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Vol 12. No.69

Landsburys Independent Accreditation Reports

Economic Overview

	Current	+/-	Movement
$AUS/$US	104.91	+0.53
Cash Rate	4.75	Steady
90 Day Bill	4.90	Steady
10 Year Bond	5.637	+0.004
ASX 200	4911.0	+12.3

New South Wales Property

• North Sydney’s office market has seen an increase in sales volume during the first quarter of 2011.
• The largest deal was 90 & 100 Mount Street selling to Laing O’Rourke for about $50 million with the site earmarked for an A grade tower development
• Altis Property Partners acquired 2 Elizabeth Plaza for $38.25 million which settled this year.
• Joint venture partners Property Bank Australia and Security Capital Corporation acquired a 12 level-office building at 75 Miller Street for $22.25 million. The building has an occupancy rate of about 98% and was purchased on a fully leased yield of 10.3%.
• Kingsmede has recently acquired 50 Berry Street for about $30 million. The 14-level office building is substantially leased to tenants including SEMF, Crofts Chartered Accountants, Norfolk Group and Proscan.

• Strata Plus has acquired a strata floor at 80 Cooper Street in Surry Hills for $2.77 million.
• Strata Plus will occupy the whole floor which is 250 square metres ($11,080/m²).

• The former Drummoyne RSL Club premises located at 162-166 Victoria Road in Drummoyne was sold with vacant possession to a private developer for $3.66 million.
• The new owner intends to convert the 1,240 square metre property ($2,912/m²) into a mixed-use project.

• A private investor has acquired an industrial building located in Marrickville for $2.65 million on a yield of 6.33%.
• The 1,600 square metre building ($1,656/m²) is situated on a 1,696 square metre site ($1,563/m²).
• The property is leased to Ensign Services until May next year at a net rent of $168,000 per year.

• A property syndicate has acquired two retail shops at 269-271 Liverpool Road in Ashfield for a combined $3.343 million.
• The shop at no. 271 sold with vacant possession while the shop at no. 269 is fully leased to Bylong International Group.
• The gross annual rent for the leased shop is $100,000 reflecting net yield of 5.4% for the sale.

• A retail shop located at 319-321 Beamish Street in Campsie has sold for $2.65 million.
• The property is leased to three tenants generating a gross return of about $96,000 per annum reflecting a net yield of 2.5%.

Queensland Property

• Credit Suisse Asset Management has made an offer to buy the Australian Taxation Office tower being developed by Grocon, located at 55 Elizabeth Street in Brisbane for around $170 million on a yield of around the 7% range.
• The offer is believed to be structured so that Credit Suisse will fund and eventually take ownership of the 20,000 square metre tower once complete.
• The ATO is understood to be finalising its 19,000 square metre lease for the tower this week.

• FKP Core Plus Fund has sold an industrial warehouse facility at 67 Robinson Road in Geebung in Brisbane to a private investor for $17 million.
• The 6.36 hectare site has DA approval for a 5 lot subdivision.
• The business park currently comprises 30,302 square metres of space with tenants including Boral, Westpac and CBA.

• Primewest is in due diligence to acquire the Fujitsu building located at 1 Breakfast Creek Road in Brisbane for about $23 million from Trafalgar Corporate.
• The five-storey building has about 6,200 square metres of net lettable area.

Victoria Property

• A study conducted by the Victorian division of the Property Council of Australia has found the average development levy in Melbourne has risen from $107,000 per hectare in 2004 to $175,000 in 2010.
• The highest levy indentified from the study was $199,101 per hectare at Cranbrourne West.
• On average, infrastructure levies have risen 8.5% annually between 2004 and 2010.
• Spending on roads and open spaces accounted for more than half than the developer levies set aside for works costs.

• Lend Lease Communities and the Richmond family have plans for a $1 billion residential community in Werribee, about 30 kilometres south-west of the Melbourne CBD.
• The 438-hectare site along Bulban Road will comprise 4,000 new homes, four schools, a neighbourhood shopping centre and local community and recreation facilities.
• The project adjoins land that will eventually be serviced by the Regional Rail Link.
• Providing the precinct structure plan is completed in time, the first lots in the new community will be available in mid-2012.

• Australand Property Group has finalised a lease with Commonwealth Bank of Australia who will occupy around 8,500 square metres of space at 357 Collins Street in Melbourne.
• CBA will occupy levels six to 10 of the building on a lease term of 10-years at a net rental rate of $385/m².

National Property

• The overall national CBD vacancy rate fell to 7.4% in the first quarter of 2011, down from around 8% at the end of last year.
• Positive net absorption was recorded at 83,700 square metres across the office markets for the first quarter of 2011.
• Perth’s vacancy rate fell to 5.6%, Melbourne’s vacancy rate decreased to 5.7%, and Brisbane’s fell from 10.6% to 7.9%.
• Sydney’s rate vacancy rate fell slightly to 7.3% in the three months to March 2011.
• Canberra was the only capital city to record a rise in the vacancy rate, increasing to 12.6%.

• Research shows the overall national vacancy rate for industrial property fell to 4.7% from 5.1%.
• The supply of prime grade stock has fallen due to the lack of development throughout the financial crisis.
• Demand has increased with large space requirements for the logistics and retail sector including Kmart, Best & Less and Toll Holdings.
• Prime vacancy rates decreased by 1.1% to 3.3% and secondary vacancy rates increased slightly to 6.4%, indicating tenants are moving to high quality buildings.
• South Australia recorded the largest drop in vacancy rates, falling by 2.4% to 3.1%.
• In NSW the vacancy rates fell to 5.1% from 5.5% and in Victoria the vacancy rates improved slightly falling by 0.9% to 4.1%.
• Queensland recorded an increase in vacancy rates rising by 1.7% to 6.3%.