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Vol 11. No.46

Economic Overview

	Current	+/-	Movement
$AUS/$US	91.08	+1.06
Cash Rate	4.00	Steady
90 Day Bill	4.23	+0.02
10 Year Bond	5.505	+0.095
ASX 200	4807.9	+40.7

NSW Property

Sydney sub-lease space update (AFR Pg.52)

• In the 3 months to January the amount of office sub-lease space available in Sydney has declined by 25% to approximately 66,000m².

Star City update (AFR Pg.54)

• Tabcorp’s Star City has commenced an EOI campaign to lease 5,500m² of retail space in the new retail and entertainment precinct.
• The formal leasing campaign will commence in April and local and international fashion retailers are being sought.
• The $575 million redevelopment of the Sydney casino and hotel will include the construction of a 250-room, 5-star hotel; restaurants and bars; nightclub; an expanded and refurbished casino and further parking.
• Upon completion in 2011 Star City will have 3 hotel towers with more than 700 rooms and apartments plus 20 restaurants, cafes and bars.

Melbourne Property

South Wharf Commercial tower on the market (AFR Pg.53)

• Austexx has placed the South Wharf Commercial tower between Southbank and Docklands on the market. Experts believe the property could sell for approximately $120 million.
• The 12-level, A-grade riverfront tower has a NLA of 20,763m² and a fully leased net passing income of $9.1 million.
• Tenants include ANL, Kraft Foods, Baulderstone and LeasePlan. The weighted average lease expiry is 8.7 years.
• The tower is part of a mixed-use development which includes the new Melbourne Convention Centre, a Hilton hotel and retail centre.
• Austexx is also in the process of selling their $1.5 billion Direct Factory Outlet business.

Sofitel Mansion Hotel and Spa, Werribee Park Estate update (AFR Pg.54)

• The Lancemore Group and a group of investors have purchased the leasehold of the Sofitel Mansion Hotel and Spa at Werribee Park Estate, on the outskirts of Melbourne, for approximately $7 million.
• The Lancemore Group will run the venue which comprises 91 guest rooms, 10 conference rooms and other facilities.
• The Werribee Park Estate includes the Victorian State Rose Garden, Open Range Zoo and National Equestrian Centre.

Epworth Freemason Private Hospital sale (AFR Pg.55)

• ING Real Estate Healthcare Fund has sold a 50% freehold share in the Epworth Freemason Private Hospital in Clarendon Street, East Melbourne to the Epworth for $14 million.
• The sale price is 50% of the assets December 2009 book value.  

National Property

Commercial update (AFR Pg.52)

• The number of prime-grade full floors available nationally is 695, down on the 753 full floors available in 2009.
• The number of floors available includes space which is about to be vacant, space that is empty and space yet to be leased and currently under construction.
• In Sydney the number of full floors has declined from 371 to 294 in the December quarter. However, compared to the same period last year the number of floors has increased by 112.
• Over the last 12 months the number of floors available in Brisbane has risen marginally, however, little change was recorded over the December quarter.
• In Melbourne the number of full floors has remained stable at 152.
• In Perth the number of floors has declined from 134 to 113.

ING Retail sales (AFR Pg.53)

• The Lend Lease consortium that purchased the $1.4 billion ING Retail Property Fund Australia portfolio has on sold some of the properties.
• Charter Hall Retail REIT has acquired a neighbourhood shopping centre in Manuka, Canberra and a bulky goods retail centre in Mile End, Adelaide for a total $69.78 million on an average yield of 9.5%.
• Future Fund, the major backer of the consortium, is also acquiring a large share of the portfolio.
• Manuka Terrace is a 3 level centre with a GLAR of 6,561m² and 585 car spaces. Coles is the anchor tenant and there are 24 specialty stores. The centre was completed in late 2000 and sold on a 9% yield.
• Mile End Homemaker Centre has a GLAR of approximately 23,278m² and 550 car spaces. Tenants include Freedom Furniture, The Good Guys and Nick Scali Furniture. The centre was completed in 2005, has potential for expansion and was purchased on a 9.9% yield.
• A private investor has purchased Style Homemaker Centre in Alexandria, Sydney for approximately $48 million. The yield is believed to be in the mid-9% range.
• The fully enclosed bulky goods centre has a lettable area of 22,544m² and parking for 750 cars.