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Economic Overview

	Current	+/-	Movement
$AUS/$US	92.64	+0.33
Cash Rate	4.50	Steady
90 Day Bill	4.81	+0.06
10 Year Bond	4.988	+0.045
ASX 200	4560.3	-21.9

NSW Property Market

Sydney auction clearance rate (AFR Pg.3)

• Sydney’s auction clearance rate at the weekend was 69.5%, up from 56% the weekend before.
• Spring clearance rates are approximately 65% compared to 72% for the same period in 2009, however, they still above the average for the past 4 months.
• Sydney’s east and inner west have been the best performers with clearance rates consistently above 70%.
• Agents have listed a record 2,468 auctions for September, up from the previous record set last September of 2,410.

Sydney Olympic Park update (SMH Weekend Business11-12 Pg.20) 

• Under the Sydney Olympic Park Authority masterplan another 370,000m² of commercial space could be added in the coming years with a further 447,000m² of residential space.
• The precinct has evolved considerably since 2000 with leading investors including GPT, Commonwealth Property Office Fund, Real I.S. and the Accor Hotels Group.
• The current commercial office vacancy rate in the precinct is 2% with average industrial and office rents fluctuating between $350/m² and $400/m².
• GPT has recently completed its latest addition to the area, 7 Parkview Drive, which has delivered 12,000m² of A-grade campus style accommodation at a six-star green rating.
• 7 Parkview Drive is one of 9 sites within the precinct that will provide a total development capacity of 200,000m² over the next 20 year period.
• The precinct is set to benefit from increased infrastructure with plans for a faster train service and upgrades to the existing surrounding motorways.

Parramatta commercial office update (SMH 11-12 Pg.16)

• The demand for commercial office space within the Parramatta CBD has increased with a number of both State and Federal Government departments relocating to the area over the past few years.
• Parramatta is a strong market contender for government as the location is generally closer for staff, the buildings are larger and cheaper and have similar facilities and green star ratings.
• The total vacancy rate for Parramatta is 10% whilst the A-grade sector has a 3.4% rate equivalent to 8,000m² of space.
• There is limited contiguous space with the majority being available in small parcels.
• Face rents increased by 1.5% in the first half of 2010 due to the lack of supply and increasing demand, however, incentives remain high in order to the remain competitive with other CBD locations.

Room 4 Surry Hills update (SMH Weekend Business 11-12 Pg.18)

• Mirvac is poised to take advantage of strengthening conditions within commercial fringe precincts by placing the Room 4 building at 285a Crown Street, Surry Hills on the market.
• The property is said to have a value in the order of $40 million and is the former administration headquarters of Sydney Water and was originally built circa 1950’s.
• Mirvac has extensively renovated the property and it now provides 4,624m² of NLA with ground floor retail, 2 upper levels of commercial office space, leisure areas and basement parking.
• The property comprises 32 separate tenancies ranging in size from 56m² to 870m².
• The heritage property also includes The Winery and The Café located on the rear parcel.
• The vacancy rate for the CBD Fringe market was 2.3% as at June 2010 with only 0.5% available in the A-grade market and 2.7% vacancy in the B-grade market.

Sydney Airport retail upgrade (SMH Weekend Business 11-12 Pg.16)

• Sydney Airport has recently undergone a $500 million upgrade and now includes 120 retailers.
• Due to the 32 million passengers travelling through the centre a number of high end retailers are looking to open stores.
• Victoria’s Secret is reportedly looking to open an outlet within the International terminal.
• The number of travellers who pass through the terminals is expected to reach 80 million annually over the next few years.

Minto Mall update (AFR Pg.55)

• Minto Mall, on the corner Ben Lomond and Penbroke Roads, has been placed in the hands of receivers.
• Sources suggest that a number of options are being explored for the centre which has been gradually allowed to deteriorate in recent years.

Nation Property Market

Hotel update (AFR Pg.55)

• Australia recorded $626 million in hotel sales in the first half of 2010, the highest in the Asia Pacific region.
• There were 14 transactions, including the Tourism Asset Holdings sale of 5 hotels to Singapore listed REIT CDL Hospitality Trust for $175 million in January.
• Other sales included the Sofitel Wentworth in Sydney selling for $130 million to LaSalle Investment Management and the Swissotel Sydney which sold for $90 million to Singaporean investor Michael Kum.
• Asian investors accounted for $482 million (77%) of the sales.

Sunkids Children Centre sales (AFR Pg.55) 

• 20 Sunkids Children Centre’s in Queensland and Victoria have sold for more than $32 million.
• The sales included 14 child care centres in south east Queensland and 6 in Melbourne.
• The centres were owned by Octaviar Investment Holdings No. 2 and attracted 6 bids for the portfolio of 20 centres and more than 70 bids for the centres individually.
• The Queensland centres were purchased by a private consortium and the Victorian centres were purchased by a Canberra based private investor.
• Other assets in the Sunkids portfolio include 24 leased freehold centres and 12 development sites.