Archive | Australia – Queensland

Augusta slots new single-asset fund in ahead of tourism fund

Augusta Capital Ltd has delayed the launch of its tourism fund while it raises new capital for its industrial fund and starts a new single-asset fund.

The single-asset fund will hold a mixed-use property in Brisbane. It’s at 255-271 Gympie Rd, Kedron, and comprises 5 office, retail & childcare buildings. The property’s 6 tenancies are all occupied, giving a weighted average lease term of 7.7 years.

Augusta managing director Mark Francis said just before Christmas the new fund would acquire the property for $A21.52 million. Settlement is scheduled for 29 March. Augusta intends to raise $A15.1 million of equity, using a debt facility to fund the balance of the purchase price & establishment costs. Augusta expects to receive an offeror’s fee of about $A700,000. The offer won’t be underwritten and is expected to open in mid-February.

As a result of the timing of this offer and the timing of the Augusta Industrial Fund’s next capital-raising in February-March, Mr Francis said Augusta had determined to delay the establishment of the Augusta Tourism Fund until later in 2019. The 2 properties so far intended to go into it – 54 Cook St in Auckland & 7-19 Man St in Queenstown – will continue to be held on Augusta’s balance sheet until the tourism fund is established.

Earlier stories:
21 December 2018: Augusta Industrial Fund to add 5 properties, seek more investors
3 December 2018: Augusta buys Queenstown site for second tourism fund hotel
23 October 2018: Fund shareholders approve sale to initiate Augusta tourism fund
24 September 2018: Pod hotel the opportunity for Augusta to close value-add fund with strong return and open tourism fund

Attribution: Company release.

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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 M14Dec15 – CDL Singapore develops in Brisbane

CDL Singapore enters Brisbane apartments joint venture

Singapore-listed City Developments Ltd has re-entered the Australian residential sector, this time directly rather than through the 2 NZX-listed companies it controls, Millennium & Copthorne Hotels (NZ) Ltd & CDL Investments (NZ) Ltd.

CDL Singapore, part of the Hong Leong Group, has joined Australian developers Abacus Property Group & private company KPG Capital in a partnership to develop 2 30-storey towers on a 2733m² Merivale St site in Brisbane’s South Bank precinct. CDL & Abacus will jointly provide most of the equity funding via a preferred equity interest of about $A30 million each.

The 472 apartments will have an $A275 million gross development value. Site works have begun and both towers have been launched for presales.

CDL executive chairman Kwek Leng Beng said, “Our re-entry into Australia’s residential market is in line with CDL’s overseas expansion strategy, which we announced 2 years ago to supplement our existing Singapore operations. Brisbane’s residential market remains highly attractive due to its affordability when compared to other major cities in Australia. Both domestic & international buyers are looking to Brisbane for greater value & higher yield.”

Earlier story: World property Sun29Nov15 – CDL Singapore buys eighth London development site

Attribution: CDL.

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 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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$A16.85 million penthouse back on market as Soul completion nears

Published 25 April 2012

A 4-level penthouse apartment 240m above Surfers Paradise has been put on the market by its first owner, who bought off the plans for $A16.85 million in 2006. The building is nearing completion and therefore purchase settlement.

The 1040m² penthouse on levels 70-73 of the Soul building on Cavill Avenue, at the centre of the Gold Coast business district, has its own private internal Italian glass lift & staircase, and a rooftop pool, spa & entertainment area. The 6 bedrooms include chef/butler quarters and the apartment has an allocation of 6 parking spaces. The building has 24-hour room service plus concierge & housekeeping.

Marketing agent Karyn O’Dea of Ray White Robina Varsity said the first owner (unnamed) “is involved in one of the largest equipment hire businesses in Australia, now has a young family so he’s putting it on the market.” She’s seeking expressions of interest by 15 June.

The $A850 million building, on the site of the former Raptis Plaza, was developed by the Juniper Group and built by Grocon Pty Ltd. On completion it will have 288 apartments and a retail centre.

Link: Soul building

Want to comment? Go to the forum.


Attribution: Agency release, Grocon, story written by Bob Dey for the Bob Dey Property Report.

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Sunland puts Palazzo Versace on market

Published 25 April 2012

Sunland Group Ltd made a 4-line announced to the ASX on Tuesday: The Palazzo Versace Gold Coast Hotel is up for sale by tender so the company can focus on its core business of property development in Australia.

Expressions of interest close in June with the new boutique agency, McVay Real Estate, headed by former CBRE Queensland agents Dan McVay and his son Sam.

Sunland built the hotel in 2000. It has 200 rooms 7 suites, 72 condominiums, a 65m heated outdoor lagoon pool with its own beach, meeting spaces for up to 500 people and a private 90-berth marina on the Broadwater.

In 2004, Sunland entered a joint venture with Emirates Investment Group subsidiary Gulf Resources to deliver a second Palazzo Versace, this one in Dubai and financed by Gulf Resources. The deal also required Gulf Resources to buy 49% of the Gold Coast hotel, then valued at $A85 million.

Design & styling for the hotels came from the House of Versace, a partnership which required 15 resorts to be developed over 30 years.

Sunland took back full ownership of the Gold Coast hotel last October, pulling out of its half of the Dubai ventures in return.

Sunland reported low half-year earnings – net profit down from $A7.8 million a year ago to $A185,000 announced in February –  and an expectation that full-year earnings would be around $A14-15 million after many settlements were pushed into the second half of the year. Its gearing is very low – a debt:equity ratio of 23%, debt:assets ratio of 14%.

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Attribution: Sunland announcement & websites, story written by Bob Dey for the Bob Dey Property Report.

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Delfin prepares 1600ha Townsville masterplanned community

Published 5 June 2007

Lend Lease Corp Ltd subsidiary Delfin Lend Lease Ltd has finalised a heads of agreement to create a new 1594ha masterplanned community at Rocky Springs, a major growth corridor in Townsville.

Delfin Lend Lease plans to develop 15,000 residential lots plus retail & community facilities, and potential commercial business, schools, parklands & conservation areas. Work should start in 2008 for a first release of sections in 2009. Rocky Springs, 15km east of Townsville, is expected to have an eventual population of 55,000, 70% of it developed by Delfin Lend Lease.

The company has 25 masterplanned communities across Australia, making it the country’s largest developer of this kind of property.

Want to comment? Click on The new BD Central Forum or email [email protected].


Attribution: Company release, story written by Bob Dey for this website.

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Abacus buys Twin Waters from Lend Lease & GPT

Published 27 October 2005

Lend Lease Corp Ltd has exchanged contracts with the property trust it used to manage, now called the GPT Group, to sell the Twin Waters Resort on the Sunshine Coast to listed property company Abacus Property Group for $A58 million.The deal included sale of management rights of 2 neighbouring resort villages to Twin Waters manager Accor Asia Pacific for an additional $A3.5 million. The management rights comprise the Lend Lease/GPT-owned Twin Waters Coastal Community for up to $A1 million and Lend Lease’s wholly owned North Shore Coastal Village for $A2.5 million. Lend Lease & the General Property Trust bought the Twin Waters resort & golfcourse in August 2003. The golfcourse was sold in June to a specialist operator for $A7.9 million. Settlement of the resort sale is expected to occur in the first half of 2006. Lend Lease owns 51%, GPT 49%. They’ve retained a beachfront site at Twin Waters Resort and have approval to develop 64 dwellings – apartments, houses & villas.


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Investment market getting back to equilibrium

Apartments still trailing, warning on guarantees

Residential starts on the Gold Coast jumped 24% in the December quarter to just over $A1 billion as builders tried to get in ahead of the introduction of gst, Gold Coast analyst Alan Midwood says in his latest quarterly report.

He says the value of non-residential work done in Queensland in the December quarter rose slightly, taking forward order books to their lowest level in two years, just over $A1 billion, and that should mean layoffs while equilibrium is regained. March quarter approvals fell 20%.

But he said the reductions were all outside the state’s south-east corner, with the Gold Coast back up to its long-term level.

The statistics Mr Midwood provides on room occupancy show a steady picture, which is brighter for owners than previous years when room numbers expanded rapidly and both occupancy and room rates fell sharply. In the December quarter, Queensland had 3% more rooms, sold 3% more room nights and got a 3% increase in takings.

The Gold Coast, the biggest market, sold 4% more room nights in the December quarter and raised takings by 4% (Brisbane sold 8% more for a 7% gain, the Sunshine Coast 7% for 5%).

Available rooms on the Gold Coast rose 2% and the occupancy rate was up 1.1% to 63.9%. Hotels, which were heavily discounting at times last year, got their occupancy level up to 66.9% and the average room rate to $A118.10 in the December quarter.

Serviced apartments, the sector New Zealanders have invested heavily in, crept back over the 60% level to 60.6%, with room nights sold up from 239,200 to 270,800, a 13.2% increase. Average room rate for Gold Coast serviced apartments in the quarter was $A93.30, and apartment takings for the quarter were up 19.3% to $A25.3 million.

Queensland’s tourist accommodation industry took a beating in the four years to 1998, with Gold Coast hotel occupancy falling (on an annual basis) from 79.4% to 62.9%.

Mr Midwood says 1999 should mark the bottom of the cycle because the competing supply of new “apartment hotels” or serviced apartments is at last drying up.

“This is due to a combination of investor dissatisfaction with the low returns, and the Managed Investments Act, which is now regulating the previously unrealistic offers of high ‘guaranteed’ returns.”

Rental guarantee flaws

Mr Midwood gives an interesting analysis of the rental guarantee market, and the preference for building apartments instead of hotels — albeit it’s a little too late to help one round of investors there (and another batch over here, some of whom are also being caught out).

“The collapse of the ‘guaranteed’ 7% returns for five years at Brisbane’s Radisson Suites, only three months after investors settled on their apartments, must give developers, financiers and investors cause to re-examine this concept,” he writes.

He says hotel rooms would be more appropriate and viable in cbd areas (this is Brisbane, not the Gold Coast tourist strip), but these one-bedroom apartments/’all-suites hotels’ have been built instead “mainly to suit the requirements of financiers.

“They happily approve borrowings on a one-bedroom hotel suite because it has an alternative use as a rental apartment. But they will not lend on a less costly and more viable hotel room because it is too small to have that alternative fallback residential use.

“This arrangement protects financiers and creates work for builders and developers, but it produces too much of the wrong type of accommodation for the hospitality industry and leaves investors to carry the shortfall.”

Mr Midwood argues that all-suites apartments should only be built “where there is a proven market prepared to pay a premium over a hotel room for a superior product, at least in terms of space. Where this is not the case the all-suites hotels have to undercut the existing traditional hotels to gain business and a price war develops.”

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