THE PROPERTY DEVELOPMENT REVIEW
What are the primary concerns for those committing capital to the Queensland market, particularly for assets across your specialty - the hospitality industry? Insurance has been a major issue and continues to be a major issue. Anything north of Hervey Bay, insurance becomes a real problem, for whether you can afford it. It just becomes non-feasible. Additionally, there are factors like wage, food, and alcohol costs which are all increasing. These factors are putting significant pressure on PnL’s. In terms of the transaction process, how fast are deals being completed? If you’re talking about your A-Grade properties that everyone wants, they are highly sought after. They are going at record yields, and they are transacting incredibly quickly. If you’re talking about the B-Grade and C-Grade assets, they’re taking a bit longer. Finance is starting to get a bit tighter. For non-traditional assets, you have to do a bit of mezzanine funding and things like that to try and get it across the line. So, transaction- wise, it’s still bullish, but I think it’s coming off a little bit now.
What properties are you currently in the process of selling? We’re currently doing the Pineapple Hotel in Brisbane; at last count, I had about 148 enquiries on that asset. That is an A-Grade asset that I would expect to have that level of enquiry. Elsewhere, we have a lot of “meat and two-veg” pubs. It’s not the flashy stuff, but more so blue-collar areas with diverse income streams on decent landholdings. They’re the type of properties I’m selling at the moment.
September / October 2022 – 83
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