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Vol 11. No.43

Economic Overview

	Current	+/-	Movement
$AUS/$US	90.50	+0.72
Cash Rate	4.00	Steady
90 Day Bill	4.24	+0.05
10 Year Bond	5.425	+0.035
ASX 200	4735.7	+33.8

NSW Property

Sydney south west residential development sale (AFR Pg.64)

• A 19,830m² residential development site at 435 - 437 Hoxton Park Road on the border of Hinchinbrook and Hoxton Park has sold for $2.6 million ($131/m²).
• The site is zoned for low density residential development.

Sydney residential property update (SMH Pg.5)

• Sydney’s median house is $595,745, double what it was almost a decade ago.

Residential housing forecast (AFR Pg.53)

• Sydney house prices have been forecast to rise by 8% to 10% in 2010 due to an undersupply of properties.

The Rocks heritage terrace home sales (AFR Pg.53)

• The NSW government has sold 2 heritage listed properties on 99 year leaseholds in Millers Point.
• The 4 level 64 Argyle Place sold for $1.15 million ($46,000 above reserve) and a 3 level terrace at 50 Kent Street sold for $960,000 ($110,000 above reserve).
• The properties require extensive renovation under conservation management plans.
• The NSW government will list 62 Argyle Place and 73 Lower Fort Street for auction in April.
• The funds realised from the sales will go towards developing 42 new public homes in the inner west.

Dulwich Hill development site sale (AFR Pg.64)

• A 1,412m² development site at 793-799 New Canterbury Road, Dulwich Hill sold for $3.45 million ($2,443/m²).
• Improvements to the 3 titles comprise 2 semi-detached cottages and a shop with a residence.

Sydney industrial update (AFR Pg.60)

• Sydney industrial rents and yields are forecast to improve this year due to economic growth, rising imports and limited supply.
• In the December quarter the average yield for Grade A warehouses firmed by 0.6% to 8.8%.
• Yields are forecast to firm by a further 0.3% to approximately 8.5% by the end of 2010.
• Rents for Grade A warehouses are forecast to grow by 2% in 2010, 3% in 2011 and 2.9% in 2012.
• Over the next 2 years an average 290,000m² of space is forecast to be completed per annum, 63% below the average 780,000m² recorded between 2005 and 2009.

Marrickville factory sale (AFR Pg.64)

• An owner occupier has purchased an old 1,100m² factory at 40 - 42 Chapel Street in Marrickville for $1.305 million ($1,186/m²).

Dulwich Hill sale (AFR Pg.64)

• An investor has purchased a leased shop and residence at 388 New Canterbury Road, Dulwich Hill for $537,000 on a yield of 5.3%.
• The property returns $31,822 p.a.

Swissotel Sydney acquisition (AFR Pg.49)

• Michael Kum is set to purchase the Swissotel Sydney for approximately $90 million from an Abacus Property Group managed fund.
• The property was purchased in early 2007 for $85 million.
• Previously the Kum family linked LJ&M Management acquired the Four Points Sydney for $185 million from GPT Group.

Queensland Property

Yeppoon residential development update (AFR Pg.55)

• Concept Living Properties is awaiting the decision on Oshen a 60 unit project in Yeppoon by the Iconic Panel.
• The project is Yeppoon’s first major regional development since the Iconic Places Act in 2008
• The Rockhampton Regional Council gave preliminary approval for the project in December.
• The site is located in the CBD and has ocean views. Preliminary sales total $10 million.
• The State Government brought in the Iconic Places Act so regions such as the Capricorn Coast, Blackall Ranges, Noosa and Port Douglas would be protected after the councils were amalgamated.

Slacks Creek sale (AFR Pg.64)

• A vacant mixed-use building at 5 – 11 Noel Street, Slacks Creek has sold for $1.46 million ($1,141/m²).
• The freestanding building has a NLA of 1,281m² and comprises 8 shops, a 2 bedroom unit, storage and parking for 38 cars.
• The property is located off Kingston Road, a 4-lane dual carriageway.

Hotels passed in (AFR Pg.56)

• The Royal Exchange Hotel, Oxford 152 and The Stones Corner Hotel in the Brisbane CBD were passed in at auction yesterday.
• The hotels are owned by the ALE Property Group and are leased to the Australian Leisure & Hospitality Group.
• The properties have BWS bottleshops, gaming facilities and approximately 19 year leases.

Cairns theme park (AFR Pg.55)

• The Queensland government is currently assessing an EIS for a proposed $3 billion theme park to be located 18 km south of Cairns. The project was deemed to be state significant in October.
• The Tropical Paradise Resort would be located on an 800 ha site and comprise a major US theme park and film studio, a water park, resort hotels, short stay accommodation, a village centre, themed retail, a golf academy, driving range and an extreme sports complex.
• The Melbourne-based investors have optioned the site from several owners and if the project is approved will either on sell the entire development, seek a JV or sell the development in stages.

Victoria Property

1 Spring Street, Melbourne update (AFR Pg.49)

• Daniel Besen may purchase a half-share in 1 Spring Street, Melbourne for $65 million ($4,063/m²) on a yield of 7.5%.
• Shell has a 30 year lease over the entire 28 level tower until 2019. The majority of space is now sub-let to state government departments
• Half of the 32,000m² building was sold to John and Stanley Roth for $65.25 million ($4,078/m²) in early 2009. They have pre-emptive rights over the remaining share of the property and have yet to announce their decision on the purchase.

Richmond commercial sale (AFR Pg.64)

• A commercial building at 5 Prince Patrick Street in Richmond has sold for $1.285 million on a 7% yield.
• Improvements to the 235m² ($5,468/m²) property include a 340m² ($3,779/m²)  2 level building and street parking for 6 cars.
• Cardiac Science has leased the property since 2002 on a 5 + 5 year lease. The current annual return is $89,980 + GST and outgoings.

Cranbourne industrial site sale (AFR Pg.60)

• Investa Property Group has purchased a 48 ha industrial site in Cranbourne for more than $30 million from Morgan and Griffin.
• The transaction was part of a 2008 deal which was subject to a sunset clause that once the property was rezoned from rural to industrial the transaction would take place.

Melbourne hotel sale (AFR Pg.49)

• Lasseters International Holdings has completed the purchase of the Holiday Inn on Flinders Street, Melbourne for $44 million from Eureka Funds Management.  

National Property

Canberra AusAid building update (AFR Pg.49)

• Swiss based AFIAA Foundation for International Real Estate Investments is close to purchasing Orchard Fund’s AusAid building in Canberra for approximately $54 million on a yield of less than 7%.
• The 6 level, A-grade office building was Civic’s first 5-star Green Star building.