Queensland, Australia Property

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Inner-city off-the-plan sales in Brisbane at record high
ROSANNE BARRETT THE AUSTRALIAN AUGUST 30, 2014 12:00AM

QLD_SM_NEWS_CAMPAIGNCHANGE_11MAY14
The inner-city Brisbane apartment market faces a balancing act with concerns of oversupply. Picture: Marc Robertson Source: News Corp Australia
OFF-THE-PLAN unit sales in inner-city Brisbane were the highest on record last quarter as a rash of apartments was launched on to the market.

In the June quarter, 1083 ­unconditional sales were signed in 57 projects, according to a report released yesterday by agents Place Advisory.

Over the past 12 months there were 3420 unconditional sales in Brisbane, for an average of $551,847. Place Advisory ­director Lachlan Walker said the market remained price sensitive with 58 per cent of the unconditional sales in the quarter under $550,000.

“It’s all about affordability,” he said. “Our market at the moment is driven by those investment fundamentals. We’re getting owner-occupiers coming through the door but they’re still a minority when it comes to sales.”

The top-selling project, with 117 sales, was Pellicano’s Trafalgar Lane in Woolloongabba on the city’s southside. Other top performers were Kilcor Properties’ Spice North Tower at Southbank, Liberte at Kangaroo Point, from Pradella and Silverstone ­Development’s Sessari.

“Prices, which have to date ­remained relatively stable for ­almost two years, will begin to grow, reflecting the demand for larger, more livable owner-occupier product,” the report said. Mr Walker said total approvals rose 10 per cent in the quarter to 24,750 apartments.

He expected only half those developments would come to fruition under their current owners. “There are a lot of sites under approval whose owners have gone through that (development approval) process to try and add value.”

A report from valuer LandMark White noted population growth in Queensland fell 14 per cent last year at a time development was rising. The inner-city Brisbane apartment market faced a balancing act with concerns of oversupply, the report said.

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Brisbane’s unit glut to ‘soften’ rents
ROSANNE BARRETT THE AUSTRALIAN SEPTEMBER 03, 2014 12:00AM

BRISBANE’S apartment development boom will lead to a renters’ market within three years when more than 8900 new units in the inner city are released for settlement.

The Urbis Apartments Insights report, released yesterday, found the rental market is expected to soften because of the looming increase in supply by 2017.

It also reported the city skyline is set to rise as infill developments go into the construction phase.

Urbis national residential director Jon Rivera said he was confident rentals would become more competitive as the stock was released to the market.

“Rents have been very strong and will start to soften as renters are spoiled for choice and look at location, design and nearby facilities,” he said in a statement.

But he said an expansion of the rental market was a long-term trend driven by the 25-35 age bracket seeking inner-city proximity. The report, to the end of June, found it was another 12 months of record-breaking off-the-plan sales for the city.

Average prices per square metre were $7982 for a one-bedroom, one-bathroom unit, and $10,092 for a three-bedroom, two-bathroom apartment. During the quarter there were another 10 projects under way and 45 pending development approvals.

But Mr Rivera urged caution on the development application figures as they may not all come to fruition: “We don’t think that everything we’re looking at will make it to construction and, until we see exactly how much gets built, we are cautious about predicting too much supply.”

Almost 70 per cent of forecast settlements this year are in Brisbane’s inner south and north.

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Incentives slash rents in Brisbane CBD amid high vacancy rate
ROSANNE BARRETT THE AUSTRALIAN SEPTEMBER 11, 2014 12:00AM

LEASING incentives are reaching almost half the face rents in Brisbane as landlords compete aggressively in a market with Australia’s highest central business district vacancy rate and a flood of new development in the wings.

Tenant adviser Project Control Group managing director Simon Gunnis said early access for tenants, base building upgrades and lessor works were being wrapped up in incentive packages equal to 40 to 50 per cent of the total passing rent over the lease term.

Vacancies in the Queensland capital’s CBD have officially reached 14.7 per cent, the highest level recorded by the Property Council since 1990. B-grade vacancies are more than 20 per cent.

“Brisbane is the basket case of office in Australia,” Mr Gunnis said.

“(Incentives) can get up to the high 40s. You don’t have to talk beyond 10 (years’ lease).

“Incentives are known as the supply side’s dirty little secret.

“It’s happening nationally — this is a dynamic that is happening in every national capital city.”

PCG, which provides property advisory and project services for commercial tenants and owner-occupiers, said owners had to compete with a huge volume of sublease space on the market, much of it from the mining services sector.

“The mining companies however are having to compete with their own lessors to move the space,” Mr Gunnis said. “They’re effectively a landlord themselves.”

Property Council of Australia Queensland executive director Kathy Mac Dermott is in discussions with the Brisbane council for a co-ordinated strategy to adapt older office buildings to student accommodation, residential or hotel use.

“It is critical to address the supply issue in this cycle,” she said.

She said Melbourne had success with the Postcode 3000 strategy in the mid-1990s, which involved overhauling city precincts with the reuse of buildings.

The Property Council’s latest office market report found a “flight to quality” would continue to plague the secondary office market as new stock came online.

Office towers continue to be developed.

Japanese group Daisho will raise its 57,000sq m tower 180 Brisbane at 180 Ann Street.

The Taiwanese Shayher Group has plans for a 54,000sq m office block at the former Supreme Court site on 300 George Street, and Dexus’s 480 Queen Street is expected to be complete in early 2016.

There is continued concern about the Newman state government’s decision to build the 75,000sq m 1 William Street office tower amid ongoing high vacancy rates.

Investa manages eight towers in Brisbane’s CBD, including 140 Creek Street, 257 Ann Street and 239 George Street.

Head of capital transactions, commercial development and leasing for Investa Office, Michael Cook, said: “We simply need to work harder, drive our agents to be more creative and be more flexible.

“Most of all in a market like this, we have to be prepared to walk away from a deal if it doesn’t make sense.”

CBRE Queensland state director of office services, John Walklate, said he remained positive about the market, with transactions up on last year.

“Face rates are holding up. Incentives have been attractive and have lured tenants,” Mr Walklate said.

“For a handful of tenants, they have secured premises on very attractive terms,” he added.

Analyst Michael Vincent, from stockbrokers Petra Capital, also issued a note of optimism, citing the return of tenants squeezed out of the city centre before the global financial crisis and the reduced availability of good quality sublease space.

He cited Uniting Care Australia’s recently consolidation of five offices into 6000sqm at 192 Ann Street at a gross face rent of $600 per sqm.

He also noted the conversion potential of B-grade assets, as well as the willingness of the council to enable the adaptation of properties to residential and accommodation use.

Brisbane’s 14.7 per cent vacancy is the highest of all capital cities, according to figures from the Property Council.

The Queensland capital leads Adelaide (13.8 per cent), Canberra (13.6 per cent), Perth (11.8 per cent), Melbourne (8.5 per cent) and Sydney (8.4 per cent).

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Apartment developments rise in Brisbane
ROSANNE BARRETT THE AUSTRALIAN SEPTEMBER 11, 2014 12:00AM

APARTMENT developments have reached almost one-third of private sector approvals in Brisbane as residents increasingly choose to live in units.

A new research report from JLL, Brisbane residential market: an investment case, found the relatively wide price differential between property prices in the Queensland capital and Melbourne and Sydney would again drive interstate migration, the force that propelled Brisbane’s early 2000s property boom.

The median price of stand-alone houses in Brisbane, at $470,000, is one-third below Sydney’s and 15 per cent lower than the Melbourne average.

“A relatively wide dwelling price differential between Brisbane and Sydney, along with Melbourne, is likely to add to the attraction of the region as it did in the early-2000s,” it said.

Demographic changes are leading to a catch-up in the proportion of Brisbane residents choosing to live in apartments.

“Recent buyer trends have been highly skewed towards the apartment market and suggest that this process of rising density is gaining momentum,” it said.

“A structural shift in Brisbane housing demand away from detached housing towards higher-density living also appears to be underway.”

Census data showed only 12 per cent of Brisbane residents live in apartments, compared to 16 per cent in Melbourne and 26 per cent in Sydney. There was an almost sixfold increase in the number of planning approvals in the city’s inner-north in the last 12 months, with a construction hub forecast across Hamilton, Newstead and Bowen Hills.

Developers are also choosing Queensland over the southern capitals because of the relatively low cost of sites — 20 to 50 per cent of the price of Sydney’s hot market. “Recent stronger price growth in other markets and relatively subdued growth in Brisbane means the differential has widened,” the report said.

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Bikies down, Gold Coast real estate up

Bikies down, Gold Coast real estate up
Harry Triguboff says international students – in particular Chinese – are major buyers on the coast and they needed to be ­convinced they were safe.  Photo: Louie Douvis
MATTHEW CRANSTON

Billionaire Harry Triguboff has declared the Newman government’s crackdown on criminal gangs at the Gold Coast a major factor in the recovery of the city’s property markets.

Billions of dollars in new infrastructure, along with cheap funding, is also driving the comeback. At least six major residential developments were due to be launched before Christmas.

“I am very happy with what ­Campbell Newman has done with the criminals,” Mr Triguboff said.

“The criminals were in the best parts such as Surfers Paradise, it’s not like they were just living at Logan.

“It was quite frightening to walk in the commercial areas of Cavill [Avenue] at night but it is not any more.”

He said the improved perceptions around the Gold Coast following the Newman government’s crack down had not only helped influence interstate buyers to purchase property there, but also foreign buyers.

“For foreigners when they come to a strange place, they already are unsure of themselves,” Mr Triguboff said,

“So they needed to know they were safe too.”

INTERNATIONAL STUDENTS MAJOR BUYERS
He said international students – in particular Chinese – were major buyers on the coast and they needed to be ­convinced they were safe.

Mr Triguboff, who started development of his Sundale residential project at the Gold Coast’s Southport this year, said the improved perception came just as the power of lower in­terest rates was starting to filter through to the city.

“The Gold Coast has been depressed and people were used to buying things cheaply, but people can’t buy at those prices any more,” he said.

Valuation experts also said the improved perceptions, coupled with a narrowing gap between established and new dwelling prices on the Gold Coast, had convinced developers to ­proceed.

“The negative publicity has gone and that has certainly had an effect on the perceptions of people from Sydney or Melbourne,” Herron Todd White director Luke Nichols said.

He said the market had bottomed in late 2012 and since then the price dif­ference between established and new homes was no longer as large as it once was. “Established property under $1 million has been steadily improving and that has made it more commercially viable to develop new homes.”

Colliers International’s Tony ­Holland has been appointed to market and sell six residential projects on the Gold Coast ranging in value from $90 million to $160 million.

‘ALL YESTERDAY’S NEWS’
“We haven’t seen this level of activity since 2007,” Mr Holland said.

“I agree that the Gold Coast has not only suffered a property correction but also a bad crime and bikies perception, which is now all yesterday’s news as a result of the government’s crackdown.”

Mr Holland said that while the perceptions had been cleaned up, the major driver of the comeback was the level of public and private infrastructure . He said infrastructure such as the city’s Light Rail, which is now complete and operational, had given developers the confidence to push ahead with a number of their residential projects and sign off on marketing budgets.

“Our developer clients have acquired sites over the past three to five years, obtained the development approvals and waited patiently for the right opportunity to launch to market,” Mr Holland said. “They can see that the time is right, with new apartment supply at 30-year lows, combined with record low interest rates, a buoyant Sydney, Melbourne and Brisbane ­property market and ever increasing demand from the Asian market.”

In August China’s richest man, Wang Jianlin, had committed $HK12.5 billion ($1.7 billion) to invest in Australian real estate, including the construction of a $900 million beachfront resort on the Gold Coast.

The private sector is also helping to renew the city with AMP Capital spending $300 million redeveloping the Pacific Fair Shopping Centre.

Major Commonwealth Games infrastructure has proceeded, including the Aquatic Centre at Southport, which is now complete, and the Athletes’ Games Village at Southport, which is under construction.

The Australian Financial Review

BY MATTHEW CRANSTON

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Chunk of CBD up for grabs
ROSANNE BARRETT THE AUSTRALIAN SEPTEMBER 24, 2014 12:00AM

ALMOST a hectare of elevated land in Brisbane’s central business district will be sold off as a single parcel after the state government amalgamated its landholdings for sale.

Brisbane’s Dental School and an adjacent government-owned site at 200 and 168 Turbot Street totalling 8919sq m will be sold under an expression of interest process to be managed by Savills.

Deputy Premier Jeff Seeney refused to speculate on the site’s value but said the combined land was greater than the sum of its parts.

“The valuations that we have indicate that combining the two sites, the work that GLAM (government land asset management) has done, represents a significant uplift,” Mr Seeney said.

“I anticipate strong market interest in that site.”

The almost 8000sq m Supreme and District court site was sold last year for $63 million. A 1.4ha vacant school at Fortitude Valley, 1km from the city centre, is expected to sell for up to $45m.

The Economic Development Queensland board will sign off on the expressions of interest requirements today, but terms are to be kept broad to enable a range of proposals from the private sector.

The heritage-listed dental school building is to be retained.

Expressions of interest are also expected to be opened today for the sale of the 3.4ha former Gold Coast hospital site in the city’s recently designated CBD, as foreshadowed in The Australian last week.

Meanwhile, Premier Campbell Newman yesterday officially opened the second stage of Lend Lease’s $2.9 billion development at the Royal National Association’s Exhibition site, describing it as “arguably Australia’s largest brownfield land redevelopment”.

More than 3000 residents and 15,000 workers will inhabit the 22ha Bowen Hills site, which will also include a four-star, $50m Rydges-operated hotel.

Demolition is under way for a new road, King Street, to link St Paul’s Terrace and Gregory Terrace. It is to be lined with 40 restaurants and boutiques.

The new release, The Yards, will include 401 apartments in 16 and 18-storey towers and 11 terraces. Construction is to begin mid next year.

Lend Lease project director Andrew Hay said office tower Kingsgate and the initial residential development The Green would be finished by the end of next year.

A $50m Rydges-operated hotel is being developed by Phillip Wolanski’s Denwol Group in a consortium with Stewart Baron’s Baron Corporation.

The hotel is expected to be open by 2016.

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Chinese to back $900m Gold Coast Jewel project
ROSANNE BARRETT THE AUSTRALIAN OCTOBER 02, 2014 12:00AM

Riding's proposed $900 million tri-tower project, Jewel, which is planned for Surfers Paradise. Supplied by Ridong (Gold Coas...
The Jewel project will house a Wanda-branded five-star 188-room hotel, cinemas, karaoke and 470 apartments Source: Supplied
CHINESE hotel and development giant the Wanda Group will underwrite construction of the $900 million triple-tower Jewel project on the Gold Coast in its first foray into the Australian development market.

The Chinese-backed international group has announced it met the requirements of the Foreign Investment Review Board to invest in the gleaming Surfers Paradise luxury hotel and apartment proposal.

In a release to the Hong Kong Stock Exchange this week, Wanda Commercial Properties said the Jewel project would go to market early next year with an expected completion date of 2018, the year the Gold Coast will host the Commonwealth Games.

“The board believes that given the unique location of the Jewel property and its unobstructed waterfront views along Surfers Paradise of the Gold Coast, the company is confident it can maximise the development value of the Jewel property and generate attractive returns on this investment,” the circular said.

Wanda is the 55 per cent shareholder in a partnership with ­Chinese-backed Ridong Group for the Jewel project, which had stalled after being launched to fanfare in 2011.

The Australian revealed that Wanda had been in discussions to buy into Jewel in July and held meetings with Trade Minister Andrew Robb, Queensland Premier Campbell Newman and Gold Coast Mayor Tom Tate.

Jewel is set to feature three towers — the premium, luxury and classic — housing a Wanda-branded five-star 188-room hotel, cinemas, karaoke and 470 apartments within the oceanfront site.

Wanda, China’s biggest developer, will be responsible for any additional project funding over the $290m stake from its Hong Kong-listed arm, Wanda Commercial Properties.

“Having regard to preliminary discussions with banks and the estimated construction costs, the company and Wanda HK have considered the total capital ­commitment of Wanda Australia Commercial can be reasonably set at $290m”, the circular said.

“In the event the capital ­commitment falls short of the actual funding requirements, Wanda HK will provide the necessary funding for Jewel Project Co, which will not be subject to any cap amount.”

The joint venture requires shareholder approval by November 30.

The company said it expected 60 per cent of the project’s total cost, or $540m, would be funded by bank loans and 40 per cent ($360m) would come from shareholders of the joint venture Jewel Project Co.

Modified planning approvals are expected to be finalised by the end of this year ahead of construction and pre-sales starting in the first quarter of 2015.

Wanda Commercial Properties also reasserted its commitment to provide $HK12.5bn ($1.85bn) to fund further real estate projects in Australia through its Master Australia joint venture with Wanda HK.

“The company aims to obtain additional credit facility which may be used for the development of the Jewel Project and other real property projects in Australia to be taken up by Wanda Australia Commercial, if any, by the end of 2014,” it said.

“The aggregate capital commitment of $HK12,500m is determined with reference to, among other things, the current real property market in Australia and the expected acquisition and development costs for suitable real property projects.”

The Dalian Wanda Group has a string of shopping centres, five-star hotels, department stores and karaoke centres across China.

In the past year it has ­embarked on an international drive, buying British Sunseeker yachts and American AMC ­cinemas, and investing in ­property in London and Spain.

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Brisbane riverfront land released
ROSANNE BARRETT THE AUSTRALIAN OCTOBER 10, 2014 12:00AM

TWO hectares of Brisbane riverfront land capable of supporting 720 apartments have been released for development by the Queensland government.

Deputy Premier Jeff Seeney yesterday announced a fresh round of expressions of interest for the 304ha Northshore Hamilton master-planned area.

More than $5 billion of development is already under way at the riverfront precinct, where Australand, Devine, Brookfield, Citimark, Leighton Properties, Pamada, Peloton, Shayer Group and Wentworth Equities have already invested to transform industrial land into urban residential.

Mr Seeney told a UDIA industry lunch the new release precinct offered riverfront land capable of supporting about 54,000sq m of residential gross floor area, 14,500sq m of commercial area and 3500sq m of retail space, likening it to the development of Brisbane’s Southbank.

“This is our vision for Northshore Hamilton,” he said. “This is the kind of premium development opportunity that doesn’t come along very often.”

The site is located between Hamilton Reach and Portside Wharf.

Its development plan includes a park and community swimming pool.

The development area, known as Civic Park, follows land releases at the former Southport Hospital, former Brisbane Dental School and the former Brisbane Children’s Hospital.

Northshore Hamilton has been under development since 2007.

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Jump in construction plans signals bright outlook for Sunshine Coast
ROSANNE BARRETT THE AUSTRALIAN OCTOBER 11, 2014 12:00AM

Sunshine Coast confidence up
The Bells Reach development in Caloundra. Source: Supplied

QUEENSLAND’S Sunshine Coast council has reported growing confidence and a jump in development applications as Stockland pushes ahead with its massive $5 billion Caloundra South masterplanned site.

Latest figures from the council reveal that 194 lots were approved in August from 21 applications, three times the 65 lots approved in July. It marks growing confidence in the family-friendly tourism haven, where construction spending reached a five-year high last month.

The Sunshine Coast housing market has been sluggish since the global financial crisis but over the past two years median prices have returned to about 2006 levels at $468,000 for a house.

The latest Real Estate Institute of Queensland figures show the median price grew 5.7 per cent over the past 12 months.

Listed developer Stockland has lodged plans for its Bellvista Boulevard Town Centre and recently won approvals for 350 new residential lots. It expects its 700-lot Bells Reach project, adjacent to the Caloundra South area, to sell out within a year.

Caloundra South regional manager of residential for Stockland, Ben Simpson, said the multi-billion-dollar project was a generation-long development.

“We keep evolving the design and each set of terraces,” he said. “The market has been difficult … but over the last 12 months there has been a resurgence.

“There was limited supply for a time and there is an accumulating effect of that.”

Stockland holds 2310ha of approved developable land across the southern Sunshine Coast, with plans to create 20,000 lots, job hubs, shopping areas and a retirement village.

“Historically, about 75 per cent of development in masterplanned communities has been north of the Maroochy River,” Mr Simpson said. “Going forward, because of ready land supply, 75 per cent (of the development) will be south and a lot of that is Caloundra South.”

Construction is under way at the health precinct Oceanside for a 300-bed private hospital and 700-bed public facility.

A report this week from property advisory Herron Todd White said sales volumes were ticking along and supply was emerging as an issue. “First-home buyers and entry-level investors are pretty much priced out of the new home market other than for small lot developments in areas in the estates on the coastal strip and standard sized lots in the railway towns,” the report said.

Rental yields are about 5 per cent.

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Surge in Chinese property buys takes state total to $462m
THE AUSTRALIAN OCTOBER 13, 2014 12:00AM

Natasha Bita

National Correspondent
Brisbane
CASHED-up Chinese buyers have tripled their spending on Queensland real estate, farmland and commercial property since the global downturn, outlaying a record $462 million last financial year.

The Chinese almost doubled their real estate spending in the Brisbane City Council area during 2013-14, to a record $185m — up from $96m the previous year.

China is now the biggest source of foreign investment in real estate in Queensland, the only state or territory to track purchases by offshore buyers.

On the Gold Coast, where property prices plummeted during the global financial crisis, Chinese buyers topped the list of foreign buyers by snapping up $196m worth of property during 2013-14 — 5.9 per cent more than 2012-13.

Americans were the most active foreign investors in Brisbane, spending $244m last financial year — up 60 per cent in 12 months.

But Chinese buyers almost doubled their expenditure in Brisbane, to $185m. Singaporean investors bought property worth $97m and Malaysians spent $32m.

In the tourist city of Cairns, Chinese investment nearly halved to $4.5m but Singaporean investment rocketed from just $890,000 in 2012-13 to $11.5m during 2013-14.

The Asian investment surge is detailed in the latest annual report of Queensland’s Foreign Ownership of Land Register Act, which reveals Chinese investment was too low to show up in the ranking of the six top investors at the start of the financial crisis in 2008-09.

Within a year, however, Chin­ese buyers had spent $150m on Queensland property, ranking third behind Korea and Singapore.

China’s expenditure of $463m in 2013-14 was 43 per cent higher than the 2012-13 result, which had been inflated by the sale of the nation­’s biggest irrigator, Cubbie Station, to a Chinese consortium for $240m in January last year.

The federal parliamentary standing committee on economics is investigating whether foreign investment is fuelling Australia’s property prices.

The head of the committee, Liberal MP Kelly O’Dwyer, has flagged imposing an application fee for offshore buyers to finance a Treasury crackdown on illegal purchases.

She has criticised the Foreign Investment Review Board for failing to enforce its restrictions on foreign buyers, who are banned from buying established residential property.

Foreigners are allowed to buy housing off the plan, while temp­orary migrants, such as those on 457 visas and foreign students, can buy an established home as long as they sell it when they leave.

Immigration Department data provided to the parliamentary inquiry reveals that Chinese invest­ors have put tens of millions of dollars into real estate through the “significant investor’’ visa scheme.

It shows that 90 per cent of the scheme’s applicants are Chinese, and 8 per cent have put their money into managed property funds worth $27.5m. The department is considering applications from 610 migrant investors, offering to invest $3 billion.

The significant investor visa waives the points test and English-language requirements for mig­rants who will invest at least $5m in Australia for four years.

They cannot spend the money directly on buying property, but can invest in managed funds or property development companies.

The parliamentary committee was due to report last week, but the inquiry has been extended for another six weeks.

The Parliamentary Secretary to the Treasurer, Steven Ciobo, has declared that planning controls and a shortage of housing — rather than foreign buyers — are to blame for property price rises.

Housing prices in Sydney have soared by nearly 15 per cent in the past year, according to data compiled by RP Data.

Prices jumped 8.5 per cent in Melbourne, 5.1 per cent in Brisbane, 5.5 per cent in Adelaide and 3.6 per cent in Perth.