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Ipswich sees office property revival as take up hits record high

The Ipswich office market had a record year in 2015 according to Savills, with take-up hitting 160,000 sq ft (14,864 sq m), a 44% increase on the five year average of 90,000 sq ft (7,432 sq m). The firm notes that last year saw significant activity in the town’s office market, with Suffolk County Council…Read More→

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Ipswich sees office property revival as take up hits record high

The Ipswich office market had a record year in 2015 according to Savills, with take-up hitting 160,000 sq ft (14,864 sq m), a 44% increase on the five year average of 90,000 sq ft (7,432 sq m).

The firm notes that last year saw significant activity in the town’s office market, with Suffolk County Council acquiring the 25,000 sq ft (2,322 sq m) Beacon House and Birketts Solicitors securing planning permission for a new 40,000 sq ft (3,716 sq m) headquarters on Princes Street.

Chris Moody, director of business space at Savills in Ipswich, comments: “Princes Street continues to grow in popularity and is fast becoming one of the prime business locations in Ipswich. Now known as the Princes Street Business Corridor and recently awarded Enterprise Zone status, there are a number of major projects that are currently underway in this area which will benefit from tax breaks and financial incentives, making it highly desirable to potential new occupiers.”

Take up is set to grow further  due to the proposed delivery of a number of new schemes, which includes Connexsions 159, the first speculatively built office block in over two decades and planning consent for a new landmark building at 88-96 Princes Street. The scheme, which is being marketed by Savills on behalf of Ipswich Borough Council, will total 40,000 sq ft (3,716 sq m) and offer businesses premium Grade A office accommodation.

The impending delivery of prime new stock has set record rents for Ipswich, with the Birketts scheme pre-let at £18 per sq ft (£193 per sq m) and Connexions 159 being marketed at  similiar terms. This is a noteable uplift on the average rent of good quality second hand stock in the town, which is currently £12.50p per sq ft (£134 per sq m).

Chris adds: “There has been a tangible uptake of business space across the office, industrial and mixed-use sectors, which shows a real level of commitment being made by occupiers in the town. This kind of activity is something that hasn’t been seen in Ipswich for a number of years and can be accredited to the growing importance of the Town as a major regional centre.”

 

Originally Published On: http://www.savills.com/

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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/TerritoryCapital city/regional centreRest 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$600,000N/A
NT$550,000N/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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Commercial Property

Tenant Demand in Gold Coast Office Market Expected to Rise

Tenant Demand in Gold Coast Office Market Expected to Rise

Investment activity in the Gold Coast office market was subdued in 2018 with few assets on offer, although Knight Frank expects the tide to change this year with around $90 million in assets hitting the market in 2019’s first quarter.

The office investment market on the Gold Coast, Australia’s sixth largest city, has traditionally been dominated by private investors and syndicators given the relatively smaller investment scale.

But as confidence builds with a higher level of tenant demand and the depth of the market, Knight Frank’s Mark Witheriff says the region is “likely to appear on the radar for a greater swathe of investors”.

Sustained population growth is forecast to average two per cent per annum over the 25 year period from 2016 to 2041, with the majority of growth to come from both internal and overseas migration attracted to lifestyle and educational opportunities, according to Knight Frank’s Gold Coast office market overview.

Local businesses dominate demand

While tenant demand in the Gold Coast office market has been dominated by local businesses, Knight Frank’s Tania Moore said there’s a growing core of larger corporates with branch or head offices located in the region.

“With the likes of National Disability Insurance Agency, Mantra Group (Accor) and Wyndham Vacation Resorts and Asia Pacific,” Moore said.

“With only 37,500sq m of supply added to the Gold Coast market over the past 10 years (9 per cent growth in the stock base) there is a relatively small pool of modern assets which can handle the higher employee densities required for major corporate branch offices, processing centres and call centres.”

The research found supply remains low but pre-committed new construction was beginning such as the recently acquired Acuity Business Park, snapped up by Alceon last month for $7 million from the Gold Coast City Council, which plans to kick off construction.

Knight Frank’s Jennelle Wilson says the supply of new office space across the core Gold Coast precincts stalled during 2018 with only 2,744sq m of refurbished space returning to the market.

“Supply is expected to remain small, sporadic and pre-commitment driven in the medium term.”

Total vacancy for the Gold Coast office market is 11.6 per cent, this after hitting 12 per cent mid last year.

“Despite the vacancy rate on the Gold Coast stalling at double figures, rental growth is well entrenched due to the relatively low number of quality options available, with prime effective rental growth of 5.9 per cent year-on-year recorded,” Wilson said.

 

Source: theurbandeveloper.com

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