asian fusion and cocktails. Lastly, a boutique brew house will bring a strong growth F&B category to the center, something of a somewhat missing element to date. The development introduces a diverse experiential precinct and aims to fully service the southeast of Melbourne and compete with the CBD offers.

The addition of further dining and entertainment options at Chadstone aligns to that growing trend of localization as customers continue to seek out local options, preferably 20 to 30 minutes from home, while still wanting greater comfort and convenience and access to known, reputable and world-class brands and experiences. Similarly, this is reflected in the design of the fresh food experience that Josef will talk to.

The fresh food and dining project is the last part of the retail puzzle for Chadstone. With our existing fresh food area trading quite well today, but the format does not really reflect the current fresh food trends and ignores the opportunity to integrate a complementary dining offer. The plan is to deliver a European-style market hall with a comprehensive range of premium produce and an integrated retail dining offer, all under one roof and, of course, the convenience of 3 major supermarkets for those everyday essentials. The redevelopment will transform Chadstone into a destination for both artisan and everyday needs, giving our customers the ability to spend their entire food and beverage wallet at the center, rather than having to make multiple trips to go to their local supermarkets and then to a stand-alone marketplace like [indiscernible] in South Melbourne or, for example, Harris Farm at Drummoyne, Sydney. The top 2 images on this slide show the fresh food pavilion sitting beneath the grand market roof structure, incorporating a range of European culture and cuisine offerings along with a full Asian grocer. The 2 lower images show the newly refurbished dining precincts that will give customers the option to dine al fresco 365 days a year, while enabling our retailers to perform to their full potential. Importantly, the fresh food and dining precinct will be seamlessly integrated with our next office tower at Chadstone. The next slide has its cross-sectional diagram that explains this. Known as the One Middle Road office, which we intend to deliver simultaneously, these projects will be our first fully integrated mixed-use development. The diagram on screen represents an exemplar of mixed-use integration. Let me explain. Starting from the top, the 9-level office tower will add 2,000 workers each day to the new retail precinct and indeed through the rest of the center. Below the tower is the multi-category space, multi-category retail space, which will, in this case, includes a childcare center, along with medical and wellness facilities. The next layer down is the main retail level, where the fresh food and dining precinct is central. The lowest level in this vertical stack is the basement that will provide the loading services for the entire precinct. Lastly, but importantly, is a direct connection to 5 levels of car parking, providing excellent levels of convenience for each user group. As you can see from the image, the planning between the 2 projects enable seamless access between office and retail spaces, while maintaining an external front door and address, which Truman will share with you in a moment. The projects have been designed to 5-star Green Star standards along with the sustainability focus on the modernization of plant and equipment and the external building materials for the refurbished areas. As Carolyn referred to earlier, we have studied extensively the visitation habits of office workers at Chadstone and across our other assets. It's clear that convenient all-weather access materially increases visitations to the center. In fact, office workers in spaces that are directly or integrated into the center -- office workers visit 7 times per week, whilst workers slightly further away only visit 4x per week. The construction of these projects is expected to be completed within 2 years and combined will further position Chadstone as a mini city in a strategically important market.

Today, Chadstone has approximately 30,000 square meters of existing office space, all of which is either occupied or subject to a binding lease commitment. In other words, we are 100% leased with 0 vacancy. One of the first office buildings constructed at Chadstone, Chadstone Place, is currently undergoing a major refurbishment and is being expanded to 8,000 square meters in preparation for the building to become Officeworks' new national headquarters under a 10-year lease arrangement. We're also pleased to note that Chadstone Place is the first office project in Australia to register for a zero carbon certification under the program developed by the International Living Future Institute. And we're also targeting a 5-star Green Star and a 5.5 star NABERS Energy rating. Not only will Chadstone Place be an industry leader in terms of sustainability, it will set a new benchmark for all projects within the Vicinity development pipeline. The image on the screen is an artist impression of the collaboration hub in the redeveloped Chadstone Place. The creation of this new hub and outdoor terrace area was specifically designed to meet the workplace needs of Officeworks and was fundamental to securing its 10-year lease commitment. Construction works commenced late last year and are expected to be completed in time for Officeworks relocation in mid-2023. Now on to our One Middle Road project. Not surprisingly, our announcement of the Officeworks deal sparked interest from other tenants in the market looking for new workspace at Chadstone and has reinforced our views that there is strong demand for modern metro office buildings that are well serviced by high-quality amenity. With this demand and the changing context of Melbourne cities, our Chadstone One Middle Road project is well positioned to capitalize on emerging post-COVID trends such as work near home rather than work from home. One Middle Road is a new 20,000 square meter office building with large, flexible office floor plates and like Chadstone Place will have high sustainability credentials. The building sits above the existing retail center and will be delivered simultaneously with the fresh food and dining project. Pleasingly, we've already secured our first tenant, and we are currently in the process of formalizing legal documents. We expect the final project approval will be sought in August this year, ahead of construction commencing later this year and a 2-year construction period to follow. This image shows the new entrants into the One Middle Road precinct from the arrival point into Chadstone, with the One Middle Road Tower on the right and the refurbished Chadstone Place building on the left. The construction of this new precinct arrival point will not only provide a distinct address for both office buildings but will also deliver a public front door, a premium arrival experience for all customers and visitors to Chadstone. The bottom images provides an artist's impression of the vision work space within the One Middle Road Tower. The top right image reflects the outdoor sky garden and meeting spaces that will be made available to all building occupants. The top left image illustrates the high-quality interiors proposed for the ground floor lobby space. On completion, we expect this building to be occupied by approximately 2,000 office workers. And for the reasons both Carolyn and Josef referenced earlier, its proximity and amenity will see new workers to -- we'll see these new workers to Chadstone visit the center often.

So what we've discussed so far, so far -- sorry about that -- are the current and near-term plans we have for Chadstone. Equally as exciting, though, are our medium and longer-term opportunities, particularly within the context of Plan Melbourne and the 20-minute cities that I outlined earlier. As you can see on this diagram, Chadstone is proximate to the Monash National Employment and Innovation Cluster, one of the key jobs and innovation precincts in Melbourne's future plan. Chadstone now and into the future will provide the amenity that, that precinct and, more broadly, the Southeastern economic corridor of Melbourne requires and deserves. For Chadstone, this geography is important as this economic corridor has more than 1 million residents and more than 0.5 million jobs today, and these figures are forecast to grow by 30% by the mid-2030s. There are more than 500,000 overseas visits per annum and 39,000 foreign students reside in the area. In fact, Chadstone sits at the heart of the most economically powerful part of suburbia in Australia. So for some time, our future plans at Chadstone have not been purely shopping center focused, but rather, they've aimed to take steps towards a mini city in this burgeoning part of Melbourne. Our recent research has shown that jobs growth and economic performance of the Chadstone precinct has outperformed every other metropolitan and major activity center in Melbourne for the past 20 years with the exception of Box Hill, and this is forecast to continue as part of the growth of Melbourne Southeast.

To support the growth in Southeast Melbourne, including Chadstone, we welcome the government's commitment to investigate new public transport infrastructure. Together with Monash University, Australia's largest university by student numbers, Vicinity has developed a concept for a trackless rapid transit system, or TRT, which will enhance accessibility through the corridor, including the Chadstone from both the East and the West. The concept has since been supported by the federal and state government with bipartisan support, along with a funding commitment towards business case to investigate the TRT system. The TRT would halve the current travel time from Caulfield to Chadstone and reduce the 37-minute drive from the eastern suburb of Rowville by up to 13 minutes. The connectivity to Suburban Rail Loop at the Monash University Clayton SRL hub will also significantly reduce the travel time to Melbourne Airport in peak periods. We also foresee a large portion of students at the 2 Monash University campuses utilizing the TRT to access retail and entertainment experiences or employment at Chadstone. In short, TRT will further enable the government's planned Melbourne objectives that David spoke about earlier and will connect even more members of the community to the shops, experiences and jobs at Chadstone. Now we have a short video to explain the TRT concept in a little more detail. [Presentation]

Future transport network for the southeast of Melbourne, TRT and SRL coming together. The imagery also illustrates how new public transport can be integrated here at Chadstone along the Dandenong Road frontage with a potential TRT station in the center of the roadway at the window to my left. The proposed trackless tram technology is well developed globally and has recently been adopted for the new Brisbane Metro project.

So you've now seen the way that the transport in the Chadstone area will change to meet the 20-minute city of people working closer to home and enjoying all their daily needs closer to home. But in the context of those 2 million more residents in the inner ring of Melbourne that I mentioned earlier, seeking that employment and that amenity close to home, what does that mean for Chadstone itself. In this image taken recently, you can see Chadstone in the context of its immediate surrounds and the CBD beyond. To the left-hand side of the Chadstone site, you can see the first 2 major mixed-use buildings delivered as outlined by Josef earlier, this hotel and the adjacent office building. Those buildings have been delivered within an existing planning framework that enables further expansion of these mixed-use building types along Dandenong Road and where their distance from neighboring sites provides appropriate setbacks. Perhaps not so readily apparent in the image are the existing facilities on or near the Chadstone site, including Holmesglen's extensive training spaces, existing health and aging places, parks and sports facilities and, of course, the major transport routes evident in the image. The opportunity, therefore, and the challenge is to best place Chadstone's future into this densifying and developing middle ring suburb, and the projects that we've outlined earlier are the next step in Chadstone's ongoing evolution.

I'm going to pause and take some questions in just a second, but just to recap, so Chadstone has obviously been a hugely important asset in our portfolio for a long period of time. And today, you've heard a little bit about our current and near-term plans for Chadstone. They include the number of projects that Josef and Truman referred to, including the new and expanded entertainment and dining offer on the city side of the center. The fresh food market hall, a new dining precinct on the center's East, an 8,000 square meter office refurbishment for leading corporate office works and the new 20,000 square office building with the first tenant recently secured. The TRT transport solution brings even more people to Chadstone's doors. And this year, we received bipartisan government support to fund the business case for this project, which means it's no longer solely a Chadstone aspiration to connect public transport to Chadstone, but rather a project with which both state and federal governments have engaged as a means of supporting the further growth of Melbourne. It would be easy to continue to think about Chadstone as simply a retail powerhouse, which of course it is. But what we hope we've outlined today is that increasingly, Chadstone's future is different and more diverse than its past. The current projects that we've referred to cement Chadstone's position as an activity center in Melbourne's East. Beyond the current projects, there are many more opportunities. And for the reasons that David, Josef and Corrine all referred to, it's not hard to imagine the additional uses which we can accommodate here at Chadstone and that Chadstone will continue to grow over time, realizing the full potential of the 31 hectares of land, which we own in around the center. I will pause there now and open up to questions.

Thanks for having us today in a really nice hotel and throw the really good presentation. Just a quick one on the developments at the fresh food. The yield is sort of around the overrated 5 that is one of open areas we can't [indiscernible] the normal rental area in that fresh food dine precinct?

We measure our returns in a variety of ways. We're particularly focused on the long-term IRR that comes off each of these projects. I think what you see in the fresh food is that we're actually repurposing a lot of existing space in the center, so there's not the incremental additional area that you might see in a traditional expansion project.

Okay. And then on the office redevelopment with Officeworks yield and IRR [ tweskinny ], I would have thought it be a bit higher given it's just a refurb and you'd probably get a good rental uplift on it. I just want to understand why it looks a bit low.

Look, I think, again, we'll say that's existing space, which we're repurposing, we've obviously inbuilt some very significant sustainability credentials into that building. And again, it's fully derisked. It's 100% leased before we've entered into construction. So we're very happy with the risk and return parameters for that project.

And then just finally...

On that particular building or we had -- we used the underlying income base from that building. So we already had a high underlying income [indiscernible] for One Middle Road. It's pretty space. [indiscernible]

Yes, that makes sense. And then finally, cost of funding has gone up along the sector. You guys have a good balance sheet, good hedging. Incrementally, like you're looking to circa -- at least 5 -- if you go forward 1 year, how does it stack up on accretion? Or how do you look at funding with the debt? And would you bring in capital partners for some of these projects? I know it's a big question, but what's your thoughts on capital funding and cost of debt?

Yes. Look, when I think our funding of our pipeline generally is driven by a couple of key principles we have touched on them as part of your question. One is we want to maintain a completely flexible balance sheet. And you've seen us do that with the way we've positioned the balance sheet over the last number of years. We're also keen to maintain our distribution policy. So we've got our range of where we want our gearing to see. And typically, we expect to see with the pipeline sitting at the bottom end of that range. On some of the bigger projects where we don't have an existing co-owner, obviously, at Chadstone, we have a big co-owner in Gandel Group. But on some of the solely owned assets, bringing in a capital partner is definitely part of that solution. We'll talk about that a bit later when we get to Box Hill and Buranda.

Thanks. Lauren Berry, Morgan Stanley. Just Carolyn, a question on construction costs. Obviously, they've been going up pretty significantly in the last 12 months. Can you just talk about how you're assessing for that and your feasibilities and what you've got baked in?

Yes. So undoubtedly, construction costs have seen the impacts of supply chain uncertainty that's come about as part of the pandemic and, generally, the level of activity in the economy. I think, for us, because we're developing on land that we already own, we're not buying land and putting it on balance sheet and incurring an additional expense. We actually have significantly more flexibility as to when we bring our projects online. We are robustly updating the feasibilities for all our projects to take account of those construction cost impacts, and that includes both a higher-than-normal escalation rate on construction costs, and it also includes additional contingency. And again, we go through a very robust process with tendering the contract before we go out. And if the price parameters don't come in, in line with the feasibility, then that's caused to pause and to rethink a project. Fortunately, we haven't had that position so far, which I think demonstrates the robustness with which the whole team is approaching that feasibility analysis upfront.

Lou Pirenc from Jarden. Two questions. Just a follow-up on previous questions. The 5% -- or 5% to 6% yield on cost, is that enough in this environment? I mean we've seen a number of companies recently adjust their return requirements based on the quickly rising cost of debt. So can you talk through it? Have you changed it? Have you -- will you change it if necessary?

Well, I think we've set those hurdle rates as targets. And as we've said, we look at each project and each asset on a case-by-case basis, depending on the risk and return associated with what we're contemplating. So there'll be some cases where we think it's appropriate to adjust up. There'll be other places where we might adjust down. I mean places like Chadstone, which are fortress-style assets, which we have a lot of confidence in, how we approach those might be different than elsewhere.

And then...

Do you want to add something?

I'll just probably add that all of these projects we're looking at on an IRR basis. So we typically got the discount rate and then do a risk-adjusted return based on the probability rating of the success of the development. So Chadstone will be a lot lower in terms of the increment on IRR versus the discount rate that we have for Chadstone versus, say, a Box Hill, which is a new build, which is a demolition of new build. So we can get through into a little more detail that when we come into -- but the cash-on-cash yield, probably the couple of points, firstly, it's a stabilized yield that we typically do a stabilization period of 2 to 3 years to build into cash yield in the range. But we fundamentally are also looking really closely at the IRR.

Yes. And then the IRR you have adjusted the potential exit cap rate at the end?

We adjust every 6 months because we adjust in the line with the valuations on our properties. And if they're adjusted, then we adjust the risk/return in accordance with the valuation of the properties.

Great. And then secondly, you're clearly quite passionate about the structural change and growth, yet you're really only spending $300 million, $400 million a year in the next few years. Is your ambition to kind of accelerate that to make it a more meaningful part of, I guess, the future growth? Or you just prefer to do this really slowly?

Well, I think part of the timing is driven by the nature of the very material approvals that we're obtaining in a number of places, and you'll hear about it more as we work through some of the assets this morning. We're talking about whole of site master plan-driven DA approval. So I think if we could get some of our local and state governments to move a bit quicker, we would be delighted. But where we're asking for 300,000 square meters of space. We completely get that they want to do things like transport studies and understand how all the other infrastructure fits with what we want to do. So yes, we would love to move more quickly. And if you can do anything about that with our friends at government, we would really appreciate it.

Just got a question online from Caleb Wheatley at Macquarie Group. How should investors think about the development spend beginning to translate into benefits for the existing portfolio in near term? It appears that a lot of the key projects completion in FY '26 and beyond. Should we expect certain stages to complete earlier and begin to see the benefit prior to FY '26?

I might tackle that by saying in the short term there's a number of retail projects and the pipeline is definitely skewed at the front end towards a number of those larger retail projects, which, again, we'll talk further to this morning. The bigger projects in the mixed-use space, they do take longer to deliver, both for the approval reason that we've just discussed and also because they're typically really been building. So if we're building 42 levels at Box Hill, it takes us 2 full years to do that once we get into construction. So the pipeline and the way we're forecasting ultimate that NPI equation will reflect that -- when we come to our results in -- full year results in August, I'm sure that we can provide further detail in relation to that.

Grant McCasker, UBS. Just 2 questions. Sort of following on from that question. You talked about a stabilized yield. Sometimes that can take up to 3 years to get that. How long do you expect to get that stabilized yield across these developments you're talking to?

Yes. We're measuring stabilized yields all at year 3. So we're assuming 2 years effectively to get through to that period. And that's reasonably consistent across both the retail and the mixed use.

Great. And then secondly, on Chadstone in particular, you've mentioned a lot of things about working from home, how people live, how people shop. What's changed in the last 3 years in regards to this scheme that you've sort of adjusted for?

Look, I think we would say the fundamentals of what we've been talking about for Chadstone haven't really changed at all. The pandemic has accelerated some parts of that change. And I think we've seen that play out in office attendant rates, whether they're in CBD locations or in suburban locations. But the idea that people are much more time conscious, and that's translating to how much time do they want to spend commuting to the CBD as opposed to coming to an office that is within 20 or 30 minutes of time. We're definitely seeing a lot of movement in that space. And as Truman referred to, the interest that we have beyond Officeworks for new office accommodation at Chadstone is a combination of 2 things: convenience and the time of how long it takes to get to the place; and two, really high amenity. So without being too disparaging to my friends who have offices in suburbs that don't have a lot of amenity in them, call it the industrial office parks of the past, we see those assets under challenge. And Chadstone and places like Box Hill being a beneficiary of that change.

[ Nebhani ] from Citi. I've got 1 question. It's a bit of a continuation of the previous questions, but it's just in your feasibility specifically around office and thinking about the market generally. I know these projects have specific attractions to bringing in office clients. But how do you see the overall market moving? And is it one where the overall market is growing and you see your assets growing into that? Or do you see it more as attracting away from other less desirable locations.

Both those things in short. We're saying the suburbs of Melbourne, suburbs of Sydney and the suburbs of Brisbane will all be beneficiaries of that ongoing population growth that we've talked to, which is a really large number over the next number of years; and two, notwithstanding that the pie is bigger and there's more to share around, we see that attraction of these locations, given that convenience factor that we referred to.

Could I just maybe add to Carolyn's answer? We've done quite a lot of study through the pandemic of looking backwards prior to the pandemic, what was the growth of professional services roles in the Australian economy and where were they focused. And year-on-year, that growth is almost a dead straight line. And whilst the pandemic and -- you can call it work from home or you could call it live at work, it's one or the other, and borrowing much more intelligent person these comment there. That localization of jobs, even if it takes out for a period of time, let's say, an increase in work from home from pre pandemic 5% to post normalization of pandemic number, 15%, that's really only 2 years of that straight-line growth effectively of professional services. So it doesn't rely on us saying, "Oh well, nobody wants to work in the CBD anymore. They're all coming to the suburbs, it just says of that continuing growth in professional services, a significant chunk of it, the millennials that Corrine have talked about, the younger generations coming through. They don't want to get all the way into the city for 45 minutes to work and then 45 minutes to come home. They want to work near where they live, and that's the demand growth that we're working into and that we're really seeing play out in a number of places, particularly at Chadstone at the minute.

Thank you, and thank you for all of those questions. I will call it there and say that we're on the road together today. So there's an opportunity to talk further to the team as we do that. I'm now going to ask Truman to take us through some plans that we have for Victoria Gardens in Richmond.

Thank you. Victoria Gardens is a major mixed-use opportunity for Vicinity. Located just 3.5 kilometers from Melbourne CBD in Richmond, the trade area is dominated by young, highly affluent lifestyle-focused renters. This area was gentrified and densified over the past 20 years with lots of major residential development already completed in the surrounding areas. In particular, the primary trade area is heavily populated by Metrotechs. We are an ideal customer for the build-to-rent residential model. Interestingly, 52% of dwellings in the surrounding catchment area are rented, compared to the Melbourne average of just 29%, which is another positive market indicator for the potential of build to rent in this location. Victoria Garden presents us with a tremendous opportunity to utilize the adjacent land holdings to reshape the retail offering and to capitalize on air rights for mixed-use development. In May 2021, we lodged the town planning application with the Victorian State Government to redevelop the southernmost part of the site. The proposed development utilizes a significant 1.5 hectares of additional land we co-own adjacent to the center. Today, we are pleased with the progress of our planning application and continue to work closely with the state government to deliver a positive contribution to the precinct, to the community and to our customers. The mixed-use development will incorporate multiple residential towers located across the top of a commercial level and a generous public -- at ground level, all activated by outward-facing retail. The overall project will be adding an incremental 7,000 square meters of retail, 3,500 square meters of office workspace and more than 800 new residential dwellings that will supply a residence community of over 1,300 people who will be living literally on top of the center. With a more vibrant retail offering, we'll be creating a revitalized and attractive destination for our customers that will not only increase our market share, but also create a real point of difference for all residents living above the center. And as you'll see on the site tour later today, Victoria Gardens as it is today is an inward-focused traditional shopping center. We see a fantastic opportunity to open this up and connect the retail to the street, with the combination of OpenEdge retail laneways that lead into a new fresh food market hall and other contemporary service offerings. Given the scale of the project, it's proposed to be delivered in stages. The first stage contemplates 430 apartments and approximately 5,600 square meters of the fresh food market hall and laneway retail spaces. We expect to obtain town planning approval in early 2023. And we are in the process of working up a business case to support a residential build-to-rent proposition. It is also worth highlighting that our [indiscernible] properties is very experienced in delivering both build-to-sell and build-to-rent residential products and has already completed over 1,800 dwellings in the precinct. Once again, this development opportunity is in a highly attractive location with strong public transport connections. The demographics comprises of young affluent renters in close proximity to the Melbourne CBD, which gives us great confidence in the investment case and the significant mixed-use project.

And this is a quick snapshot of the intended look and feel of the new fresh food market hall that celebrates the integration of cultures through food experience and the site's heritage. This is where the theater and experience of local produce along with food purveyors will be shown on a daily basis to the local community of residents, workers and shoppers.

For those that appreciate the feeder of food, you can see how experience led the design of this precinct is, essentially turning experience into entertainment. Sustainability, health and localization converge in the selection of retail, with an emphasis on local and artisan vendors while taking inspiration from food cultures representative of the diversity of the area to create a familiar yet differentiated food and sensory experience.

Thanks, Corrine. Before I pause for questions, I will say that there is morning tea at the back of the room. Troy tells me he's running a tight ship. There's no break, but you are more than welcome to help yourselves to refreshments and including tea and coffee in the lobby. So recapping what the guys have said, Victoria Gardens is obviously really different to Chadstone in a whole variety of ways. But a couple of things that they share in common are: one, their locations, great locations in suburban Melbourne; and two, the incredibly powerful demographics of their trade areas. And at Victoria Gardens that enables us to combine that retail offer, a great retail offering, including the new fresh food hall, with a residential product that we know will have appeal to the young and really affluent workers who want to live and work and play very close to the Melbourne CBD. And we're confident about our ability to execute this project, having had Victoria's Planning Minister accept that town planning application into its fast-track facilitation approval process. So that's an exciting project, and we -- as I said, we're visiting Victoria Gardens this afternoon. Again, pausing and happy to take questions or enable you to get up and grab a cup of tea.

I think in the front of the presser, you said yield on cost of build rents 4.5% to 5%. But given Melbourne you own the land, it would be probably at the higher end of that range because you already own the land and is cheaper than Sydney pricing.

So Victoria Gardens, that's a great question. Victoria Gardens is one of the few exceptions where we've actually acquired some additional land beside the center in order to undertake both the retail expansion and the residential development over the top. Most of the cases we're referring to today, we haven't had to do that, but when -- we'll show you those parcels this afternoon.

And some of your competitors put on the yield on cost of fees they get in that number. Is that just the NOI yield on cost? Is the rental yield on cost without any management fees or third-party fees in that number? Is it pure NII yield on cost?

Yes. So the build-to-rent business model is very much in development, but still not quite resolved. In this case, as Truman referred to, we actually have a partner on that site, Salter. They have a lot of experience in residential build-to-sell and build-to-rent, and we're working through exactly how we're going to manage that asset.

And just finally, on the build-to-rent, more broadly, across the business, would you have like a name for it like some of your competitors have names like a brand? Or is it more location asset-by-asset type thing for you guys?

The answer is we don't know yet, but that's definitely part of what we're considering as part of the business case for how we realize build-to-rent across the portfolio. I feel like I'm standing in between you and a hot cup of tea.

Nothing online.

Okay. Well, we might keep moving. I am now going to take you back to David Waldren who will outline why we see plans we have at Box Hill Central as one of the further high-value opportunities that we have.

It's me again. So I won't be the least surprised if there's a stampede now for the tea and coffee. But anyway, let's get a bit of an overview of Box Hill Central. And I will point out, if you do choose to pop over for a snack or cup of tea or coffee on your way, the view out the window there is of Box Hill Central. And all you need to do is join the big building on the right to the big building on the left and then add a bit, and that's where we are, and that's what we're talking about. Box Hill Central, as its name suggests, is located at the very heart of the Box Hill activity center in Melbourne's eastern suburbs. Just over there. The center is proximate to existing major health and education facilities, and it's exceptionally well serviced by rail, bus and tram transport connectivity. The Suburban Rail Loop, that I mentioned earlier, will further extend Box Hill's connections to suburban Melbourne, including to Melbourne Airport. And all this transport infrastructure is key to supporting the level of activity around Box Hill today and critically into the future. With forecast growth of 3% to 5% per annum, Box Hill's population is expected to grow at around double the pace of Greater Melbourne. The catchment has concentration of high-income, highly-educated and career-focused families who have a high propensity to spend on retail. Total employment in Box Hill is double the average of other metropolitan activity centers around Melbourne, and it's expected to grow by more than 20% this decade. Finally, to give you an order of magnitude for visitation, Box Hill Central attracted 23 million visits per year pre-COVID. This is relative to around 24 million annual visits at Chadstone. So clearly, these are 2 very popular places. Expanding a little on the outlook for Box Hill. Under Plan Melbourne, the Victorian government is encouraging further densification in the Greater Box Hill area to accommodate that future population growth that I've talked about and it's identified the center of Box Hill as a key metropolitan activity center. Box Hill is already, as I've said, an established office and worker location and is home to tertiary education institutions and major public and private health infrastructure. One of the key advantages for Vicinity is the fact that the suburb's major train station and bus interchange are literally located on our site while the tram route runs almost alongside it on White Horse Road. Adding to this, the first stage of the Suburban Rail Loop will have a station entrance at Box Hill right at the very entrance to our center. And that will solidify our center's status as the major commuter hub for Melbourne's eastern suburbs. Box Hill is already a mini city. But with the expected growth in population, and with government policy and investment driving further infrastructure and accessibility, the asset is primed for redevelopment and further NPI growth as we consolidate and strengthen the retail. To give you a better sense of Box Hill in the context of Greater Melbourne, we'll play a very short video. [Presentation]

What might not have been immediately apparent to you in that video is that those swaths where one image changed to the other is a photograph of today's condition, transferring to the future envisaged condition in exactly the same spot. I'll now hand over to Truman to just discuss our master planning and the mixed-use opportunities of the site.

Thanks, David. Our Box Hill footprint currently spans 5.5 hectares at the very heart of an important activity center. The existing Center Holdings, [indiscernible] Corridor, comprising of a Box Hill South side holding 23,000 square meters of retail and our Box Hill North side that holds just under 15,000 square meters of retail. Our master plan strategy for Box Hill contemplates a consolidation of the core retail into one center being Box Hill South. Then utilizing the Box Hill North side to create 280,000 square meters of high-density mixed-use development with the flexibility to accommodate residential, office and hotel, all activated by street-level retail and other commercial uses. On this slide, you can see the Box Hill South retail center in the bronze outline and the proposed mixed use development of the Box Hill North site towards the top of the page, in the -- outlined in blue. In May this year, we successfully received town planning approval for the first 2 of a potential 6 master plan towers for the Box Hill North side. The first 2 towers are identified as lot 4 and lot 5 on the above slide and on completion will have a combined value of over $760 million. The residential tower, which will be the tallest building outside Melbourne CBD, is a 48-level building with 366 apartments and above a 7,000 square meter commercial and retail podium and ground play. At this stage, we envisage a build-to-rent or multifamily residential model for this project, and we are advancing our business case for this delivery approach, which may include partnering with an experienced build-to-rent group in the near future. Importantly, Box Hill has an established residential apartment market. And considering its location as a strategic corridor of Plan Melbourne, plus the expected population growth, we expect the strategic mix of residential, office, retail is the highest and best use for our Box Hill North landholdings. And of course, from a sustainability perspective, the residential tower will be targeting a 4-star Green Star. The second tower, identified as Lot 4 previously, is a 25-level, 42,000 square meter A-grade office building with large office floor plates of over 1,900 square meters. The vision for this tower has been simple, to bring a modern CBD-like office product to Box Hill, giving office workers city amenities, but bringing them closer to home and without the commute time. Like other projects in our development pipeline, we are planning for the Box Hill North office tower to reflect high sustainability credentials, with the project targeting a 5-star Green Star and a 5.5 star NABERS Energy rating. This artist's impression illustrates the new expansive public realm and the Spanish steps design concept that will connect the first 2 towers together then back towards the existing train station, our Box Hill South retail center and, of course, the proposed Suburban Rail Loop station scheduled for completion in 2035.

Linking this back to the megatrends that we spoke to earlier, Box Hill is just one of the middle-ring suburbs expected to attract a high portion of overseas migration that will drive population growth. In many ways, Box Hill will be another CBD in Greater Melbourne. We know that CBDs attract a younger population seeking access to education, new job opportunities and the social benefits of dense and diverse communities. We established earlier the importance of health and wellness in the experience of both millennials today and to future generations. The public realm space here at Box Hill will be critical to fostering health and wellness as a space for the community and a platform for cultural celebrations, outdoor activity and social connectivity.

Prior to commencing the major mixed-use development, which Truman has referred to, we're currently in the process of consolidating the retail users which span both of our existing Box Hill centers into one high-performing retail center in the Box Hill South site. This includes repositioning the retail offer as a transit-based offer leveraging the high-commuter traffic that the center enjoys today and will enjoy into the future including with SRL landing at its doorstep. We're in the process of relocating Coles from Box Hill North into Box Hill South and it will open up its stores in its new location later this year. In turn, all of that enables us to demolish the existing Box Hill North building and will commence development of the first 2 mixed-use towers for which approvals have been obtained. A further project which is currently under construction and which you'll see this afternoon is the new high-quality co-working space, which we're developing as part of the Box Hill South site. We've entered into a new long-term 10-year lease with leading co-working operator, Hub Australia, and we expect them to open in summer this year also. So looking at the images and taking on both the comments that various team members have made, what you'll see is that we have in mind for Box Hill a complete transformation of this asset from 2 relatively traditional retail centers into a fresh food dining and convenience offer as well as creating a new mixed-use precinct capable of supporting 280,000 square meters of new development area. And with DAs approved for the first 2 towers, our next steps include resolving a partnering position for what are 2 very significant buildings in Box Hill. Again, we will pause there and open for questions.

Just on the yield you've quoted for Box Hill South, does that include the loss of income from Box Hill North retail as well?

Yes, it does.

Okay, cool. And can you comment on whether you would want to keep long-term ownership of the build-to-rent building or whether would it be more in that JV structure?

Yes. Look, I think, as I said, the business case for our build-to-rent projects is still under development, albeit at a very advanced stage. We do see the benefit of build-to-rent as the complementary nature of that use consistent with the flexibility that enables us to retain over the retail asset over the long term and also the fact that it's another form of recurring income, which is very similar to what we do as a landlord of a retail business. So not conclusive, but definitely trending in that direction.

How the team has set up the authority approvals? Is each of the buildings sit on their own essentially allotment? So it gives multiple flexibility that we could mix and match those buildings into the future, whether we wanted to keep them, JV them or sell them.

We've got Grant McCasker from UBS. I think you may have answered it, but if we look across all assets, you've got all different JV partners or different arrangements. Is Box Hill an opportunity to sort of reset that and sort of get the right partner, the right structure for something across the entire business?

Yes, that's essentially what we're working throughout the next 12 months. From our point of view, Grant, it would be -- we think Box Hills in such demand would be relatively easy just to go and do it an individual partnership deal with an individual partner at the moment. What we're looking for with Box Hill is potentially some network advantage of partnering at Box Hill that may spin off other opportunities for the group more broadly.

This is from Ashton Reid from Martin Currie. How do you see build-to-rent model evolving, different capital partners at each asset or a single partner? And how does that significantly need for scale on build-to-rent management platform?

Thanks, Ashton. That's really what we're working through over the next 12 months. So all those items are still under assessment at the moment. It may be a single partner or it may be a partnership opportunity moving forward. Obviously, at the moment, and the team went through it on Victoria Gardens, we have an inbuilt joint venture partner that is our build -- that brings the build-to-rent expertise or brings the residential and build-to-rent expertise for that area. And that's obviously the first one that we anticipate will hit the market and there's good testing platform for us. But over the next 12 months, we hope to work through both Box Hill and the team also speak about Buranda shortly.

Just another one from Simon Chan at Morgan Stanley. Can you please clarify timing of Box Hill North resi and office building when kickoff and completion expected?

So we might just take you back to slide it rather for those of you who are following along a home in the book. Actually, we don't have a program slide on there. We've got it into FY '25.

Thanks, Carolyn. And another one from Caleb Wheatley from Macquarie Group. How is VCX viewing its ability to fund the overall development pipeline? Capital partnering has been flagged, but could VCX consider other options to fund the pipeline, such as lowering the payout ratio.

Maybe I'll pick that up. The distribution payout ratio, just to remind everybody, is 95% to 100% of AFFO alongside the strong balance sheet policy, it's an extremely strong commitment of the business. So we'll look for alternative levers, as Peter has outlined, to fund projects, if required. Just on that point, the specific gearing ratio that we will be targeting will also be at the lower end of that 25% to 35% range. So if you run the mathematics, a combination of levers other than debt, other than reduction of the AFFO payout ratio will be used if required to maintain those both at the current levels.

Thanks, Grant. And just 1 last one from Alexander Prineas. Can you please comment on your base case and contingency assumptions for population growth, recovery and tourism and a further recovery in workers returning to offices? Could the Vicinity pipeline increase or decrease, if recovery in those areas turn out to be better or worse than expected?

That's a really good question. And we wish we had a super definitive answer. But I guess what we're focusing on today are what we see some inevitable trends in the way our cities are going to continue to evolve and grow. So whether working from home and working from the office and what those commute times are varies by 5% or 10% to a large extent across our assets for the sort of opportunities we're talking about and the long-term view we're taking. We don't see the fundamentals of those directions actually changing.

I'll probably just add just quickly to that. We've spent an inordinate amount of time master planning our assets so that they could be broken up and phased to meet market demand on land that we already own. And so we know our forecast today is not going to be 100% accurate, it never is in development world, but essentially, what we're trying to do is make demand in the market and break up the phases of the development that we can do that in a practical manner.

Could I Just add to that if that's all right. From a master planning point of view, that Peter has talked about and we've talked about in this presentation, we're effectively building an opportunity platform from which we can realize mixed-use project. What we're very focused on in doing that is attempting wherever possible to be largely agnostic to the building use in the long term in that master plan, in another word, to give us the flexibility to say, we might have thought out of, I don't know, 19 towers at Bankstown that we'll talk about in a little while. A certain proportion of those are residential and another proportion is office. But we're not locked to that. We have the ability over time to meet the market as we see fit in that location as that place evolves. And that evolution of cities is quite clearly something that's not perfect and it's not linear. So building that platform of opportunity and with flexibility is a key driver of what we've been on about.

Can I just -- and it's little bit linked to this, and apologies if I've missed it, but you're adding listening to these 3 projects now quite a bit of office space, you're spending time with agents in Melbourne CBD, new office space is the last thing no one needs. How are you thinking about precommitments before you actually start, and what is maybe for everything that is currently under construction, what is your precommitter?

Yes. So we're definitely keen on derisking all of our projects, whether it's office, retail or anything else. And in the office space for the vast majority of projects, you should expect to adopt a very healthy precommitment level. The exception to that in the current day would be Chadstone, I think, because we have an established office market here. We know that there's demand. Part of the high-quality problem or challenge and opportunity we have here is that bringing demand or bringing office supply online in order to match that demand. We have a building that's about to go into construction, and there's a tenant that's already come along before we've started building to say, hey, I'll take a decent portion of that. So we want to be in locations where there's a very predictable amount of demand, ready to take that. There are other locations where we know that we're doing something that's matching to David's point, coming off that platform of where we're seeing it over the longer term, and we'll be a little bit more cautious in those locations.

Just follow on from Lou, if you look at the office, obviously, suburban offers different demand drivers and the CBD into the new supply and suburban is a different proposition on rents and things like that. But would you ever consider stabilizing the assets and then sell them to like a suburban office player or you just prefer the rental income that you get out of the business?

Look, yes, I think, I mean the fundamentals of why we've gone down the mixed-use track because we love the complementarity between the retail combined with another use. So setting up an office building, entering into typically what are really long-term leases, 10 years with fixed escalation. We like that model, and we see that -- not to say that we're not ever going to sell anything. But the idea is that we're setting these things up to own over the long term, and that's how we measure our returns.

And just I want to add to that. One of the advantage of the strong balance sheet is there's no incentive or motivation to sell. So if an asset's performing, and/or if it has high strategic relevance in the medium to long term, we have no requirement unlike perhaps some of our competitors to delever. And I think this is the virtue of both the 25% gearing and also, frankly, driving towards the equity raise we did 2 years ago.

Mixed-use strategy you think has a lot of appeal, I guess, the driver to the retail. Is it also without being negative admission that there is too much retail space and a lot of retail, you cannot develop like used to and get that demand that you need to go in mixed use in order to get the best potential out of your existing sites is rather than have it all retail like it used to be? Because the demographics and structural changes in the industry is just an admission that you have to have mixed use of these big retail precincts to make them stack up these days. Chadstone aside is a mega house for everything else.

Well, I think you should think about the other assets that we're talking today in the same spirit that you think about Chadstone because really what we're talking about is changes that we're seeing in the way people want to live, the way they want to work and what they want to do with their leisure time. And that idea that our cities are densifying, they're more congested and that people want all that convenience and amenity closer to home means there's really large land parcels that we have right throughout suburban Melbourne, Sydney and Brisbane. The idea that you can get there relatively quickly and you can find all of those things co-located in 1 place, that's really what our mixed-use agenda is on about. And that's, again, a pattern that we saw prepandemic and something that we've seen accelerating during the pandemic and beyond.

Just with one. Firstly, retail where retail-led mix used develop, but that's how we term it. But retail essentially works for the first 3 levels. What we're talking about today, Truman was going through a 48-storey building that's being built outside of the CBD of Melbourne so it's really maximizing the value of air space above the retail.

Question at the back here from [indiscernible].

Just on your office components. So how does the conversation start with half Australia at Box Hill Central North -- Central South and office works at Chadstone place? How did you gauge your negotiating power and other tenants who approached you? And perhaps my follow-up questions are, how long are these leases and are there annual escalators or what happened upon the ending of the lease?

For sure. Yes, they're both 10-year leases, and they both have this fixed escalation rather. And why they're interested in Chadstone in the case of Officeworks in Hub Australia in the case of Box Hill because of the amenity that is in the retail center. So if we were to say if I was to venture to say Officeworks to current home is just over [indiscernible] in a stand-alone site, it's struggling to get its staff back in the office. The idea that its staff find coming here as an exciting place to be going to the gym before work, having lunch with friends, catching up with the movies on a Friday night. All of those things are part of the reasons that Officeworks has been attracted. And they've been among friends here, reasonably candid with us in saying that they are key contributors to their decisions. And the same with Hub Australia, they can get another site not anywhere in Box Hill, but there's plenty of other places where they could go, and they've chosen to come into the retail center.

Good morning. Winston Sammut at Charter Hall. Just in terms of this mixed-use strategy, do you have a potential target in mind in terms of how you want to see the business mix, say, in 5 years' time or 10 years' time in terms of what's pure retail and what is mixed development. Do you have a target?

I can see the [indiscernible].

Yes. Winston, I'll pick that up. Thanks. It's a great question. Right now, the mix is about 90% retail rental income and 10% other. The target is that, which I think will be hit well and truly, is within 10 years, that moves to 80/20. So 20% from nonretail rental income, of which a significant majority will be income from mixed-use and also funds management.

I might just pause there. I know that we're on the road and there's opportunities for further questions. I'm keen to hand you over to Mark Kelley, who's going to take you through some super exciting plans that we have for Chatswood Chase in Sydney, which was one of our very large retail redevelopment projects and also combined mixed use.

Thanks, Carolyn, and good morning. Chatswood Chase is located in the Lower North Shore just 8 kilometers from Sydney's Central Business District in one of, if not, the most affluent catchments in Australia. Due to the proximity of the Sydney CBD the center's inner city location and the extensive provision of bus, rail and metro transport, Chatswood is a well-established commercial precinct with an ever-expanding high-density residential market. 90% of the trade area are residents that are employed in white collar professions, which is above the Sydney average of 75% with high and often single income households. This means that the catchment remains far more resilient during economic cycles, but equally, the catchment demands a high level of amenity. The center has always succeeded in its positioning at the premium end of the market, and the proposed developments of Chatswood Chase enable us to capitalize on that premium positioning even further. The planned redevelopment of Chatswood Chase comprises 2 key stages. The first is a lower ground level project commencing later this year, and the main redevelopment will commence in late 2023. The lower ground level at Chatswood Chase currently caters for a variety of fresh food, service and casual dining tenants anchored by Cole's and Kmart and is a considerable driver of customer traffic to the center. The center last underwent redevelopment 13 years ago, and while it still presents well, opportunity exists to deliver a premium fresh food precinct and enhanced dine-in options. And there aligns with the demands of our customer assist the center in preserving its premium position within the catchment. The repositioned fresh food market is bookended by a high-performing Coles supermarket and the Kmart. Our redevelopment plans include expansion of the fresh food offer by creating a wider mall, improving sightlines and connectivity and creating a variety of store formats, replicating a traditional fresh food market environment. It shares some of its aims with what Josef spoke about earlier in respect of our plans for Chadstone and Victoria Gardens. The project repositions the Senate's fresh food offer and comprises 40 retailers, including a combination of new and existing operators, anchored by a large gourmet of fresh food operator, who is a new addition to the center. The center is currently underway in dining options. So there is a great opportunity to elevate the dining court with a mix of premium fast service dining operators, which will complement the iconic shopping center experience that is to be delivered as part of the main redevelopment project. The proposed major redevelopment of Chatswood Chase is something we've been working on for some time. Whilst COVID gave us cause to pause, we see the redevelopment of Chatswood Chase as one of our most exciting large-scale retail redevelopment opportunities. We are now in the detailed planning phase of this project, which contemplates the introduction of a new luxury offer, reinforcing the center's Sydney -- sorry, reinforcing the center's Northern Sydney premier retail destination. With Vicinity being the leading landlord for luxury in Australia, we are well advanced in our discussions with the leading luxury groups, and we anticipate being in a position to make some exciting tenant announcements later this year. The new luxury precinct will be complemented by a strong mix of Australian and international designers, which will create a unique retail offering specifically tailored towards our customer. Agreements are in place with our existing major tenants, which is a key enabler for the major redevelopment to proceed, and we anticipate being in a position to make those announcements later this year. It also reconfigures the layout and introduces new [indiscernible] features to a number of the malls. The Victoria Street entrance receives a major upgrade as part of the project, which effectively becomes the new front door of the center. Consistent with Vicinity's commitment to sustainability, both the retail and commercial components of the main redevelopment project are targeting the 5-star Green Star rating for design and as build and you'll hear more from Truman shortly in relation to the office project.

Contrary to what many expected during COVID when international board is closed, the luxury category has enjoyed significant growth over the past 2 years, contributing to the strong sales performance of our centers and their NPI. For residents in the Chatswood trade area, there is both a physical and psychological barrier created by the harbor, creating a desire to stay on the Northern shore whenever possible, be it for work, entertainment and most definitely their shopping needs. The major luxury houses know this and recognize the market potential in the center, as evidenced by the success of Louis Vuitton's pop-up at the center over the past 2 years. Despite hard and shadow lockdowns during the time that the pop-ups were open and operating, sales for the pop-up exceeded expectations, and resulted had an influx in inquiries from customers asking if the store would be made permanent, along with increased requests for other luxury brands. And I have just completely lost my space, often that happens. Given the demand from these luxury brands, we know that there is at least 20 to 30 brands that we can accommodate in that Tier 1 to Tier 2 luxury tiering. We know that it's also not just the differentiated experience of these luxury brands and their quality that brings this demand. It's their ability to provide a customized and immersive omnichannel retail experience that drives their performance and demand from this discerning customer. We know that this presents a compelling value proposition for luxury brands to join a precinct that will create a destination in and of itself.

The major development of Chatswood Chase includes 8,500 square meters of new workspace at the rooftop level of the existing center. The proposed Office Village provides a great example of how complementary non-retail projects can be successfully integrated into our existing centers. Chatswood is already a well-established commercial precinct and with limited new office supply coming on to the market since the mid-1990s, we expect strong demand from occupiers who are seeking a contemporary workplace, and whose workers will enjoy direct access to the amenity within the center. The image here illustrates planned open air rooftop laneway and informal meeting spaces that will be made available to all tenants to enjoy. The interiors reflect the modern natural light field unique workspace, which we believe will have wide appeal to the occupier market. And we'll also deliver approximately 850 new workers into the center Monday to Friday.

So beyond what we've presented today, what's next for Chatswood Chase? In Chatswood, the planning regime is undergoing change. The planning controls are being revised by our council led change to the [ LEP ] and these changes essentially locking an acknowledgment that the Chatswood CBD is a place for significant growth. The change, therefore, provides for much taller building envelopes as a matter of right. By way of example, the building envelope for our site will more than double in height to 90 meters. We've masterplanned for that future as part of the near-term projects that Mark, Corrine and Truman have outlined. The diagram you can see on the screen is a conceptual framework for that future opportunity. On the right-hand side of the diagram is the Havilah Street building. And on the left-hand side is the Malvern Avenue building. When the new planning controls are in place, the sites shown on this slide will provide for heights and volumes that readily lend themselves to city-like uses. And through our masterplanning through the whole center, these mixed-use sites will directly link into our upgraded center to drive the retail uplift benefits that we've talked about earlier today.

Well, as you've heard, Chatswood Chase is somewhat of a unique asset, considerably because of the high concentration of wealth which it enjoys in its main trade area. And really, to summarize what Mark has outlined, think about the luxury mall at Chadstone, we should be seeing this afternoon. Think about it being replicated and transported to Chatswood Chase in Sydney because that's very close to what we're actually intending to do with the project with some complementary dining and fresh food elements going with it. The strong performance of the luxury category, both before, during and after pandemic as Corrine referenced and the enthusiasm with which the luxury brands have embraced the project only reinforces our confidence in it and it's absolutely the right product for this affluent Chatswood Chase customer. And as David mentioned, in the medium term, we have other mixed-use opportunities at Chadstone -- Chatswood, rather. They include the benefit that we have from what council is proposing to introduce as increased height limits at particular locations across the site, so plan to do in the near term and some opportunities in the medium term as well. And again, we'll pause for questions in relation to Chatswood.

This has been planned for a while. Obviously, COVID put a span in the work. So you go there, it's a bit tired because you're planning a lot of holdovers you're planning to develop that's been put on hold. How much has changed since COVID with this plan we're seeing today? And also for the second part of the question, why no resi, is it because the returns are too low or the planning doesn't allow. Those are my 2 questions.

So taking the first one of those, the fundamentals of the plan have not actually changed, the idea that it's a luxury offer that will fundamentally underpin what we're doing in that project; secondly, that natural light and premium finishes that you expect to see in a luxury mall, they're all still there. What I will say is that with the pandemic we -- and we already had a view that we wanted to derisk the project by way of significant leasing. There was a period of time when retailers and landlords were focused on things other than doing new rent deals. That's pretty much why we've paused at Chatswood, but that's been reignited in the last number of months, and we're well advanced with that pre-leasing campaign. So that's really what we've seen during the COVID period. We did take the opportunity with the benefit of more time to do some value engineering of the scope, that the fundamentals, as I said of what we're doing in the project in the build form that we have planned really hasn't changed. In terms of the residential component of that site; at the moment, yes, we're allowed and we're contemplating additional height. It doesn't include residential under the council's controls. And that's because they see our asset in Chatswood as part of a commercial core as opposed to other locations where they've designated residential. Whether that changes over time kind of remains to be seen. But for the moment, we're not contemplating that.

[indiscernible] do you think there's enough demand? Would you like to have embedded [indiscernible].

I think Chatswood Chase is an amazingly sought-after location, both for residential and a range of other things. A spot for choice.

Winston Sammut from Charter Hall. Just getting back to the difference between Chadstone and Chatswood, if you want to do any further developments in Chatswood, would you have to buy additional land? You've got land capacity here, but not there, number one. And number two, can you talk a little bit about the process of getting approvals through the difference between New South Wales, Sydney and Melbourne. And does that imply a preference for further developments in Melbourne as opposed to Sydney?

I'm going to give you that one, David Waldren.

Thank you. How long have you got for by way of an answer. Look, for a very long time -- I'll take the questions in reverse order. For a very long time, being a Melbournite, I would have said planning in Melbourne is a whole lot easier than planning in New South Wales and planning in Queensland is easier than Melbourne. Sadly, Melbourne and Victoria have taken the opportunity to be competitive and say, well, if they -- if they're giving us a very hard time -- giving people a very hard time, so should we. So I think looking at the planning regimes and the planning processes in both states, while they're obviously unique to each state, the politics of development are such that, by and large, they're the same. It certainly doesn't say to us, it's much easier to do it in one jurisdiction than another. In terms of the land area at Chatswood Chase and the development potential, when a council comes forward and says, we of our own volition are deciding to masterplan a whole CBD, and we want to engage with you about what you're doing, we, of course, pay a high degree of interest. It's never the case that we've experienced anybody saying it's other than a ratchet system. So it's always they want more development, they want to see more economic activity. In Chatswood Chase that opportunity is really quite significant. So what we've planned is those 2 sites that I outlined, Havilah Street and Malvern Avenue. And we've looked at how the whole of our site, which is largely effectively nearly a whole city block in Chatswood actually stitches into the suburbs so that whether or not it's our site or the site next door that is developers build to rent or multi-res or a hotel, our network, our public realm is the glue that holds that part of the city together. And the central core of our asset is fed by what happens around it. It's no longer Fortress Mall stuff with free to get in pay to get out. It's actually part of the city. So whilst there are opportunities on our land, and I've talked about 2 of them, there's long term, potentially another one, it's what happens around it and how we glue it in together that's really significant opportunity at Chatswood Chase.

I want to just add whilst David is somewhat pessimistic position in terms of how we see town planning evolving across Australia's major cities...

I bear the scars.

You bear the scars, okay. All right, well, what I will say is that we've heard today about 80,000 square meters of space being secured under DAs at Box Hill, they're the 2 largest buildings, and we can see the existing skyline at Box Hill out of the window. Add another couple of stories onto those buildings. Whilst we find it a longer process, and the question was raised earlier, would we like things to happen more quickly. If we could change anything, it would be the speed through that process. But in terms of the quality of the outcomes that we've been able to achieve, it's actually hard to complain. Very big buildings approved at Box Hill, 300,000 square meters of space approved at Bankstown, and we're about to turn to brand where there's an equally compelling opportunity albeit on a smaller site. So I think having a position as a long-term owner of these sites, owning the retail asset and being such an important driver, an integrated driver in those locations, it does give us a competitive advantage in the way in which we go about those approvals and the level of quality and quantity of outcome we're able to get all of that stuff that's happening at the ground plane. We know that the authorities are keen to see that level of activation. And we've already bought that with us when we're going in asking for that approval. So I'm not saying that the job for us is easier than it might be for others, but I do think we have some benefits and advantages that we bring on the way through.

In terms of feasibility study do you want to do that, there is a difference between owning the land and not owning the land [indiscernible] we get term developments going down track [indiscernible].

At Chatswood? Well, at Chatswood as David's outlined there's already 2 very big towers that we think that we can deal with in that location. As you said, there's potentially 1/3 elsewhere on the site. If we wanted to go bigger than that, yes, we would need to acquire more land.

So those towers are on land we're owning them. We're master planning for land we own.

So where will the luxury move if you wanted to develop more luxury in Chatswood?

Actually, Dare, I might just get you go back to Page 63 for those who are following on at home, and I might just get you to talk through how we see the stack a little bit like what Josef did earlier on Chadstone.

Happy to do that. So this is the conceptual diagram -- sorry, this is the conceptual diagram I outlined earlier. The 2 towers Havilah street and Malvern Avenue are on the east and north of the existing center. The existing center is all of the buildings shown in the foreground of those 2 images. That's the retail core, and you'll hear that terminology come up a bit for the balance of what I'm talking about today. So our essential interest is to maintain the retail core that we have today or retail REIT and to turbocharge or supercharge that by masterplanning a completely interwoven and integrated mixed-use solution. And I use that language not because they're different things. Obviously, retail is part of mixed-use. The complementary is what we're on about. So that luxury component part is in that retail core, and these 2 towers and then part of the land that we own adjacent to the existing retail core.

Sorry, just 1 question on that. So spending $0.5 billion adding 8,000 square meters of office implies a substantial uplift in retail rents. So what gives you the confidence or how you're pitching that today to sort of understand that you're going to get the right returns?

Look, I think across all our projects, we're very enthusiastic about derisking as much of the income as we can before we start construction. Chatswood is obviously a large project, and it involves a particular market segment where a lot of that uplift is coming from. So as Mark referred to, we've gone a long way down the track of pre-leasing into that project. We think we're a year or so away from starting, and we're confident that feedback that we've had from the luxury fee retailers, in particular, on the way through that, that income will be underwritten.

So how much of the retail sort of changes of the specialty component within Chatswood?

I mean do you think going back...

I'll pick up some of your questions, sorry. So essentially, Chatswood in a more micro scenario, David Jones, Apple, Williams Sonoma, the luxury brands, resecuring basically Coles and Kmart downstairs, all that is in a form of heads of agreements at the moment, subject to binding documentation. That secures the pre-leasing income more than the targets are being set for Chatswood to move forward. So the majority of the last 12 months has been taking advantage of that and getting those income precommitment sorted. Mark will go back to council, it's a minor amendment to a development application. And then we'll be in the market with the contractors to ensure that we can deliver to the feasibility assumptions from a cost point of view. But we're highly confident Chatswood is in a really good shape. To maybe answer a couple of questions from Sholto and Winston. The change has been I mean, from projects you've seen in the past, were about half the total cost. We're down about $500 million versus what was $1 billion and pre-COVID was $750 million. And the reason we're down is the retail has come down a little bit. But those 2 buildings you saw on Page 63 were previously contemplated to be inside the retail project, and they weren't adding the income to it. So essentially, they're now stand-alone development sites in their own right. And that's what's really driven the total feasibility down. And from our point of view, we're substantially confident at this point in time on the income levels with the engagement we've had internationally and domestically with retail at Chatswood.

Just one more here in Chatswood. Just thinking about your process for competing for leases in North Sydney, you're seeing a little bit of speculative development there, and obviously, that time to leasing is a little bit of an advantage for the guys that do that. But how do you guys think about that with something like Chatswood with a strong fundamental basis? Would you take a chance and do some spec? On the commercial side.

So no, it's a good question. In terms of Chatswood, we'd still like to be in a position where we preleased some outcome of it. But at only from our point of view, 8,500 square meters really in the first round, and it's on top of the building in Chatswood. There's probably more of a component where we would spec a hell of a lot more of that given the fact that it's Chatswood. In terms of those 2 towers that are on Page 63, we would still require as Carolyn said, under the LEP or DCP then there's no requirement for residential there. So we would have to prelease into some of those towers. For context Chadstone here, the target of preleasing that we internally set ourselves was around about 30%.

Okay, well, also in Sydney is huge opportunity that we have at Bankstown Central, and unfortunately, you are back with David.

Yes, thanks for that, Carolyn, me again. Bankstown Central, it's yet another one of our assets. And as Carolyn said, has significant, you could underline significant opportunity for growth and mixed-use development beyond the retail core. And that's due to its strategic location and its connectivity to current and future public transport networks. The New South Wales government is predicting demand for an additional 30,000 homes over the next 5 years to 2026. To support this growth, the Greater Cities Commission, the Southwest District Plan, has identified Bankstown as a strategic center in the development of a 30-minute city. It's within a 30-minute drive from Sydney CBD, Parramatta, Liverpool, Sydney Olympic Park and Sydney Airport. Bankstown Central already has excellent public transport connectivity with a major bus interchange on our site and the heavy rail railway station located immediately next door, but it will also benefit from the new Sydney T3 metro station, which is to be completed in 2024. This new metro station will link Bankstown to Sydney CBD in 28 minutes via effectively a turn up and go service with trains every 4 minutes during the peak. It will integrate with Bankstown's existing bus and heavy rail infrastructure. In addition to those transport initiatives, though, Bankstown Central will benefit from the Greater Cities Commission's plan for Greater Sydney that nominates Bankstown as a future Health and Education Innovation district. That nomination has already resulted in major institutional and government infrastructure investment in education, training and employment growth. This includes the construction of a new Western Sydney University campus with world-class teaching and research facilities for 7,000 students and a $1.3 billion commitment from the New South Wales government for a new Bankstown-Lidcombe Hospital. This slide quite neatly summarizes the Greater City commission's thinking on the maturation of new cities of health and knowledge from a cluster to a precinct and has an ultimate outcome of development to an innovation district. The addition of the Western Sydney University to the current TAFE, the announced new hospital and the delivery of the new metro station create the foundations for a place that will deliver significant productivity uplift to transition in the near term from a suburban center to the highest designation of an innovation district. The opportunity to grow that district lies in the creation of private sector-funded space in the form of residential dwellings, offices and research spaces to accommodate the living and working spaces for a population that will power this new health and innovation district. Our vision for Box Hill builds on the government city planning. Our site is the largest development parcel in the Bankstown CBD representing nearly 10% of all the land with development potential. As such, the site's transformative further development will play a major role in the success of the Bankstown CBD. When we began our master planning for the future of Bankstown Central in 2018, our proposal focused on unlocking the development potential of approximately 300,000 square meters of new mixed-use development space across 16 development sites that add to the retained retail center. After further refinement that stitched our proposal into the Council's updated CBD master plan, our master plan now proposes the development potential of approximately 19 towers with plans for commercial offices, a hotel, residential apartments, service departments and student accommodation, childcare facilities, landscape open space and laneways, all integrating with and benefiting from the amenity and convenience of our retained and upgraded retail asset. Earlier this year, Bankstown Council unanimously endorsed our masterplan proposal with State Government Gazette expected in April 2023.

Clearly, Bankstown Central is an asset that offers outstanding development potential now and into the future. Here, we are illustrating our masterplan for the site. At the bottom of the image, you can see the Sydney Metro station and its proximity to our site. And with the retail core shown in blue, surrounded by the mixed-use development sites in brown. The red boxes show our near-term projects with 2 retail modernization projects already underway. And above that is our first mixed-use stage. And then on the left or western end of the site is the Town Center precinct, which will be our next precinct planning focus. We received planning approval mid-last year for the first stage of mixed-use development. The precinct, now known as Bankstown Exchange, will bring to life 3 commercial buildings, delivering approximately 30,000 square meters of new A-grade office space that will also target 5 Star Green Star and a 5-star NABERS energy rating. Plans also include 3,000 square meters of activated retail offerings at ground level, including a new Eat Street for indoor and outdoor dining. Similar to our other major projects across the development pipeline, Bankstown Exchange has the ability to be staged to ensure we have maximum flexibility to respond to market demands whilst achieving our total investment returns. We are now actively in market seeking tenant precommitments for these buildings. With a heavy government focus on creating an innovation cluster in Bankstown coupled with the new Sydney Metro station that is under construction, plus the nearby health and education facilities, we believe Bankstown Exchange can deliver an affordable proposition to potential occupiers when compared to the likes of Parramatta and Liverpool.

There are 2 retail projects currently under construction at Bankstown Central that are strategic enablers for the future mixed-use development of Bankstown Exchange and the Town Center precinct as referenced by Truman. The first project, effectively known as the Grand Market will deliver a new fresh food precinct with the selection of artisan, fresh food and specialty retailers with a greater level of convenience, but more importantly, an improved range of fresh food that has been curated to align with Bankstown technically diverse community. Located on Level 1, the project is anchored by a Coles supermarket. The project comprises 39 new or reconfigured specialty retailers, which will be complemented by an upgraded common mall environment creating a more vibrant fresh food experience. And as part of this first project, we recently completed the relocation of the Bankstown Bus Exchange to make way for the construction of 190 new car parking spaces providing direct access to both the Grand Market and the remainder of the center. The second project is the introduction of new many major tenants, including a new international flagship retail and a federal government tenancy and complementary specialty retailers. Both projects are currently under construction, and due to open later this calendar year with a combined value of $63 million.

Following recent research into our existing CBD assets, we have learned that retail is consistently one of the top 3 reasons people visit a CBD or city, becoming even more compelling when coupled with dining and food experiences. As Bankstown becomes a growth CBD in the polycentric CBD model of Sydney, Retail will continue to be a leading driver of visitation to this already popular hub for the community. Much like the Sydney CBD and other major cities, the success of the retail experience will be underpinned by its differentiation, both in the offer and design and the nuance of the localized cultural experience. The multiple phases of development at Bankstown are evidence of the ways in which the growth in population will continue to drive further diversification of cultures and generations in these newly formed CBDs. The integration of access to education, improved health services and increased local government opportunities will be further enhanced by the ways in which the culture of the community is integrated into the evolved retail and food experience of the center.

So what I hope we've conveyed today in relation to Bankstown Central is that it can be so much more than a retail shopping center. It has heavy rail there today, it has the new Sydney Metro about to land there in 2024, and both those things are literally on its doorstep. There's a new $1.3 billion public hospital about to land somewhere in the Bankstown CBD, which means it's super approximate to our site. Western Sydney University is over the road, and you'll see that tomorrow, and Bankstown TAFE is just around the corner. And our view is that with that level of permanent government investment in and around the Bankstown CBD, that CBD will grow. And our plan, the master plan that David has taken you through, the 300,000 square meters of masterplan approval, which we've already obtained from the Council is really our blueprint as to how Bankstown's future will grow as part of the overall growth of the Bankstown CBD. On that note, pausing for some questions. Mr. McCasker?

Sorry, this is a bit of a broader question. So I think across the presentation, you're targeting sort of 4.5 star ratings to 5 stars, why aren't you pushing the envelope something further. These are long-term assets in major locations.

I might just get David to talk to the variety of trading tools that we're using, including what we see in terms of the domestic tools and how we're looking from an international point of view.

That's a seriously good question, and it runs the risk of about a 2-hour answer. We set ourselves a minimum. And as you've identified in 1 case, particularly, we talked about today is 4 star, but generally, we say 5 star is the minimum. It doesn't mean it's the only rating. It's the minimum rating. We task our teams to very early in the process say 2 things. How can we achieve that rating in the context of the framework we set for all our developments. But critically importantly, how too does the outcome of that rating feed our performance rating for the whole portfolio. So you'll be well aware of that with Green Star performance rate the whole portfolio. What we're pushing towards now is things that are only now starting to get into those tools, the assessment of carbon, the implications of embedded carbon, the recurrent carbon budget for projects. So whilst our interest might be to say, well, look, 5 Star is a ticket to the dance these days. If you're offering commercial office space anything other than 5 stars, it's kind of a waste of time. So it's a quality metric to start with. But then it's an opportunity to say within that context of the broader rating tool for, let's say Green Star, 5 Star, what are the other tools internationally or locally, that better reflect the critical initiatives that we see, particularly around carbon, critically around our tenants' energy utilization and what it means for them. And in a more fulsome period, what is the social return on investment by the community related things that we bring into those sustainability tools that are part of our view of a much broader sustainability rating. That's as quick as I can do that answer. I don't know if Peter wants to...

Actually, David, I'm going to respond, if I can, Grant. Let me raise the green bond recently. What was were interesting was if you look at a benchmark, about 40% of our assets are 5 Star or above, of which the vast majority are 5.5. The industry average is about 10%. The criticality of that is actually we have a plethora of, I think, financing options because of the depth of, frankly, the NABERS rating system that we have been working on for a long time now. And I think that's one of the reasons that we're able to get that bond away despite really challenging market conditions. So it's a credit. I think to Peter Huddle, Carolyn and the team that we've actually managed this rating system to be if not market-leading, then certainly a very dominant feature of our business. And financially, it's helped us significantly in cost of funds.

Berry again. It has been a while since I've visited Bankstown, but I do recall previously, there was a large percentage of tenants on holdovers in anticipation of a larger redevelopment of the center. It looks like today, you're talking more about an ambience upgrade and fresh food. So those tenants being converted to more permanent lease structures or if you could talk about that.

Lauren. A large part of those are on holdover in the Target mall that led from Target into the existing mall. That whole section has been demolished. So that is essentially the Town Center precinct that Truman was talking about. And then as part of the fresh food upgrade, a large portion of the tenants were on holdover and there to deal with the fresh food upgrade. So we're converting them from holdover to full time leases. We're actually just reducing the size of the retail in Bankstown at the moment as a result of the Target demolition to make way for this Town Center precinct.

Thanks, Lauren, great question. We have one last asset to take you through, and I'm a tiny bit mindful of time. I am going to ask David and Truman, in going to take you through what we're intending on doing at Buranda. It's a different opportunity for us because it combines retail, residential and health precinct, which is something that we haven't talked about thus far today.

Thanks, me again. So we'll move to Queensland. Our Buranda Village today is a popular Woolworths-anchored convenience center sitting on approximately 2.1 hectare island site. In its current form, it's a well-optimized asset. However, significant growth opportunity stems from its location and the evolving demographics in this area. In light of the growth opportunity, this project is 1 of our 6 key mixed-use projects to be presented today. Buranda Village, our site, is located 3.5 kilometers from the CBD, and it enjoys excellent connectivity to the existing public transport, and importantly, to the new CrossRiver Rail and Brisbane Metro projects. It's a 15-minute drive to the Brisbane CBD, and our site sits within Brisbane's Knowledge Corridor state planning framework, adjacent to the Princess Alexandra Hospital and its extensive research precinct. The center is 1.5 kilometers from Queensland's preeminent sporting precinct, The Gabba which will be the main stadium for the 2032 Olympic Games, and it's in an area which has average forecast population growth of 3.25% per annum, well above the Brisbane average. Like Victoria Gardens that Truman presented earlier, the residential catchment at Buranda is young and dominated by Metrotechs. They're the affluent lifestyle-focused people, and it's an area that's heavily skewed towards renting with rented households accounting for over 64% in the surrounding area, which is well above the Brisbane average of 36%.

In the context of our consumer megatrends, this segment is a driving force of influence for sustainability, which has been factored in our targets to achieve 5 Star NABERS Energy and 5-star Green Star ratings across all buildings while also achieving carbon neutrality for the retail common areas. These sustainability principles have been key in the design of the experience from sustainable green travel via e-bikes, EV charging stations, along with over 150 bike storage spaces to the expansion of subtropical landscaping to reduce heat impacts and the introduction of the community space and public ground. Buranda Village has been designed to celebrate Brisbane's outdoor lifestyle while fostering the health of the community through consideration for the planet.

When thinking about our Buranda Village master plan, in addition to contemplating the site's indigenous history and its more recent tram depo history. We reflected upon its role as a precinct. Earlier today, we've outlined our understanding of innovation precincts through our work at Chadstone. We also spoke about the health and knowledge District evolution at Bankstown. And here, we see parallels in the opportunity at Buranda. Immediately adjacent to our site is the precint, Princess Alexandra Hospital. The PA is one of the major hospitals in Queensland. It services more than 1 million people with over 1,000 beds and is one of the largest teaching hospitals in the state. The hospital site employs more than 6,500 staff and is also home to world-leading research institutions attended by not only Australian health experts, but also visiting international physicians and researchers. In short, our neighbor is a 24/7 highly dense place in need of nearby amenity, private sector commercial spaces and convenient places to live. Consequently, our master plan for Buranda contemplates an integrated retail and mixed-use precinct that takes into consideration the adjacent services, the growing population and the demands of the demographic and the links to government-led infrastructure developments. Truman will now step us through the detail of this master plan.

Our master plan development application was lodged with Brisbane City Council in December late last year and is progressing well with approval anticipated for September this year. The scheme totaling over 100,000 square meters of new development area comprises of 7 buildings in total over 2 precincts, being the residential precinct and the commercial precinct. The new 10,000 square meter retail offering will focus on a new laneway based retail and dining offer anchored by a full-line Woolworths. All situated within 8,000 square meters of high-quality public realm for fitting the Queensland climate. The completed retail village will also deliver excellent amenity for on-site residential community, as well as all office and health workers within the commercial precinct and surrounding areas. This image illustrates the master plan arrangement of the 7 buildings across the residential and commercial precincts. With the residential -- within the residential precinct, dwellings will span across 4 buildings with an estimated population of over 1,000 residents accommodated in more than 600 apartments. The new brand of village residential community will have access to over 5,000 square meters of dedicated amenity, including an outdoor pool, private dining facilities, a gym plus a large private outdoor terrace totaling over 4,000 square meters. Unlike our other residential pipeline projects, we are exploring options -- all options in terms of capital partnering and preferred delivery models. The image here gives you a sense of the design vision and the architectural form as well as the scale of the individual buildings. And finally, on to the commercial precinct. Early market interest in this precinct is encouraging. As described earlier by David, besides location adjacent to a major hospital is a real opportunity for us to leverage allied health groups into the new commercial buildings. We have already entered into a memorandum of understanding with a leading health infrastructure group to jointly develop a new 24,000 square meter private hospital in this precinct. We are now in the process of concept design for this building. In addition, commercial pricing also incorporates another 2 buildings equating to a further 25,000 square meters of future development potential. From a sustainability perspective, a whole master plan we'll be targeting a minimum 5 Star Green Star and 5-Star NABERS energy rating. And we're also in the early stages of investigating carbon reduction initiatives. As you can see, Buranda Village is a large-scale development which has been carefully planned like our other projects to be delivered in stages, enabling us to respond to market conditions. Thanks for your time today, and I'll pass you back to Carolyn.

Thanks Truman. So to recap, today, Buranda Village is a relatively small shopping center located right next door to the growing Princess Alexandra Hospital and the inner suburbs of Brisbane. But in future, it will be part of a health precinct, a health precinct where there's demand for private hospital space, hospital administration, allied health, all those services and consulting suites that you typically see around hospitals. Our plans also include residential, a build-to-rent product, which, as Truman's outlined, like Victoria Gardens and Box Hill. We're well advanced in developing a business case for. I am going to pause there before handing over to Peter Huddle to wrap up. And see if there's any questions people have on Buranda. Just one at the back.

This may not relate directly to Buranda, but I was wondering if you could just perhaps share any learnings that you might have had from the mixed-use development at The Glen that you'll be applying to all the mixed-use developments that you've spoken about today?

I think the key thing that we would say across all of the projects, and Peter touched on it briefly earlier, is setting up a master plan that has a lot of flexibility in terms of how the pieces have arranged and what the uses might be over time. because the question that came from over here earlier was a great question that said, how can you completely predict over 50 years, what people are going to do. And the answer is we can't absolutely. We think we can get pretty close, and we want some flexibility that enables us do that. Certainly, the scheme that we had at The Glen where we've codeveloped with a partner, 550-odd apartments. They're completely integrated into the center, and we're delighted with the result that we have. But it's taken advantage having a flexible approach to how we realize those projects over time. Thanks.

It's Ben from Barrenjoey. I have a couple of questions. I was wondering if you could just touch on your approach to titling of land, where you're building on existing retail land, you're introducing potentially third-party capital. How do you see, I suppose, the ownership of the underlying land going forward? Are you considering long-term leasehold creation? Or is it more stratum just any thoughts or guidance please?

That's a good question, Ben. I mean it depends on the situation. We're not considering long-term leasehold unless there is a tax advantage situation for us to actually do that otherwise, essentially when we're bringing capital into the land, it's normally bought in. We've made the development applications flexible that we can [ strata ] them off. And so we can bring capital allocation in per stratum or per land title, stratum if it's typically on a podium. So it won't come in necessarily as leasehold.

Just a second question, just around the uplift in [ MIT ] from mixed-use you mentioned earlier, I think, on Slide 20. Can you just clarify, is that included in your forecast yield on costs?

It's a really tough one. So I think we need to get a few more projects underway to really validate it. So at the moment, we're quite conservative. We don't necessarily include what we call a halo effect in those numbers, in those range of numbers, we would anticipate that, that will be essentially cream on top. And once we start proving out some of these mixed-use developments of the window is a classic example, then we potentially will start adding those into our forecast numbers. So we would anticipate, at this stage, we're at the more conservative scale of it.

Sorry, just one other question, if I may. Just in so far as putting more density on to your sites, how do you think about, I suppose, parking and congestion. I mean, implicit in your thinking, is an assumption around more parking, does, it actually even affect the parking requirements of your centers?

Yes, no, no, it absolutely impacts the parking requirement of our centers again, if I look at the wind on the 31.5 hectares that we've got here, our key component as a retail-led mixed-use developer is to make sure that nothing impacts the jewel in the crown, the retail that drives our business forward. So in terms of parking and transport infrastructure, we spend a lot of time around making sure when we bring ancillary uses onto the -- onto our properties that they complementary, and they're not competing against resources. So in terms of that, it's really around separate access and ingress separate parking locations. And then all the infrastructure that revolves around that is tied into our master planning, and that's how we're releasing it. In terms of things such as Box Hill as an example, and we're going out to see that later on this afternoon. What we try to do is essentially whether it's Box Hill, Bankstown, to a certain degree, what we're doing at Chatswood, we're actually consolidating the retail into one of the assets and making sure the amenities there prior to building the nonretail developments, whether they're residential, commercial, hotel or whatever. And so to a certain degree, within the public realm they're connected, but by infrastructure, they're separated.

I think we might wrap up Q&A there. I guess we'll get on. So I'll let you wrap up now.

I'll try. Thank you. Look, thanks, Truman, and thanks, Carolyn and the team. Look, to summarize. I hope that everyone sees today. Fundamentally, Vicinity has multiple assets in really strategic locations throughout Australia's major cities. And those cities are destined for a lot of growth. And what we've tried to do through master planning is making sure that our assets are really aligned to take advantage of that growth. And already, our assets are linked to major transport infrastructures and primary activity centers that already play a major role in that city. So essentially, our masterplans have also taken into account a lot of what Corrine has spoken about today. What we're trying to do is really take advantage of trends that are occurring in the marketplace and making sure we're overlaying those as they are conceived within our plans. Obviously, one of the key things that we did through the pandemic was really shift our focus to basically getting in the context of never waste a crisis, shifting the focus to elevating our planning approvals to really state government level. And David and Carolyn spoke a bit about that today. It is working hand-in-hand with councils is really important, but really that elevation of these major material projects has to occur at a state government level. And what we found is we're getting higher-yielding outcomes in a more efficient time frame despite some of the frustrations that still occur in that sort of scenario. So as a result, in summary of today, what we have achieved is a whole site masterplan for Bankstown which is about 300,000 square meters endorsed by a Council that will go through the state government gateway process with the Council's approval. We've already got the approval out the window, and we'll point that out when people leave the room, the Box Hill Towers through here. The first 2 towers of 80,000 square meters of what we think will be 280,000 square meters of Box Hill. The team spoke about the Buranda master plan today, and we're confident working with the Brisbane City Council. We're in a very good relationship that we have there that will unlock sometime this year, another 100,000 square meters of developable area. And post the elections in Victoria this year, the Victoria Gardens approval has already worked hand in hand with the state government, with the department to have a really well resolved plan just awaiting that final minister call in, which will occur postelection. So in construction -- in addition to the master plans that we have approved in construction at the moment, right now, we have about $190 million of projects under construction in FY '22, will be delivered at bench starting to be delivered or will be delivered by the end of this calendar year. For FY '23, there's about $430 million of projects that we plan to commence under construction. A lot of those will be in mixed-use, some of those are in assets that we haven't spoken about today, including Bayside, The Glen, Sunshine, Emporium. And obviously, we always have a development plan for Chatswood. I hope we answered some questions around Chatswood. I can't reiterate how vital Chatswood is for us in terms of positioning of Vicinity in the marketplace. We'll start the lower ground this year, which is the food redevelopment. And part of that is really to ensure a really major project that we're delivering contemporary food offer for the primary trade area demographic. If you look at what we're building at the moment that's in construction, it's all food orientated. So to Sholto's question earlier, what's happening with retail in the future, what we're doing with retail is we're bringing food, entertainment and experience all into our centers. We have 7 or 8 projects under construction at the moment. You'll see some of them today it's all food related. And then whilst we're obviously doing the food development project in Chatswood, we plan to commence late next year, the major project. And hopefully, at the same time, the planning controls are upgraded within the local Council, which will allow those other buildings up to about 21 storeys to be also delivered in the not-too-distant future, enhancing our mixed-use activities. Of course, it goes without saying where you are today, we're extremely proud. We're really proud of Chadstone as an asset. Everyone in our company lives and breathes this asset as well as the other 60 assets in the company. It's really sort of an economic driver for the Southeast of Melbourne. Hopefully, what you saw today was a list of the projects, but quite frankly, under 31.5 hectares, and we haven't shown the master plan of Chatswood here today, but we have an infinite list of projects that will continue to build our Chatswood for a period of time to really drive it into that vibrant city. And also, from our point of view, ensure that it maintains its retail leadership in Australia by really some -- quite some margin. And of course, mirroring Vicinity's organizational focus on sustainability and what we spoke about in the last 15 minutes or so on Grant's question, a lot of what we're doing with our new projects is really aiming at multiple ratings, at least as a minimum at a 5-Star Green Star but not only in design but also in operation. Truman mentioned it previously, the other tools that we're using around measuring our sustainability credentials and really focus on that embody carbon and emissions ratings around material selection and so forth in terms of how we're moving forward. So maybe on a more personal note. From my point of view, I had the privilege of being involved in 3 significant development phases in my career. One was in the lead up to the [ GFC ] in Westfield; one was overseas for the last 10 years in the U.S. where there's more than 5 billion of developments across really major cities; and this current project with Vicinity. And from my context, the first 2 are really material shaping and at the point in time, which we deliver them really value creating for the companies that I work for at that point in time. I honestly believe what the process that we're in at the moment in terms of the whole development pipeline for Vicinity is equal, if not greater, in terms of company positioning and value creation for this company in the future. So whilst it may not be overly visible to everyone in this room, there's been a huge amount of work that's been undertaken in the last few years and particularly during the pandemic time. And I think you'll start to see -- not I think, you will start to see the large-scale rollout of those projects into execution. So hopefully, what we've seen today is that we have the right assets in the right locations. We have a significant development pipeline really focused on some -- because we also need to be focused on the key material projects that will make a difference to our company and its shareholders and our retailers and our future occupants. And more -- and most importantly, I hope you've seen that we have a really experienced and valuable team here that can actually execute these projects. So with that, I do like to have a special thank you to Carolyn Viney in particular, but also Mark, David. Truman, Corrine and Josef. Special thanks to Jane and the corporate affairs team for putting today together. It really is a privilege working with this team and also the other 1,200 people around vicinity as we look to execute not only our retail operational outcomes, but also the mixed-use development program that we've outlined today. So look, thank you, everyone in the room and those that have joined us on the webcast as well. We look forward to spending more time with those in the room over the next 1.5 days as we tour our assets and spend some time at dinner tonight, but more importantly, we look to show what we can do and roll out these developments over the next 1 year, 2 years and beyond to really add value to this company. So with that, Troy, I'm going to hand over to you to coordinate this afternoon in close.

Okay, guys. We're now in a little bit of -- not so much of a hurry, but the tour will start in about 10 minutes.