Archive | Australia – Victoria

Melbourne prepares to start 485ha urban renewal at Fishermans Bend

Victoria’s state government released the final version of the Fishermans Bend vision last month – a plan to revitalise 485ha sitting between the existing central business district and the port.

Image above: Fishermans Bend, between Melbourne’s cbd & port, an urban renewal site including Holden’s headquarters (outlined).

melb-fishermans-bend2It’s intended to house 80,000 residents and provide 60,000 jobs in 5 precincts beside the mouth of the Yarra River, where it flows into Port Phillip Bay.

2 precincts are in Melbourne – Lorimer and the Fishermans Bend employment precinct – and 3 are in Port Phillip City – Montague, Wirraway & Sandridge.

In 2012, the state government identified the urban renewal area as an urban renewal project of state significance and rezoned it as capital city zone. Initially the rezoned area was about 250ha but it’s now 485ha, more than doubling the central city.

Last month, a major step forward occurred when the state government bought the 37.7ha General Motors Holden headquarters & engine-manufacturing site. Holden will become an import-only company once the last Commodores roll off its Adelaide production line next year, ending 80 years of Australian production.

The GM-Holden site outlined.

The GM-Holden site outlined.

The state government has earmarked the Holden land for a design, engineering & technology district, aiming to bring together industry leaders in aerospace, defence, marine & automotive design.

The government said in a release the Holden site would be a catalyst for creating thousands of high value jobs: “This project will drive private sector investment into the Fishermans Bend employment precinct.”

Benchmarks for urban renewal

The Fishermans Bend vision sets benchmarks for inner-city urban renewal on economic prosperity, sustainability, design, smart urban management, community service provision and both active & public transport.

Benchmarks: 

  • A target of 80% of transport movements to be made by public transport, walking or cycling
  • Delivery of catalyst projects, starting with an education & community precinct
  • At least one activity centre in each precinct including retail, jobs & community services
  • Primary & second schools across Fishermans Bend
  • Open space within 200m walking distance for all residents & workers
  • An integrated transport strategy including cycle paths, tram lines & an underground rail line, and
  • Diverse & affordable housing opportunities.

Links:
Fishermans Bend Vision, final version
Melbourne Age, 17 June 2015: How not to stuff up Fishermans Bend
Port Phillip City: Project history

Attribution: State government, Port Phillip City, Age.

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World property W30Mar16 – Collins St tower rejected, Anbang returns to Starwood chase

Melbourne ‘pantscraper’ rejected again
Anbang raises Starwood bid twice more

Melbourne ‘pantscraper’ rejected again

Victoria’s planning minister, Richard Wynne, has rejected Cbus Property’s revised $A1 billion apartment & hotel development for a 6000m² block at 447 Collins St in Melbourne, 5 months after introducing stricter planning rules.

The Australian Financial Review reported last October that Cbus had outlined fresh plans for its then-$A1.25 billion development , cutting back from a 295m tower rejected because of the shadow it would cast across the Yarra River, to 2 170m towers connected by a skybridge and providing 42 levels for 250 hotel rooms & 260 apartments.

Cbus outlined that plan just after Mr Wynne announced the stricter rules. The development company, a subsidiary of the national construction industry superannuation fund, applied for an exemption, but also modified its proposal.

However, Mr Wynne stood by his previous decision on shadowing.

Links:
The Age, 30 March 2016: Planning minister defends Collins Street ‘Pantscraper’ tower rejection
The Age, 25 March 2016: $A1 billion Collins St tower rejected because of Yarra River overshadowing
Australian Financial Review, 13 October 2015: Cbus Property trims tower plan for prize Collins St site

Anbang raises Starwood bid twice more

Anbang Insurance Group Co Ltd of China returned to the fray to control international hotel giant Starwood Hotels & Resorts Worldwide Inc at the weekend, securing a determination from Starwood’s board that its revised non-binding proposal was “reasonably likely to lead to a ‘superior proposal’ to Marriott International Inc’s raised merger bid.

Anbang’s consortium, in partnership with private US investment firm JC Flowers & Co and China-based global investor Primavera Capital Ltd, previously offered $US76/share in cash, topping by 19% Marriott’s initial offer totalling $US63.74 in cash & scrip. Marriott returned with a $US13.6 billion offer at $US79.53/share, including $US3.6 billion of cash, but over Easter Anbang raised its bid to $US81/share, and then to $US82.75/share in cash, lifting it to $US14 billion.

Earlier stories:
26 March 2016: World property Sat26Mar16 – Marriott tops Anbang, Fosun buys in London
World property Sun20Mar16 – Starwood prefers Anbang over Marriott
World property W16Mar16 – Chinese bid for hotelier Starwood
World property Tues17Nov15 – Marriott buys Starwood hotel business

Link: Starwood statement, 28 March 2016

Attribution: Property Review, Australian Financial Review, Age

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property Sat5 Mar16 – Melbourne Quarter approval, big development outside Brisbane

Lendlease’s Melbourne Quarter gets stage 1 approval
$A6 billion development campaign opens for aspiring Brisbane cbd competitor

Lendlease’s Melbourne Quarter gets stage 1 approval

Victorian planning minister Richard Wynne approved the first stage of Lendlease Group’s $A1.9 billion Melbourne Quarter development on Thursday.

Mr Wynne said the precinct on Batman Hill, between Collins & Flinders Sts and across the road from Southern Cross station, would improve the link between the Hoddle Grid (the rectangle marked out 180 years ago as Melbourne’s centre) & Docklands. The approval includes a 2000m² elevated park to be built over part of Wurundjeri Way & Collins St, called Melbourne Skypark & expected to be complete in 2018.

A 30,000m² 19-level commercial tower has also been approved for Aurora Lane & Collins St. It will have 177 car spaces & 210 bike spaces.

All up, the development will have 7 commercial & residential buildings, 110,000m² of office space, 4500m² retail net lettable area, and 3 towers on Flinders St will contain 1700 apartments.

The managing director of Lendlease’s urban regeneration business in Australia, Jonathan Emery, said: “With its apartment neighbourhood located next to a thriving commercial district, Melbourne Quarter offers the opportunity to live next to work, which is increasingly appealing for young professional owner-occupiers & investors with a keen eye on the leasing market.

“Lendlease’s urban regeneration footprint across the globe has revealed that an increasing number of city dwellers are aspiring to live close to work, and where they have access to all a city has to offer – restaurants, shopping, public transport, workplaces & education. Melbourne Quarter delivers on this need.”

On completion, it is expected to be home to 10,000 workers & 3000 residents.

Links: Melbourne Quarter
Victorian Government, 3 March 2016: Elevated park & office tower approved for Docklands

$A6 billion development campaign opens for aspiring Brisbane cbd competitor

The developer of a city on the outskirts of Brisbane, which it wants to become a competitor of Brisbane’s central business district, launched an expressions of interest campaign on Monday for a medium-density apartment project with an estimated $A6 billion end value.

Springfield Land Corp chair Maha Sinnathamby, who bought the original 2860ha of Greater Springfield 30km south-west of Brisbane with business partner Bob Sharpless for $A7.2 million in 1990, has grown it to a population of 32,000 and is aiming for 86,000 by 2030.

He’s seeking development & capital partners to deliver the 10,000-apartment City Centre North project, and ancillary commercial & retail space, next to the rail station & transit hub in the heart of Greater Springfield over the next 15 years. UBS AG’s Australian branch, as financial advisor, is running the expressions campaign.

Springfield is a suburb of Ipswich, a city of 180,000 people, but has been changing fast. It’s had $A12 billion invested in it, and about $A600 million/year is being spent on construction. The University of Southern Queensland has just completed an $A45 million expansion of its campus, the Orion Springfield Central shopping centre has undergone an $A154 million expansion, and new office buildings include GE’s $A72 million Queensland headquarters, opened last year.

Mr Sinnathamby, 76, studied engineering in Sydney in the 1960s, and emigrated to Australia from Malaysia in the 1970s after working at the World Bank & Asian Development Bank. He said this week: “The City Centre North apartment project represents an exciting next step in the evolution of Greater Springfield, as an alternative to the Brisbane cbd, providing greater housing & work choices to the diverse mix of Greater Springfield residents across age cohorts & market segments. It also represents an opportunity for another visionary group to join existing major stakeholders who have been active in the development and commercialisation of Greater Springfield.”

Link: Greater Springfield

Image: Lendlease’s Melbourne Quarter (left foreground).

Attribution: Lendlease, Victorian Government, Greater Springfield

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property Sun28Feb16 – Multiple Goodman projects in UK, London City Airport sells, Melbourne port lease

Goodman teams up to develop Anglesea UK portfolio
Canadian & Kuwaiti consortium buys London City Airport
Deal agreed to sell Melbourne port lease

Goodman teams up to develop Anglesea UK portfolio

Goodman Group & Anglesea Logistics Partnerships have leased a spec warehouse in the Derby commercial park in the English Midlands to the group that owns the global lifestyle brand Ted Baker, No Ordinary Designer Label Ltd, as Goodman lifts its production of logistics space around the UK.

Asset manager & trader Anglesea Capital 0 LLP entered a joint venture with Goodman in November 2014, and has entered into a partnership funding joint venture with Lone Star Real Estate Fund III for this partnership, while Goodman has agreed to sell 4 more logistics assets containing 220,000m² to the joint venture.

The £25 million Ted Baker building, Angle 325, is a 30,000m² high-spec warehouse including 1400m² of office. It’s being fitted out and is due for completion at the beginning of May. It will be the retailer’s pan-European distribution centre, handling all operations for its retail, wholesale & e-commerce businesses in Europe and operating 24/7.

Goodman has spent £175 million developing the 66ha Derby commercial park at Raynesway, 3km from the centre of Derby, and has just opened a 59,000m² design/build national distribution facility there for Kuehne & Nagel and Heineken. It has 2 more spec warehouses lined up for construction at Andover in Hampshire & London Medway for the Anglesea partnership.

Sydney-based Goodman is also at full stretch in Europe. It signed up in January to develop a 130,000m² facility for online fashion, shoe & accessory retailer Zalando SE.

Link: Goodman UK

Canadian & Kuwaiti consortium buys London City Airport

3 Canadian pension fund managers and a Kuwaiti infrastructure investor agreed on Friday to buy London City Airport from Global Infrastructure Partners (75%) & Highstar Capital LP (25%). They haven’t disclosed financial details. The transaction is not subject to any regulatory approvals and is expected to close on 10 March.

The airport was opened near Canary Wharf in the Royal Docks in 1987 and Global Infrastructure Partners took control of it in 2006.

The new owners are Alberta Investment Management Corp (Aimco), on behalf of its clients OMERS (originally the Ontario Municipal Employees Retirement System), the Ontario Teachers’ Pension Plan & Wren House Infrastructure Management Ltd. Wren House is the infrastructure investing arm of the Kuwait Investment Authority.

Link: OTPP release

Deal agreed to sell Melbourne port lease

The Victorian State Government & opposition coalition agreed terms on Thursday enabling the sale of the lease on the port of Melbourne.

State Treasurer Tim Pallas said the 50-year lease should be sold early next year. While he’s been kept clear of the transaction, he’d been told 4 consortiums were lined up to buy the lease.

The Labor government agreed on Thursday to an opposition demand to amend the law enabling the lease, restricting compensation for the buyer. Compensation will be payable if the Government opens a second port within 15 years and the original port hasn’t reach its agreed capacity.

The port lease law is scheduled to be passed on Tuesday 8 March.

Attribution: Goodman, Anglesea, OTPP, GIP, Victorian Government

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 W23Dec15 – West Melbourne deals, Westfield reshapes

Melbourne development site sells
Westfield sells 6 US malls

Melbourne development site sells

A Melbourne apartment development site has been sold to the Asian Pacific Group (Will Deague) for $A35 million at $A9117/m², and 3 adjoining buildings have been sold for $A38.8 million.

The 3839m² site at 83-113 Batman St, West Melbourne, has a permit for 522 apartments in 2 27-level towers, including 33 2-storey lofts, plus retail, designed by Bruce Henderson.

The whole site, known as the Spencer portfolio, contained the historic Sands & McDougall buildings and a warehouse at 355 & 371 Spencer St & 102 Jeffcott St.

Hume Partners (Peter Scanlon) took the development site & 3 buildings to the market through separate CBRE campaigns.

Bennelong Group (Jeff Chapman) had earlier proposed 2 towers of 39 & 29 storeys above a 5-level podium for the whole site, with a gross floor area of 85,000m² and originally containing 749 apartments.

The 1770m² Jeffcott St warehouse & office, on a 920m² site, sold for $A6.1 million.

The CBRE team also said yesterday it had sold 206 Bourke St, on the edge of Bourke St Mall, for $A116.28 million at a 5.75% yield, on behalf of Hiap Hoe Ltd and that it had been bought by unlisted fund manager ISPT, which has $A11 billion of properties under management.

206 Bourke St has a net lettable area of 11,922m² – 9582m² retail, 2340m² office – and an approved planning permit to build a 142-room hotel above the fourth level of the existing development.

Westfield sells 6 US malls

Westfield Corp, owner of the US & UK malls of the former Westfield Group, sold 5 of the US malls this week for $US1.1 billion. It sold another in November to Rouse Properties Inc for $US170 million. The Australia-NZ Westfield portfolio is owned by Scentre Ltd, some now in partnership with Singapore sovereign wealth fund GIC.

The US assets sold are in Connecticut, Washington, and 2 each in California & Illinois, reducing Westfield’s US portfolio to 32 malls. It also has 2 in the UK and has entered a partnership with Gruppo Stilo to develop a centre in Milan, Italy.

Westfield Corp co-chief executives Peter & Steven Lowy said in August: “Our strategy is to create & operate flagship assets in leading markets that deliver great experiences for retailers & consumers. We are focused on innovation and are creating a digital platform to converge with our physical portfolio, in order to connect retailers & consumers both physically & digitally.

“Our capital investment is almost entirely weighted towards our flagship assets, with estimated development yields in the range of 7-8%. Upon completion of these projects, we expect Westfield Corp’s flagship assets will represent 85-90% of the total portfolio and our business will be more evenly weighted between the US & UK/Europe.”

When they announced the northern hemisphere company’s results in August, the Lowy brothers said: “The performance of Westfield’s pre-eminent portfolio remains strong. The benefits of our restructure last year can be seen in the significant progress being made on our $US11.4 billion development programme. This year we expect to commence $US2.5 billion of projects, having already commenced $US1.6 billion of redevelopments to date in 2015.”

Attribution: CBRE, Westfield.
Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property W29Apr15 – Frasers trust buys Melbourne tower

Frasers shifts Australand tower into Singapore trust

Frasers Centrepoint Ltd, a Singapore-listed company now controlled by Thai billionaire Charoen Sirivadhanabhakdi, has sold a Melbourne tower acquired in its 2014 takeover of Australand Property Group to a Frasers-managed trust.

The Melbourne building at 357 Collins St was known as a ghost tower. Formerly Stock Exchange House, it’s actually 2 towers, one facing Collins St and the other on Flinders Lane, and had been empty since the exchange moved out in 1992 until Australand bought it from Malaysian owners in 2010 for $A45 million.

Australand anticipated spending $A80 million on a refurbishment and reopened the 25-storey building in April 2013, extended from net lettable area of 22,000m² to a total 30,920m² above a new laneway, Fulham Place. It’s 95.5% leased, has 1825m² of retail space & a foodcourt, and has received a 5-star Nabers (National Australian built environmental ratings scheme) award for its energy efficiency.

Frasers Centrepoint bought Australand for $A2.6 billion last year and agreed the $A222.5 million sale of the Melbourne property to the Singapore-listed Frasers Commercial Trust on Monday. At the same time, Frasers announced that China Square Central in Singapore, another trust asset, would build a 16,000m² hotel.

Trust management company chief executive Low Chee Wah said the trust would use equity & debt to buy 357 Collins St, which would increase the trust’s portfolio by 14.2% from $S1.8 billion to $S2 billion, would lift the Australian component of the portfolio to 40% and was expected to be distribution accretive for unitholders after purchase about $A2-4 million below registered valuations.

The trust was established as Allco Commercial REIT in 2006 by Sydney-based Allco Finance Ltd, which was expanding rapidly & internationally, including taking control of Strategic Finance Ltd in New Zealand. Strategic Finance fell over in 2008 and, in Singapore, Frasers took control of the Allco trust in August 2008. Frasers Centrepoint has total assets of $S21 billion.

Earlier story:
2 July 2014: World property W2July14 – Frasers goes ahead with Australand bid, Goodman increases German portfolio

Links: Frasers Centrepoint
Frasers Commercial Trust

Attribution: Frasers Centrepoint, The Age, Sydney Morning Herald, Urban Developer

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property M26Jan15 – Stockland buys land, small A-reit gain, US shops in Europe

Stockland buys 3 big Melbourne & Brisbane tracts for commuter suburbs
Small rise in A-reit returns follows solid revenue gain
US funds lap up distressed euro property

Stockland buys 3 big Melbourne & Brisbane tracts for commuter suburbs

Stockland Property Group said a week ago it had bought 3 big tracts of land for masterplanned suburban development on the outskirts of Melbourne & Brisbane.

The sites are all residentially zoned. Prices weren’t disclosed.

The biggest, Cloverton, is an 1141ha site 35km north of Melbourne. 45km south-east of Melbourne it’s bought 65ha at Clyde North. The 143ha Brisbane site is 38km north of the cbd at Scarborough, on the shore of Moreton Bay.

Stockland said last week it was about to embark on its largest masterplanned residential community development in Victoria, Cloverton, creating about 11,000 homes.

The $A4.6 billion development will occupy 1141ha at Kalkallo, in a growth corridor 35km north of the Melbourne cbd. The project will feature a 60ha city centre with a regional shopping centre, a train station, 4 additional local town centres and a retirement village.

Stockland managing director & chief executive Mark Steinert said last week construction would start in a few months.

Stockland is planning to invest more than $1.3 billion on residential, retail & retirement living projects in Victoria over the next 10 years. Cloverton is a 30-year project, expected to house 30,000 people at a gross 10 dwellings/ha.

The group’s residential development manager for Victoria, Mike Davis, said new rail lines were proving to be the gamechanger for opening up new tracts of land to create viable, sustainable & highly liveable new communities.

Stockland has acquired 65ha of residentially zoned land at Clyde North, in the rapidly developing urban growth corridor of Casey City, 45km south-east of the Melbourne cbd.

Casey is one of Victoria’s fastest developing growth areas. Its population is set to rise from 250,000 in 2011 to 400,000 2031. The state metropolitan planning authority says its transport connection to central Melbourne & outlying areas include 2 electrified railway lines and 2 freeways, and it’s a one-hour rail commute from the cbd.

The site at 120-130 Tuckers Rd is included in the Clyde Creek precinct structure plan, which Victoria’s planning minister approved for residential development in November. Stockland will create an 800-home masterplanned community over 6 years, at a total development cost of $A128 million. Construction will begin in 2017, with the first settlements in the 2019 financial year.

Clyde North is a mixed-use precinct which will ultimately provide 7500 jobs & 13,900 new homes. Stockland said its site, 4km east of Cranbourne, offered residents convenient access to the existing Cranbourne train station, Berwick bus station & Princes freeway. It was also near 3 shopping centres, numerous childcare facilities & state primary schools & Monash University Berwick. The Casey Fields Regional Sporting Complex is 2km away.

In Queensland, Stockland has acquired 143ha of residentially zoned land in the northern Brisbane suburb of Scarborough for $A67 million, its first major land acquisition in Queensland in 5 years. The project, known as The Isles of Newport, has been trading for a number of years and is on the shore of Moreton Bay, 38km north of the Brisbane cbd.

Stockland’s development of new waterfront lots & bayside residential areas will have a total end value of $A590 million. It will comprise 1500 new homes, a 28ha non-tidal lake with a navigable loch providing high-mast boat access to Moreton Bay, a village centre and a number of foreshore parks.

The Isles of Newport is near the new Kippa Ring train station, due to open in 2016.

Links: Stockland
Clyde Creek approval

Small rise in A-reit returns follows solid revenue gain

A-reit (Singapore-listed Ascendas Real Estate Investment Trust) increased third-quarter gross revenue by 11.2% to $S171.7 million (2013 revenue restated), net property income by 5.6% to $S114.6 million, the total available for distribution by 1.6% to $S86.4 million, and the distribution/unit by 1.4% to S3.59c.

Link: A-reit presentation

US funds lap up distressed euro property

The Daily Reckoning noted last week that the $US is trading at an 11-year high against the euro, Financial Times property correspondent Kate Allen wrote that 79% of commercial transactions in Europe involved US private equity firms, and CBRE Capital Advisors said sales of European loan portfolios rose 133% last year to €49 billion.

Europe still has plenty of unwanted real estate debt to sell, but Ms Allen wrote that the discount on it had been cut from 63% in 2012 to 44% in 2014.

International alternative assets research firm Preqin said this month closed-end private real estate funds that focus on debt investments raised a record $US20 billion, up from $US16 billion in 2013; funds focusing on Europe raised 131% more capital in 2014 than in 2013, up from $US15 billion to $US36 billion; and 39% of capital raised internationally last year had a primary focus on Europe, up from 17% in 2013.

Links: Financial Times (behind wall), European banks step up sales of distressed property loans
AI-CIO, Europe destination of choice for real estate investors
Prequin, Private real estate fundraising maintains momentum in 2014, while debt funds raised record $US20 billion

Attribution: Company releases, Victorian Metropolitan Planning Authority, A-reit.

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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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

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Proposal to double Melbourne cbd into “capital city zone” unveiled

Published 20 February 2012

Victoria’s planning minister, Matthew Guy, unveiled a proposal on Friday for an expanded “capital city zone”, and Colliers International said today land values in the Melbourne cbd & surrounding suburbs could double if it went ahead.

Under the proposal, high-density living would expand beyond the Hoddle Grid, Docklands & Southbank. Opportunities would be made available in Fishermans Bend & E-Gate on its western edge, St Kilda Rd in the south, and towards Melbourne University on the northern side.

Mr Guy said: "We want to hear Melburnians’ views about where high-density housing is best located. This proposal could cement Melbourne as the best cbd for growth & investment opportunity in Australia. Maintaining our advantage is vital for retaining important construction jobs, as well as an affordable city for residents & businesses.

"It doesn’t mean we will have Rialto-size buildings in every part of it, but what you will have is greater density and greater height throughout an expanded cbd. Concentrating highrise, high-density growth takes development pressure off existing suburbs and can maintain liveability in existing residential areas while providing a large, vibrant heart to a growing central city area."

The “affordable” tag might not work, though, if Colliers International’s national research director, Nerida Conisbee, is correct in her assessment that, as most uncommitted space in the existing cbd would be absorbed by 2022, increasing development potential over an area twice the size of the present cbd could double the value of that land.

Links: Victorian Government release

Colliers shares vision for larger Melbourne cbd

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Attribution: Victorian Government release, Colliers, story written by Bob Dey for the Bob Dey Property Report.

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