Listed Singaporean property REIT Mapletree Logistics Trust has bought 36 hectares of industrial land on Brisbane’s outskirts in a deal worth about $95 million as institutional investors look beyond Sydney for better value.
It is understood the trust has agreed to terms with the vendor Pointcorp for the sale of the site, which will be part of the proposed 157 hectare Crestmead Logistics Estate, south of the Logan Motorway corridor in Brisbane.
Pointcorp, a Brisbane developer which has been amalgamating the land over the past two years, will start developing the estate in January. Mapletree will then be able to develop its own warehouses on the site with a capacity for about 200,000 square metres of space.
The land is just south of the 90,000-square-metre Metcash property that Charter Hall purchased from Blackstone earlier in the year for $183.6 million and is transacting on a yield of 5.15 per cent. The relatively tight yield is indicative of the increased demand from institutional investors for industrial property .
Pointcorp director Chris Vitale confirmed the group had contracted to sell 36 hectares unconditionally but would not disclose the price or buyer.
Selling agents Michael Callow and Scott Dalton of Cushman & Wakefield and Colliers International’s Matthew Frazer-Ryan also declined to comment on the deal.
However, Mr Callow did say there was a trend of institutional funds restocking their land supplies in Melbourne and Brisbane to facilitate large-scale warehouse and logistics parks, given the Sydney market was tight and overpriced.
“Melbourne land prices have doubled in the last 12 months based on strong tenant demand,” Mr Callow said. “It’s having the best run of all capital cities and Brisbane is likely to follow in 2020.”
Based on some recent comparable transactions, industrial land has been selling for anywhere between $600 and $700 per square metre on Sydney’s fringes, compared to between $250 and $350 per square metre in Brisbane’s western corridor precinct.
The Charter Hall-managed Core Logistics Partnership recently announced its acquisition of a 3.9 hectare site at Glendenning in Sydney’s west for $26 million, at about $680 per square metre.
Mapletree Logistics Trust has been an active player in the local logistics property market of late.
In September, the REIT bought a yet-to-be-built untenanted 15,000 square metres warehouse in Melbourne’s west in a fund-through deal worth $18 million and last year the trust paid $102 million for a Coles distribution centre in Heathwood in Brisbane’s south-west from US-based institutional investor Blackstone.
Experts identify best cities to buy property
Property hunters after the best value should eye up properties in Brisbane and Melbourne, according to a recent survey.
Finder spoke to experts and economists and asked them which city they would buy a property in if they were to invest today.
Nearly a quarter of them picked Brisbane and Melbourne, while 13 per cent would search for property in Canberra or Sydney.
Nine per cent saw potential in Hobart. But Perth and Adelaide did not rate high, with only 4 per cent of experts enticed to invest there.
“While Melbourne and Brisbane are strong candidates for the most promising property market in Australia, it is a bit stunning to see Sydney perform relatively poorly,” Finder insights manager Graham Cooke said.
The results illustrate that it is essential to consider property in other parts of the country, he said.
“The state you live [in] doesn’t need to be the state where you buy. With many Sydneysiders grappling with housing affordability, rentvesting could be the way to go.”
Although the majority of experts and economists were able to put their finger on a city they would invest, 13 per cent did not think it was the right time to buy a property.
Queensland Confirms 2032 Olympic Games Bid
Queensland will join the race to host the 2032 Olympic Games after premier Annastacia Palaszczuk confirmed that cabinet had given the green light for the bid on Monday.
State cabinet officially endorsed the bid after a feasibility assessment detailed significant investment and economic benefits for the state.
A south-east Queensland Olympic Games could create 130,000 jobs and deliver more than $8 billion in new trade opportunities, the analysis found.
“This is about so much more than a few weeks of sport,” Palaszczuk said.
“Hosting the 2032 Olympics and Paralympics could be a game-changer and deliver 20 years of accelerated opportunity for our state.”
More than 80 per cent of venues that would support an Olympic Games are already built, while recent IOC reforms ensure host cities receive significant financial support from the committee.
Preliminary analysis undertaken in May estimated net operating costs of $5.3 billion to host the 2032 Olympic Games.
Lord mayor Adrian Schrinner said that IOC’s financial contributions may be enough to offset the cost of the games entirely.
“The operating costs of the games can be done in a cost-neutral manner,” Schrinner said.
Schrinner, along with the council of Queensland mayors, has been vocal in his support of 2032 Olympics campaign—penning an open letter to the premier in an attempt to fast-track the bid.
The premier said the bid process will be staged, with the first phase about securing financial support across all levels of government.
On Monday, the premier said that the government has “not discounted” the use of the Gabba for the opening ceremony, and flagged upgrades to the ageing QEII Stadium and Albion Park raceway for major events.
The International Olympic Committee is not expected to announce the winner until 2022, giving the state government two years to finalise its bid.
Both the opposition leader Anthony Albanese and prime minister Scott Morrison have already thrown their support behind the bid.
“We will continue to work closely with our partners to ensure we receive the financial support we require from all levels of government,” Palaszczuk said on Monday.
Queensland’s initial bid will be assessed by the IOC executive committee, before being signed off by more than one hundred Olympic delegates.
China, Germany, Indonesia and the “combined Koreas” are among rumoured early-stage bidders.
Window to slam shut for first-time buyers as property prices surge
First-time buyers could well be locked out of the market again if property prices continue to surge – and the government’s scheme to help new buyers with small deposits is unlikely to make much of a difference, experts say.
Property investors often compete in the same parts of the market as first-home buyers, particularly modestly priced apartments.
The prospects of surging prices, future capital gains and even lower mortgage rates next year are likely to see investors flood back into the market.
While the increase in investor finance for mortgages so far has not been overly strong, this is highly likely to change in 2020, according to Doron Peleg, founder of property researcher RiskWise.
With official interest rates likely to be even lower from as early as February, he expects Sydney and Melbourne property prices to snap back to record highs by the end of 2020.
“First-home buyers are likely to be significantly impacted due to projected increased competition [from investors] and way less affordable houses,” Mr Peleg said.
I think [first-home buyers] will be crowded out of the market in 2020 – as has happened in previous upward price cycles
Louis Christopher, managing director of property researcher SQM Research, said first-home buyers have been entering the market in greater numbers over the past two years, particularly in Sydney and Melbourne.
“But following the latest price surges in both cities, I think [first-home buyers] will be crowded out of the market in 2020 – as has happened in previous upward price cycles,” he said.
Property prices in Sydney dropped about 15 per cent after peaking in mid-2017 and dipped a little more than 10 per cent from peak to trough in Melbourne, before recovering strongly from the middle of this year.
Figures released by the Australian Bureau of Statistics show that during 2014, 2015 and 2016 – when prices were booming – the number of loans to owner-occupier, first-home buyers was between 7000 and 8000 a month.
However, since prices started falling in 2017, commitments by first-home owners have surged to between 9000 and 10,000 a month.
Since the beginning of June, the Reserve Bank of Australia has cut the cash rate three times to a new record low of 0.75 per cent.
Over the three months to November 30, Sydney dwelling prices lifted by 6.2 per cent and by 6.4 per cent in Melbourne, CoreLogic figures show. Dwelling values in Sydney rocketed 2.71 per cent and across Melbourne by 2.25 per cent in November alone.
For many first-time buyers, even when prices were falling, a significant obstacle was coming up with a sizeable deposit. And buyers with less than a 20 per cent deposit of the purchase price are usually required by lenders to have mortgage insurance.
Though paid for by borrowers, the insurance covers lenders for any shortfall that may occur through the sale of a re-possessed house.
The one-off premium can to run to several thousands of dollars – even on modestly priced properties – although it is usually added to the home loan at the time of purchase.
The Morrison government’s First Home loan Deposit Scheme will start on January 1.
The scheme guarantees mortgages for up to 10,000 first-home buyers each year who have saved deposits as low a 5 per cent, helping them buy sooner and avoid having to pay mortgage insurance.
The government’s scheme limits the purchase price of Sydney properties to $700,000, which to be honest, is a joke
Graham Cooke, insights manager at comparison site Finder, said that aside from the small number of borrowers who may be able to get help in buying their first home, the property value caps for the scheme are also “problematic”, especially in Sydney.
“The government’s scheme limits the purchase price of Sydney properties to $700,000, which to be honest, is a joke,” he said. That is also the cap for regional centres in NSW, defined as cities with populations of more than 250,000. The cap for the rest of NSW is $450,000.
“Not many properties [in Sydney] will qualify for this scheme – some apartment buyers may qualify, but not many houses are available for below that price,” Mr Cooke said.
The cap for houses is $600,000 for Melbourne and regional Victorian centres and $375,000 for the rest of Victoria.
Successful applicants must have taxable incomes of $125,000 or less a year for singles and $200,000 or less for couples.
The scheme is administered through the National Housing Finance and Investment Corp. in partnership with major lenders. Last week, the scheme signed its first lender, NAB.
The government has said the scheme is designed to help first-home buyers purchase a modest home and is just one way it supports them.
In 2017, the Morrison government introduced the First Home Super Saver Scheme, which helps first-home buyers save a deposit inside their superannuation fund by making voluntary contributions.
The government will be monitoring the new scheme, including how the supply for loans is meeting demand, and it can be modified, if required.
Robert Mellor, executive chairman of economic and property forecaster BIS Oxford Economics, said first timers can take some heart that prices of cheaper dwellings, particularly apartments, are not rising as quickly as the middle and upper ends of the market.
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