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Vol 11. No.80

Economic Overview

	Current	+/-	Movement
$AUS/$US	91.98	-0.49
Cash Rate	4.25	Steady
90 Day Bill	4.54	-0.02
10 Year Bond	5.715	-0.070
ASX 200	4822.8	-57.2

NSW Property

• In 2009 Sydney CBD’s strata office market recorded an average 3.4% decline in asset prices whilst the sales volume was down by 6.9%.
• Transactions totalled $127 million and the average sale price was $5,501/m².

• Interest in the commercial building at 77 King Street, on the corner of George Street, Sydney has been strong from both local and international parties. The price is approximately $110+ million.
• The total space on offer is 13,500m² as the Apple Store is not included.
• Local parties who have shown interest include Colonial First State Global Asset Management and SunSuper.
• Offshore parties include the Switzerland-based AFIAA Foundation for International Real Estate Investments, the Hong King-based CLSA Asia Pacific Markets unit, the German Deka Immobilien Investment and the Government of Singapore Investment Corporation, GIC.

• Investa Property Group’s Ark development in North Sydney has reached practical completion and is 85% leased.
• The building will be the national headquarters for Coca-Cola Amatil and Vodafone Hutchison Australia.

• The Skin and Cancer Foundation has sold a 4 level commercial building on the corner of Bourke and Liverpool Streets in Darlinghurst for $4.75 million on a yield of 5.9%.
• The vendor will leaseback the property for $280,000 p.a. whilst they develop a larger site.

• A 280m² whole office floor at Level 3, 73 Union Street, Pyrmont has sold for $1.175 million ($4,196/m²).
• The floor has views of Darling Harbour, the Sydney CBD skyline and Barangaroo from the 3 balconies.

• A 254m² strata office suite at Suite 2, Level 2, 4 Railway Parade, Burwood has sold for $1.35 million ($5,315/m²).

• A empty 2,181m² property at 23 Queen Street, Campbelltown with development potential has sold for $1.25 million ($573/m²).
• Improvements include an office building with 36 metre frontage.

Chippendale boarding house sale (AFR Pg.56)

• A recently renovated 14-bedroom DA-approved boarding house at 103 – 105 Shepherd Street, Chippendale has sold for $1.439 million.
• The property has a license for 11 people.

Queensland Property

• During the 2009 December quarter 468 blocks of land or house and land packages were sold on the Gold Coast, an 8% decline over the quarter.
• In 2010 approximately 4,000 lots will be developed, almost double the level of current demand.
• Underlying demand is 6,000 lots p.a.

• A 1.531 ha development site at 116 Yawalpah Road in Pimpama has sold for $2.05 million ($134/m²).
• The site ha DA approval for a mixed-use development.

• Nexus Group has sold a whole floor commercial suite at 54 Jephson Street, Toowong for $1.85 million to a medical centre operator.
• The floor is partially tenanted for $60,000 p.a. and the new owner will occupy part of the floor.

• Macquarie Group, ANZ, Allens Arthur Robinson and Norton Rose are in discussions to occupy space in the 44-storey 111 Eagle Street development in Brisbane.

• A retail building at 708 Davis Low Way, Pacific Paradise has sold for $1.27 million on a yield of 7.3%.
• Improvements to the 718m² ($1,769/m²) lot total 383m² ($3,316/m²).
• The property is leased to 4 tenants.

Victoria Property

• Caydon Property has purchased an apartment development site at 201 High Street, Prahan for $21 million. The vendor is Vision Australia.
• The 4,800m² ($4,375/m²) site has 3 street frontages and approval for 330 units (63,636/unit) and 10 retail shops.
• Existing improvements include 2 buildings with a NLA of 13,700m².
• A previous purchase price of $25 million was agreed to in late 2007 but did not eventuate.

• A 2,700m² development site over 12 lots at 99 – 121 Carinish Road, Clayton has sold for $4.15 million ($1,537/m²) to a private developer.
• Improvements include an older style industrial building which was previously occupied by MacFarlane Generators.
• Potential development options include a multi-level residential development.

• A vacant 2 level art deco building at 289 LaTrobe Street, Melbourne has sold for $2.82 million at auction.
• Improvements to the 195m² ($14,462/m²) site total 390m² ($7,231/m²).

National Property

• Australian median house prices grew by 16.2% over the year and 3.1% over the March quarter.
• The quarterly growth rates slowed in all capital cities except Adelaide and Darwin.
• Median house prices in the most affordable 50% of suburbs increased half as fast as house prices in the upper half, at 2.4%.
• In Melbourne median house prices grew 27% over the year, a 15 year high, and 6.8% over the quarter.
• Median prices for units rose by 10.4% over the year and only 0.2% over the quarter.
• Annual increases in Melbourne, Canberra, Perth and Sydney ranged from 10.4% to 13.7%.
• Median unit prices in Brisbane rose by 3.6% over the year.

• According to a recent survey, sentiment in the Australian office market strengthened in the 2010 March quarter.
• It is the first time since the 2008 September quarter rental expectations are positive with 24% of respondents believing rents will increase. The 2009 December quarter result was -17%.
• 22% of respondents believe capital values will rise during the June quarter.