Archive | Australia – NSW

Lendlease becomes Barangaroo tenant and promotes multi-storey timber office construction

Lendlease Corp moved into its new headquarters in the 168-tall tower 3 of Barangaroo South’s International Towers on Friday, 11 years after being shortlisted in the design competition for the new Sydney financial district between the harbour bridge & Darling Harbour and 6½ years after winning the state government contract to develop stage 1.

2000 of the construction company’s employees are moving from 5 locations into 24,500m² on levels 8-19 of Tower 3’s 39 floors.

Work practices

Chief executive & managing director Steve McCann said the new headquarters showcased Lendlease’s capability – it’s owned by a Lendlease-managed fund, was built by the company, is in a precinct transformed by its urban regeneration business and is in a tenancy that demonstrated the group’s understanding of vibrant, productive workspaces for employees & customers.

Under the team-based working model, instead of belonging to an individual desk, employees belong to a team neighbourhood of 15-20 people, and each neighbourhood has access to a range of spaces. Spaces include a team table, the anchor point for each team; working walls for visual communication; enclosed spaces known as pods; breakaways, for less formal & ad hoc collaboration; and focus points, for tasks requiring concentration.

Levels 13 & 14 feature a 6m high breathing green wall containing over 5000 plants. Mr McCann said the active, modular green wall system was scientifically proven to accelerate the removal of air pollutants, such as carbon dioxide & volatile organic compounds. “In addition, it cools the surrounding air temperature, resulting in energy efficiency and health & wellbeing gains.”

Tower 3 is one of the largest highrise office buildings to have received a 6 star green star office design v3 rating from the Green Building Council of Australia.

As well as noting that staff will have access to over 1000 bike racks, 40% of their work stations are stand-up desks. Lendlease made some observations about work practices in its business, and said the research that informed its new workplace strategy & design revealed:

  • 41% of its people occupy a work point seat at any time
  • 36% are away, on site or working away from the office
  • 23% will be around & about, mainly in meetings or refreshing
  • 54% of their work is process-type, interruptible & routine
  • 53% of their work is done collaborating with others, and
  • 46% of their work requires deeper thinking, focus & to be ‘in the zone’.

Barangaroo South project progress

The whole of Barangaroo South adds about 270,000m² of premium office space to Sydney – similar in scale to the Marina Bay financial centre in Singapore & Canary Wharf in London. 3 towers named International Towers Sydney have been built, 2 now occupied:

Tower 1, PwC, HSBC, Marsh & McLennan, Servcorp
Tower 2, Westpac, Swiss Re, Gilbert + Tobin
Tower 3, KPMG, Lendlease

  • $A4 billion of funding secured for the whole precinct
  • Unitholders in the Towers 2 & 3 owner, Lend Lease International Towers Sydney Trust, are the Canadian Pension Plan Investment Board (50%), Australian Prime Property Fund Commercial (25%), Lend Lease Trust (15%) & APG (10%)
  • Tower 2 completed & opened 1 July 2015. Tower 3 opening mid-2016 and Tower 1 to open end 2016
  • Barangaroo Reserve (6 ha of parkland) opened by NSW Government in mid-2015.
  • 7000 office workers have moved into Tower 2 and 25 retailers are trading in the precinct; on completion there will be over 80 retail outlets
  • $A40 million public art fund ($A20 million for Barangaroo South) established, with first indigenous artwork unveiled late 2015
  • Transport for NSW’s construction of Wynyard Walk & Barangaroo Ferry hub is ongoing
  • Planning assessments in progress for concept plan amendment (modification 8) & Crown Hotel
  • Application to come for Renzo Piano-designed 1 Sydney Harbour towers.

Trust also buys 6-storey laminated timber office building

An impression of the 6-storey Barangaroo timber-structure office building.

An impression of the 6-storey Barangaroo timber-structure office building.

As its own new headquarters in Barangaroo South neared completion, Lendlease Corp announced on 24 June that the owner of 2 of the 3 office towers in the precinct, Lend Lease International Towers Sydney Trust, would also acquire an innovative 6-storey engineered timber office building.

The building, designed by Jonathan Evans & Alec Tzannes of Tzannes Associates, is aimed at setting a new benchmark in the use of sustainable building materials. It’s due for completion next year.

It will have 5 office floors above ground-floor retail, net lettable area of 6850m², and will be built at the Sussex St junction between the old central business district and the new Barangaroo.

The building will be constructed from cross-laminated timber (CLT) & glue-laminated timber (glulam). CLT has a lower carbon footprint than other building materials, the production process produces zero waste, and timbers are sourced from certified sustainably managed forests. Much of the building can be prefabricated and assembled on site.

Mr Tzannes said: “Looking from the bridges leading to Barangaroo, through the clean glass skin, the multi-storey timber structure forms the character of the architecture, that from inside creates an interior environment reminiscent of the spaces often found in Sydney’s historic timber or cast iron & brick buildings from the era when warehouse buildings were crucial to Australia’s maritime economy.”

International House Sydney is Lendlease’s third CLT building in Australia, joining 2 in Melbourne – Forté Apartments and the Library at The Dock. The library is Australia’s first 6-star green star public building and is made from engineered timber & reclaimed hardwood.

Links: Lendlease
Barangaroo
Barangaroo South
International House Sydney

Earlier stories:
21 December 2009: Lend Lease wins Barangaroo stage 1
25 March 2006: 11ha of park in Sydney’s East Darling redevelopment
7 August 2005: East Darling Harbour design competition goes to round 2

Attribution: Company releases.

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World property M1Aug16 – Aqualand grows Sydney portfolio, Saudis buy US farmland

Chinese developer Aqualand buys 9th Sydney site & touted for $A1.5 billion Barangaroo project
Saudis buy US farmland for animal feed

Chinese developer Aqualand buys 9th Sydney site & touted for $A1.5 billion Barangaroo project

Mingtiandi reported on Friday that Aqualand Projects Pty Ltd – described as a “transplanted” Chinese developer – bought its 9th site in Sydney for $A105 million.

Managing director Lin Jin joined family company Shenglong Group (now headquartered in Shanghai) in 2007 and established Aqualand Australia in 2014 with a mix of Chinese & local executives. Its chief financial controller, Rhyson Li, began his career at PricewaterhouseCoopers and was previously chief financial controller of the China Hydroelectric Corp, an energy company listed in the US.

Lin Jin’s father, Lin Yi, founded Shenglong in Fujian in 1999 and, by 2013, had 30,000m² of projects internationally worth $US25 billion, developing highrise office buildings, high-end urban residential spaces & 5-star hotel complexes in Asia, Europe, the UK, North America & Australia. In the US, Lin Yi partnered with his cousin, Los Angeles businessman Joseph Lin, to form City Century LLC.

The new Sydney project is to convert the Samsung office building at Milsons Point into upmarket apartments. It’s across the harbour bridge from the cbd and was bought from local investor Barana Group for $A140 million.

Aqualand & local partners Grocon Pty Ltd & Westfield malls owner Scentre Group were also being touted this month to win the bidding for the $A2 billion 5.2ha Central Barangaroo project, the last piece of the $A6 billion Barangaroo redevelopment of naval & commercial shipyards between the Sydney Harbour Bridge & Darling Harbour.

Central Barangaroo will contain 150,000m² of office, retail & residential developments, plus public amenities including the Sydney Steps, a project to link residential to commercial centres.

Links:
Mingtiandi, 29 July 2016: China’s Aqualand buys 9th Sydney site for $105 million
Mingtiandi, 21 July 2016: China’s Aqualand said to win bid for Sydney’s $US1.5 billion Central Barangaroo project
Mingtiandi, 24 May 2015: Chinese developer plans $100 million La Condo Tower, buys 2 Sydney sites – on same day
Aqualand

Saudis buy US farmland for animal feed

CNBC reported in January on Saudi land purchases in the US south-west to grow feed for dairy herds back home – similar to Chinese purchases in New Zealand to supply milk back home, and not raising attention until the regions the Saudis have focused on became afflicted by drought.

Saudi companies grow alfalfa hay in California & Arizona for shipment home. Private company Fondomonte California bought 1790a (724ha) at Blythe, on the Colorado River in California, in January for $US32 million, 2 years after its parent, food company Almarai, bought 4000ha 80m away in Arizona for $US48 million.

Link: Saudi Arabia buying up farmland in US Southwest

Attribution: Mingtiandi

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property W20Jan16 – Chinese to buy second Investa portfolio, global institutions buy UK residential, fund for small UK industrials

Chinese fund in line to buy second Investa portfolio
Invesco launches fund to invest in UK rental housing
UK industrial estates investor establishes fund

Chinese fund in line to buy second Investa portfolio

Dexus Property Group agreed an $A10 billion merger with the unlisted Investa Office Fund a week before Christmas, with approval scheduled for an Investa shareholder meeting in April, but reports from Australia this week indicate the Chinese sovereign wealth fund China Investment Corp may win the fight for the second part of the former Investa empire.

The Australian Financial Review’s Street Talk column cited sources saying documents with some preliminary metrics had been drawn up.

The Chinese fund bought the $A2.5 billion unlisted Investa Property Trust from Morgan Stanley Real Estate Investing last year. The listed office fund has an $A3.5 billion portfolio.

Mingtiandi’s Michael Cole said on Monday the China Investment Corp had bought $US7.3 billion of properties in Asia, Europe & Australia in the last 5 years.
Links: AFR, 18 January 2016: China Investment Corp approaches Mirvac on $3.5b Investa Office Fund (behind wall) 
Mingtiandi, 18 January 2016: China’s CIC said ready to bid

Earlier story: 29 July 2015: World property T14Jul15 – Chinese fund buys Australian portfolio

Invesco launches fund to invest in UK rental housing

Giant US fund manager Invesco Ltd has closed a new open-ended UK private rented sector fund with £250 million of investable capital, including debt, from 5 institutional investors in Australia, Canada & the UK.

Invesco has $US775 billion of funds under management and its real estate division has $US16 billion under management.

The new UK fund was established in response to Britain’s growing imbalance in residential supply & demand. Invesco also has multi-family investments in the US & Asia, and has launched residential development investments in the UK & Germany in the last 18 months.

Invesco client portfolio management managing director Simon Redman told Europe Real Estate institutional investors owned less than 5% of the UK private rented sector, compared to over 25% in the US.

Links: Europe Real Estate, Invesco launches residential fund
Invesco global portal

UK industrial estates investor establishes fund

IO, a specialist UK manager of multi-tenanted industrial estates, bought 10 properties for £34.9 million in October and has just bought another 24 properties for £76 million to close a £120 million joint venture with the privately owned international property group Grosvenor Ltd and Quilvest, the Bemberg family office business which is an independent global wealth manager & private equity investor.

The first 10 investments for IO Investment 2 LLP had a combined vacancy rate of 16%, a blended net initial yield of 7.25% and a blended gross reversionary yield over 9%.

The second portfolio, bought from MStar, a joint venture between a controlled affiliate Starwood Capital Group & M7 Real Estate, has a combined vacancy rate of 11.3%, net initial yield of just under 7% and a gross reversionary yield over 8.5%.

IO says on its website it “applies a pioneering method of management to generate outperformance”.

Links: IO

Europe Real Estate, IO acquires portfolio
Grosvenor
Quilvest

Attribution: Investa, Invesco, AFR, Europe Real Estate, IO.
Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property W6Jan16 – Barangaroo, Melbourne Quarter, UK fast-track housing

Lend Lease gets Barangaroo investor, first Melbourne Quarter tenant
UK government launches fast-track housing programme

Lend Lease gets Barangaroo investor, first Melbourne Quarter tenant

Lend Lease Group announced major deals in the week before Christmas on its Barangaroo South development in Sydney and Melbourne Quarter in the heart of Melbourne.

In Sydney, it’s sold a 25% stake in the Barangaroo South Tower 1 to an unnamed Asian institutional investor, conditional on Foreign Investment Review Board approval. This will reduce Lend Lease’s equity commitment from $A525 million (37.5%) to $A175 million (12.5%).

The developer set up the Lend Lease 1 International Towers Sydney Trust last June to own the building, expected to be completed by July 2017 with PwC, HSBC, Marsh & McLennan and Servcorp as major tenants. Other investors include the Qatar Investment Authority and the Lend Lease-managed Australian Prime Property Fund Commercial.

Tower 2 has already opened and Tower 3 is due for completion by mid-2016.

In December, Lend Lease signed up global design & engineering firm Arup as the first tenant in its $A1.9 billion Melbourne Quarter precinct between Collins & Flinders Sts and across the road from Southern Cross station.

Arup will move to the 25,000m² 6-star green star One Melbourne Quarter, the first tower of 7 commercial & residential buildings planned for a precinct Lend Lease is calling Melbourne’s “new economic heart”.

Link: Lend Lease

UK government launches fast-track housing programme

British Prime Minister David Cameron said on Monday the government would directly commission small & up-&-coming companies to build thousands of affordable homes on public land in a fast-track programme.

He said the direct commissioning approach hadn’t been used on this scale since Margaret Thatcher and Michael Heseltine started the London Docklands regeneration in 1981.

This time, the government will set up a £1.2 billion fund to build 30,000 “starter homes” on underused brownfield land in the next 5 years.

Mr Cameron said developing on public land “will lead to quality homes built at a faster rate, with smaller building firms – currently unable to take on big projects – able to get building on government sites where planning permission is already in place.

“The first wave of up to 13,000 will start on 4 sites outside of London in 2016 – up to 40% of which will be affordable ‘starter’ homes. This approach will also be used in at the Old Oak Common site in north-west London.”

The Conservative government has committed to delivering 200,000 starter homes over the next 5 years. The brownfields starter home fund will fast-track construction of at least 30,000 new starter homes and up to 30,000 market homes on 500 new sites by 2020.

Link: Government will directly build affordable homes

Attribution: Lend Lease, UK Government.

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property F7Aug15 – $A70 million home, A-reit looks at mature markets, big European trade

Chinese family’s new Sydney home costs $A70 million
Ascendas reit to expand into mature offshore markets
€1 billion portfolio deal in Europe as investment focus shifts

Chinese family’s new Sydney home costs $A70 million

Sydney media yesterday identified the buyer of James Packer’s 3345m² 6-level Vaucluse mansion La Mer as Chinese billionaire Chau Chak Wing. The price, $A70 million, set a new record for an Australian “house”, topping the $A53 million paid in 2013 for the Point Piper mansion Altona.

Dr Chau is a developer in Guangzhou, but the Australian Financial Review said he was a resident of Hong Kong and also a citizen of Australia. Forbes China Rich List last year ranked him at number 220 with a net worth of $US1 billion.

He has strong Australian interests – his wife & daughter Winky live in Sydney and he owns the Chinese-language Australian New Express Daily, which Winky Chau runs. She’s previously worked for 2 New South Wales premiers, Bob Carr & Morris Iemma.

Links: Australian Financial Review, story on Dr Chau
Daily Telegraph story

Ascendas reit to expand into mature offshore markets

The Ascendas Real Estate Investment Trust, listed in Singapore, said yesterday it was exploring investment opportunities in mature developed markets such as Australia & Germany.

The trust’s manager told unitholders expanding in this way would strengthen the portfolio.

Ascendas launched A-Reit in 2002 with a portfolio of 8 business & industrial properties worth $S636 million and has grown to a portfolio of 105 properties worth $S8.2 billion. It intends to grow its offshore investments to 20-30% of the portfolio.

Link: A-Reit

€1 billion portfolio deal in Europe as investment focus shifts

German asset manager Union Investment Group talked at the end of last year of moving most of the €2.5 billion/year it applies to real estate into international markets such as the UK, Japan, Australia, Singapore & the US, and helped that intent on Tuesday when it sold the Aqua package of 17 properties in 6 European countries to French company Amundi Immobilier SA for €1 billion.

Amundi is one of Europe’s largest asset managers, with €954 billion of assets under management, including €9.2 billion of real estate.

Union Investment specialises in open-ended real estate funds for private & institutional investors. It has €27.8 billion in 20 funds under management through Union Investment Real Estate GmbH & Union Investment Institutional Property GmbH.

In an explanation of its new, wider international focus, it said: “Union Investment is increasingly leveraging the opportunities that arise from different property cycles around the world. To spread risk and enhance performance, the company has a strict policy of investing in a mix of uses, regions & property sizes.”

Links: Union Investment
Amundi

Attribution: Australian Financial Review, Daily Telegraph, Ascendas, Union Investment

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property W1Jul15 – Qataris fund Sydney tower, Brisbane congestion, Mirvac buys for apartments & houses

Qatar fund joins Lend Lease for $A2 billion Barangaroo tower
Lend Lease wins tender for Brisbane motorway widening
Mirvac buys Sydney apartments site & 481ha for Brisbane homes

Qatar fund joins Lend Lease for $A2 billion Barangaroo tower

Lend Lease Corp Ltd has launched a wholesale open-ended property fund to invest in the $A2 billion commercial Tower 1 at Barangaroo South, in the 22ha redevelopment zone between Darling Harbour and the Sydney Harbour Bridge. The former container port is being transformed to become a global financial hub, with a headland park.

Lend Lease One International Towers Sydney Trust is the second fund established to invest in the precinct and takes total equity raised to $A3.4 billion. Construction of Tower 1, the third & largest commercial tower, began in April 2014.

Barangaroo, beside the old Sydney cbd.

Barangaroo, beside the old Sydney cbd.

The new fund will acquire 100% of Tower 1 with $A1.4 billion of equity commitments from capital partners & $A600 million of debt financing. The Qatar Investment Authority has committed to a 37.5% investment and the Lend Lease-managed Australian Prime Property Fund Commercial has committed to a 25% investment. Consistent with its strategy of investing alongside capital partners, Lend Lease will hold the remaining 37.5% as a co-investor.

Lend Lease recently signed leasing arrangements with Marsh & McLennan Companies for 10,400m² (4½ floors) and Servcorp for 2300m² (one floor). PricewaterhouseCoopers & HSBC were already signed up.

Lend Lease group chief executive & managing director Steve McCann said pre-leasing of the 3 towers had reached 66%. All 3 are under construction. Completion of Towers 2 & 3 is expected in the 2016 financial year (which starts today) and Tower 1 in the 2017 financial year.

Tower 1, 48% leased, will have 101,000m² of commercial net lettable area & 6000m² retail, Tower 2 88,000m² & 1000m² (79% leased) & Tower 3 78,000m² & 4500m² (76% leased).

The Barangaroo South precinct will also host a Crown Resorts Ltd integrated resort, agreed a month ago after Lend Lease lodged a modification to its revised concept plan

Links: Barangaroo South
Lend Lease

Lend Lease wins tender for Brisbane motorway widening

Lend Lease Corp’s Lend Lease Engineering Pty Ltd was named last Friday as the successful tenderer for design & construction of the $A1.162 billion Gateway upgrade north project in Brisbane.

Queensland’s Assistant Minister for Infrastructure & Regional Development, Jamie Briggs, and Minister for Main Roads, Road Safety & Ports, Mark Bailey, said the project would fix one of the state’s most congested & important motorways which formed a vital link between key freight hubs, such as the Port of Brisbane & Brisbane Airport.

It will widen an 11km kilometre section of the motorway from 4 to 6 lanes and widen the Deagon Deviation to 2 lanes in each direction.

The Federal Government has committed up to $A929.58 million and the Queensland Government $A232.42 million to the project, scheduled for completion in 2018.

Link: Gateway project

Mirvac buys Sydney apartments site & 481ha for Brisbane homes

Australian masterplanned residential developer Mirvac Group has signed up for 2 new sites in the last 3 weeks, one for 500 apartments & 7500m² of commercial space at St Leonards, 5km from the Sydney cbd. The other is a 481ha acquisition in a Brisbane growth corridor for 3000 homes.

The 5000m² St Leonards site, near the train station at 472 & 486 Pacific Highway, has recently been zoned for mixed use. Mirvac has bought it from CIMIC Group Ltd for $A121 million.

In Brisbane, Mirvac has bought a 481ha parcel at Greenbank, in the greater Flagstone priority development area 30km south-west of the cbd. The Australian Financial Review estimated it cost $A15-20 million.

Links: Mirvac
Australian Financial Review story
Brisbane Courier-Mail story

Attribution: Lend Lease, Mirvac, AFR, Courier-Mail

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property Sun10May15 – Bright Ruby buys Sydney Hilton, Henderson exits global venture, Greenland starts on UK renewal, renewal works for Goodman

Hilton sells Sydney hotel to Chinese-owned commodities trader
Henderson splits from joint venture with US fund after year
Greenland starts ₤600 million London development
Urban renewal a big bonus for Goodman Group

Hilton sells Sydney hotel to Chinese-owned commodities trader

Hilton Worldwide Holdings Inc has sold the 579-room Hilton Sydney hotel (pictured above) to Chinese-owned Singapore commodities trader Bright Ruby Resources Pte Ltd for $A442 million.

Hilton was pleased with its price, but who is the buyer, Bright Ruby? Various media have described the company as being controlled by “the Du family of Shandong, China”. Du, I’ve read, is the 47th most common surname in China – and in the village where Du Shuanghua came from, everyone carried the surname Du.

Du Shuanghua, founder & major shareholder of Rizhao Steel in Shandong Province, was most recently ranked at 263 on Forbes magazine’s list of wealthy Chinese with assets of $US670 million. In 2009 he backed 30% of his steel company shareholding into a Hong Kong-listed industrial investment holding company, Kai Yuan Holdings Ltd, getting a 5.54% stake in the listed company in exchange, and also affording himself some official protection just ahead of an unusual steel industry bribery case (see the Sydney Morning Herald story by John Garnaut below for all the implications of that).

Du Shuanghua began investing in Sydney in 2013. Spreading himself around, Mr Du’s Bright Ruby spent over $S1 billion buying the Grand Park Orchard Hotel & Knightsbridge retail podium on Singapore’s Orchard Rd and he lent Kai Yuan $US280 million to help it buy the Paris Marriott Hotel Champs-Elysees for €344.51 million.

Mr Du incorporated Bright Ruby in 2009 and reports on its previous property investments indicate it has attracted considerable investor support in China for its purchases.

Bright Ruby made his 2013 Singapore purchase for $S1.15 billion, which the Straits Times calculated was at a price of $S1.4-1.5 million/room (based on $S102-108,000/m² retail), well above the previous high of $S1.1 million/room, and at a net yield just over 4%.

A JLL report last year put the price in American dollars at $US921 million, of which $US595 million was for the 6875m² retail at $US86,545/m², thus pricing the 308 hotel rooms at $US1.06 million/room (current conversion rate $S1.41 million).

In Sydney, Bright Ruby bought 2 cbd office buildings in 2013, one at 231 Elizabeth St for $A201 million, but it appeared to be against stiff competition for the Hilton.

Hilton Worldwide president & chief executive Christopher Nassetta said the sale was “at attractive pricing in a tax-efficient manner”. It was sold at a multiple of 15 times adjusted ebitda, on a yield of about 6%. He said Hilton expected to use the sale proceeds to reduce long-term debt.

Hilton looked for interest in its Sydney hotel early this year and revealed the sale down in the smallprint of its quarterly results announcement on 29 April. It was the only hotel Hilton owned as well as managed in Australia, and it will continue to manage it under a 50-year agreement.

In its quarterly results, Hilton said it increased earnings/share by 25% to US15c, net income by 22% to $US150 million, adjusted ebitda by 18% to $US599 million and the adjusted ebitda margin by 320 basis points, system-wide comparable revpar (revenue/available room) by 6.6% on a currency-neutral basis, management & franchise fees by 18% to $US391 million, and reduced long-term debt by $US225 million.

Hilton opened 8000 rooms during the quarter and approved 23,000 for development, growing its development pipeline to 1432 hotels & 240,000 rooms.

Links: Australian Financial Review, 3 May 2015: Bright Ruby buys Sydney Hilton
Mingtiandi, 17 June 2014: Controversial China steel magnate linked to $US468 million Paris hotel deal
JLL, 2 April 2014: Asia’s shopping centres entice investors
Australian Financial Review, 25 September 2013: Bright Ruby spends $A975 million on Singapore hotel gem
Sydney Morning Herald, 17 April 2010: Bribery pays: court reveals iron ore corruption
South China Morning Post, 18 June 2014: Hong Kong-listed Kai Yuan buys Paris Marriott Hotel Champs-Elysees hotel

Henderson splits from joint venture with US fund after year

US investment fund TIAA-CREF (Teachers Insurance & Annuity Association – College Retirement Equities Fund) has bought out its partner in the year-old TIAA Henderson Real Estate Ltd (TH Real Estate) joint venture for £80 million.

TIAA-CREF, based in New York, had 60% and Henderson Global Investors Ltd 40% of the partnership, which managed $US26 billion of assets in Europe, Asia & North America. TIAA-CREF injected its European real estate business into the joint venture, while Henderson injected its European & Asia Pacific-based real estate businesses. TIAA-CREF continued to manage its own North American real estate business, and also provided investment management services for the new venture.

The company had its headquarters in London and James Darkins, Henderson’s property managing director, became the chief executive. During the joint-venture year TH Real Estate made 67 acquisitions worth $US3.7 billion, raised $US1.3 billion of new equity mandates and secured $US3.6 billion in capital recommitments from closed-end fund investors.

Henderson chief executive Andrew Formica said TH Real Estate would continue to sub-advise the Henderson UK Property OEIC (open-ended investment company – unit trust).

Australian insurance company AMP Ltd bought UK investor Henderson in 1998 and introduced the Henderson name to its investment businesses until 2003, when Henderson Group plc was relisted as a public company in London & Australia, with Henderson Global Investors Ltd as its property arm. AMP Capital Investors (NZ) Ltd was called AMP Henderson Global Investors (NZ) Ltd at that time.

TH Real Estate chief executive James Darkins, who’d emigrated to Wellington in the 1980s, joined Henderson in 1998 as head of property in New Zealand, then moved to the Sydney head office of AMP and back to London in 2001 as Henderson’s property managing director. He’s maintained a link to Wellington throughout, as a director of private company The Property Group Ltd.

Greenland starts ₤600 million London development

Chinese state-owned developer Greenland Group has broken ground on its first UK project, the ₤600 million residential Ram Quarter redevelopment of the Ram Brewery site in Wandsworth, London.

661 homes are envisaged for the 9ha, including a mix of luxury apartments, affordable housing & commercial facilities. The refurbished brewery will have 5200m²of retail space.

Greenland also has a major Canary Wharf project due to start in London, is developing apartments in Sydney and unveiled the $US666 million 52ha Tebrau Bay Waterfront City in Malaysia’s Johor state, across the water from Singapore, in January.

Michael Cole, of the Mingtiandi website, said at least 7 Chinese developers had Johor projects, worth billions of dollars in projected investment values.

Links: Greenland Group breaks ground on $922 million London housing project
Greenland’s $US666 million project to bring snow & opera to Malaysian seaside

Urban renewal a big bonus for Goodman Group

Changing land use in Sydney & Melbourne is proving a highly profitable bonus for ASX-listed Goodman Group, which now has an urban renewal pipeline exceeding 35,000 apartments in the 2 cities.

Full story: Urban renewal a big bonus for Goodman Group

Attribution: Hilton Worldwide, JLL, Straits Times, Singapore Business Review, Mingtiandi, Australian Financial Review, Sydney Morning Herald, Forbes, Kai Yuan, South China Morning Post

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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Parramatta Rd caryard sells for $NZ5800/m²

A 2216m² development site at Homebush, in Sydney’s inner-west, has been sold for $A12.6 million ($NZ12.9 million). That’s a land price of $A5685.92/m² ($5824.29), and an average cost for each of the 84 consented apartments of $A150,000/apartment ($153,650).

Peter Kotzias, of Ray White Commercial South Sydney, sold the former caryard on behalf of a private local company to a local developer.

Mr Kotzias said the vendor had amalgamated 3 caryard sites at 172-176 Parramatta Rd, Homebush, and obtained development approval for the apartments: “This site was sold off-market to a developer ready to exchange & settle in a short period of time, We had strong interest in this site from our buyer as this area is undergoing significant rejuvenation, with caryards & warehouses in this precinct proving popular for redevelopment.

“The site is within close proximity to Homebush Railway Station and has easy access to the M4 motorway. There are good local primary & secondary schools as well as shopping centres.”

Homebush is 15km west of the Sydney cbd and is near the Sydney Olympic Park & Flemington Markets.

Other World property stories today: World property M30Mar15 – Melbourne site value doubles in 2 years, RBS makes 2 sales

Attribution: Ray White

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Second cbd proposed for Sydney

The New South Wales state government proposed yesterday that Sydney should have 2 central business districts – the established one on the harbour and a second fully fledged centre at Parramatta, 23km to the west.

Planning Minister Pru Goward released the state government’s Plan for growing Sydney yesterday, saying the aim was “to make Sydney an even better place to live and cement our status as one of the world’s most exciting cities.

“The metropolitan strategy will reinvigorate key Sydney suburbs, with more choice of homes linked to improved public transport and access to services like shops.”

Among the plan’s key proposals for action:

  • Shifting the city’s gravity from east to west by establishing Parramatta as a major cbd, alongside the Sydney cbd, for jobs and world-class shopping & entertainment
  • Creating vibrant new neighbourhoods with access to local jobs&d first-class local amenities by renewing the area between Greater Parramatta & the Olympic Peninsula
  • Delivering the Sydney green grid project to link open space across the greater metropolitan area
  • Transforming Western Sydney by delivering more jobs closer to home, including confirming Penrith, Campbelltown & Liverpool as regional city centres.

Ms Goward said the plan contained 59 specific actions to deliver, and said the Greater Sydney Commission would implement many of them over time: “This is different to other plans – it is measurable, it is deliverable and there is unprecedented opportunity for the community to get involved.

“This is a new way of delivering for our city – working side-by-side with communities & councils to deliver plans for Sydney’s regions. The Greater Sydney Commission will oversee the implementation of the plan and be responsible for making sure its actions are implemented.

“We’ll take it step by step. The differences people will see will be gradual and unfold over time, but we’re getting the ball rolling with an injection of $A6.5 million to start work and to establish the Greater Sydney Commission over the next 6 months.”

Work towards raising the profile of Sydney’s west has already started, with the decision to build a second airport at Badgerys Creek, 56km west of the present cbd.

Ms Goward said the plan was backed by the state government’s 4-year $A61 billion commitment to building better infrastructure to improve public transport, improve the efficiency of freight routes and unclog congested Sydney roads.

As part of the state infrastructure strategy, Western Sydney is also set to benefit from an infrastructure boost to get the region moving. This includes:

  • an extra $A600 million for the Parramatta light rail project
  • $A1 billion to upgrade Sydney’s existing rail network, – including the Western Sydney rail upgrade programme
  • a share of $A7 billion to deliver the rapid transit programme
  • a share of $A300 million to upgrade pinch points to get traffic moving in Western Sydney.”

Links: Planning NSW
Rebuilding NSW: Picturing a greater Sydney
Earlier story:

16 April 2014: Abbott confirms Sydney’s western second airport

Attribution: NSW Government release.

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World property Sun14Dec14 – Leighton offloads to Chinese, German housing, Sydney redevelopment, 270ha Melbourne subdivision, Valad trades, transit-linked mall, New Scotland Yard

Leighton sells John Holland to Chinese company
Sovereign fund joins German housing joint venture
Wynyard Station redevelopment advances
270ha masterplanned subdivision for Melbourne fringe
Valad sells Berlin complex
Construction to resume on Copenhagen transit-lined mall
Abu Dhabi investor to replace New Scotland Yard with apartments

Leighton sells John Holland to Chinese company

Australian construction group Leighton Holdings Ltd said on Friday it had entered into a binding agreement to sell its John Holland Pty Ltd subsidiary to China Communications Construction Co Ltd for an enterprise valuation of $A1.15 billion, subject to certain adjustments.

China Communications Construction’s subsidiary buying the ASX-listed company is CCCC International Holding Ltd (CCCI). The parent company is the fourth largest construction company in the world by revenue, is listed on the Hong Kong & Shanghai stock exchanges and has a market capitalisation of $NZ25 billion.

China Communications Construction has also been on a World Bank procurement blacklist for 6 years, and is scheduled to remain on it until January 2017, for fraud & corruption by a company which is now a subsidiary.

Leighton is 69.62% owned by German construction company Hochtief AG. Hochtief chief executive Marcelino Fernández Verdes, who is also Leighton’s executive chairman & chief executive, said the sale conformed to the strategy outlined in June to strengthen Leighton’s balance sheet. Notably, though, he reflected this in Australian terms, although John Holland, like Leighton, is a very international company, including a New Zealand presence: “Following a comprehensive & extensive global sale process, we have achieved a value for John Holland which reflects its position as one of the country’s leading engineering & construction companies.

“The divestment of John Holland supports our focus on further reducing gearing and strengthening our balance sheet so we can be sustainably competitive. Proceeds will also be used to finance future growth, particularly in public-private partnerships.”

For Leighton, Mr Fernández Verdes said indicative impacts were a reduction in gearing of about 10 percentage points, an $A3.7 billion reduction in annual revenue and $A5.4 billion of work in hand, and about 4100 employees transferring with the John Holland business.

Mr Fernández Verdes said: “The existing John Holland management will work closely with CCCI to ensure a smooth transition so the business continues to safely & efficiently provide services to its clients.”

The sale is subject to customary approvals including by Australia’s Foreign Investment Review Board.

The Leighton Group is a major international contractor and the world’s largest contract miner. The group provides development, engineering, construction, contract mining and operation & maintenance services to the infrastructure, resources & property markets.

John Holland provides engineering, contracting & services to the infrastructure, energy & resources and transport services sectors in Australia, New Zealand, South-east Asia & the Middle East.

The World Bank recently clarified its sanctions regime to ensure that successor organisations – through purchase or reorganisation – will be subject to the same sanctions applied to the original entity, making CCCC ineligible to engage in any road & bridge projects financed by the World Bank Group.

CCCC is the designated successor entity to China Road & Bridge Corp, which was debarred by the World Bank for 8 years, beginning January 2009, for fraudulent practices on the Philippines national roads improvement & management project.

Links: Leighton
World Bank blacklist
The Bribery Act, CCCC debarment
HiPipo, blacklist allegation dismissed

Sovereign fund joins German housing joint venture

A niche property market in the northern hemisphere, portfolios of German housing, continues to attract investors, often through international partnerships.

A €300 million joint venture established this week is between a Berlin-based manager, Kauri CAB Management GmbH, an investment & asset management specialist in northern European property with bases in London & Stockholm, Apeiron Capital Ltd, and an unnamed sovereign investment fund.

They’ve started the joint venture with a €130 million portfolio of 1675 residential & 105 commercial units within 61 residential buildings, 70% in Berlin and the rest in Magdeburg.

The seller of the portfolio is another German residential investment specialist, ZBI AG.

Kauri sold a portfolio of 25 Berlin residential buildings €78.6 million in July, after holding it for 3 years with Pramerica Real Estate Investors, the $US1.1 trillion real estate investment & advisory business of Prudential Financial Inc of New York.

Links: Kauri
Apeiron

Wynyard Station redevelopment advances

Sydney media said this week Brookfield Property Partners LP’s $A1 billion Wynyard Place development (marked in red in aerial picture above) had moved to the final stage of the New South Wales Government’s unsolicited proposal process.

Brookfield proposed combining its One Carrington St development with improvements to the public access areas for Wynyard Station, a major underground commuter stop in the heart of the Sydney cbd. Brookfield wants to create a new 68,000m² commercial & retail development over & including the eastern access ways to the station concourse from George St through to Carrington St, which was given concept plan approval in 2012.

It would involve demolishing Thakral House on George St and the Menzies Hotel on Carrington St, and refitting the heritage-listed Shell House from a hotel to office space. The 99-year land leases would be extended by 21 years, running to 2110.

Wynyard Station’s old low-clearance tunnel entry would be replaced by an open shared thoroughfare with natural light and the provision of new public domain spaces.

Links: Brookfield Property Partners
NSW Government, unsolicited proposals
$100 million Wynyard Station upgrade to begin
Wynyard Station upgrade, Transport for NSW

270ha masterplanned subdivision for Melbourne fringe

Villa Word Ltd & CVC Ltd have bought 270ha at Donnybrook in Melbourne in 2 transactions for a masterplanned residential subdivision. Total purchase price was $A22.775 million ($A84,352/ha).

Villa World chief executive & managing director Craig Treasure said on Thursday the 2 adjoining sites were inside Melbourne’s urban growth boundary, 46km out from the cbd in the northern growth corridor. That’s about the same distance from the cbd as Puhoi in the north and the Bombay Hills in the south are from the Auckland cbd.

Mr Treasure expected a planning process taking 2-3 years, potentially yielding more than 2000 lots. He said the project should start contributing to revenue in the 2019 financial year.

Links: Villa World

Valad sells Berlin complex

Thiemann Quartier, Berlin.

Thiemann Quartier, Berlin.

Real estate investment manager Valad Europe has sold Thiemann Quartier in Berlin Neukölln, Germany, to Concarus Real Estate Invest GmbH for €46.75 million, reflecting a net initial yield of 7.76%. The sale was completed on behalf of Valad’s V+ Germany mandate.

Thiemann Quartier’s 15 buildings contain 53,000m² of warehouse, office, leisure & retail space.

Valad Europe’s head of German business, Andreas Hardt, said this week the company had extended the leases of the 2 anchor tenants and agreed a long-term lease with a new tenant, getting the complex almost fully let, mostly on long-term leases of up to 10 years, before marketing it.

Valad Europe, a subsidiary of Valad Property Group of Australia, manages €4.9 billion of real estate assets & investment capacity and €1 billion of development projects for 20 funds & mandates. Concarus is owned by 2 entrepreneurial German families.

Link: Valad Europe

Construction to resume on Copenhagen transit-lined mall

Vanløse mall, Copenhagen.

Vanløse mall, Copenhagen.

A shopping centre directly linked to a railway station and also on a main bus route, in an affluent suburb 5km from the centre of Copenhagen, will be completed in the second half of 2016 after a European investment fund bought the half-finished structure.

Holberg Fenger Invest A/S stopped construction 2 years ago. It had planned a total 36,000m², including 18,000m² of shops, 3000m² for restaurants & cafes and a 9-storey office tower, with 350 parking spaces for cars, 400 for bikes.

EPISO3 (European Property Investors Special Opportunities 3), a fund advised by real estate investment manager Tristan Capital Partners & joint-venture partner Solstra Capital Partners, plans to spend €90 million completing the Galleria development in Vanløse, Copenhagen.

Links: Tristan Capital Partners
Vanløse

Abu Dhabi investor to replace New Scotland Yard with apartments

The famous New Scotland Yard police headquarters in London has been bought by a multi-billion dollar alternative investment company, Abu Dhabi Financial Group, for £370 million – £120 million more than the guide price and 3 times what was originally paid for the site freehold in 2008.

The building will be demolished to make way for apartments. Once redeveloped & sold, the Victoria St site is projected to yield up £100 million in stamp duty.

The London Mayor’s Office for Policing & Crime (MOPC) replaced the Metropolitan Police Authority in 2012, and mayor Boris Johnson has earmarked proceeds from this sale to be invested in cutting-edge technology and a leaner, more modern police property portfolio.

The building also houses many artefacts & policing memorabilia dating back to the formation of the Metropolitan Police in 1829, none of which are on public display. Some of the sale proceeds will be used to relocate this collection to a dedicated museum site.

The police headquarters is shifting to the refurbished Curtis Green building on the Victoria Embankment, less than 1km away.

Link: London Councils

Regular leads: Europe Real Estate, Mingtiandi, Planetizen, World Property Channel

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