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Vol 11. No.86

Economic Overview

	Current	+/-	Movement
$AUS/$US	90.45	+2.22
Cash Rate	4.50	Steady
90 Day Bill	4.86	-0.02
10 Year Bond	5.560	+0.085
ASX 200	4599.8	+119.1

NSW Property

• On the weekend Mirvac sold all of the houses within Stage 2 in Endeavour 88 in South Coogee within hours of launching the product.
• The average price of the 48 off-the-plan freestanding and attached homes was just under $1.5 million.

• The consortium developing Green Square Town Centre has submitted a planning proposal to modify the planning controls to permit an increase in the density by almost 40%.
• Under the current controls 161,100m² of residential, commercial and retail space is allowed.
• The new proposal plans to add a further 61,980m², the majority being commercial space, with retail space increasing by 29% and residential unit space rising by 13%.
• The previous 70-30 residential commercial split would be revised to 50-50.
• The layout would also change with an increase in the number of internal roads and 7 towers with a minimum 17 storey height limit.
• There would be no increase in contributions for the public infrastructure.

• According to research during the March quarter the office vacancy rate in North Sydney increased by 1% to 12.1%.
• Average prime gross effective rents rose by 1.6% to $399/m².
• There was 6,100m² of gross leasing activity during the quarter including NBN Co moving from 1,000m² of temporary space at 76 Berry Street and going to their permanent space at 100 Arthur Street. APP expanded from 1,800m² at 53 Berry Street to 2,000m² at 116 Miller Street.
• Investa’s Ark development at 40 Mount Street is the only major project due for completion over the next 2 years.
• Chatswood recorded their first quarter of positive absorption since September 2008.
• Over the last 6 years St Leonards’ office supply has recorded 13,800m² of new supply and 21,600m² of space being withdrawn. There are currently no projects either in the planning process or under construction.
• Within Macquarie Park net absorption has remained positive and the vacancy rate is lower than previously anticipated.
• The 3 major leasing deals in Macquarie Park include the commitment by Schneider Electric to 7,900m² at 78 Waterloo Road, UKTV leased 2,000m² at 6 Eden Park Drive and George Weston leased a further 1,200m² in their current premises at 11 Talavera Road in North Ryde.
• Winten Property Group has approximately 150,000m² of GFA awaiting state government approval under the Part 3A process across the North Shore – 70,000m² in Macquarie Park, 45,000m² in North Sydney and 36,000m² in St Leonards.

• Shortly Ten Network Holdings will announce whether they will stay in the current premises in Pyrmont or move to the former ABC Studios at Gore Hill being developed by Bennelong Developments.
• The lease in Pyrmont is due to expire at the end of 2011 and the company is seeing a further 3,000m² of space.
• If Ten remains in Pyrmont the total space to be occupied, including the expansion, would be 12,166m².

• Dexus Property Group has purchased the Centrewest Industrial Estate at 108 -120 Silverwater Road in Silverwater for $24.43 million ($1,370/m²) on an initial passing yield of 9.7% from Mirvac Group. The yield after cost is 9.1%.
• The estate’s has a GLA of 17,838m² and the weighted average lease expiry by income is 3.8 years.
• The tenant profile includes the Christian City Church and Chubb Fire & Security.
• The property is adjacent to an existing Dexus estate at Egerton Street. If the 2 estates were to be merged the area would total 47,164m².

• A Charter Hall-run fund will purchase Centro Lake Macquarie and Mount Hutton Plaza for $66 million.
• The sub-regional Centre Lake Macquarie has been upgraded and comprises a GLAR of 16,924m² and 775 car spaces.
• Big W and Woolworths are the anchor tenants and there are 45 specialty stores.

• The NSW Government has approved a flat 4% infrastructure levy based on construction costs on all new development above $250,000 within the Burwood Town Centre.
• In comparison the Sydney CBD has a 1% levy and Newcastle has a 3% levy. Only Gosford has a 4% levy.

• The eco-tourism development proposed by Killalea Coastal Investments, a JV between Mariner Financial and Babcock & Brown, for Killalea State Park has been permanently abandoned.

Victoria Property

• Australand Property Group has leased 36,000m² of “spec” space in the West Park Industrial Estate in Derrimut. Construction on the facilities commenced during the Global Financial Crisis.
• Logistics group UTi(Aust) has pre-leased 13,000m² of the newest facility.
• Last month Queensland Cotton moved into 23,000m² of office/warehouse space.
• Australand is contemplating building an additional spec building totalling 25,000m².
• In the last 6 months the sale of 30 lots and various leasing transactions have generated a total $60 million.
• Since the estate commenced in 2004, 200 of the 280 hectares has been developed or sold.

• PCL Prattcorp has purchased Centro Croydon from the Centro MCS 8 Syndicate for $31.5 million.

National Property

• During the March quarter there were 3,548 building approvals for “private other dwellings”, which included units and townhouses, in Melbourne. In comparison there were only 1,747 in NSW and 1,940 in Queensland.
• The majority of the construction in Melbourne is in the middle and outer rings.
• A contributing factor of the development in Melbourne is the stamp duty treatment for off-the-plan sites as it is based on the value in place when the contract is signed.