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Councils Want Workers to Kickstart CBD Economies

Economies

A survey indicating more than half of full-time employees want a hybridised virtual and in-office working model is not helping a national bid to lure workers back to the capital city centres.

According to a McKinsey survey of about 5000 full-time corporate employees, more than half of respondents wanted a flexible hybrid working solution post-pandemic, while just over a third wanted to work in the office.

The number of people wanting to work remotely grew 3 per cent to 11 per cent.

The changing face of work models was addressed by Brisbane Lord Mayor Adrian Schrinner when he spoke to the National Cabinet on behalf of the Council of Capital City Lord Mayors, outlining the issues facing the country’s CBDs and what needed to be done to kickstart their economies.

The Kepler Retail Index for the week ending June 6 showed passer-by traffic was still 26.5 per cent down year-on-year from the same time in 2019, excluding Victoria, which remained in lockdown.

Schrinner said the CBDs were the “beating heart of Australia’s economy” and contributed 69 per cent to the nation’s gross domestic product before Covid-19.

“We can’t ignore the plight of our city centres … if we’re going to get Australia’s economy firing on all cylinders again, we have to get people back into city centres and using public transport,” he said.

Economies

Source: McKinsey Reimagine Work: Employee Survey (Dec 2020 – Jan 2021, n=5043) 

“The working-from-home phenomena may suit many people but we can’t ignore the fact it has an economic consequence.

“Councils have been undertaking a range of initiatives, including waiving rates, fast-tracking maintenance and providing hospitality discounts, to help CBD businesses and to entice people back.”

Schrinner said while office occupancy rates had lifted from record lows last year, data indicated growth was plateauing.

He said traffic congestion continued to be a problem along major arterials as people chose to drive instead of use public transport to commute.

The Council of Capital City Lord Mayors has joined the growing chorus of groups calling for the federal government to expand the use of travel bubbles and fast-track the return of international students.

At the end of the third quarter in March, Melbourne’s office vacancy rate had quadrupled from 3.4 per cent to 14.3 per cent over 12 months.

Sydney’s office vacancy rate doubled to 12.1 per cent, while the already double-digit vacancy rates in other capital cities continued to increase with Perth recording a 20.2 per cent office vacancy rate.

 

Article Source: www.theurbandeveloper.com

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Brisbane

Ascendas Sells $125m Australian Logistics Portfolio

Ascendas

Singapore’s largest listed owner of industrial and office property, Ascendas’ Real Estate Investment Trust, has sold three assets in Queensland and Victoria for $125 million.

A Coles warehouse and a neighbouring warehouse at Heathwood, south of Brisbane, were sold for $101.6 million to Arrow Capital Partners’ $1-billion logistics investment fund, Strategic Industrial Real Estate with Altis Property Partners.

The latest acquisition, which is due to complete later this year, comes in the wakes of two logistics asset acquisitions in the Irish capital Dublin recently.

The Heathwood warehouses are in the Brisbane South Industrial Park. The 35,000sq m Coles logistics warehouse at 82 Noosa Street will be vacant later this year as the retail giant moves its operations to a purpose-built facility at Redbank.

Ascendas also divested a 16,134sq m warehouse and office space at 1314 Ferntree Gully Road in Melbourne via a unit sale agreement to China Tube and Haelram worth $23.5 million.

In a statement to the Singapore Exchange Ascendas REIT said: “The proposed divestments are in line with the Manager’s proactive asset management strategy to improve the quality of Ascendas REIT’s Australian portfolio and optimise returns for unitholders”.

“The total sale price of $125.1 million is approximately 16.8 per cent higher than the total market valuations of the properties of $107.1 million as at 31 December 2020.”

The proposed divestments are expected to complete in the third quarter of 2021.

Ascendas REIT is part of CapitaLand, which owns industrial assets in Singapore, Australia, the United States and Europe.

 

Article Source:www.theurbandeveloper.com

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Brisbane

Bluebird Rolls Out Innovative Development Partnership Model

Bluebird

Bluebird has launched its latest boutique project in Brisbane under its innovative joint venture model.

The firm’s development partnership with landowners allows them to become equal partners in the development process.

In this TUD+ Briefing, Bluebird co-founder and partner Riye Arai-Coupe discusses the division of responsibilities under its new model as well as the expected risks and returns for both the landowner and developer.

Bluebird’s maiden project under its development partnership is located at 5 Dudley Street in Brisbane’s riverfront suburb of Highgate Hill.

“The landowners were keen to construct a new apartment building but had limited experience in tackling a development project of this size and complexity on their own,” Arai-Coupe said.

“Under our model the landowners were able to learn of all of the possibilities through the project feasibility assessment and analysis.”

The development, currently before the council, will comprise a four-level, “high-end” apartment building with eight, three-bedroom riverfront apartments.

The project is centred around Bluebird’s “biophilic” design to deliver a development that connects residents with nature, creates best practice in sustainability and considers the community.

 

article Source: www.theurbandeveloper.com

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Brisbane

Hong Kong investor splashes out $19.5m on office

investors

Who says the office is dead? Despite the many obituaries written for the office in the past 12 months, investors are undeterred.

This week, a Hong Kong investor splashed out $19.5 million on Beams Projects’ new office in Richmond.

The freshly leased building at 45 Wangaratta Street was snapped up in a deal reflecting a highly competitive 3.7 per cent yield with only a 21 day settlement.

Records show Cheerich Property, the local subsidiary of Hong Kong ragtrader Cherry Body Fashions, slapped a caveat on the property during the week.

The boutique 1413 sq m office project was built over the old Duchamp clothing warehouse in the old ragtrade precinct behind Richmond railway station and the Corner Hotel.

It’s now called the Richmond Interchange Precinct. The property sits on just 368 sq m reflecting a building rate of $13,829 a sq m and a land rate of $53,100 a sq m – new benchmarks for the city fringe office investment market.

A year ago, an old double-story factory at 32 Wangaratta Street on 629 sq m sold for $8.8 million. Records show it was bought by the Benjamin Duncan Property Group.

JLL agents Josh Rutman, Piers Jalland, Tim Carr and MinXuan Li ran the campaign which attracted more than 150 enquiries from local private investors, syndicates, and owner occupiers.

“The fact that the building continued to lease up well during the height of pandemic last year resonated well with buyers given the continued debate about the return to the workplace,” Mr Carr said.

Family Court

A cashed-up private investor has agreed to pay $12 million for the Dandenong Family Court building, despite the court’s lease expiring in 2023.

The uncertainty over the lease, especially as the court recently merged with the Federal Court, kept the yield comparatively high at 6.5 per cent.

Sources say it can be difficult to get bank financing at that kind of yield so the buyer is likely to have deep pockets.

The 2729 sq m office at 53-55 Robinson Street has been a family law court since the mid-1980s.

The Commonwealth government’s lease runs out in July 2023 and there are no further options. Annual rent is $782,413 a year.

The deal was done by Gross Waddell ICR’s Alex Ham and Michael Gross with CBRE’s Scott Orchard, Scott Hawthorne and Jimmy Tat.

Mr Orchard said the uncertainty stopped the transaction achieving the sharp yields usually obtained by government-leased buildings.

A Family Court representative told Capital Gain there were no plans to move.

City fringe

A family-run boutique student accommodation building on the city fringe has been listed for sale as the flow of international students dries up.

 investors

57-65 Drummond Street, Carlton 

It is understood the 43-room property, known as Albert House, has just four students living in its dorms.

The 1600 sq m three-storey building at 57-64 Drummond Street was configured into accommodation in the 1990s but it started out as offices for the Australian Workers Union.

Records show the AWU sold up in 1997 for $1.05 million. It’s expected to fetch more than $10 million.

Expressions of interest, closing on July 1, are being handled by Gross Waddell ICR agents Raff De Luise, Julian Materia and Danny Clark.

The property is on a 604 sq m site near the corner of Queensberry Street and has room for 10 car parks.

Meanwhile, bigger players like Scape are planning towers for the Carlton precinct to house the students expected to return in the future.

Wizel buys

Former CBRE agent Mark Wizel, who struck out on his own last year, establishing the Wizel Property Group, is ramping up his activities.

Two shops opposite Fairfield railway station owned by Mr Wizel have been leased to Burgertory and the Bean Smuggler.

CBRE agent Jason Orenbuch said the 92 sq m and 98 sq m shops at 7-9 Railway Place, the foot of a new apartment building, were leased on 10-year terms.

Mr Wizel has been a keen investor in new strata title retail and confirmed he also owns around 150 sq m of space in Caulfield.

In Prahran, Wizel Property Group’s Lewis Tong made the winning bid of $5.2 million for a two-storey shop at 257 Chapel Street on the corner of Greville Street – a sharp yield of 3.35 per cent yield.

Mr Wizel did not return calls so it’s not clear if the group was acting as buyer or buyer’s representative.

Gross Waddell ICR agents Michael Gross and Andrew Waddell handled Thursday’s auction on the eve of lockdown.

The sale was struck at a building rate of $8228 a sq m and a land rate of $10,505 a sq m. There are offices on the first floor and the long-running discount store Supa Bargains on the ground. It returns $230,000 a year from leases expiring in 2026.

Two bidders competed in front of a crowd of around 40 for the property.

By Friday, auctions were back online and the Oreana Group paid $13.15 million for a row of faux Tudor shops at 169-175 Toorak Road. It adjoins South Yarra Square which it purchased for $35 million last month.

Faux Tudor

Speaking of faux Tudor shops and Prahran, a row opposite Prahran Market at 182-194 Commercial Road is expected to sell for $8 million.

investors

The faux Tudor shops at 182-194 Commercial Road are expected to sell for $8 million. 

The shops, leased to Red Cross, Mediterranean Butchers, Rare Earth Hair, Eugenie French Cake Shop and Carpe Diem Bar, are on 1130 sq m of activity centre zoned land which could allow for a five-to-seven level tower.

They return $380,000 a year in rent. Sonebridge agents Rorey James, Julian White, Nic Hage and Chao Zhang are handling the auction.

Castlerock sale

A regional syndicate associated with fund manager, Castlerock, is selling a Spotlight store in Sale.

The Gippsland Spotlight, has been held by the syndicate since 2004. It’s managed by Castlerock whose founder, Gippsland born-and-bred Hank Bronts, is also a member of the syndicate

Spotlight, a tenant of 30 years, has signed a fresh 10-year lease on the 216-228 Raymond Street property. Total income is $287,000 a year.

The 1908 sq m building is on a 6774 sq m site in the middle of town and expected to sell for more than $3.5 million.

Expressions of interest close on June 23 through Stonebridge agents Rorey James, Nic Hage, Kevin Tong and Justin Dowers.

 

Article Source: www.brisbanetimes.com.au

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