Victoria Property, Australia

[greengiraffe]

Singapore Cos trying to make it big Down Under such as Aspial and Hiap Hoe will have to start worry about their big bets in wrong capital cities. St****** IMO has excellent feel over the pulse of the Australian capital cities and by far is the only Singapore listed entity to have focus on the red hot undersupplied Sydney market for their apartment developments. Even Capitaland has sold out too early on their long term investments in Australand (ending at above A$4.10 vs placement price of A$3.78)

City in desperate search of tenants
SARAH DANCKERT THE AUSTRALIAN MARCH 22, 2014 12:00AM

Biggin Scott real estate director Marcus Peters looks over Melbourne’s St Kilda Rd from oBiggin Scott real estate director Marcus Peters looks over Melbourne’s St Kilda Rd from one of his company’s apartments. Picture: Aaron Francis Source: News Corp Australia
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Biggin Scott real estate director Marcus...Luxury across continents
TWELVE months after the Reserve Bank of Australia issued a warning about a potential apartment glut in Melbourne’s CBD, signs are emerging the market is bloated with empty apartments.

According to new data, 20 per cent of apartments on the main boulevard of St Kilda Road are for rent, while in the heart of the city, where 12 per cent of apartments are empty, developers are pulling out all stops to find tenants.

Researcher SQM, which tallies the number of apartments for rent on a range of online portals, has also found rents for all apartments in the St Kilda Road area have dropped 21.2 per cent to an average of $564 a week over the past three years.

However, Biggin Scott Melbourne residential director Marcus Peters is optimistic about the market despite acknowledging that it is a tougher slog for CBD-based agents at the moment.

“It’s not like the suburbs. Where we have highs and lows in our business is when a couple of new towers come to the market. If there’s an influx of two or three towers, that puts a hole in the rental market,” Mr Peters said.

The area has also been popular with executives on contracts, often causing a “lumpy” market, with many tenants leaving at the end of their 12-month lease.

St Kilda Road’s apartment indigestion comes as thousands more apartments are under development or planned for the city.

In the CBD, Melbourne developer Brady Group has hung “apartments for rent” signs off the upper reaches of its completed towers. Sources said hundred of apartments were for lease in two of Brady’s towers.

China’s Far East Consortium Upper West Side also has scores of empty apartments in its CBD project. Brady Group and Far East Consortium did not return calls.

ANZ head of property research Paul Braddick said areas such as the CBD and St Kilda Road could become victims of oversupply.

“The question is whether we’ll get a repeat of what we saw in the middle of last decade where we did get a clear excess supply and that resulted in some fairly significant value downgrades,” he said.

[greengiraffe]

Melbourne's flat glut stunts market

Rebecca Thistleton
537 words
17 Apr 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Melbourne CBD apartments are being offloaded below the asking price as more off-the-plan stock comes to an already oversupplied market.

While the property industry has applauded record numbers of off-the-plan apartment approvals for stimulating construction and boosting housing supply, concentrations of new stock are devaluing units in Melbourne's high-density suburbs.

A similar trend could emerge if off-the-plan apartment supply continues to rise in Brisbane and Perth, says SQM Research's managing director, Louis Christopher.

More than 2000 properties have been on the market for over two months around the CBD. About 14 per cent are selling for less than their listed asking price. "While detached housing has performed well in Melbourne, there has been little to no price growth in the CBD. It shows the recovery in the property market is still patchy," he said.

Those high-density suburbs also have the highest rental vacancy rates in Melbourne at more than 5 per cent compared with 2.1 per cent for Melbourne. A 3 per cent rate is considered balanced. In Sydney, where the off-the-plan market has been described as "insatiable" after about a decade of under-development, a concentration of new supply has softened existing apartment prices in Chippendale and Camperdown.

Camperdown's median price fell 4 per cent last year once work began on a $2 billion, 1900-apartment project. A research paper from Deep End Services and Landsburys said the price volatility was reasonable given so much new stock was added in a short space of time.

The latest ABS building approval figures, which outline new unit numbers to February, showed the supply pipeline continues to grow at record rates.

BIS Shrapnel associate director Kim Hawtrey said the February trend figure of 17,073 unit approvals was the highest ever in a single month, breaking the 16,891 recorded set in July 1994.The number of units approved was 22 per cent higher than February 2013.

Mr Hawtrey said new approvals would flatten prices and increase vacancy rates in inner Melbourne. He predicts the current annual approval rate of 6000 will halve to 3000 by 2018.

The oversupply has prompted calls for the Victorian government to stem the rate of high-rise approvals. Planning Minister Matthew Guy has repeatedly said it is for the market to regulate supply and demand, and the priority is to encourage construction and higher density housing around the CBD, Docklands and Southbank.

Mr Hawtrey expects high vacancies and lower sales prices due to a spike in off-the-plan apartments in Adelaide and Canberra but is less concerned about the other capitals. "I don't think we will see similar problems in Sydney, most of Sydney's approvals have been in the suburbs and it is following a very different pattern to Melbourne."

Mr Hawtrey said Adelaide is also at risk of an apartment oversupply because population growth has not kept up with the South Australian government's push to increase supply.

Key points More than 2000 apartments have been on sale for two months in CBD; 14pc selling under asking price. Fears trend could spread to Brisbane and Perth.


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[greengiraffe]

More bad news on top of new supply for Melbourne apartments...

Melbourne Developers to be hit for more green funds
Michael Bleby
602 words
29 Apr 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Central Melbourne developers could be slugged an extra $1000 in contributions for each apartment under a proposal before the City of Melbourne.

The move puts state Planning Minister Matthew Guy in an awkward position just months before a state election.

The Australian Financial Review can reveal a move to extend a developer contribution introduced last year on residential towers built across the Yarra River in Southbank.

City of Melbourne councillor Stephen Mayne will table the motion before the end of the financial year.

Extra funds are needed for the city to develop open and green spaces as the population of the inner city grows. ­Melbourne has no central business ­district charge on inner-city residential developments and the proposal would bring Melbourne in line with Sydney and Brisbane, Mr Mayne said.

"I'm confident that when all the facts are considered, there will be political support for a modest developer ­contribution on residential apartments in the CBD, Southbank style," Mr Mayne told the Financial Review.

"They'll be much smaller than ­Sydney. Melbourne's going to retain its east coast-leading position of being a low-tax environment for developers."

In the Sydney CBD, all residential, commercial and retail developments are charged 1 per cent of the construction cost. In Victoria, all developments pay 5 per cent of the value of the footprint towards the provision of open space. This payment is insufficient to keep urban space in proportion to the growing population when the ­development is a tall apartment block on a small area of land, Mr Mayne said.

"In Brisbane, residential and non-residential developments in the CBD are subject to infrastructure charges. The per-apartment change for residential apartments varies between $19,000 and $27,000."

The motion requesting Mr Guy to extend the Southbank developer levy to the CBD looks likely to pass the ­11-member council despite opposition from lord mayor Robert Doyle.

Last year, Mr Doyle was one of five councillors who recused themselves from voting on a plan to raise the space contribution to 8 per cent from 5 per cent because they had had donations from developer Central Equity.

Mr Doyle, who is on paternity leave, could not be reached for comment, but at a council meeting earlier this month he argued there was a difference between the city's growth areas and the CBD – its so-called Hoddle Grid area.

"If you're going to put a levy on the Hoddle Grid for infrastructure, what is it you want to provide?" Mr Doyle asked. "If it's just a tax grab, say so and we can argue it on that basis."

The issue increases the pressure on Mr Guy in the run-up to a November state election that will closely pit the ­ruling Coalition against the Labor opposition. Mr Guy did not oppose the Southbank charge nor a separate one for the city's planned 250-hectare ­Fishermans Bend urban renewal project of $15,700 for each apartment.

"We'd be strongly lobbying the ­planning minister to desist in imposing extra taxes and charges," said Tony De Domenico of the Urban Development Institute of Victoria developer body.

Mr Guy would examine the request when he received it, a spokesman said.

"The Minister respects the City of Melbourne and welcomes their advice in how to keep our CBD an attractive place to live and invest in," the ­spokesman said.

Mr Guy will outline changes to ­developer contributions on Thursday, but is not expected to discuss this topic, industry sources said on Monday.


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[greengiraffe]

Critics slam housing plan

Rebecca Thistleton and Nick Lenaghan
498 words
20 May 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

More apartments, rather than houses, will carry the weight of Melbourne's bulging population, projected to hit 7.7 million by 2051.

Another 1.6 million dwellings will be needed to accommodate the growth, outlined in a revised plan for Melbourne released on Monday.

But Plan Melbourne, updated after a draft was released for consultation last year, will still allow local councils to lock up suburbs from higher-density development, despite criticism from the planning and property industries.

Victorian Planning Minister Matthew Guy said urban renewal would be focused around inner areas such as Fishermans Bend, E-Gate and Arden-Macaulay.

In the draft Plan Melbourne document, 42 per cent of new dwellings were expected to be detached houses. This has fallen to 33 per cent and apartment development will carry the rest.

A neighbourhood residential zone, which rules out townhouse and apartment development, will be applied to at least 50 per cent of all Melbourne's residential land, despite heavy criticism.

Planning experts have warned zoning would lock up the suburbs from development, worsening housing affordability around the inner suburbs – particularly the wealthy inner east.

The updated plan factors in recent infrastructure funding announcements for the East West Link and the Melbourne Rail Link.

Terry Rawnsley, principal of SGS Economics and Planning, said an original Metro rail plan, drafted under the previous government, would have provided more land use opportunities than the updated Melbourne Rail Link.

Mr Rawnsley said the Coalition's plan for rail supported the significant development planned for Fishermans Bend and would kickstart development, but it was still 10 years away.

He added that building the East West Link, which was funded in the May state and federal budgets, would allow for intensive development around western suburbs such as Sunshine.

The updated Plan Melbourne included new areas identified for development around Fitzroy and North Fitzroy, and around Watsonia and Hughesdale train stations.

Colleen Peterson, a director of planning consultancy Ratio, said the strategy identified opportunities for more development around train stations, but failed to capitalise on the potential for more housing on tram lines.

Radley de Silva, chief executive of the Master Builders Association of Victoria, said a variety of housing was needed across Melbourne so everyone could access diverse housing options in their own community. Mr de Silva said all councils needed to play a role in accommodating more housing.

"Councils will condemn future generations to a housing affordability pandemic if they try to lock up their suburbs from all forms of development now," he said.

A new planning authority will be established, which Victoria's Property Council described as the most important innovation to come out of the Plan Melbourne process, as it would be a sole body with the power to enforce the government's planning strategy.

Key points Melbourne needs another 1.6 million dwellings to accommodate growth. Local councils still allowed to lock up suburbs from high-density development.


Fairfax Media Management Pty Limited

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[greengiraffe]

http://www.smh.com.au/business/property/...39fin.html

Melbourne set for 1000 new apartments
Date
June 3, 2014 - 10:53AM

Simon Johanson
Property Editor for The Age
View more articles from Simon Johanson

Surging: Building approvals in Victoria have risen by 14.9 per cent.
Another 1000 apartments are set to soar above Melbourne's skyline with five new towers in Footscray and Southbank gaining development approval.

Planning Minister Matthew Guy this week signed off on two projects worth $270 million as the latest building approval figures show a surge of construction in Victoria - up by 14.9 per cent in April.

Around the country, however, dwelling approvals fell by 5.6 per cent over the same period, suggesting the broader building boom spurred by historic low interest rates may be losing momentum.

''Just as home prices appeared to top out ahead of the Budget, there also appears a degree of home-builder caution,'' CommSec chief economist Craig James said.

''Only time will tell whether approvals to build new homes have peaked. Still, the pipeline of building work is very full so builders, tradespeople and building material companies have plenty of work.''

The 751 apartments approved for Footscray may prove controversial.

The project by developer Giancorp Property Group will be constructed within 100 metres of the Maribyrnong River bank and span four towers rising between 16 and 28 storeys.

The plans attracted significant criticism from residents when first lodged last year who claimed the tower’s height suggested there was one planning rule for buildings along the leafy eastern suburbs of the Yarra River and another for the Maribyrnong in Melbourne’s west.

The apartment complex at 57 Haig Street in Southbank will be 38 storeys (122 metres) tall and house 249 units.

[greengiraffe]

He said he would not develop further in Melbourne’s CBD, Southbank and Docklands because of an oversupply in those markets. “I think there is too much supply. My plan is to stay away from those areas.”

AXF Group to build $3bn project
GREG BROWN THE AUSTRALIAN JUNE 05, 2014 12:00AM

RICHARD Gu’s AXF Group will take a 70 per cent stake in the $3 billion Eynesbury residential development project in Melbourne’s west.

The deal will make AXF the majority stakeholder in the 1250ha site, which is 40km west of Melbourne, with the group paying about $42 million for its stake.

AXF will head a consortium with Hyde Property Group, which is backed by developer Francis Kwong, and a Singaporean and Malaysian syndicate. Hyde Property bought the development site last year for $60m from the listed Villa World and the Baillieu family company Woodhouse Pastoral.

The sale last year included all of the underdeveloped land in the site, of which Villa World has built about 700 homes, and also the Eynesbury Golf Course business.

The deal between AXF and Hyde Property will be settled by the end of the month, in time to meet Villa World’s revised deadline for last year’s transaction with Hyde Property, following a delay from the initial settlement date that was due in March, according to Mr Gu, who is the AXF managing director.

AXF will now be the biggest player in the development, heading a new consortium which will be called Eynesbury Property Development Trust. AXF plans to develop up to 10,000 houses for a new town that will house about 30,000 people.

The consortium will also develop a town centre, schools, cafes and restaurants, sporting parks and other amenities that would be needed for a town.

Mr Gu said the group would look to taking advantage of the booming population in the surrounding areas.

He said the project would complement the apartment projects that AXF was undertaking.

The move is a new direction for AXF, which has focused on mixed-use developments with residential and serviced apartments. “Once you sell a lot (of land) it goes into your cashflow straight away, you don’t have to wait until the tower is finished,” Mr Gu said. “As a developer you have to make sure the portfolio is healthy; you cannot only have apartments, which don’t have any cashflow come in for five or six years.”

The group is planning to build Melbourne’s tallest suburban residential tower in Box Hill, which is 14km east of the CBD.

It will include 419 apartments, serviced apartments, retail and commercial office space.

Mr Gu said he chose the Box Hill area because there was a large Asian population

He said he would not develop further in Melbourne’s CBD, Southbank and Docklands because of an oversupply in those markets. “I think there is too much supply. My plan is to stay away from those areas.”

[greengiraffe]

When Aussie apartment tycoon avoids Melbourne, it will be wise to avoid Singapore developers that are making a beeline for Melbourne apartment markets...

Triguboff shuns ‘risky’ Melbourne apartment development
PUBLISHED: 2 HOURS 47 MINUTES AGO | UPDATE: 2 HOURS 47 MINUTES AGO

Triguboff shuns ‘risky’ Melbourne apartment development
The Reed and Kidley Belise apartment project begun in Bowen Hills, Brisbane.
APARTMENTS
REBECCA THISTLETON AND MERCEDES RUEHL
Melbourne is an investment risk as unit development is centred on the CBD, according to apartment baron Harry Triguboff, who has ruled out building in the city as it is oversupplied.

Mr Triguboff, managing director of Meriton, one of the biggest private apartment developers in the country, told a federal inquiry into offshore investment into property that Sydney still presented the best opportunity for apartment development.

He expects apartments to be in oversupply in Melbourne, where high-rise towers have been centralised ar­ound the CBD, Southbank and Docklands.

Sydney, in contrast, offered suburban development hubs such as Parra­matta and Chatswood, which spread out supply.

Meriton’s Melbourne- and Brisbane-based competitors remain confident in their local markets and strong apartment approvals are expected to continue down the east coast.

Another three high-rise towers were approved by Victorian Planning Minister Matthew Guy on Thursday, including a $900 million, 319-metre tower that will be the tallest in the southern hemisphere.

BIS Shrapnel senior manager Angie Zigomanis said apartment approvals had spiked and new housing starts would rise 31 per cent in 2014-15.

Though an oversupply would weaken prices in Melbourne, it would take longer for demand to be met in Brisbane and Sydney, he said.

New high-density dwelling approvals are forecast to remain at just above 20,000 dwellings a year over 2014-15 and 2015-16, fuelled by low interest rates and the expectation of further price growth. Unit prices are forecast to increase by a further 15 per cent over the two years.

In Sydney, new apartment development has spiked. Demand for off-the-plan apartments will continue to boost the rate of office block to apartment versions, said Tom Southern, CBRE president and CEO for Australia and New Zealand. This would have a flow-on effect to the broader office market.

“I wouldn’t say it is the one thing that will save the office market, but it could provide a much better balance,” Mr Southern said.

He pointed to rocketing off-the-plan unit sales at Lend Lease Barangaroo and Darling Quarter projects, as well as China’s Greenland Group Greenland Centre in the Sydney CBD.

“Sites in the inner city or in decent suburbs are going to continue to see this kind of demand.”

In Brisbane, the end of financial year marked the adoption of the new Brisbane City Plan 2014, intended to cut red tape and encourage development.

Ken Reed, group managing director of Reed Property Group, said there was an undersupply of high-end property in Brisbane’s inner city suburbs.

Streamlined development approvals would promote growth in the state’s economy.

Reed Property Group and Group Kidley began work on the $120 million, 228-apartment project Belise in Bowen Hills.

[revelationofpyramids]

I think the most exposed are Aspial, Hiap Hoe and Chip Eng Seng. However, must also look at the components of their investments and the devpt sizes relative to their other business and assets.

For eg Hiap Hoe's exposure in Melbourne has a large portion of hotel, office and retail component. If I take their melborne residential exposure compared to all its other business and assets (like ZP Park), it's only a small %.

For CES, if TM goes through, it only has one other site in the CBD (although it's 1,000 units) as its other site is in Doncaster which is suburb, and an office building in St Kilda. Relative to its big earnings from its Singapore project, this remainder exposure also becomes small in %.

Aspial has some 3 big residential projects in Melbourne, so maybe they are most exposed?

[Boon]

In Melbourne, the is no "supply constraints" as in Sydney.

"Plan Melbourne" sets out the Victorian Government's vision that will guide the city's growth to 2050.

http://www.planmelbourne.vic.gov.au/

[greengiraffe]

New projects launched in off-the-plan Melbourne boom
Larry Schlesinger
395 words
2 Jul 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.
Concerns about a potential oversupply of Melbourne apartments has failed to deter developers with 49 new projects launched over the June ­quarter, according to real estate group Oliver Hume.

Combined, the 49 projects could deliver more than 5800 new apartments – a record number for Oliver Hume data going to back to 2011.

The quarterly figures were 24 per cent higher than the 4678 apartments launched across 37 projects over the March quarter and more than double the number launched over the same period last year.

Meriton boss Harry Triguboff, one of the biggest developer of new ­apartments in Australia, has ruled out undertaking developments in ­Melbourne, claiming the central business district market is oversupplied with apartments.

New launches over the June quarter include the 69-level Light House by Chinese-backed developer Hengyi in the CBD featuring 608 apartments, the latest tower in Hong Kong-based Far East Consortium's Upper West Side development on Spencer Street featuring 402 apartments, Lend Lease's 888 Collins Street tower at Victoria Harbour, Docklands featuring 363 apartments and Malaysian developer Mammoth's 61-storey Mammoth Empire tower on Elizabeth Street with 474 apartments.

Andrew Perkins, head of research at Oliver Hume, said the record number of apartment releases over June showed there was continued confidence among multi-unit developers in Melbourne's off-the-plan market.

"Notably, 20 per cent of projects released during the quarter are also under construction," said Mr Perkins.

The City of Melbourne, which includes the CBD and Docklands and the City of Yarra, dominated new releases over the June quarter, but the figures also showed new apartment markets emerging in Glen Eira in the south-east and re-emergence of ­Darebin in the north, Mr Perkins said.

Last week, Victorian planning ­minister Matthew Guy approved the $900 million Australia 108 tower on Southbank by Singaporean developer Aspial, which will be the tallest residential tower in the southern hemisphere at 319 metres once completed. 

Mr Guy also approved two further high rises – a 241-metre apartment tower at 452 Elizabeth Street, with 75 storeys, and 622 apartments and a ­54-storey tower at 84-90 Queensbridge Street in ­Southbank.

In all, the three projects are expected to generate more than $830 million in investments, deliver 2022 apartments and create 5800 ­construction jobs.


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