Queensland, Australia Property

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Global giants close in on Springfield apartment project
ROSANNE BARRETT THE AUSTRALIAN OCTOBER 16, 2014 12:00AM

INTERNATIONAL property giants Country Garden and Daikyo are homing in on a multi-billion-dollar 20,000-apartment development in southeast Queensland’s biggest masterplanned community.

The Australian understands the major Asian property companies are running the ruler over development rights for the transit-oriented development offering from Springfield Land Corporation, which will transform 22.5ha of land around the train station into a high-density residential and student accommodation area over the next 15 years.

Plans are in place to build a series of high-rise unit towers, plus commercial offices, business premises, education, retail and hotels across 868,000sq m. The train station is the size of a central business district facility, opposite Mirvac’s Orion Town Centre, and is on track to transport 1 million commuters within its first year.

Investment opportunity documents said about 480,000sq m would be available for residential development.

“The development of an urban lifestyle community based around high-density mixed-use transit-oriented community living on this scale and on a greenfield site is unique within Australia,” it said.

The documents said similar opportunities had been common in greenfield and brownfield sites in emerging Asian cities.

Daikyo Australia managing director Hiroshi Mori told The Australian the company was seeking more details about the project but remained interested “subject to our internal feasibility and due diligence”.

Chinese-owned Fullshare Group had also investigated the unit development, but a local representative said it was focusing on other opportunities.

Springfield Land Corporation’s managing director Raynuha Sinnathamby declined to comment on international interest in the transit-oriented development.

But she said the response to a site visit in July from a trade delegation connected with the B20 international business meeting had been overwhelming. “It opened up some doors to some pretty big Asian hitters,” Ms Sinnathamby said. “There is genuine interest. While the Asian investors have always been interested in the southern states, the move up to Queensland is something that our eyes have been opened to.

“I think they are avoiding some of the competition down south and looking at the opportunities to come into Queensland where it has not been as hotly contested.”

She said the investors were most interested in joint-venturing with local partners for shovel-ready, approved sites.

International investors were also eyeing other possibilities including hotels, apartments, student accommodation, and educational facilities, she said.

It is expected marketing for the first stage at Springfield will start next year.

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Older inner-city units under pressure from shiny new entrants
THE AUSTRALIAN OCTOBER 18, 2014 12:00AM

Kylar Loussikian

Journalist
Sydney
Older inner-city units pressured
The Brisbane skyline. Picture: Marc Robertson Source: News Corp Australia
TALK of apartment oversupply is often centred on Melbourne, but inner Brisbane could be developing its own problems, according to a long-time residential property analyst.

Michael Matusik has warned that the West End and South Brisbane markets were at or ­approaching apartment over­supply, with the situation “very likely to get worse over the next three to five years”.

Mr Matusik’s analysis shows older riverfront apartments are going without a tenant for four weeks, and rent for substantially less than previous terms. He also cautioned investors that new apartments purchased could not later be sold to overseas buyers, a major segment of the inner-Brisbane apartment market.

“Owners of older apartments need to renovate or probably, in the next year, get rid of the property,” he said. “Older stock will still make a pretty good profit, but they won’t get as much money as they could have prior to the increase in supply coming through.

“This will definitely soften ­prices, and the rental yields won’t be the same.”

Mr Matusik said as new developments were finished, tenants in older buildings were moving.

“Rental falls are more in older stock. The rental market is footloose and tenants are attracted to the shiny new toy,” he said.

He said newer stock coming on to the market was being supported by strong overseas and interstate demand. But as the market cooled and interstate demand disappeared, local investors could be left with stock they could not sell, Mr Matusik said.

About 500 new apartments have come on to the South Brisbane and West End market recently, with another 850 to be completed in the next 12 months.

This week The Australian reported Brisbane-based developer Michael Hurley was planning a development across 17 land parcels in South Brisbane. While the company’s last project, the 180-unit Melbourne Residence, had sold out in just a week, Mr Hurley has a pipeline of more than 750 apartments across the city.

The Queensland government also released more riverfront land, capable of supporting 720 apartments.

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Norman Park and Hawthorne dominate Brisbane’s prestige sales
THE AUSTRALIAN NOVEMBER 15, 2014 12:00AM

House
46-50 Aaron Avenue, Hawthorne, was bought by Gina Rinehart. Source: News Corp Australia
BRISBANE River has become the Queensland capital’s prestige address, with waterfront locations racking up the most multi-million-dollar home sales in the past year.

Two-thirds of the $5 million-plus Brisbane sales recorded in the past financial year were on the riverfront.

Three were in suburban Norman Park — where former prime minister Kevin Rudd and his wife Therese Rein own a block of land overlooking the water — and another three were in the adjacent suburb of Hawthorne, where mining billionaire Gina Rinehart recently purchased a new home.

Lachlan Walker from Place Advisory, which supplied the data to Weekend A Plus, says the riverfront has always had a prestige element because of its rarity. “The evolution of the riverfront has been driven by the eastern and southside of the city,” he says.

The $5m-plus waterfront properties were located on Griffith Street in New Farm, King Arthur Terrace in Tennyson and Ningana Street in Fig Tree Pocket. The non-waterfront property sales were in the traditionally high-end areas of Ascot and Hamilton, and New Farm and Ashgrove.

Agent Damien Hackett, who sold six inner-eastern suburban homes worth more than $5m, says people want to live in the inner-eastern riverside suburbs because of the proximity to the city, superb views, and potential for boat moorings.

“Demand is high for homes on the riverfront with all recent properties for sale attracting multiple offers with some receiving up to 10,” Hackett says.

“This level of demand is a huge step in the right direction for the high-end waterfront market, which bottomed out following the 2011 floods.”

Last month Rinehart bought her first Brisbane home, spanning five blocks of riverfront land in Aaron Avenue, Hawthorne, for a reported $14m. Representatives for Australia’s richest person have applied to the local council to renovate the 1990s home with new verandas, sprucing up the pool house and an internal lift.

One of the first multi-unit riverside developments in decades is the St Lucia Residences in the leafy university suburb.

Priced from $2.16m, the Macquarie Street apartments, two per floor, were designed by HAL Architects to be flood-resistant, with essential services on the second floor. Each apartment is at least 239sq m, and the ground-floor penthouse is 582sq m. The complex also features a six-berth marina.

Place Advisory’s 2014 Riverfront Apartment Report found waterfront units consistently achieve higher resale prices than their landlocked competition.

“A riverfront apartment has become a status symbol in Brisbane,” it says. “It is the pinnacle of lifestyle apartment living.”

Riverside apartments recorded the highest capital growth last year, in 2012 and in 2009, returning to their higher value after non-waterfront sales achieved better results in the Brisbane flood-affected years 2010 and 2011.

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Inner-city units on the rise
ROSANNE BARRETT THE AUSTRALIAN NOVEMBER 20, 2014 12:00AM

OFF-THE-PLAN apartment sales in Brisbane are expected to smash previous records this quarter as more than 2000 apartments swell the new-unit market.

Fourteen new unit blocks are set to hit the market in the last three months of the year, totalling up to 2200 units, according to a new report from Place Advisory.

Director Lachlan Walker said the Brisbane market was building momentum, tipping more than 1000 sales this quarter.

“The inner-city market is in a perfect position as we head into the last quarter of 2014 with high demand and more projects coming on to the market,” he said.

CBRE project marketing director Paul Barratt said Pradella’s Light & Co apartments in West End had sold almost 70 per cent of its first-stage apartments in the first week of marketing.

“We’ve got this drive toward inner-city living,” Mr Barratt said.

“In Brisbane 13 per cent of people live in apartments, in Sydney 26 per cent of people do.”

Mr Barratt is also marketing Billbergia’s Skytower, which will rise 274m to become the city’s tallest high-rise. He said there had been strong demand in the lead-up to the launch next month.

Last quarter there were 785 unconditional sales worth $428 million across 56 projects — more than double the 10-year average of 343 sales per quarter — but fewer than the second quarter record of 1038 purchases.

Over the past 15 months more than 4200 apartments have been sold off the plan. The average price in the last quarter fell 1 per cent from the previous period to $545,478, an 8 per cent decline on 2013 figures.

Mr Walker said the top performing project for the period was Lend Lease’s The Yards at its $2.9 billion RNA Showgrounds development with 162 unconditional sales.

It was followed by David Devine’s Metro Property Development complex Newstead Towers (112 sales), Walker Corporation’s Westmark at Milton (82 sales) and Hindmarsh’s Zest in Kelvin Grove (68 sales).

Analyst Urbis has noted the dramatic rise in development applications to Brisbane City Council, rising from 1382 apartments in the last quarter of 2013 to 2948 in the March quarter this year and 6242 to June.

In a presentation, residential research director Jon Rivera said 2015 would be the test of the market, when settlements were due.

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Developers stalk riverside land
THE AUSTRALIAN NOVEMBER 20, 2014 12:00AM

PRIME riverfront land planned for major residential and mixed-use development is being targeted by dozens of major international developers and listed Australian companies.

Two land parcels for sale in South Brisbane’s Kurilpa precinct are understood to have attracted the attention of developers including Australian Securities Exchange-listed companies Lend Lease and Leighton, and internationals Greenland Holding Group, Chinese Overseas Holdings, R&F and others.

Known as the Parmalat and Hanson sites, the riverside industrial areas have strong government support to be transformed into high-density residential zones supporting up to 8000 residents. Towers of up to 40 storeys are permissible under a proposed new local plan.

Chinese state-owned company Greenland has plans to focus on southeast Queensland after investing $1.6 billion in Sydney and Melbourne in the past year. It is also a joint venture partner with James Packer’s Crown Resorts in a bid to develop the Queens Wharf casino in Brisbane.

Yesterday development director Kang Xue said he was aware of the Kurilpa precinct but Greenland would not comment on tenders. “We know the project, we understand there is development there,” he said.

The Australian was unable to contact R&F and Chinese Overseas Holdings.

The Parmalat site spans 2.5ha on the Brisbane river, 600 metres from the city central business district and is for sale through Colliers International’s Brendan Hogan and Pat George, along with Knight Frank’s Justin Bond and Ben McGrath.

Mr Hogan declined to comment on any specific interest in the sites, noting the tender process was ongoing. “They’re both outstanding development opportunities and will be the catalyst for the Kurilpa riverfront renewal,” he said.

The adjacent 12,921sq m Hanson site across two lots is also for sale. The concreter will move to the former Brisbane city council bus depot in Bowen Hills.

Leighton and Lend Lease declined to comment on the industry speculation.

Prominent private developer David Devine, who leads Metro Property Development, said the company had cast its eye over the area but warned of excessive ­prices. “A lot of the vendors have got the idea that they’re probably worth a lot more money than they really are.”

Brisbane-based developer Consolidated Properties has also indicated its interest in the sites.

Brisbane has a raft of development sites including the Fortitude Valley State School, the former Dental School at Turbot Street and the former Children’s Hospital at Herston.

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Hatham moves closer to $230m Brisbane tower sale
BEN WILMOT AND GREG BROWN THE AUSTRALIAN NOVEMBER 27, 2014 12:00AM

Greg Brown

Property Reporter
Sydney
MORE than $300 million worth of Brisbane office towers are close to selling with financial services groups setting the pace in trading assets.

In the largest play, private landlord Hatham Holdings has drawn interest from a domestic group for its building. Earlier this year it struck a major leasing deal with Queensland’s Newman government.

The buyer, thought to be financial services player Challenger, could pay about $230m for the tower, on the corner of Albert and Margaret streets.

Hatham Holdings is owned by accountant Earl Larmar and William Douglas and the pair developed the 22-level tower in 2009.

The off-market campaign for the A-grade building at 53 Albert Street, was handled by CBRE’s Bruce Baker and Flint Davidson, who declined to comment.

The sale is tipped to show a yield of about 7.5 per cent.

Elsewhere in the city, insurance body RACQ is thought to be in due diligence to acquire a $60m tower in Edward Street from an AMP Capital client. The state’s top provider of car insurance, which declined to comment, is looking at purchasing and then shifting part of its operation into 60 Edward Street.

The 18-level building, which has 14 floors of office space, could suit the group’s accommodation needs as it considers options, including shifting from its Fortitude Valley base at 300 St Pauls Terrace.

AMP Capital head of property John Dynon confirmed that the property was in due diligence, adding it was part of the group’s strategy to sell non-core assets.

Also in the Brisbane CBD, boutique group Denison Funds Management is believed to be in due diligence to buy Medtronic House for about $35m.

The 10-level office building, at 200 Creek Street, adjoins a Novotel Hotel and is about 200 metres fro Central Train Station.

It last changed hands in 2011, when a Centuria fund picked it up from Valad.

Elsewhere, Trinity Group entered into an option agreement to buy 16 Marie Street in Milton for $20.43m.

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Qld waits for housing boom

Matthew Cranston
517 words
4 Dec 2014
The Australian Financial Review
AFNR
English
Copyright 2014. Fairfax Media Management Pty Limited.

Expectations Queensland's property market could boom because of its relative cheapness compared with Sydney and Melbourne, look less likely to be fulfilled due to the state's ­unemployment and slowing population growth.

Since 2009, a Sydney-based investor has had to shell out an extra $200,000 for a median dwelling compared with a Brisbane buyer.

While there are plenty of interstate punters buying apartments in ­Brisbane, the price gap has still not been enough for people to migrate north and occupy an apartment.

Valuation company LandMark White makes the case that it is job growth and not cheaper prices that will underpin a property boom in ­Brisbane.

"The price gap has been used to ­support a forecast recovery in interstate migration, however, the price differential began to peak in 2010 and interstate migration has since only worsened," LandMark White Queensland research manager Ally McDade said.

"Forecasts from Deloitte indicate unemployment will remain high for the foreseeable future, therefore indicating that migration will likely remain at low levels and the price differential between Sydney and Brisbane will fuel investor sales activity only."

"A direct concern is then the ability of the residential rental market to soak up the amount of available stock." However, National Property Research Co director Matthew Gross sees the price differential between ­Brisbane and other cities as more ­influential in creating a property boom than the state's unemployment and population growth.

"It's bizarre, but it's true," Mr Gross said. "Migration into south-east Queensland will increase because of the widening gap in house prices and the limited supply and this is likely to drive up prices in the next two years.

"It hasn't happened in the last four years because of the financial crisis and political unrest and some job ­uncertainty," he said

"But if the long-term trend continues it will push more people into ­Queensland." For Brisbane developers, interstate punters keep rolling in.

Brisbane developer Silverstone Developments is still reporting between 60 per cent to 70 per cent of its off-the-plan sales in its residential apartments are being sold to interstate buyers.

"Without a doubt most of our buyers are from down south," Silverstone's Troy Daffy said.

"The bang they get for their buck is still substantially higher in Brisbane."

Listed groups such as Investa, Lend Lease, Mirvac and Stockland have all reported some increased interstate activity for their apartment projects.

Place Projects' Lachlan Walker said more interstate investors would ­purchase apartments in the year but whether the fundamentals were right, was another question.

"Our rental market at the moment is going through a period of softening. I don't think anyone would argue with that," Mr Walker said.

"We have this sort of limbo situation where people are either negotiating on cheaper rents or going to invest in an apartment."

Mr Walker said that with the median price of an apartment in Sydney now 56 per cent higher than the price of an apartment on Brisbane, there would still be further buying from southern investors.


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Local players getting pushed out of Brisbane development race
ROSANNE BARRETT THE AUSTRALIAN DECEMBER 08, 2014 12:00AM

Local players getting pushed out
David Devine: ‘Prices have now been elevated above what is a good business investment.’ Picture: Tara Croser Source: News Corp Australia

COMPETITION for development sites in Brisbane is pushing out local players in the fast-growing city.

The influx of interstate and international players into the Queensland capital’s development scene this year has included Chinese R&F, Singaporean Aspial and Banyan Tree and “southerners” Urban Construct, Billbergia, Pellicano and Gurner.

Queensland property veteran David Devine — who is set to profit $20 million after flipping two sites in less than a year to R&F — said the new entrants had spurred some vendors to overreach on their price expectations.

“The prices have now been elevated above what is a good business investment,” he said. “All the vendors are reading about increasing prices and they’ve all jacked their prices up. The market will take a period of settling down to see what happens over the next three to six months.”

Mr Devine — whose company Metro Property Development settled 500 apartments this year and expects another 1000 in 2015 — said site prices in South Brisbane, West End and Fortitude Valley were “now getting too high”.

Local developer PointCorp co-managing director Chris Vitale said the firm was increasingly selective about its sites as competition grew and site prices rose.

“Whereas 12 months ago, 18 months ago you might have two or three competing bids, now you’re talking about six or seven,” he said. “It has pushed site values up. In some ways it was easier developing in the GFC because we had less competition, but that’s the cycle.”

Melbourne-based young rich-lister Tim Gurner, who himself burst into the Brisbane market with his $600 million triple-tower Flatiron precinct in Fortitude Valley, said some sites were selling for “crazy money”.

“I think people are paying too much and I think they (the projects) won’t get up,” he said. “When they’re paying $70,000 to $80,000 per apartment site then I think it’s crazy.”

Mr Gurner purchased the 5000sq m site he is transforming into the Flatiron precinct for $25m, buying out an appliance shop, church and small business owners.

But he said he had been offered more than $70m to onsell the site. “We’ve had some crazy, crazy offers from the Asian developers.” But national director of real estate transactions for ­Deloitte Capland Real Estate ­Advisory, James Walsh said value was relative.

“Some of the local developers that purchased sites several years ago at lower prices are having a harder time getting their head around some of the prices being paid today,” he said.

“But for developers interstate and offshore it’s quite the opposite. Brisbane represents what is perceived to be good value.”

He cited the recent $150,000 per unit price paid in western Sydney’s Parramatta compared to prices ranging from $70,000 to almost $90,000 in South Brisbane. He said several offshore developers, including those among the biggest in China, would enter the Brisbane market in 2015.

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Apartment splurge for Queen’s Wharf casino site
ROSANNE BARRETT THE AUSTRALIAN DECEMBER 13, 2014 12:00AM

Matt BekierEcho CEO Matt Bekier says the company has ‘stretched itself’. Picture: Mark Calleja Source: News Corp Australia


THE consortiums headed by James Packer’s Crown Resorts and rival Echo Entertainment will compete for the rights to build more than 2500 apartments at the multi-billion-dollar Queen’s Wharf project in Brisbane’s CBD.

Industry sources have told The Weekend Australian the proposals for the riverside city precinct will include thousands of apartments across five towers around the ­future casino, luxury hotel and entertainment and shopping area.

One skyscraper will be a “super tower” set to overtake the city’s tallest buildings.

The Newman government’s competitive tender process for Brisbane’s biggest development is down to two consortia: Crown Resorts and partner Chinese state-owned developer Greenland, versus incumbent Brisbane casino operator Echo Entertainment in a joint venture with Chow Tai Fook and the Far East Consortium.

The winning team will shape the city with control of ten blocks from Alice Street to Queen Street, from the river to George Street. Three government buildings will be demolished to make way for the project.

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GALLERYAustralia’s other waterside suburbs
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Under the Echo consortium proposal, The Weekend Australian understands the luxury hotel to come to Brisbane would be the Rosewood brand, owned by Chow Tai Fook. The “six-star” ­offering would follow grand openings in Britain and China.

Echo Entertainment holds the licence for the city’s Treasury ­casino, which grants operational rights until 2070.

In October, Echo chief executive Matt Bekier said the company had “stretched” itself presenting a “very robust” bid for Queens Wharf.

Echo’s licence and long-term lease over three buildings within the precinct could stymie plans from Crown and Greenland.

Likewise, if the Crown proposal gets up, the city of 2 million could have two casinos almost side by side, with more than double the number of existing poker machines.

This has prompted analysts to back Echo as favourite, despite rumblings of discontent from government about how they have run their Queensland casinos.

Echo, Crown and representatives from the Newman government declined to comment, citing confidentiality.

It is understood the Newman government wants the project to roll out within an ambitious three-year time frame.

Details of the proposals are shrouded in secrecy, with confidentiality arrangements binding both proponents and the state government. The proposals were submitted last month ahead of a decision expected early next year.

The historical rate of inner-city Brisbane apartment sales before the boom this year was about 1000 sales annually. But Brisbane is seeing a surge in off-the-plan applications and developments. More than 1400 apartments sold in the inner city, within a 5km ­radius, in the last quarter.

More than 2500 sales across that area are expected this year, with more than 5300 settlements in 2016.

In the two years to mid-2014, fewer than 1000 apartments were sold in the city’s CBD. In the third quarter of 2014 there were 18 sales in the CBD, with only three developments available for sale.

A summary of the Brisbane Apartment Essentials report by property analysts Urbis found record off-the-plan apartment sales in the inner city were leading to the “super tower phenomenon”.

It cites Billbergia and AMP Capital’s 1119-apartment Skytower — set to be the highest in the city — and the Shayher Group’s twin-tower 428-apartment, hotel and office development on ­George Street.

“It is likely that these projects may however be surpassed in 2015, with a number of new development applications expected to be lodged within the CBD by domestic and international developers,” the report said.

Billionaire Harry Triguboff’s Meriton developed two skyscrapers of more than 1000 apartments over the last three years.

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Bumper year predicted for Cairns property market

Yolanda Redrup
710 words
10 Jan 2015
The Australian Financial Review
AFNR
English
Copyright 2015. Fairfax Media Management Pty Limited.

Property Development and a weak dollar are lifting up prices.

Cairns is emerging as a real estate hot spot for 2015 as a weaker Australian dollar combines with recent development announcements and a surge in the local economy to restore confidence in the city's property market.

Owner of local real estate agency RE/MAX Real Estate Cairns, Tony Williamson, said the city "came out of its slumber" in 2014. "Prices had fallen since 2007 but there were some major developments announced for Cairns, so confidence returned," he said.

"We did three auctions of inner city properties in December and all three went significantly above the reserve which is something we haven't experienced for a while.

There were also a lot of registered bidders on each property."

In the 2014 September quarter, sales rose more than 34 per cent in Cairns, according to figures from the Real Estate Institute of Queensland.

Record-low interest rates encouraged house prices to rise in 2014, up 7.9 per cent across the capital cities, according to CoreLogic RP Data. That had some flow-on to regional towns. Sydney prises were up 12.4 per cent and Brisbane 4.8 per cent over the course of the year.

Cairns recorded the greatest improvement in vendor discounting outside the south-east of Queensland.

The low dollar is expected to boost domestic and international tourism to the city. Mr Williamson said his company recently sold a block of land with a $120,000 reserve for $340,000. "We also did a deceased estate in Edge Hill and there were 23 registered buyers on one property," he said.A love affair renewed

REIQ chief executive Antonia Mercorella said Cairns was ripe for growth.

"Cairns has emerged as the star performer of Queensland real estate and the prospects for 2015 are bright as buyers renew their love affair with the city," she said.

"Over the September quarter 2014, preliminary house sales in Cairns increased by an impressive 38 per cent, with unit and town house sales also recording a strong 34 per cent rise."

Ms Mercorella said sales over $500,000 had performed well.

"House sales in the $500,000-plus price bracket were up 48 per cent, reaching an all-time high of 95 preliminary sales – and there was also strong growth in the sub-$500,000 price bracket. Over the year to September 2014 the median house price in Cairns rose 6.2 per cent to $376,000 and average days on market are also trending down, reflecting the strong demand in the market."

The proposed $8.15 billion Aquis resort and casino has helped to spur confidence in the market. Not all agents are as buoyant about the market. Ray White Cairns Beaches principal Paul Stirling said the market turned around in Cairns in late 2012, was strong in 2013 and steady in 2014. He expected growth to continue in 2015 at a slower rate. "We're coming of a low base in 2013, so we had to play catch-up to a lot of areas in Australia."

There are also differences between the housing and unit markets. Unit sales have plummeted due to crippling body corporate fees, caused by high insurance costs.

"The unit segment can be divided into three or four areas. We've got the mum and dad units, which are rented or lived in full-time and those body corporate fees are $4000 or under and selling quite well, but the units above $5000 in fees are harder to sell," he said.

"In the holiday let market, they generally have more substantial body corporate fees, if they have a strong income the units are turning over, but not as well as they were say in 2005 to 2007. If they have only an average income and high fees of $16,000 to $20,000 then they have a slow turnover rate."

Domain Group senior economist Andrew Wilson said the high insurance costs for apartments meant no new units had been built recently in Cairns. "They have stopped building units, but the median price has now dropped below $200,000 so buyers will start looking at that market again," he said.


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