That is all from us today.
Thank you for your time and your comments. Tomorrow the bureau of statistics is releasing building permit data for April. The March numbers were down 15 per cent month on month and the consensus view is none or minor growth of 0.1 per cent for April.
The S&P/ASX 200 has closed 0.7 per cent lower at 6440 points. It traded at that level for most of the day with very little change between 11am and close.
Lynas was the outstanding performer today with a rise of 15.5 per cent to $2.76. Ausdrill had the next biggest move with a gain of 2.3 per cent to $1.53, which highlights how extraordinary Lynas was today compared to the rest of the market. Altogether 42 companies closed higher.
On the down side, Downer EDI dropped 9.1 per cent to $7.16 and Nufarm dropped 5.8 per cent to $4.05 on reports by News Corp it is assessing its balance sheet with a view to possible asset sales.
But the points were really taken off by a 1.3 per cent fall in CSL to $204.50 and a 0.6 per cent drop in BHP Group to $38.36. Wesfarmers, Woolworths, and Transurban all softened. The most traded stock was South32 with 24.2 million shares trading hands and the price falling 2.3 per cent to $3.36.
Shares in highway health food retailer Oliver’s are up 59 per cent to 3.5 cents after it told the market it will return to profit in 2019-20. The company is booking a loss of $5.3 million for the current financial year. The former board and chief executive were turfed out in March and the new team has ended “outrageous cash burn“. Oliver’s has closed several stores and “stopped the unproductive activities at head office”.
In January the previous board advised of a half-year loss of about $3.5 million and Oliver’s incurred a loss of $1.8 million in the three months from January to March. Since the new board has taken over it delivered a break-even position for the April to June quarter.
“Olivers will post a trading loss for the 2019 financial year of around $5.3 million, all of it incurred prior to the actions and initiatives of the current Board and the new senior management team.”
The board expects to see a return to profits and “with it the ability to pursue a number of very exciting and potentially viable opportunities”.
The markets is down 46 points to 6438.5 as we head towards the closing bell. The S&P/ASX 200 fell 50 points on opening to 6419 and has been unable to get above 6440 all day. Just 49 companies are trading higher.
The most points are being taken away by a 1.5 per cent drop in CSL, and 0.8 per cent fall in BHP, and a 1.7 per cent fall in Wesfarmers.
Adding the most points today is National Australia Bank with a 1 per cent rise, and Lynas has rallied 14 per cent to $2.73. Telstra is 0.4 per cent higher after confirming more job cuts and being on track with its T22 program. And Nine Entertainment is up 1.5 per cent.
On Monday I posted about a regional Chinese bank taken over by regulators. Today two Asia-based economists for ANZ Bank released a note saying they think it is an isolated incident and will not trigger systemic risks.
The Baoshang Bank had a significant credit risk and was owned by a large private company which used to be heavily involved in the domestic financial market, according to ANZ economists Betty Wang and ZhaoPeng Xing. However, the takeover did increase short term funding costs, which will impact smaller banks and have spill-over effect on small and private enterprises.
“Some key indicators of [Chinese] city commercial banks have deteriorated in the past two years amid the nation-wide deleveraging campaign. The average capital adequacy ration (CAR) of banks decline to 12.64 in first quarter of 2019 from 12.75 per cent at the end of 2017,” they wrote in a note to clients. “Meanwhile, the non-performing loan ration rose to 1.88 per cent in first quarter 2019 from 1.52 at end of 2017. However, we do no think that this reflects a pandemic risk in the sector.”
They also note China has accumulated a lot of hidden debts, particularly in shadow banking.
“Assuming control of Baoshang could be a trial undertaken by the authorities to clean up such activities which have posed hurdles to the monetary transmission mechanism. The flurry of comments from different senior Chinese regulators in the past few days also signal that preventing financial risks is priority for China even amid the economic downturn.”
Lynas Corporation is one of the most strategic assets traded on the ASX and could eventually triple production from its 200 million-year-old rare earths deposit in Western Australia, according to fund manager Newgate Capital Partners. Newgate chief investment officer Tim Hannon said the Mount Weld mine, where the Lynas board met this week, boasted the largest and highest quality rare earths deposit in the world. The Lynas share price surged more than 10 per cent to $2.64 in early trading on Wednesday, way above the indicative $2.25-a-share price offered by Wesfarmers as part of a conditional $1.5 billion takeover tilt on March 26.
The board meeting at Mount Weld, including a barbecue with community leaders, comes as Lynas considers either Mount Weld or an industrial estate on the outskirts of Kalgoorlie for a first-stage processing plant as part of a $500 million capital works program.
The new plant would remove low-level radioactivity from rare earths material before it is shipped to the main Lynas processing hub in Malaysia for downstream processing. The company expects the move to clear the way for Malaysia to renew its operating licence, which is due to expire in September.
Mirvac Continues Office Push with Brisbane’s ‘Healthiest’ Tower
Listed developer Mirvac has broken ground on its $836 million 80 Ann Street Brisbane CBD tower, promoting it as Brisbane’s “healthiest” commercial building.
Mirvac’s continued push into the office sector has now made it Australia’s second-largest office manager, with $15 billion of assets under management.
Mirvac’s pipeline of commercial developments, including 477 Collins Street in Melbourne and Australian Technology Park in Sydney, has an estimated end value of more than $2 billion and is expected to add a further $90 million in recurring net operating income for the diversified developer.
The developer’s latest commercial project, spanning an entire block between Ann and Turbot Streets in Brisbane, will soon be home to financial services giant Suncorp.
At its construction commencement on Wednesday, Mirvac chief executive Susan Lloyd-Hurwitz was joined by Suncorp acting chief executive Steve Johnson and Trevor Evans MP on site to launch the project.
Mirvac’s chief executive Susan Lloyd-Hurwitz said her team had worked closely with Suncorp over a number of months, as well as the architects on the project, Woods Bagot.
“This is of course going to be leading workplace for Suncorp and highly flexible in a way that we haven’t seen before in Australia,” Lloyd-Hurwitz said.
“With a focus on incorporating biophilia throughout the design, 80 Ann Street will be surrounded by an urban garden oasis while also providing cutting-edge smart building technology, flexibility and premium amenities.”
The tower will incorporate three-storey atriums and interconnecting floors, breathing floors featuring gardens and a function facility.
Suncorp’s future Brisbane office building will also boast Brisbane CBD’s largest floor plates when completed and will feature new retail amenities on the ground floor.
“This building will be for the public not just for the customers that make their homes in this building,” Lloyd-Hurwitz said.
In a nod to the heritage of the site that once housed the Brisbane Fruit Market, a 1,098sq m retail offering on the ground floor would include a market place and market laneway.
“We’re going to revitalise the old markets on Turbot Street and create a place for the people of Brisbane to eat, connect and meet.”
Suncorp acting chief executive Steve Johnson said the move was an opportunity to consolidate Suncorp’s teams in Brisbane together into one location, creating efficiencies as it has done in Sydney, Auckland and Melbourne.
“Suncorp has been providing Queenslanders with financial services for over 100 years, and the development of our new headquarters demonstrates our ongoing commitment to Queensland.”
“This is a reflection of bringing a number of our premises together in due course into one fantastic facility in the Brisbane CBD.”
Suncorp, currently Queensland’s largest privately listed company with market capitalisation of around $18 billion, will make up about 66 per cent of the premium-grade tower’s total space of 60,000 square metres on a 12-year lease, Brisbane’s largest leasing deal in a decade.
Mirvac also recently secured the Commonwealth Bank for a new building at the Australian Technology Park in Sydney’s Redfern.
“There’s a long way to go yet and we certainly look forward to seeing the development emerge over time which will bring together three CBD operations together for us and makes our operations more efficient,” Johnson said.
The development will provide 6 Star Green Star, 5 Star NABERS Energy and Gold Shell and Core WELL ratings.
Demolition of the eight-storey Primary Industries building has now concluded and construction is now set to move ahead on the tower which is set to be delivered in the first quarter of 2022 as planned.
Habitat’s $83m Sunshine Coast Development Greenlit
Queensland developer Habitat has received approval for a $83 million multi-use development targeted at entrepreneurs, which will be part of the Maroochydore’s new tech-centric city centre.
The proposal is for two residential towers comprising 152 units and six Small Office-Home Office (SOHO) townhouses to be built on a 4,158sq m parcel of land in the new $2.1 billion CBD.
Part of a massive 53-hectare swathe of land currently being transformed, the multi-use development will be part of a wider CBD vision with its extensive use of smart technology to create a cleaner, greener, more liveable and dynamic city centre.
Maryoochydore’s 20 year plan not only involves construction plans to become a 21st century smart city but will also feature Australia’s fastest data connection to Asia from the East Coast.
The prospect of high-speed internet could be a major draw card for start-up and established technology entities, one that Habitat has identified with its project planning.
“The Sunshine Coast has been called the entrepreneurship capital of Australia because there are more than 35,000 small businesses across the region,” Habitat managing director Cleighton Clark said.
According to the Australian Bureau of Statistics, the Sunshine Coast out-performed Brisbane in the growth of new small businesses in 2018, increasing 2.5 per cent, more than double the growth in Brisbane.
“The SOHOs have clearly hit the mark for this sector, providing a perfect combination of work and home in one property,” Clark said.
“Even before we received approval for the project, we had numerous inquiries from potential buyers about the town homes.”
Each SOHO will have non-residential space downstairs, with street frontage, which can be used for an office, shop, food and drink outlet or other kinds of business use.
The 53-hectare site of the new Sunshine Coast’s central business district, formerly Horton Park Golf Club, was purchased by the Sunshine Coast Council for $42 million in 2015.
SunCentral Maroochydore, established by the Sunshine Coast Regional Council, is the company overseeing the design and delivery of the new city centre.
SunCentral chief executive John Knaggs said the project showcased the type of urban design and innovation the new CBD would deliver.
“Habitat recognised early on the Maroochydore city centre will be a place that people will want to live and work,” Knaggs said.
“I expect demand from owner occupiers and investors to be strong, not just for the SOHOs but the residential apartments and the retail space at the base of the towers as well.”
Construction is expected to start on the project in February 2020, after it was signed off by the Economic Development Queensland.
Meanwhile, construction officially commenced at the new city centre site last month, with ground breaking on the precincts first commercial building, the $30 million Foundation Place by local developer Evans Long.
The new CBD will also feature a 167 room hotel by developer Pro-Invest, 100 residential apartments, and 40,500sq m of retail.
Brisbane’s Narrowest Commercial Tower Approved
A development application has been approved for an ultra-skinny mixed use tower located in Brisbane’s CBD.
The 30-storey development, lodged by Sydney-based Lionmar Holdings, will sit atop the heritage-listed Grosvenor Hotel on the corner of George and Ann Streets.
Lionmar, who purchased the site for $4.4 million in November 2010, submitted the development application to council in December 2016.
The office development, located in Brisbane’s legal precinct, will be just nine and a half metres wide and 30 stories tall, making the tower the narrowest building of a comparable height in Brisbane.
The building, designed by Hames Sharley, will feature 9,100sq m of boutique commercial office space, three levels of restaurant space, two apartments and 17 carparks.
The development will also feature a rooftop bar on level 29 with views across the Brisbane River to South Brisbane and through the CBD as well as a 400sq m city room and garden on level 14.
Hames Sharley principal Jason Preston said the building’s narrowness meant the design needed to be innovative in dealing with the challenges of structural tension, compression and stability.
“At just nine and a half metres wide and 30 stories tall, we believe this would be the narrowest building of a comparable height in Brisbane,” Preston said.
“Given the building’s four lifts are designed as a ‘side core’ to the west boundary wall, a building of this kind will twist and sway differently to a traditional tower, which is usually anchored by a number of central lifts, stair cores and a larger floor plate.”
The building will feature a hybrid ‘exo-skeleton’ bracing system, both as a structural necessity and to visually anchor the building.
Last year, council outlined several concerns about the height and scale of the proposed tower as well as the need for construction details compromising the heritage value of the 140-year-old hotel.
The developer agreed to reduce the tower site coverage from the initially proposed 68.5 per cent to 67.9 per cen and enlisted expert guidance of heritage architect Malcolm Elliot from Vault Heritage Consulting.
Preston said Hames Sharley’s design incorporated the client’s desire for a grand entrance that honoured the heritage status of the existing building.
Construction of the development is expected to start December and once complete the building is expected to earn premium A-grade commercial development status due to its sustainability characteristics, high-end lobby finishes, express lifts and high-performing services.
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