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Vol 11. No.188

Landsburys Independent Accreditation Reports

Economic Overview

	Current	+/-	Movement
$AUS/$US	96.94	-0.22
Cash Rate	4.50	Steady
90 Day Bill	4.91	+0.02
10 Year Bond	5.010	-0.065
ASX 200	4625.3	+46.1

NSW Property

• Sources suggest that up to $500 million worth of office towers across North Sydney and the lower north shore will be listed for sale in the coming months as vendors take advantage of a resurgence in the area.
• Assets that will be listed for sale include 2 Elizabeth Plaza, 75 Miller Street and 32 Walker Street as well as a sell down of a 50% stake in Investa’s ARK building.
• North Sydney is emerging as a sought after location with many Asian and local investors struggling to find suitable property in the Sydney CBD.

• Woolworths is set to lease the ground floor of the $50 million South Sydney Leagues Club redevelopment .
• The lease covers some 2,360m² of space and is due to begin in December when the redevelopment is complete.

• Sources suggest that Sydney’s central west and east have been the most resilient industrial markets in Sydney since the Global Financial Crisis.
• Recent deals include the Goodman Group and Brickworks announcement of the development of two new pre-committed facilities at Oakdale Industrial Estate at Eastern Creek, the sale of a 2.1 hectare parcel of industrial land in Lidcombe for $10.5 million to Synnex Australia and the $210 million sale of the Salta Properties portfolio.  Industrial property accounted for 23% of all sales in the third quarter 2010.

• The lack of new supply of premium offices in the Sydney CBD in recent years has meant that many companies are looking to the fringe to find contiguous space.
• Sources suggest that tenants are looking at all of metropolitan Sydney for space, taking into account where their staff live , access to transport, rental levels and other amenities.
• Opportunities on the north shore are limited and Parramatta and western Sydney are popular with government tenants.
• Additionally, South Sydney is popular with transport and import/exporters due to its proximity to Port Botany.
• South Sydney currently has a vacancy rate of 4% while recent speculative A-Grade developments at 75-85 O’Riordan Street and the Altitude Corporate Centre are fully pre-committed.

• 579 Harris Street, Ultimo has sold for $14.5 million ($5,217/m²).
• The property comprises 2,779m² of space.

Victoria Property

• VicTrack, Victoria’s second largest land holder is beginning to look at undertaking property developments.
• VicTrack is responsible for 30,000 hectares of land which is mostly used for rail corridors and 1,800 leases.
• Some of the land owned by VicTrack which is not used for tracks and trains has become prime development land and VicTrack is considering undertaking Joint Ventures and Partnerships with local councils to develop the land.
• One of the largest projects VicTrack is undertaking is the redevelopment of Wadonga city centre. VicTrack will reroute the track that divides the centre of the town, freeing up 40 hectares of land.
• Plans for the site include a city square and five star hotel.
• VicTrack is also working on plans to redevelop 20 hectares of industrial land at the edge of Docklands in Melbourne.

• Woolworths has purchased two adjoining sites in North Melbourne for slightly over $21 million ($2,625/m²). The consolidated 8,000m² parcel is located some 2 kilometres from the Melbourne CBD.
• Reportedly the site will be developed in to a mixed retail/residential building and Woolworths is in the process of looking for a residential development partner.
• North Melbourne has a population of 10,000 with neither a Woolworths or Coles supermarket.

National Property

• Sources suggest there will be a market recovery in 2011 for the commercial office markets in Sydney and Melbourne.
• A survey has indicated that hiring levels have improved in Sydney and Melbourne over the last six months. The majority of respondents indicated the number of available jobs has risen and it was likely hiring levels would increase in 2011.
• It is expected that effective rental growth in Sydney and Melbourne would be 8% and 7% respectively in 2011 as incentives and vacancy fell.

• A record $327 billion of Australian property exchanged hands in fiscal 2010, accounting for 25% of GDP.