Call us today

Vol 11. No.147

Landsburys Independent Accreditation Reports

Economic Overview

	Current	+/-	Movement
$AUS/$US	91.32	+0.62
Cash Rate	4.50	Steady
90 Day Bill	4.72	-0.04
10 Year Bond	5.145	-0.020
ASX 200	4542.1	-29.5

NSW Property

Northern NSW land values reduced by 50% (AFR Pg.1 & 9)

• The NSW Valuer-General has reduced land values along the beachfront strip at Belongil in northern NSW by 50% due to coastal erosion and the global financial crisis creating limited demand .

Catherine Hill Bay planning update (SMH Pg.3)

• The proposed environmental planning policy for Catherine Hill Bay states that neither SEPP No.1, which relates to development standards, or SEPP No.71 which relates to coastal protection, will apply.

Sydney office market update (AFR Pg.51)

• Sydney’s vacancy rate as at July was 8.5%, a 0.4% increase since January. The vacancy rate is the highest since July 2006.
• 72,363m² of new space was added to the market.
• Absorption was 39,376m², a 3 year high.
• The vacancy rate in North Sydney rose 0.1% to 11.8%.
• The vacancy rate for the North Shore market, which includes Chatswood, St Leonards and Crows Nest, recorded a 0.4% increase over the 6 month period to 14.1%. This is the highest vacancy rate in 15 years.

60 Margaret Street, Sydney update (AFR Pg.54)

• MTAA Super has placed a 50% share in 60 Margaret Street in the Sydney CBD on the market.
• The A-grade tower has 36 levels of office space, a NLA of 40,567m², 3 levels of retail space and direct access to Wynyard railway station.
• The property was developed in 1980 and has been progressively refurbished.
• The major tenants are the co-owners of the building, Mirvac Group, along with Reuters Australia. Both leases expire in 2015.

Charter Hall Group buys in Chullora (AFR Pg.48)

• Charter Hall Group’s Core Plus Industrial Fund has purchased a 7 ha industrial site in Chullora.
• CIP, which is 50% owned by Charter Hall, will undertake the development of 5 ha of the site.
• Volkswagen Group Australia will lease a 27,000m² facility for an initial 13 years. There is the option for a further 8,000m² of expansion space.
• Annual rent increases are 3.25%.
• The $55.5 million facility will be utilised as an office, training and distribution centre for Volkswagen.

Lidcombe industrial sale (AFR Pg.56)

• Receivers have sold an industrial building at 34 – 36 Adderley Street in Lidcombe for $2.005 million, $250,000 above reserve. The purchaser was an owner occupier.
• The property has 1,130m² ($1,774/m²) of floor area, 18 underground car spaces and rear lane access.

Mortlake industrial sale (AFR Pg.56)

• A corner property at 10 Edwin Street in Mortlake sold at auction for $1.062 million.
• Improvements to the 393m² ($2,702/m²) block total 310m² ($3,426/m²). The building has roller door access, a mezzanine office and 4 car spaces.

Queensland Property

Mirvac buys Hamilton site (AFR Pg.55)

• Mirvac Group has purchased a 7,600m² development site at Hamilton on the Brisbane River from the state government for more than $10 million.
• Mirvac intends on developing in excess of 500 dwellings with a $300 million end value.

Queensland office market update (AFR Pg.46 & 53)

• Brisbane’s office vacancy rate as at July was 10.9%, well above the national capital city average.
• The vacancy rate for B-grade space is 15.4%.
• Last year 212,000m² of new supply was added to the Brisbane market and 94% of the space was leased.
• The Gold Coast has the highest vacancy rate at 23.4%.

Santos Place sale (AFR Pg.55)

• Malaysian sovereign wealth fund Permodalan Nasional Berhad has exchanged contracts to purchase Santos Place at 32 Turbot Street in Brisbane for approximately $290 million on an initial yield around 8%.
• The 37 level, 34,700m² building is the largest 6-star environmentally rated building in the country.
• More than 40% of the building is leased to Santos.
• The building has a weighted average lease expiry of 7.5 years.

Victoria Property

Melbourne’s office market update (AFR Pg.1, 46 & 51)

• Melbourne’s office vacancy rate was 6.5% as at July, the lowest in the country.
• In the 6 months to July, 68,996m² of space was absorbed in the Melbourne CBD, more than twice the 20 year average.
• East Melbourne has the tightest vacancy rate at 2.2%.

Mulgrave industrial sale (AFR Pg.56)

• An office/warehouse in the Com.park Estate has sold for $1.19 million ($1,845/m²) on a yield of approximately 8%.
• Unit 5 at 6 – 7 Gilda Court, Mulgrave is leased to Turck Australia Pty Ltd for a further 2 years with a 5 year option. The annual income is $95,000 p.a.
• The property comprises 2 levels of office space, approximately 300m²; a 345m² warehouse and 16 car spaces.

Brunswick industrial sale (AFR Pg.56)

• A refurbished office/warehouse ay 33 Tinning Street, Brunswick has sold at auction for $1.015 million.
• The property has 791m² ($1,283/m²) of floor space.

Westfield Doncaster update AFR Pg.48)

• LaSalle Investment Management has placed a 25% share in the $1.4 billion Westfield Doncaster shopping centre on the market. The yield on the share is expected to be less than 6%.
• The redeveloped centre is 1 of Westfield’s top 5 performing centres in Australia and the flagship property in Victoria. Annual sales are in excess of $720 million.
• Major tenants include a full-line David Jones, Myer, Woolworths and a Coles plus 400 specialty retailers. The lettable area is 119,405m².
• LaSalle owns a 50% interest with Westfield controlling the remaining share. Westfield has pre-emptive rights but is believed to be an unlikely contender.

National Property

Residential update (AFR Pg.57)

• According to the ABS, national established house prices increases by 3.1% over the June quarter or 18.4% over the year.
• Sydney’s established house prices rose by 4.9% over the quarter or 21.4% over the year.
• Melbourne’s established house prices rose by 3.6% over the quarter or 24.3% over the year.
• The slowdown was most apparent in Perth, Brisbane and Hobart. Brisbane’s house price growth was only 0.3% over the quarter and 8.5% over the year.

Meriton update (AFR Pg.49)

• Meriton Apartments is about to settle on the acquisition of a property on the corner of South Dowling Street and O’Dea Avenue in Zetland for $25.3 million. The vendor is Joynton North Pty Ltd.
• The site has approval for a 26 level building comprising 294 units ($86,054/unit) and 5 retail shops.
• Construction will commence next week. The units will most likely be serviced apartments.
• Meriton has placed the development of a 500 unit tower on Brighton Parade in Surfers Paradise on hold due to interest rates being too high and the lack of demand from buyers.

National office market update (AFR Pg.46)

• The Australian office vacancy rate rose from 9.3% in January to 10% in July.
• Supply was 571,142m², well above the average, and demand for the 6 months was 332,922m², almost double the 20 year average.
• The vacancy rate for  the suburban office market is 12.2%, the highest level in 15 years.
• The vacancy rate in prime buildings declined from 8.2% in January to 5.2% as at July. The vacancy rate increased in all other grades.

Retail sales (AFR Pg.48)

• A McDonald’s restaurant at West Ryde in Sydney sold for $3.35 million on a yield of 4.69%. The land lease is until 2014 with a 10 year option.
• A ground floor strata office in Eastwood, Sydney which is leased to a medical centre, sold for $2.85 million on an 8.5% yield.
• A Target store in Bendigo, Victoria sold prior to auction for $14.24 million on a yield of 8.66%. The 37 year old building has been occupied by Target for the last 10 years.
• A Baby Bunting store in Ringwood, Victoria sold prior to auction for $3.05 million on a 7.37% yield. Rental increases are fixed at 3.5%.