Development giant Yuhu Group has expanded upon its $1 billion Jewel development, snapping up a neighbouring parcel of land in Surfers Paradise.
The $11.25 million purchase includes two low-rise apartment buildings on a 1264sq m parcel of land adjacent to the major Jewel development.
While no specific plans for the 2 Wharf Road site have been finalised, Yuhu chairman Jimmy Huang said the vision for Jewel is to “create the most desirable destination possible for both residents and visitors”.
“The extra land could, for example, lend itself to additional retail and commercial offerings, including facilities to support leisure, exhibitions, entertainment or business activities.”
Yuhu Group acquired the historically difficult developmentproject from Chinese conglomerate Dalian Wanda, along with One Circular Quay in Sydney, for $1.13 billion in May last year.
The three crystalline towers that form the Jewel project reached topping out stage last August.
In North Sydney Yuhu has topped out its $250 million residential development ‘The Miller’ reaching its maximum 21-storey construction height.
The PTW-designed tower will comprise 169 private residences and 100 serviced apartments, managed by Quest when complete.
Huang says The Miller will provide high-quality urban living in North Sydney.
“It is also in proximity to the waterfront and Sydney CBD just two kilometres away,” he said.
The Miller is scheduled for completion in the third quarter of this year.
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.
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.
Alceon Snaps Up Council Land for Business Park
Boutique investment firm Alceon has secured a large parcel of land in Robina for $7 million from the Gold Coast City Council.
Alceon will now look to create a new business park on the 9,921sq m site located at Robina Town Centre Drive.
The Acuity Business Park will comprise three stand-alone office buildings featuring large floor plates, a ground-floor plaza, basement parking, shops, gyms and parks.
The Gold Coast City Council, which intended to use the area for a new regional council office, sold the site to Alceon who now will look to provide 15,000sq m of “quality commercial premises serviced by public transport and public amenity,” Alceon said.
“Robina is considered an ideal location for the next commercial Business Park because of its high resident population which is predicted to more than double within the next ten years,” Alceon project director Paul Huston said.
“This is supplemented with low rental vacancy rates reflecting a vibrant growth corridor for corporate occupiers seeking a point of difference for their business and employees.”
The development of Acuity Business Park Robina follows successful construction of similar suburban office projects in Eight Miles Plains and Northshore Hamilton.
CBRE who is handling leasing at the park, said the time was right for grade-A offices on the Gold Coast, justified by Australia’s largest home builder Metricon has committed to 75 per cent of the first of the building at the business park.
Robina’s market vacancy currently sits at 11.6 per cent with CBRE forecasting the figure moving to sub 10 per cent by the end of 2019.
“Vacancy rates have continued to decline through eight of the last nine years across the market with Robina historically leading the way with single figure vacancy,” CBRE director of office leasing Nick Selbie said.
Construction will commence in March with the first building scheduled to be completed by July 2020.
In Victoria, Alceon is currently developing the Novotel St Kilda site with Melbourne developer Gurner and the Shand’s Barana Group into a larger luxury offering yielding up to $550 million.
Plans for the Saint Moritz development include 240 luxury residences spread across the three new buildings, including a 1,000sq m penthouse which was recently sold to ex-Domain boss Antony Catalano for a record breaking $30 million.
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