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Evidence mounting for Brisbanes Industrial Property Market’s ‘cautious recovery’

Brisbane Industrial Property Investment

AFTER a tough year, cautious optimism is building in the Brisbane industrial market.

Ray White Commercial director of industrial transactions Graham Norris believes the Brisbane market was “in a very slow stage of cautious recovery”.

“Over the last 18 months the market place diminished to a certain extent and that was because of the unwillingness of banks to lend money for investment in property,” he said.

“That market has changed around now and the banks are coming back into the marketplace willing to lend money and investors are coming back, and that includes offshore investors.”

Mr Norris said in the next 12 months there were requirements for more than 400,000sq m of space from some of the biggest names in the industrial sector.

“They’re coming because the price of land has come back to a certain extent which has made it viable for these companies to set up operations in Queensland now,” he said.

“The competitive nature of our market is very attractive to these people. And also the commitment by the State Government for an on-going $1 billion infrastructure spend is positive, which will make land more accessible and viable to industrial market.”

Jones Lang LaSalle’s latest Brisbane Industrial Market Commentary found the take-up for the first quarter of this year was 78,800sq m, bringing total gross take-up for the past 12 months to 265,200sq m, 45 per cent less than the previous year.

But there was 57,100sq m of new space completed in the March quarter and the supply pipeline was slowly picking up with 171,100sq m of space currently under construction.

According to Knight Frank’s Brisbane Industrial Market View, the market has shown a return to rental growth with prime rents growing by 3.5 per cent to average $112/sq m net across the region.

This represents the first measurable rental growth within the market in almost three years.

Knight Franks director of research (Qld) Jennelle Wilson said the net rental growth was a reflection of the lack of available stock rather than an increase in demand.

“Instead we are seeing landlords with an upcoming vacancy, realising how little competition there is currently against their building, re-setting their asking rent and expectations higher,” Ms Wilson said.

“The level of stock, particularly larger prime accommodation has continued to diminish.

“This has transferred some demand to owner-occupier purchases of land to construct their own facilities, and there are also a number of larger tenant pre-commitments under negotiation at this time.”

According to Knight Frank, the levels of vacancy as measured in April recorded another new low of 177,443sq m.

Ms Wilson said land values have now bottomed, with increased activity noted at the current price levels both from owner occupiers and also some activity re-emerging from developers.

She said the impact of mining-related tenants was now being felt in the market, previously dominated by small to medium fabrication or parts/servicing businesses covering 2000sq m to 4000sq m.

“There has recently been an influx of larger tenants such as Clough (11,277sq m), Ausco Modular (4412sq m plus 6.5ha of hardstand), Caterpillar (18,375sq m) and Australian Portable Buildings (6600sq m) which are all growing their presence in the Queensland market in response to resource projects,” Ms Wilson said.

“In addition ATCO’s purchase of 10ha, Hastings Deering (18ha) and North Qld Heavy Haulage (4ha) were all for the construction of new facilities where the current stock did not meet these tenants requirements.”

 

Article from couriermail,com.au written by Chris Herde and originally published on June 15, 2012

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Commercial Property

Gold Coast shopping mecca Pacific Fair up for sale

Gold Coast

Gold Coast shopping centre Pacific Fair is expected to be put up for sale  in what is likely to be the nation’s largest retail commercial property sale.

Long one of the iconic shopping and tourism destinations of the Gold Coast, the sale of Pacific Fair in Broadbeach is tipped to set a new benchmark price for sales of major shopping centres following the pandemic disruption.

Pacific Fair will be the fourth shopping centre on the Gold Coast to be sold or put on the market in the past three weeks.

The shopping centre that opened in 1977, and has been renovated and redeveloped six times, hosts 400 stores dining, fashion, luxury and global brand stores.

It is tipped to sell for around $1.8 billion.

Pacific Fair is owned by two investment funds, AMP Capital Retail Trust and AMP Capital Diversified Property Fund.

Both plan to sell their share.

AMP Capital Retail Trust has appointed Colliers International to sell its 80 per cent share in the centre. The AMP Capital Retail Trust ownership includes sovereign wealth fund Abu Dhabi Investment Authority, the Canada Pension Plan Investment Board.

An AMP Capital Retail Trust spokesperson today declined to comment on the potential sale.

The remaining 20 per cent stake, owned by the AMP Capital Diversified Property Fund (ADPF), is on the market separately. CBRE has been appointed for the sale.

The $5.4 billion ADPF fund merged in April with rival fund Dexus, after the implementation agreement was announced on the Australian Stock Exchange in March. Under the merger, Dexus had flagged its plans to sell assets.

The ADPF 20 per cent stake has been valued between $335.9m and $366m.

With the AMP Capital Retail Trust’s 80 per cent share, the total sale price is expected to top $1.8 billion.

Under it most recent $670-million overhaul in 2016, Pacific Fair was transformed into a destination resort-style precinct that turned it into Australia’s fourth largest shopping centre.

Pacific Fair’s expected entry to the commercial property market comes after a flurry of shopping centre sales on the Gold Coast.

In the past three weeks, the State Government’s fund manager, Queensland Investment Commission, revealed it planned to sell a 50 per cent stake in Westfield Helensvale.

In smaller sales, the southern Gold Coast neighbourhood shopping centre known as the “Man on the Bike” shops was sold for $6.2 million in early June.

A week earlier, the Miami Shopping Village sold to a Gold Coast investor for $9.1 million.

 

Article Source: inqld.com.au

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Commercial Property

First Home Loan Deposit Scheme extended for new builds, price caps increased

First Home Loan Deposit Scheme extended for new builds, price caps increased

The building industry has welcomed the extension of the federal government’s First Home Loan Deposit Scheme, but experts have warned of the risk of borrowers taking on more debt.

It will enable an extra 10,000 buyers who build new homes to get into the property market with a deposit as low as 5 per cent while avoiding lenders’ mortgage insurance, with the federal government acting as guarantor on the loans.

Price caps for the scheme will be lifted, allowing Sydney buyers to purchase a $950,000 home with a deposit of only $47,500. The previous limit was $700,000 and buyers were not restricted to new builds.

Melbourne’s cap will lift to $850,000 from $600,000, while Brisbane will lift to $650,000 from $475,000.

EXTENDED FIRST HOME LOAN DEPOSIT SCHEME PRICE CAPS
State/Territory Capital city/regional centre Rest of state
NSW $950,000 $600,000
VIC $850,000 $550,000
QLD $650,000 $500,000
WA $550,000 $400,000
SA $550,000 $400,000
TAS $550,000 $400,000
ACT $600,000 N/A
NT $550,000 N/A

Source: Housing Minister and Assistant Treasurer

Housing Minister and Assistant Treasurer Michael Sukkar said in a statement on Saturday the program would drive more construction and support jobs as the economy recovers from the COVID-19 pandemic recession.

“The additional grants will not only help first home buyers but also support the jobs of Australia’s tradies at a time when the economy needs it most,” he said.

Purchasers who build a new home worth up to $750,000 or undertake a substantial renovation can get $25,000 grants through the HomeBuilder scheme, which is limited to low- and middle-income earners.

But busy builders said the short time frame was forcing them to turn potential customers away to meet their obligations to current clients, while others in the priciest cities reported strong enquiries but few customers qualifying.

The industry has backed the latest announcement, saying it would support construction jobs.

Izaac Mathieson, general manager of sales and marketing of Queensland-based builder Hallmark Homes, said the extension of the scheme was welcome news.

“That’s a sensible approach given that the HomeBuilder grant runs out at the end of the year,” he said. “It’s great to see an incentive for first-home buyers and new builds into the new year.”

The scheme’s extension will allow first-homeowners in Brisbane and regional Queensland centres to access properties worth up to $650,000 – an increase from $475,000.

Mr Mathieson said any first-home buyer in the market looking for a home above $650,000 “probably doesn’t need the scheme”.

AMP Capital chief economist Shane Oliver noted recent plans to wind back responsible lending obligations had forced banks to scrutinise borrower expenses to make sure they could repay loans.

“Coming on the back of HomeBuilder and the removal of responsible lender obligations the Government is clearly focussed on supporting the housing market,” Dr Oliver wrote in a note to clients.

“The risk is that it just drives even more people into lots more debt and a possible eventual oversupply of homes given the hit to immigration.”

Stockland chief executive of communities Andrew Whitson said the program would help first-home buyers enter the market, adding that building new homes was an important job multiplier.

“The extension of the scheme will provide welcome stimulus and confidence to the new housing sector, particularly in NSW where the increased price cap will be most beneficial,” he said.

 “Buyer confidence is critical to help drive demand and continue to support jobs around the country, and this measure will help restore confidence in the market.”

Housing Industry Association managing director Graham Wolfe said the changes “will support jobs in the residential building industry”.

“The extra 10,000 places for new homes and apartments that the Government has put into this scheme will ensure more first home buyers achieve their goal of owning a home sooner,” he said.

Urban Taskforce chief executive Tom Forrest also welcomed the news, noting it would include the purchase of new apartments, but called on the federal government to apply a similar approach to the HomeBuilder grants.

“The HomeBuilder scheme remains difficult for new apartment purchasers,” he said. “The timeframes for the completion of construction simply don’t work for most projects. The thresholds effectively exclude most new properties in Sydney.”

The peak body for real estate agents called for the extension to be applied to buyers of established housing too.

“It would have been far better to not limit the additional places to new builds in terms of the economic impacts and first home buyer preferences,” Real Estate Institute of Australia president Adrian Kelly said, adding most first-home buyers choose established dwellings and some undertake renovations.

Minister Sukkar noted some buyers may be able to take advantage of the expanded low-deposit scheme, the HomeBuilder grant and state or territory incentives.

“Combined, the First Home Loan Deposit Scheme, HomeBuilder and the First Home Super Saver Scheme represent an unprecedented level of Federal Government assistance for home buyers and the construction industry alike,” he said.

Recent research found the average first-home buyer couple in Sydney would have to save for six years and six months for a 20 per cent deposit on an entry-level house, while Melbourne buyers face six years of saving.

The First Home Loan Deposit Scheme attracted strong interest when it opened in January, offering 10,000 places for the 2019-20 financial year. Another 10,000 places were opened on July 1 for this financial year.

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

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TAWAR RAZAGHI, ELIZABETH REDMAN

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Commercial Property

AA Reit to buy Gold Coast industrial property for A$38.5m

AA Reit to buy Gold Coast industrial property for A$38.5m

SINGAPORE – AIMS Apac Reit (AA Reit) is expanding its footprint in Australia with a A$38.46 million (S$36.92 million) acquisition of a freehold industrial facility in Gold Coast, its manager announced on Wednesday morning (May 15) before the market opened.

In a press statement, its manager noted that AA Reit has entered into a sales and purchase contract with GSM Rocket Australia to purchase Boardriders Apac HQ, located in the suburb of Burleigh Heads, Queensland.

The deal amount was arrived after considering an independent valuation by CBRE Valuations Pty Ltd, which valued the property at A$38.46 million.

After including stamp duty payable and other transaction costs, the total estimated cost of the acquisition is about A$41.5 million. This is expected to be funded mainly from Australian dollar debt facilities in order to maintain a natural currency hedge on the acquisition, the Reit manager said.

Assuming that the transaction will be fully funded by debt, AA Reit’s aggregate leverage post-acquisition will increase to 35.5 per cent on a proforma basis, up from 33.7 per cent as at March 31, 2019.

The property will be leased to GSM Operations Pty Ltd for 12 years on a triple net lease basis, which is a lease structure where the master tenant is responsible for outgoings of the property, including repair and maintenance costs, insurance, and taxes, among other things.

Both the vendor, GSM Rocket Australia, and the tenant, GSM Operations Pty Ltd, are subsidiaries of Boardriders Inc, a global actions sports and lifestyle firm that designs and distributes brands including Quiksilver, Billabong and Roxy.

The first year rental from the property is A$3 million, and will increase by 3 per cent per annum, with a rent review at mid-term of the lease, the manager said. Under the contract, the tenant also has an option to renew the lease for another five years.

The development, which sits on a land area of 33,300 square metres (sq m), with a total net lettable area of 14,833 sq m, comprises a warehouse and office facility, as well as a two-storey retail building.

Notable properties in the vicinity include Stockland Burleigh Heads Shopping Centre, and the upcoming Kaufland giant supermarket. The property is also situated about 3 kilometres from Burleigh Heads Beach, and a less than 20-minute drive from Gold Coast Airport.

Koh Wee Lih, chief executive of the Reit manager said: “The proposed acquisition represents an opportunity to further diversify and strengthen our portfolio with a strategic addition that offers a strong tenant profile, and provides income stability to AA Reit. In line with our strategy to build a high-quality, diversified portfolio of assets that creates long-term value for our unitholders, the acquisition will be DPU accretive.

“The outlook for the Gold Coast economy remains positive, as the region is currently experiencing growth across key economic factors including strong population growth, investment into major infrastructure developments and an increase in both domestic and offshore tourism into the region. This investment will enable us to expand AA Reit’s footprint in a market that offers solid long-term growth,” added Mr Koh.

Upon completion of the acquisition, AA Reit will own a total of 27 industrial properties, of which 25 are located throughout Singapore, with one located in Gold Coast, Australia, and a 49 per cent interest in a property located in Macquarie Park, New South Wales, Australia.

As at 10.51am on Wednesday, units in AA Reit were trading at $1.39, up 0.7 per cent, or one cent, after the announcement.

 

 

Source: www.straitstimes.com

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