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Demand Outstrips Supply in Logan Accommodation Market

Demand Outstrips Supply in Logan Accommodation Market (1)

A surge in private and public investment, growing visitor numbers and game-changing tourism projects under way is driving the demand for short-term accommodation in the City of Logan.

Located just 30 minutes’ drive to major destinations – Brisbane to the north and the Gold Coast to the south – Logan welcomes 1.4 million visitors each year and continues to have strong levels of growth in domestic and international overnight travel.

The $12 billion of tourism infrastructure injected into the wider region, places the city in a strategic position to take advantage of the boom in visitors to south-east Queensland.

However, recent growth forecasts suggest occupancy rates in Logan will exceed 80 per cent by 2021, set to trigger a severe undersupply of rooms and leakage of trade by 2026.

Logan’s current supply is limited – at around 300 rooms across 12 facilities, it comprises primarily of motel style accommodation concentrated along arterial roads.

Despite high occupancy rates, no new hotel stock has been developed in more than a decade.

As cities like Brisbane focus on servicing the leisure travel market, Logan has the potential to grow its stake in the business travel market.

Demand Outstrips Supply in Logan Accommodation Market 1 (1)

Home to more than 21,000 registered businesses, many headquarters and operational bases in Logan generate a substantial and continuous demand in overnight room stays.

Just one example is global company John Deere – its headquarters for Australia and New Zealand is located in Logan and receives around 700 domestic visitors every year for training alone.

The demand metrics on population and business growth indicates a need for 65,000 additional room nights in Logan up until 2036 – equivalent to 180 additional rooms.

When compared to similar areas, Logan is undersupplied in the number of commercial short-term accommodation rooms relative to population, workers and visitors.

AreaRoomsPopulationBusinessesHospital bedsWorkers
Logan318320,58321,221436101,979
Springfield10537,6611,7306413,012
Kawana16518,27088656010,535
Parramatta2,060226,14924,519959137,952
Ryde1,400116,30211,92034784,410

As one of the largest employers in the city, the Logan Hospital in Meadowbrook is one of the busiest health service providers in the region and has recently kicked off its $460 million expansion project.

Meadowbrook has been identified as a hotspot for potential accommodation facilities, aligned with council’s master plan to develop the centre as a medical and health precinct.

With projects like the hospital under way and large private enterprise investing in Logan, the demand could outstrip supply faster than predicted.

In the last financial year, building activity in Logan was valued at over $800 million.

A stream of commercial activity saw large companies including national coffee franchisor Zarraffa’s Coffee, global logistics leader DHL and world-first commercial drone delivery service providers Wing (an Alphabet company) establish their operations in Logan.

Zarraffa’s Coffee moved into their $20 million purpose-built national headquarters from the Gold Coast to Logan in August this year.

The company’s new HQ will support 90 plus stores across Queensland, New South Wales and Western Australia and provide the space to progress their future expansion plans.

Spanning 18,000sq m, the site also combines a roastery, a warehousing, packaging and distribution hub, factory concept café, and the $50 million Distillery Road Market project being delivered by the company’s development arm Tonken Property Group.

Headed by founder of Zarraffa’s Coffee, Kenton Campbell, Distillery Road Market is set to become a world-class food experience destination akin to iconic markets such as Chelsea Market in New York and The Grounds of Alexandria in Sydney.

Campbell said the timing was right to relocate to Logan, given its central location along the growth corridor between Brisbane and the Gold Coast.

“From the point of view of customers, staff and suppliers, there is no better place, than where we are right here,” Campbell said.

“Logan has given me the ability to create something special at Distillery Road Market and for Zarraffa’s.”

Distillery Road Market will be the first of its kind in Logan and Queensland, and is part of a growing tourism cluster in the Beenleigh and Eagleby area.

Demand Outstrips Supply in Logan Accommodation Market (1)

Local attractions such as Beenleigh Artisan Distillery, Australia’s oldest registered distillery, and award-winning Aboriginal live theatre experience, Spirits of the Red Sand, draw in both domestic and international visitors.

In the next few years, the city’s strategic focus on developing its capabilities in the business, cultural and sports events sectors, will see Logan’s relatively youthful tourism industry continue to evolve.

Over the past 6 months, Logan City Council’s events acquisition program in partnership with Sports Marketing Australia has since attracted attendance of more than 14,000 competitors and spectators across 50 event days.

Rick Sleeman, managing director of Sports Marketing Australia said that Logan had an accessible location and the right event infrastructure in place to host major sporting events.

“A capacity and capability assessment identified Logan’s potential to become a sports super centre in south-east Queensland,” he said.

“Logan has world-class facilities from PGA standard golf courses, sporting fields, indoor courts and 2000-capacity arenas, plus access to national and international airports making the city an ideal host.”

In 2018, the Brisbane Roar Football Club invested $9 million to develop a state-of-the-art training facility and operations base at Logan Metro Sports Park with plans to host tournaments.

And the recent $65 million whitewater adventure park proposal, now at the pre-feasibility stage, will be a game-changer for Logan and the region – with the potential to become an iconic tourism asset and future Olympic Games venue.

The demand for short-term accommodation continues to escalate as the line-up of major sporting tournaments join Logan’s events calendar.

Given the strong demand fundamentals and opportunities across business, events and the emerging tourism industry in Logan, there is a demonstrated gap for a business style, specialist hotel or serviced apartments.

To support this shortage in supply, Logan City Council offers incentives for eligible new short-term accommodation developments that achieve a 3.5 to 5 star rating.

 

 

Source: theurbandeveloper.com

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Brisbane

‘Absolutely inundated’: Lack of stock drives Queensland interest

‘Absolutely inundated’ Lack of stock drives Queensland interest

As open-home restrictions begin to lift, a Brisbane agency has reported huge interest from first home buyers clamouring to get onto the property ladder despite COVID-19.

Coronis Agency has reported that it had more than 80 potential buyers attend the first scheduled open home of an Archerfield property.

The three-bedroom, two-bathroom property only hit the market last Thursday and received more than 56 phone and email enquiries within 48 hours.

Director Anthony Hunt said the agency was “absolutely inundated with buyer enquiries within 30 minutes of the property going live, with many buyers asking to schedule a private inspection on the Thursday night or Friday as they were eager to beat the rush on Saturday”.

“In the end, I opened the property up on Friday afternoon and had nine groups of buyers turn up purely from responding to their calls and emails,” he explained.

He added that at the Saturday open home, which was the first advertised inspection, “it took more than an hour to get everyone through the property due to the social distancing restrictions, but on the whole, everyone was really understanding and willing to wait their turn”.

Mr Hunt said the general feedback he received from most parties is that “they want to buy something right now, despite everything going on with COVID-19”.

“Many of them are first home buyers with pre-approval who are looking to get their foot on the property ladder and aren’t fazed about going out in public to attend open homes,” he said.

The director believes that what they’re more concerned about is the lack of properties to choose from and how quickly properties are selling at the moment.

By Saturday afternoon, Mr Hunt said he had received four offers and it was under contract by Saturday night for a price that exceeded the seller’s expectations, “so they’re very happy”.

While 140 Granard Road was “beautifully presented”, the agent expressed the opinion that the main reason it was so popular with buyers was because it offered “great value for money in a suburb only 15km from Brisbane CBD”.

He iterated that buyers are willing to look outside of their desired suburb to purchase the right property.

His message to those who are considering holding off on selling? Don’t wait.

“In the past week, the Coronis sales team has received more than 1,000 buyer enquiries, and from that, 550-plus groups attended an open home on the weekend, so there is no doubt about it — buyers have a strong appetite to purchase now, they just need more options to choose from,” he concluded.

 

 

 

This article is republished from www.smartpropertyinvestment.com.au under a Creative Commons license. Read the original article.

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Brisbane

Rio’s New Digs Hit High Point

Rio’s New Digs Hit High Point

Hutchinson Builders has topped out the “first-of-its-kind” full merging of two separate commercial buildings in Brisbane’s $700 million Midtown Centre.

Mining giant Rio Tinto signed a 10-year lease deal in 2019 on the 27-storey, Fender Katsalidis-designed tower, developed by AM Brisbane CBD Investment, a joint venture between wealth manager Ashe Morgan and developer David Mann’s DMann Corporation.

The project involves the $175 million connection and refurbishment of the former Health and Forestry Buildings located at 155 Charlotte Street and 150 Mary Street—acquired in 2017 for $66 million—into a cross-block hub comprising a commercial tower, with a public laneway connecting both streets.

Rather than using the conventional method of joining the existing 20-storey buildings by a skybridge, the buildings have been merged from top to bottom using a base podium and exterior, to provide large campus-style 2,500sq m floor plates.

The infill is locked in by a new level 20 slab supporting an additional six levels above, to form the single 26-storey tower currently being constructed by Hutchinson Builders—who, like other “essential services” have continued work while adapting to Covid-19 social distancing measures.

Fender Katsalidis director Mark Curzon said the infill completion is a huge accomplishment in terms of commercial design outcomes, adaptive reuse and sustainability in Australia.

“Through good design, we have given new life to the buildings in a somewhat unconventional but highly innovative and technically considered manner.

“We’re leading the way for more environmentally-friendly adaptive reuse while meeting commercial objectives in creating large floorplates that would otherwise be unattainable in this CBD location,” Curzon said.

Compared with a demolish and rebuild scenario, Midtown Centre’s infill achieves a claimed 231 per cent cumulative impact reduction across all environmental indicators, including a 37 per cent carbon dioxide reduction compared to a new build.

Rio’s New Digs Hit High Point (2)

Curzon said that although the successful merging of the structures in the Midtown development rests partly on the fact that the two buildings’ original designs mirror each other, the technique was transferable.

“The infill has afforded significant environmental savings, adding to the viability of this technique and its potential to be implemented across other buildings that sit side-by-side.”

Fender Katsalidis principal James Mills said the project sets a new standard for the repurposing of buildings.

“Despite nothing of this scale or nature taking place in Australia previously, we have found a way to add value to the site through a cutting-edge architectural process that is exemplar for Brisbane and beyond.

“Our work at Midtown Centre is focused on bringing the buildings in line with today’s needs, increasing net lettable area and producing environmental sustainability through the design of commercial assets,” Mills said.

Rio’s New Digs Hit High Point (3)

Even before coronavirus created the new normal of social distancing, which in turn is set to have transformative impact on office design—Ashe Morgan chairman Michael Moss predicted the “customised office solution” prescribed for Rio Tinto would “create a benchmark for workplaces of the future”.

The centre features a level 20 “sky garden”, landscaped garden terrace atop the podium and “green seam” encasing the tower along with landscaped areas across the development totalling in excess of 3,000sq m.

With the Midtown centre slated for completion in mid-2020, the next phase of construction involves the addition of six levels to create a single tower from the new level 20 slab.

 

 

 

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Brisbane

Landlords hit by rising vacancies, falling prices

Landlords hit by rising vacancies, falling prices

Property prices don’t necessarily always fall during recessions but this time you would have to think that prices will tumble significantly, given the speed and depth of the COVID-19 economic shock.

Simon Pressley, managing director of Propertyology, says the problems in the property markets will be temporary.

Even those sober economists at the big banks are forecasting price falls of up to 32 per cent over the next couple of years – though the banks’ “base” cases, or most likely scenarios, are for price declines in the order of 10 per cent.

A lot of homeowners are ahead on their mortgage repayments and have a nice buffer in case they have to drop their payments to the required minimum, and history shows most people can hold on without becoming forced sellers.

That’s also likely to be the case this time, given the level of government support through JobKeeper and JobSeeker and lenders’ granting of repayment deferrals to their home loan customers affected by the financial fallout of the pandemic.

However, the situation is trickier for property investor landlords.

Rental vacancy rates in Sydney’s CBD hit more than 13.8 per cent during April – the highest ever recorded by property researcher SQM Research.

Vacancies at Melbourne’s Southbank are similarly at 13 per cent, and in the CBD it is 7.6 per cent.

So far, the vacancy rates in the suburbs of our two largest cities have risen only slightly, with the elevated rates contained to inner-city areas.

Still, the relatively low suburban vacancy rates may be understating the true weakness in rental market, given many tenants have negotiated rent discounts or deferrals with their landlords.

Robert Mellor, executive chairman of economic and property forecaster BIS Oxford Economics, describes the high vacancy rates of inner-city areas as “alarming”.

It is the number of people out of work, fewer international students and loss of immigration that’s driving the surge, particularly in areas with many higher-density developments.

Overseas travel bans have also led to demand for short-term accommodation through sites such as Airbnb drying up, leading property owners to list their housing for long-term leasing. That’s pushing vacancy rates in holiday hotspots higher, though that will change once interstate travel resumes.

Simon Pressley, managing director and head of market research at buyer’s agency Propertyology, says many landlords with investment properties in inner-city areas are finding it tough.

And those who bought investment properties recently risk being in negative equity if prices fall significantly, where they owe more on the property than what it is now worth, he says.

However, Pressley cautions against punching out doom and gloom predictions on a negative trend.

“I’m in the minority, but I’m not seeing double-digit price falls,” he says.

“It is a dreadful thing for some landlords but we are talking about specific pockets. It is not going to be like this forever.”

The coronavirus has at least ensured that interest rates and, therefore, borrowing costs, will stay low for years to come.

Time will tell, but the almost 2 million Australians with at least one investment property will be hoping Pressley’s optimism proves correct.

 

 

 

This article is republished from www.brisbanetimes.com.au under a Creative Commons license. Read the original article.

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