It appears that agriculture has hit a purple patch and the rural property market, like rising commodity prices, is finding new highs.
It is a unique cycle and the key drivers are low interest rates, strong commodity prices and favourable seasonal conditions said Brad James, Rabobank’s Regional Manager for Southern QLD and Northern NSW.
While not every rural producers season is on par, things are still reasonably good and being spurred on by the hike in commodity prices led by beef, grain, cotton and also sugar according to James.
This general alignment of the planets is also backed by a willing banking sector, who is showing great faith in the future of the agriculture industry. Certainly at least that is the sentiment of Rabobank.
James said there is a lot of emphasis on growth, through both on farm investment and expansion into further holdings.
“The property market is going strong and it is difficult to pick where the top point is, particularly in the beef sector as people seek to expand their business and rebuild their herd numbers as prices hit 30 year highs, in relative terms.
“It’s a rare event when the market goes up in contrast with low herd numbers, both domestically and globally and that has helped build the confidence in the land market.”
Watch 2021: The year of farm expansion on RaboTV
Planning to expand
With the keen focus on growth and expansion across agricultural operations, James said it is important to weigh up your options and to have a plan before committing to buying that new property or indeed embarking on major expansion plans that see the enterprise needing to increase debt.
“While the first instinct may be to buy more property so you can grow and expand your operation, as a business it is also important to consider how well placed you will be if there is a correction in markets, a lift in interest rates or a missed season… or heaven forbid, all three.”
“Consider what your appetite for risk is and how well you have mapped out the expansion plan and importantly also consider the risk appetite of other key stakeholders in the business.”
“With so many vagaries to manage in agriculture, most of these out of the producers control, it is important to be agile and prepared to change and open to new thinking or ways of doing things that may be needed to manage through adversity. This applies in a range of commercial (non-farm) businesses also.”
“It is also important to keep a close eye on the level of gearing the enterprise is being asked to manage/service when expanding,” James said.
“This is a highly sensitive ratio to manage when we have escalating land prices, as we have now. The large fixed expense associated with the acquisition of further holdings is serviced by the many variables around the income stream as mentioned. This is why gearing is such a focus point.
“As we all know, it takes time to build the herd and develop country, these should all be part of your business plan.”
James said the impact of an adverse circumstance can vary and some we cannot foresee nor avoid, but if we have a line of sight on the early warning signs and take an agile approach then we stand the best chance of moderating the impact.
“There is one certainty in all of this, those enterprises with the highest relative levels of gearing feel the impact the most. So keeping up to date with market and commodity trends and knowing when to engage that ‘what if’ strategy is key,” he said.
James said the current hike in confidence across agriculture was likely to create some ground breaking innovation in farming, particularly for the beef industry who are enjoying very strong returns, this is often associated with reinvestment into technology and efficiency gains.
“What we are seeing is people reinvesting in their industry with the confidence that this will improve their long term efficiency and in the end profitability,” he said.
“We can expect to see efficiency gains across management practices, pasture development, livestock handling, use of drones, carbon farming, rotation grazing and regenerative agriculture.”
Watch RaboTV to see how virtual fencing can revolutionise your operation
“This could be the catalyst for a road map for the future as producers look to take advantage of this current trend,” said James.
“There are so many tremendous opportunities in agriculture at present and with a measured approach, many can avail themselves of the unique circumstances to develop and grow in what we consider to be among the best agricultural lands and enterprises in the world.”
Australian cattle farmers are enjoying a golden era learn more from the Hartley family ThankAFarmer Hartley Grazing
Article source: inqld.com.au
Why Gold Coast Developers Turned to Harvey Norman Commercial
Despite the difficulties and loss in productivity that Australia’s southern states have experienced since the onset of Covid-19, the demand for building materials and new projects in Queensland has remained strong, a reality Queensland’s Harvey Norman Commercial division has witnessed.
With record high levels of interstate migration and historically low interest rates fuelling a booming development and construction industry, Queensland shows no sign of slowing down yet.
One development and construction group benefitting from this trend is the award-winning Cru Collective. Located on the Gold Coast’s Palm Beach, Cru’s latest development Siarn, designed by architects BDA, sold out nine months ahead of completion.
Featuring stunning coastal views, oversized balconies and the latest in high end finishes and appliances, Siarn offers the residents of its 16 apartments a beachfront lifestyle paired with exclusive amenities including a oceanfront pool, sundeck, infra-red sauna and alfresco dining areas.
Recognising the need to cater to the strong owner-occupier market, Cru collaborated with Queensland’s Harvey Norman Commercial Division to select a range of appliances, finishes and fittings that would allow the project to shine in a competitive market.
Among the fittings selected for Siarn included bespoke rose gold bathroom accessories from the Australian supplier Brodware; Italian-inspired basins and bathware from Parisi; quality sinks from Swiss brand Franke and stunning Zip Hydrotaps in brushed rose gold.
Following a personalised consultation and private selection appointments at Harvey Norman Commercial’s state of the art selection centre on the Gold Coast, Cru also included a range of high-end Gaggenau appliances for Siarn’s kitchen and butler’s pantries, a German brand recommended for its cutting-edge design, innovation and quality. Integrated refrigeration from Fisher & Paykel and German Miele laundry appliances were also selected for the luxury residences.
A Cru spokesperson said Harvey Norman Commercial’s diverse range of products on offer and ability to source customised and unique items at the best price has always made them the first port of call.
Cru found the team’s strong knowledge of products, design trends and industry insight was invaluable to a project’s success.
“We love the team at Harvey Norman Commercial and are grateful for all the support provided during the build,” they said.
Over the past 30 years, Harvey Norman Commercial has been the supplier of choice for architects, developers, builders and plumbers—a trend that Queensland proprietor Steve Cavalier sees only continuing into the future with the announcement of the 2032 Brisbane Olympic Games.
Since opening their doors in Queensland in 1989, the commercial division has grown and evolved to support the needs of their clients.
With now more than 150 employees, four large format warehouse facilities and three dedicated Selection Centres in Queensland, Harvey Norman Commercial offers its clients a one-stop-shop for products and services specifically tailored to the construction and design industry, crediting their long-standing supplier relationships, solid after-sales support and committed team as the key to their success.
Harvey Norman Commercial’s state of the art showrooms are trade only and by appointment only.
The Queensland commercial division has selection centres on the Gold Coast, Sunshine Coast and Townsville. To arrange an appointment or a personalised selection service, call 07 3297 3700.
Harvey Norman Commercial showrooms are also at Taren Point, Somersby and Nowra in NSW; Mitchell, ACT: Mile End, South Australia; Osborne Park, Western Australia; Port Melbourne, Victoria; Darwin in the NT; and Cambridge, Tasmania.
Main image: Siarn Palm Beach by Cru Collective
Article Source: www.theurbandeveloper.com
Realtime Data Brings Competitive Edge for Landlords
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.
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.
Article Source: www.theurbandeveloper.com
Gold Coast shopping mecca Pacific Fair up for sale
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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