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Vol 11. No.108

Economic Overview

	Current	+/-	Movement
$AUS/$US	82.57	+0.45
Cash Rate	4.50	Steady
90 Day Bill	4.90	+0.03
10 Year Bond	5.305	-0.025
ASX 200	4385.3	+4.1

NSW Property

South west Sydney land parcel on the market (AFR Pg.49)

• The McIntosh family has placed the largest parcel of zoned residential land offered in south west Sydney since 2004 on the market.
• The 43 ha parcel adjoins the Oran Park Town Centre and is suitable for more than 475 lots.
• A JV to develop the site with Mirvac unwound last year.

Qantas’s headquarters sale update (AFR Pg.51)

• The Cromwell Group is likely to purchase Qantas’s global headquarters complex in the Sydney Kingsford-Smith Airport precinct for more than $140 million.
• The property comprises 4 separate buildings with 40,200m² of office space and 6,300m² of warehouse space.
• Qantas has a new 10 year lease over the property.
• The asset was valued in 2007 at $177 million.
• The property was listed for sale by investors, including a Trafalgar Corporate Group managed fund.

East Sydney sale (AFR Pg.56)

• Corim Properties has purchased the City Ford building at 75 – 85 Crown Street in East Sydney for $16 million on a yield of 3.75%.
• Improvements to the 2,089m² ($7,659/m²) island site includes a 6 level building with 9,500m² ($1,684/m²) of NLA.
• The property will be redeveloped into the East Sydney private hospital and will comprise a specialised medical centre, day hospital, professional suites and a supermarket on the ground floor.
• A development application has already been lodged.
• City Ford leases the building for $600,000 p.a. and will move to the former Mercedes-Benz site in Joynton Avenue in Zetland during the 2011 June quarter.

Darlinghurst sale (AFR Pg.56)

• The 5 level former Triple J studios at 171 William Street, Darlinghurst sold for $8 million on a yield of 7.74%.
• The warehouse style building has 20 car spaces and a DA for a further 190m² of space on the roof.
• The building derives an income of $619,000 p.a.

Lane Cove commercial building sale (AFR Pg.56)

• A vacant commercial building at 290 Burns Bay Road, Lane Cove has sold for $2.7 million.
• Improvements include a 3 storey building with 2 levels of office space and a ground floor warehouse.
• The site has been rezoned from industrial into high-density residential.

Burwood commercial office sale (AFR Pg.57)

• A vacant former house which has been converted into commercial offices at 56 Burwood Road, Burwood sold at auction for $1.878 million.
• The 409m² ($4,592/m²) block has 8 car spaces.

St Peters development site sale (AFR Pg.57)

• A 961m² ($1,717/m²) development site at 84 Princes Highway, St Peters has sold for $1.65 million.

 Sydenham sales (AFR Pg.57)

• Balmain Rentals have sold a 1,425m² ($982/m²) parcel of industrial land at 2 and 4 Bolton Street, Sydenham for $1.4 million to an investor. The new owner intends on developing the site.
• A 300m² ($2,333/m²) corner site at 286 Unwins Bridge Road in Sydenham has sold for $700,000, $200,000 over the reserve. The property has 3 street frontages.

Metro Hotel on Pitt sale (AFR Pg.52)

• The Mah family has purchased the 115-room Metro Hotel on Pitt in the Sydney CBD for $24.188 million ($210,330/room).
• Transmetro Hospitality Group will continue managing the business.
• The property last transacted in 2003 for $16.5 million ($143,478/room).

The Coalition's response to the NSW Budget (SMH Pg.5)

• If the NSW Coalition is elected into government next year they plan on extending the abolition of stamp duty for over-65s downsizing to homes worth less than $600,000, to over-55s between July 1, 2011 and June 30, 2012.  It would be reviewed after the first year.
• A $7,000 grant would be offered to families who move out of Sydney to regional areas. The purchased property would be deemed to be the principal place of residence and be under $600,000.
• The transfer duty on property sales would be repealed.

Queensland Property

Santos Place update (AFR Pg.51)

• A Malaysian investor is likely to purchase Santos Place in Brisbane for $300 million.

Brendale development site sale (AFR Pg.57)

• A 4.77 ha ($893,082/ha) development site on Leitchs Road, Brendale has sold for $4.26 million.
• The site adjoins the New Base Enterprise Park and is 700 metres from Strathpine railway station.
• The new owner intends on developing a townhouse complex.

Springfield Lakes sale (AFR Pg.57)

• A Gold Coast investor has purchased the former Springfield Lakes police station for $700,000.
• The freestanding building comprises 5 strata offices with a total NLA of 350m² ($2,000/m²) over 2 levels. There is parking for 11 cars.
• Delfin Lend Lease has a lease over the top floor until September.

Cooper Plains industrial sale (AFR Pg.56)

• An industrial property comprising 3 office and warehouse facilities at 48 Weaver Street in Cooper Plains has sold for $6.45 million on a yield of 8.75%.
• The 9,850m² ($655/m²) site is zoned for light industrial use.
• The total internal floor space is 6,043m² ($1,067/m²) and has 65 on-site car spaces.
• The lease to Lincoln Sentry has a further 6 years remaining.

Centro Surfers Paradise update (AFR Pg.52)

• John van Lieshout’s Unison Properties is close to finalising the purchase of the Centro Surfers Paradise from an unlisted syndicate for approximately $190 million. The last valuation was $202 million.
• The shopping centre runs along the entire length of Cavill Mall and part of Cavill Avenue and encompasses a 23,214m² site.
• Centro manages a portion of the site which has secondary tenancies and redevelopment potential.
• The centre was completed in 1980 and refurbished in 2003. The anchor tenants are Woolworths and Timezone and there are 7 mini major tenancies, 87 specialty retailers and a Hard Rock Café.
• Approximately 46% of the tenancies expire in 2013 and 2014 and the centre has the highest rents of any Australian suburban shopping strip.
• The property has approval for a 15-level apartment building above the podium.

Victoria Properly

St Kilda Road sale (AFR Pg.57)

• Chartis, formerly AIG, has sold 549 St Kilda Road in Melbourne for $21 million.
• The 7 storey building comprises ground floor showrooms and 6 office floors plus basement parking for 225 cars over 2 levels.
• The building last traded in 1987 for $28 million.
• Chartis will move into 4,700m² of space at 717 Bourke Street on the Docklands fringe.

Nunawading showroom sale (AFR Pg.56) 

• A fully leased showroom at 240 – 242 Whitehorse Road, Nunawading has sold for $6.5 million.
• Improvements to the 3,034m² site total 3,000m² plus a semi-basement car park for 59 cars.
• The property is leased to Origin shop and KeKe’s Furniture for $478,953 p.a.

• According to the AFG Mortgage Index for May the largest proportion of mortgages (38%) was for refinancing purposes, followed by investment (36.7%).
• The number of owner occupier loans (seasonally adjusted), excluding refinancing, declined by 0.5% over the month.

Commercial market buyer profile (AFR Pg.50)

• Over the past 12 months foreign groups acquired approximately 70% of the $2.4 billion office towers.
• Asian buyers represented 49% whilst only 20% were from Europe, mostly Germany.

Orchard Funds Management update (AFR Pg.48)

• The Cromwell Group has entered into exclusive due diligence to take control of the majority of Orchard Funds Management’s $1.5 billion funds management business.
• Cromwell will pay $15 million for the management rights plus an earn-out fee.
• Orchard’s Primary Infrastructure Fund and the Essential Healthcare Trust are not part of the transaction, however, deals on the funds could be announced shortly.