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Vol 11. No.223

Landsburys Independent Accreditation Reports

Economic Overview

	Current	+/-	Movement
$AUS/$US	99.22	+0.57
Cash Rate	4.75	Steady
90 Day Bill	5.02	-0.02
10 Year Bond	5.520	-0.025
ASX 200	4643.5	+14.3

New South Wales Property

• Developer Lend Lease Group has signed heads of agreement with three major tenants for the office component of its $6 billion Barangaroo project on the waterfront in the Sydney CBD.
• Lend Lease will be announcing the tenants in the coming months, prior to commencing construction of the first building next year.
• The project will include more than 300,000 square metres of office space in three towers, along with 650 apartments, retail space, a headland park and cultural facilities.
• Lend Lease has also applied for permission to build a hotel on a pier over the water.
• There is speculation that the waterfront area could become Australia’s accounting hub, with sources suggesting the big four are considering space in the precinct, to be delivered to the market over a number of years.
• PwC, Deloitte, Ernst & Young and KPMG all have lease expiries on their Sydney premises which would place them well to move to Barangaroo.
• KPMG’s lease at its current premises in Shelley Street in King Street Wharf does not expire until 2016 and they the option to renew the lease.
• PwC, which has previously been linked to the project, and is keen to leave its Darling Park headquarters and shift to the new precinct. It has a lease over close to 40,000 square metres at Darling Park until December 2015.
• Ernst & Young’s lease at it name-sake tower above World Square ends in 2016.
• Deloitte has a lease at Grosvenor Place to November 2013.
• Barangaroo will be able to absorb only 47 per cent of the expected new demand in the Sydney CBD to 2020.

• Planet Press has leased 1,230 square metres of industrial space at unit 5, 17 Willfox Street in Condell Park.
• The three-year deal is for a gross face rent of $127 per square metre, including a three-year option.
• GEO Property Trust is the lessor.

Victoria Property

• Autobarn has signed a $1.4 million a year net lease for 22,541 square metre of industrial space at 76 Station Street in Nunawading.
• The 15-year lease was previously held by Pacific Brands.

National Property

• As business sentiment has picked up and white collar employment has improved, the office market has started to firm.
• Sydney’s prime office market has shown further signs of recovery, with full-floor vacancy continuing to slide in the three months to October.
• There are 286 full floors available in Sydney CBD premium and A-grade buildings, which is tipped to shrink to 202 in the coming 12 months.
• The vacancy rate is set to fall from 11.7 per cent to 9.5 per cent. The full-floor vacancy rate is already the lowest since February 2009.
• The Melbourne market continued to strengthen during the quarter, with prime full-floor vacancies at 123, or 7.4 per cent – 19 per cent fewer floors than a year earlier.
• In Brisbane, the vacancy rate rose to 14.8 per cent, or 139 floors, as the 145 Ann Street and 111 Eagle Street buildings added to the free space.
• Adelaide’s prime vacancy rate was 8.8 per cent, with 50 free floors. With little new stock under construction, this is being tipped to slide in the coming 12 months.
• In Perth, the prime full floor vacancy rate was 10.8 per cent, or 96 floors. This is down from 113 a year earlier.

• Becton Property Group has identified a $1.6 billion pipeline as it emerges from a restructure into a simplified residential and retirement property developer.
• Becton has formed a partnership in the retirement business with an Omani sovereign fund and struck a debt-for-equity deal with Becton’s major lenders to stabilise the listed parent company.
• Last month, Becton shed its role managing $1 billion in property funds in a deal with private equity vehicle 360 Capital Group.
• Becton’s pipeline includes a residential project at Kensington in Melbourne, the redevelopment of the Bonnyrigg housing estate in Sydney and the mixed-use Waterloo project in Sydney’s inner west.
• Along with a suite of existing retirement villages, Becton is also developing four more projects in Victoria, NSW and Queensland.