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Future Fund Sells Out of Harbour Town on $180m Deal

Harbour Town on $180m Deal

Multibillion-dollar Future Fund has sold its 25 per cent interest in Harbour Town Gold Coast, the largest outlet centre in Australia, for $180 million.

The quarter share was purchased by an existing co-owner, the Lendlease-managed Australian Prime Property Fund Retail, with the acquisition lifting its control of the asset to 50 per cent.

Harbour Town Gold Coast is Australia’s largest outlet centre, comprising a total GLA of 55,225 square metres.

With more than $440 million in total MAT, Harbour Town Gold Coast is the top outlet centre in Australia, this accounts for $120 million more than DFO Homebush Sydney.

JLL negotiated the sale of Future Fund’s 25 per cent interest.

JLL head of retail investment Simon Rooney said assets which are performing well and have strong retail fundamentals are still achieving significant premiums.

“There is a limited pool of quality outlet centres in Australia,” he said.

“The discount nature of the asset class means these centres can be countercyclical. They can achieve resilient sales growth even when household discretionary spending capacity is under pressure.”

Rooney says the Gold Coast has been benefitting from a strong rebound in tourism.

“With 7.8 per cent per annum growth in international visitor arrivals forecast for 2018, this is nearly four times the long-term average,” he said.

The centre services a trade area population of 507,170 residents as of 2017, which is expected to grow by 2 per cent per annum scaling up to 742,640 people by 2036.



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Commercial Property

Realtime Data Brings Competitive Edge for Landlords

property market

After a widespread national lockdown in early 2020, Covid-19 has had a varied and fragmented impact on Australia’s commercial property market, with restriction levels varying dramatically between states.

Throughout such a volatile time, innovation and adaptation have emerged as key pillars of success for businesses within these commercial property sectors, according to Re-Leased, a cloud-based property management software solution for commercial, industrial, office, retail and mixed assets.

With the external environment shifting daily, landlords who had the upper hand were those armed with real-time data that gave them a clear picture of the market.

While the commercial real estate sector has traditionally been slow in the uptake of real-time data to guide their business decision-making, property professionals are beginning to realise that this information is a powerful tool to gain a competitive advantage.

During the past few years, the changing needs of tenants have been prominently exposed in the office sector.

A growing number of office workers no longer wish to work in an office full-time, which has increased the demand for flexible workspaces, shorter lease terms and tech-enabled fit-outs.

This trend was accelerated dramatically during 2020, as businesses were forced to set up the infrastructure that allowed their employees to work efficiently from their homes.

As tenant’s found it more difficult to access their premises, rent-collection rates fell across Australia and rent-relief subsidies increased as landlords tried to keep them on board.

property market

More established commercial landlords will have the right amenities and assets in place to offer flexible lease terms to larger companies, which will see them grow in popularity, says Re-Leased.

While rent collection is just now returning to pre-Covid-19 levels, a longer-term trend that we are likely to observe is the demand for shorter lease terms.

Tenants are taking with them the lessons from 2020, pursuing greater flexibility and protection for their business.

Securing long-term leases of 10-plus years has traditionally been a key indicator of success for property professionals across Australia. However, these investors will now have to reconsider how they evaluate the performance of their property portfolios and pivot their product offerings.

Co-working spaces are a great example of how demand for shorter lease terms is changing the market for office landlords.

Initially, this business model was hit hard, as tenants took advantage of their short leases and dropped their flexible workspaces as soon as Covid-19 hit.

However, it is this same model that is best set up to offer businesses more flexible leases in the future and meet this growing demand.

More established commercial landlords will have the right amenities and assets in place to offer flexible lease terms to larger companies, which will see them grow in popularity.

An industry that has performed consistently well during Covid-19 has been Australia’s growing industrial sector. Industrial property is currently undergoing a phase of unprecedented expansion and digital transformation, driven by the rise of e-commerce.

This growth was accelerated by online shopping demand throughout 2020, as shoppers were restricted from attending brick-and-mortar retail stores.

As industrial assets become increasingly high-tech and integrate artificial intelligence to optimise manufacturing capability, these opportunities will only expand further.

In 2021 and beyond, industrial assets are likely to rise in value and attract investment from landlords looking to diversify their portfolio.

This means that harnessing real-time data has never been so important for industrial property landlords, to keep up with this rapidly transforming landscape.

It is clear that as Australia rebounds from the events of 2020, the commercial property professionals who will prosper in our new normal will be those who are flexible and agile in their approach, and those who choose to arm themselves with the data-driven tools necessary to make informed and strategic decisions.


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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.


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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.

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 under a Creative Commons license. Read the original article




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