Top-tier investment and development firms are being invited to partner on the next stages of one of south-east Queensland’s largest urban regeneration projects.
The vision for the Sunshine Coast’s new central business district has continued to take shape with an expression of interest campaign launched for the forthcoming development stages.
The 15-hectare site of the proposed Sunshine Coast’s central business district, formerly Horton Park Golf Club, was bought by the Sunshine Coast Council for $42 million in 2015.
Sunshine Coast Council-owned company SunCentral, kickstarted by Queensland Premier Annastacia Palaszczuk in 2016, has since completed civil works in the core commercial precinct with construction of the CBD’s first buildings expected to start mid-year.
Underground waste and digital infrastructure facilities have now been completed with construction on 38,500sq m of commercial buildings in the first stage, which has already gone to market, was expected to start mid-2019 along with 23,000sq m of retail and 460 new apartments.
The city centre’s first buildings include an eight-storey commercial property by local developer Evans Long and a two-tower 152-unit residential complex by Brisbane’s Habitat Development Group.
This is in addition to a nine-storey Sunshine Coast Regional Council headquarters building, tipped to commence construction over the next six months.
SunCentral Maroochydore chief executive John Knaggs said the EOI process for the extensive next stages of the project called for experienced urban development capital funding partners to help develop key precincts.
“This is a unique opportunity for experienced developers and institutional capital groups to enter into a long-term partnership with SunCentral Maroochydore and set a new benchmark for city centre design and development in one of the fastest growing regions in the country,” Knaggs said.
The EOI campaign is offering the opportunity to build 67,500sq m of commercial space as well as retail floorspace and residential apartments across a number of precincts in the new city centre.
The site includes $10 million in underground digital waste and lighting facilities and includes space for 25,900sq m of retail and up to 1,390 apartments along waterways.
SunCentral has since leased some blocks of land in the core commercial area of the new CBD and has guided the civil works and underground infrastructure stage.
“Some of this development opportunity is located in the core commercial precinct while the majority is in the area south of the Corso waterway, adjacent the future rail station and transit plaza and in mixed-use apartment precincts alongside planned waterways and parkland,” Knaggs said.
The CBD will also feature a 250-room hotel which with 100 residential apartments, 40,500sq m of retail as well as commercial and entertainment space.
“Offering individual parcels has worked well for the first stage of the commercial precinct,” Knaggs said.
“However, in response to market feedback these next stages, involving both commercial and mixed-use areas, offer larger precinct-wide approaches.”
“We are able to provide a wider platform for capital groups and developers to operate longer term – and I’m sure this approach will help facilitate the development of key parts of the city centre.”
Apart from the new international broadband cable that will connect to a landing station located alongside the new CBD, more than $10 million in underground telecommunications and services capacity has been installed beneath the city centre’s new streets.
“Once people see the cable landing station completed and the cable connected from Guam giving this site and the Sunshine Coast the fastest data connection cable to Asia on the east coast of Australia that will generate additional interest,” Knaggs said.
The smart city framework for the new CBD includes digital signage, lighting and other “smart” technologies as well as the country’s first CBD-wide underground automated waste collection system which will transport waste from businesses and apartments through a series of underground pipes to a central collection station.
The Sunshine Coast Council has estimated up to 2 million more passengers would be flying into the region by 2040 once the region’s expanded airport was operational by 2020.
Over recent years the Sunshine Coast has attracted billions of dollars in public and private investment, making the regional economy one of the strongest in the state.
With the arrival of new infrastructure, analysts project the Sunshine Coast’s population to grow from 346,522 to 500,000 by 2036.
The expressions of interest on the next 15 hectares of the site can be lodged until 30 August.
Riverfront Brisbane CBD Development Site Hits the Market
One of the only remaining major development sites in Brisbane’s CBD, 309 North Quay, is set to be brought to market for the first time in nearly 20 years.
The property, which long housed Triple M and Hit 105, currently offers 14,049sq m of net lettable area across multiple buildings on 6,436sq m of land strategically positioned overlooking the Brisbane River and within Brisbane’s highly-anticipated North Quarter precinct.
Knight Frank’s Justin Bond and Ben McGrath, along with Jason Lynch and Don Mackenzie of Colliers International, have been appointed to run the expressions of interest campaign, with the property to formally hit the market in September.
Bond said the opportunity provided investors and developers with a rare opportunity to secure one of Brisbane’s only remaining major CBD development sites.
“With more than 260 metres of high-exposure frontage, the potential to develop multiple assets on the site is a significant point of difference and is an opportunity that hasn’t been offered to the market in several years,” he said.
“The property has incredible redevelopment potential considering the scale and position it occupies, as well as its favourable town planning provisions, allowing a range of uses and development height of 274 metres. ”
“While its use could remain commercial, the site – or part of it – also has potential for other uses including residential and short-term accommodation, such as a hotel.
“We foresee that it could become a mixed-use development, for which demand would be strong.
“Brisbane’s apartment market has shown a resurgence recently, with values forecast to increase by five to six per cent over the next few years, and only 10 per cent of stock in the inner city’s development pipeline will be in the CBD, providing limited competition for well-developed stock.
“Demand for hotel rooms is also evident across multiple consumer bases, with international visitor numbers increasing by 11.5 per cent over 2018, while business travellers increased by 13.5 per cent.
“Queensland’s burgeoning tourism sector is outperforming both New South Wales and Victoria with total expenditure exceeding $23.5 billion annually.”
Bond added that the timing for the eventual purchaser was ideal if a commercial component was developed, with more than 350,000sq m of office tenant expiries set to hit the market between 2021 and 2024.
“Any future commercial development at 309 North Quay would be able to target this market for a pre-commitment,” he said.
“The property’s current configuration also allows for the tenancy profile to be repositioned in the meantime to create valuable holding income.”
Colliers International national director Jason Lynch said the future for Brisbane was extremely positive, particularly with major infrastructure projects underway or planned, and 309 North Quay would be a direct beneficiary.
“Key city-shaping projects including Cross River Rail, Brisbane Live and Brisbane Metro are planned to be situated within 350 metres of the property,” he said.
“These projects are set to have a transformational effect on the corporate landscape of Brisbane, drawing tenants away from the traditional Golden Triangle precinct towards the rejuvenated North Quarter.”
Lynch said the rarity of such a large site in an Australian CBD would generate considerable enquiry from both domestic and offshore groups.
“Buyers will be looking to capitalise on the rebounding Brisbane office market and value proposition compared with the southern markets of Sydney and Melbourne, including for both the commercial and residential markets,” he said.
“The lease structures for the property allow redevelopment to commence from 1 July 2020, enabling purchasers to undertake a project in the near term and capitalise on the next wave of tenant demand within Brisbane’s CBD driven by a declining vacancy rate and positive employment growth forecasts.
“A mixed-use project with a residential and hotel component would also benefit from continuing population growth in South East Queensland, with demand for housing set to strengthen in the coming years, particularly with lower supply in the apartment market.”
The international expressions of interest campaign for the property at 309 North Quay will close on Thursday, 17 October 2019.
Developers Source the Next Wave of Brisbane Industrial Investment
Industrial land values continue an upward trend due to demand for completed investments combined with a low yield environment which latest Knight Frank research says is encouraging investment in the development pipeline.
Institutional developers have moved to purchase the next wave, englobo sites as land absorption continues in Brisbane’s industrial market.
Knight Frank partner and joint head of industrial Queensland Chris Wright says stand out regions have been the south east (14.5 per cent and 20 per cent) and trade coast (23.5 per cent and 20 per cent).
“With established estates, particularly in the South, now almost exhausted, the major institutional investor/developer players have been actively sourcing the next wave,” Wright said.
“The next phase of development will likely be in the Yatala precinct, where activity has already picked up, while in the South West large scale land remains at Redbank, Bundamba, Swanbank and Willawong.”
The Knight Frank report found vacant space in Brisbane’s industrial market had reduced by a further 2.5 per cent over the past year despite an increase of 15 per cent in the past quarter due to backfill space and spec starts. Vacancy remains 38 per cent below the peaks of early 2017.
The north, greater north and south east remain tight with limited availability. The research notes that the larger markets of TradeCoast, south and south west each saw increases of around 20,000sq m over the past quarter.
While tenant market activity has been fuelled by occupiers seeking to upgrade their accommodation, Knight Frank’s Mark Clifford says rental levels are recording modest growth.
“It’s a balancing act; while land values have grown rapidly, rents have only just crept up a little.
“With large industrial land options becoming scarce, you would have to think that demand will eventually drive an increase in rents as the options for tenants dry up.”
Brisbane industrial investment
Major sales, include three $100 million-plus sites this year. These include Blackstone divesting 111-137 Magnesium Drive at Crestmead for $182.50 million to Charter Hall, DWS buying 99 Sandstone Place, Parkinson for $134.2 million from Frasers Logistics & Industrial Trust, and 81 Schneider Road in Eagle Farm to Charter Hall from QLD Treasury for $102.50 million.
This year transactions total $902 million to date, which the report notes is 88 per cent of the total achieved for the 2018 calendar year.
“While there are not a large number of investment opportunities on the open market, further sales are expected to see 2019 become a record year for industrial transactions,” Wright said.
“Unlisted funds have dominated purchasing activity over the past 12 months with 54 per cent of all transactions by value.”
Wright said offshore purchasers remain motivated to increase their exposure to the Brisbane market, but were still seeking the larger scale assets.
“Offshore buyers accounted for 32 per cent of total purchasing activity in the $5 million-plus category over the past year, but when you limit the analysis to purchases of $25 million or more, offshore buyers accounted for 51 per cent of the market.”
High demand for retirement living North of Brisbane prompts another DA
The North Lakes suburb, 40km north of Brisbane CBD is fast becoming the retirement capital of QLD after yet another proposal for a retirement village landed in the Moreton Bay council’s inbox.
The DA for Linear Properties Pty Ltd is for a 145-dwelling retirement village at 1729 Anzac Ave, Mango Hill.
It sits beside Seasons Aged Care Mango Hill and across from the recently completed Opal North Lakes building.
The new retirement village the size of Westfield North Lakes with a multi-storey aged care facility has also been proposed for the site of the former North Lakes golf course, though no development application has been lodged yet.
As well as a retirement village, the Linear Properties development, which also takes in 1725 Anzac Ave, proposes an aged care facility, a childcare centre and a park.
It proposes 145 resident parking spaces and 25 visitor/employee spaces.
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