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Vol 11. No.115

Landsburys Independent Accreditation Reports

Economic Overview

	Current	+/-	Movement
$AUS/$US	88.45	+1.71
Cash Rate	4.50	Steady
90 Day Bill	4.93	Steady
10 Year Bond	5.435	+0.075
ASX 200	4612.6	+60.7

NSW Property

The Hampton Hotel sale update (AFR Pg.59)

• Over the weekend the Toga Group and Nemeth family sold 106 of 108 units in the residential conversion of The Hampton Hotel in Potts Point within 6 hours
• The conversion of the 1920s art deco hotel will comprise 126 units in total.
• Studios start at $385,000. The majority of the units are priced under $650,000.
• The Nemeth family, who own the property, will retain all 4 penthouses and a number of the other units.
• Approximately 70% of the units were sold to investors.

• The opposition and the Greens are concerned over laws that will allow the expansion of Melbourne’s urban growth boundary allowing the release of 24,500 ha of residential land.
• The amendment to move the growth boundary is to be voted on in State Parliament’s upper house today. The opposition would consider backing the Green’s push for a review but it is not deemed to be the “preferred option”.
• The opposition is objecting to clause 12 which refers to higher density housing and plans for a new road in the northern suburbs to be known as E6.
• The government has refused to consider redrafting the amendment.

Victorian building approvals (AFR Pg.58)

• In April the value of building approvals in Victoria was a record $1.9 billion.
• According to a survey the value of building permits was up 17% over the year.

National Property

National Broadband Network update (AFR Pg.17)

• Under the original $43 billion National Broadband Network developers were to install fibre-to-the-premises infrastructure within greenfield estates. Developers would have funded an upfront cost of $3,000 per lot.
• However a new policy commencing on January 1 will see the federal government’s company, NBN Co, acting as a wholesale provider of last resort in new developments constructed within or next to NBN Co’s long-term fibre footprint.
• Developers and property owners will be required to pay for the cost of pit and pipes whilst NBN Co will cover the remaining installation costs.
• Developers will be able to choose the company used to roll out fibre networks in new developments as long as they comply with the technical specifications and can be operated on an open access basis.

Hotel operator update (AFR Pg.59)

• During 2009 Australian hotel operators expanded by a further 3,177 rooms.
• The top 10 hotel operators control 35.3% of supply or 80,000 rooms across Australia, up by 13.3% over 10 years.
• There is limited new hotel supply across Australia, except for Melbourne.
• In 2009 Accor Asia Pacific Corporation was the largest hotel operator with 150 properties under management.
• InterContinental Hotels Group was ranked second.

Oaks Hotels & Resorts (AFR Pg.57)

• China Pacific is set to purchase a 19.9% share in the listed serviced apartment manager Oaks Hotels & Resorts valued at just under $11 million.
• China Pacific is also considering whether to underwrite 50% of a $30 million rights issue which Oaks Hotels is planning.
• Oaks Hotels has approximately 1,100 rooms in Brisbane and an 80% occupancy rate. They have management contracts and freehold holdings worth more than $200 million.
• China Pacific is also considering taking the Oaks Hotels model back to China.