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Vol 12. No.7

Landsburys Independent Accreditation Reports

Economic Overview

	Current	+/-	Movement
$AUS/$US	98.5	+0.15
Cash Rate	4.75	Steady
90 Day Bill	5.01	Steady
10 Year Bond	5.492	+0.070
ASX 200	4724.2	+13.5

New South Wales Property

• South Africa’s Kirsh Group has emerged as the buyer of a Martin Place office tower that was sold in late December.
• The private group worked with the listed Abacus Property Group on the purchase of two Martin Place towers from wealthy publican Cyril Maloney for a combined price of about $153.5 million.
• No. 14 Martin Place sold for $95 million and No. 4 sold for $58.5 million.
• Abacus and Kirsh bought the larger property together while Kirsh bought the smaller one itself.
• The sales were on yields, once the buildings are fully leased, of about 8%.

National Property

• Hotel sales are expected to be strong this year after a buoyant 2010.
• Hotel transactions reached $1.3 billion last year boosted by a stronger business travel market, which pushed up room rates and occupancy levels in the capital cities.
• The surge, a 62.3% increase over 2009, made 2010 the fourth strongest year on record according to research.
• The largest transaction was the Ayers Rock Resort, which sold for $300 million.
• The Tourism Asset Holdings portfolio, comprising Novotel and Ibis hotels in Perth and Brisbane, sold for $175 million, while the Sofitel Wentworth Sydney sold for $130 million.
• It is expected that transaction levels will match those in 2010, with the rising market prompting interest from buyers and sellers.
• Yields were expected to contract this year as trading conditions improved.
• Brisbane and Sydney are expected to be the best performing markets, with little or no new supply for the coming three to five years.
• Business travel had contracted 25% to 30% during the financial crisis but had returned to more normal levels by the end of last year.
• The conferences and meetings market is expected to strengthen significantly in the coming years as confidence returns to the market.
• While outlook for corporate hotel markets was strong, resort markets were being hurt by inflationary pressures and the higher Australian dollar.