Welcome to Issue 55 of The Property Development Review, exclusively for agents, developers and investors.
AUGUST / SEPTEMBER 2024 - ISSUE NUMBER 55
EXCLUSIVELY FOR PROPERTY DEVELOPERS, INVESTORS & AGENTS ACROSS ASIA-PACIFIC
LISTINGS The latest commercial assets and development site opportunities across Australia.
INTERVIEWS We speak exclusively to Australia’s best business and property leaders.
ANALYSIS Unique perspectives from the deal-makers on the ground.
At Rooftop , we take great satisfaction in producing campaigns that not only win awards but also attain successful commercial outcomes. Our mission is to take your campaign to the next level.
Get in Touch hello@rooftop.studio
2 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
August / September 2024 – 3
CONTENTS
CONNECT WITH US
DEVELOPMENT READY: Website: developmentready.com.au Soundcloud: /readymediagroup Linkedin: @developmentready Facebook: /developmentready The Interview YouTube: @TheInterviewAU Instagram: @development_ready COMMERCIAL READY: Website: commercialready.com.au Linkedin: @commercialready Facebook: /commercialready Instagram: @commercial.ready ROOFTOP: Website: rooftop.studio.com.au Vimeo: /rooftopstudio Instagram: @rooftopstudio THE PROPERTY DEVELOPMENT REVIEW: Online Issues: developmentready.com.au/ content hub READY MEDIA GROUP: readymedia.com.au
18 MARKET MOVES 22 AUCTION HUB
The Latest Transaction Activity & Key Deals
Upcoming Commercial Auctions
26 NSW DEVELOPMENT
Marisa Wikramanayakewed Barings, Rest Super Move Ahead at Kemps Creek
28 NSW MARKET OVERVIEW Peter Vines Ray White 52 VIC DEVELOPMENT 30 NSW LISTINGS
06 THE INTERVIEW TONY QUINN Quinn Family Office
Marisa Wikramanayakewed City Backs Lendlease’s Triple-Tower Gurrowa Place Plans
54 VIC MARKET OVERVIEW Tim Grant Savills
56 VIC LISTINGS
93 QLD DEVELOPMENT Clare Burnett Graya Completes Luxury New Farm Apartments 94 QLD MARKET OVERVIEW Chris Butters CBRE
09 THE INTERVIEW GERARD O’BRIEN Silverleaf Investments 10 SUSTAINABILITY Phil Bartsch 12 INVESTMENT 14 NATIONAL NEWS Colliers
96 QLD LISTINGS
EDITOR IN CHIEF Frank Materia IN-HOUSE WRITER
124 SA MARKET OVERVIEW David Ludlow Collins Bateman
Oliver Gregurek ADVERTISING frank@readymedia.com.au LISTING ENQUIRIES info@readymedia.com.au EDITORIAL ENQUIRIES editor@readymedia.com.au CONTACT Ready Media Group Head Office Level 3/161 Buckhurst St South Melbourne VIC 3205 03 9631 5476 info@readymedia.com.au MAGAZINE DESIGN Nespecart ON THE COVER Lukas Kloeppel-pexels
Net-Zero Nation Building: Industry Push or Policy Shove?
126 SA LISTINGS
Australia To Be Top Destination in APAC for Cross-Border Investment Volumes
136 WA MARKET OVERVIEW Brent Griffiths Belle Property Commercial
Asian capital to continue to flow into Australian property market
138 WA LISTINGS 142 TASLISTINGS 146 ACT LISTINGS
15 NATIONAL NEWS Knight Frank
Investment activity in Australia’s capital markets is gaining momentum
16 NATIONAL NEWS Cushman Wakefield Q2 2024 Snapshot:
Australian Alternatives -Living, Social Infrastructure,and Infralite Sectors
4 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
FROM THE CEO
Welcome to the August/September edition of The Property Development Review. I’m pleased to report that strong momentum across the Ready Media Group business has continued into the second half of 2024, with one highlight being the recent appointment of Jack Johnstone to the team as our new National Residential Account Partner. In addition to new personnel, our business continues to drive innovation & excellence in performance across the commercial property sector, recently being rated in an industry survey as the Number 1. Portal for customer service as well as the Number 1. Portal for buyer lead quality. On the topic of achievements, our proprietary, industry-first commercial property dataroom platform, InstaDocs continues to go from strength to strength, active on roughly 40% of campaigns across the Development Ready & Commercial Ready portals & enabling instant access to campaign documents for our roughly 85,000 valued users throughout Australia. I’d also like to make special mention of our in-house creative studio, Rooftop, which continues to be exclusively entrusted to deliver best-in-class creative campaigns for Australia’s leading agencies & private
investment firms including Colliers, CBRE, Savills, Wingate, Pelligra & Cushman Wakefield to name just a few. Looking ahead to the remainder of the year, we’re observing a strong uptick in transaction activity & campaign volumes with buyer sentiment for commercial assets beginning to re-bound, signalling a positive step for the commercial real estate sector. In closing, I’d like to extend my sincere gratitude to our valued agency partners & users for their willingness to disrupt the status-quo & support our challenger mindset, with a number of exciting new initiatives shortly to be announced. Thank-you
Nick Headshot - TPDR Intro Page
NICK MATERIA CEO - Ready Media Group
August / September 2024 – 5
The Interview
SCAN OR CLICK TO WATCH THE VIDEO INTERVIEW IN FULL 90 MINUTES
TONY QUINN
With Rob Langton
QUINN FAMILY OFFICE
Joining our program in this exclusive feature profile is Tony Quinn - Founder of Quinn Family Office (Quinnfinity Group). A visionary, pioneer & the man with the Midas touch, Tony’s remarkable business success is a journey across three Countries, wherein his innate corporate nous combined with a relentless work ethic has enabled him to scale to the top of a diverse range of industry sectors including fresh pet food, confectionary, motorsport & commercial real estate investment. Though perhaps best known for his early success as the founder & driving force behind global market leader VIP Petfoods, the business he established from the ground up in 1994 before selling a majority stake to Quadrant Private Equity in a $410m transaction in 2015, Tony’s business achievements extend far beyond the VIP deal & incorporate a number of other triumphs; not least of which being the rapid turnaround & re-structuring of the infamous Darrell Lea Confectionary business, a company he acquired in 2012 for $25m before selling six years later in a $200m deal. Alongside his well popularised feats with both VIP & Darrell Lea Confectionary, Tony’s unheralded business victories include a number of other previous ventures in both his hometown of Scotland & his adopted home of New Zealand, with his entrepreneurial flair resulting in similarly successful outcomes being achieved for sign writing business Lofthus & Co Signs, waste-fat collection businesses CueWaste & Fatman Services Limited as well as chip-producer Fast Fry Chips amongst many others. The culmination of this financial success over a long period of time led to Tony establishing his own private investment vehicle Quinn Family Office (Quinnfinity Group) in 2015, a company through which he channels his considerable resources & expertise to invest in a broad spectrum of domestic and international businesses, commercial property assets throughout the World & venture opportunities.
6 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
Through Quinnfinity Group, Tony combined his passion for motorsport & love of New Zealand to develop Highlands Motorsport Park in Queenstown, a World-class, purpose-built racing circuit he developed in 2013 for a speculated $25m that now incorporates a 4.1km racetrack that hosts global championships, multiple racing experiences, members-only club events, a motorsport museum, an innovation & technology park and one of the World’s largest & most valuable private car collections. In 2015, Tony further added to his portfolio of motorsport investments acquiring Hampton Downs Motorsport Park as well as Taupo Motorsport & Events Park, both situated in New Zealand’s North Island & revered amongst the sports global racing community - in 2021, he also acquired the rights to Queensland Raceway in Australia. With a long-held passion for & interest in philanthropy, in 2021 Tony established the Tony Quinn Foundation, a charitable organisation that provides grants, sponsorship, mentoring and advice to a broad range of grassroots organisations and individuals. In particular, the foundation is heavily geared toward supporting the next generation of motorsport talent across New Zealand & Australia to reach their ambitions on a global stage. Committed to sharing his legacy and life experiences, first and foremost with his family but also with the general public, Tony co-authored his biographical bestseller ‘Zero to 60’ in 2016, recounting in detail his vast journey in both life and business. In this rare & exclusive profile produced and distributed by Ready Media Group, Tony Quinn details his extraordinary life, from growing up in a caravan in Aberdeen, Scotland to becoming one of the World’s most successful self-made business owners & investors - this is Tony Quinn, in his own words, filmed in his adopted hometown on Queensland’s Gold Coast, Australia.
August / September 2024 – 7
8 – August / September 2024
The Interview - EXCLUSIVE
THE PROPERTY DEVELOPMENT REVIEW
SCAN OR CLICK TO WATCH THE VIDEO INTERVIEW IN FULL 50 MINUTES
GERARD O’BRIEN
With Rob Langton
SILVERLEAF INVESTMENTS
Joining our program on this episode is prolific developer, agricultural investor & businessman Gerard O’Brien - Founder & Director of Silverleaf Investments, a privately held commercial real estate investment company. For over three decades, Gerard has been an instrumental figure across Western Australia’s real estate & business communities, playing an integral role particularly throughout Fremantle wherein his award- winning retail, commercial and residential projects have significantly added too & boosted the appeal of the City. Alongside his development / re-development projects in Fremantle, Gerard also has extensive commercial holdings throughout Perth & Hobart in addition to a number of private farming interests. In this exclusive profile, Gerard walks us through his background, his approach to real estate investment & development, how the Cities of Fremantle, Perth and Hobart have evolved over recent decades & the types of opportunities he sees on the horizon for sophisticated investors.
August / September 2024 – 9
Sustainability
NET-ZERO NATION BUILDING: INDUSTRY PUSH OR POLICY SHOVE?
Author: Phil Bartsch Urban Developer
The big push is on for Australia to become a net-zero nation and there is no question a lot of the heavy lifting will need to be done by the property development sector. Figurehead founder Joe Grasso, Mitchell Brandtman partner Maoibh Russell and Hip v Hype’s Gavin Ashley with The Urban Developer’s Taryn Paris [left] during the panel.
“We’re a fair way behind as an industry,” he says. “But there’s definitely not enough incentive at the moment. Ask all the developers out there how they’re being incentivised to go down these pathways. They’re just not. “And market conditions are just so tough. “It’s so hard to run a construction site these days and has been for the last few years, that it’s difficult to get outside of just surviving and into this [net-zero] world.” However, Figurehead has proven it can be done with the delivery of its 11-storey carbon-neutral office building 116 Rockeby at inner-city Melbourne’s Collingwood. ‘Unfeasible’ Asked how he made the project’s feasibility stack, Grasso pulled no punches: “We didn’t.” “It’s a long-term asset hold for us,” he says “It’s our own building. It’s our new corporate head office. So there was a different mindset around how we structured our feasibility. “But simply, it probably cost us circa 15 to 20 per cent more to go down the path of a 5.5 NABERS sustainability rating and then having a platinum WELLS certification,
The construction and operating of buildings accounts for 40 per cent of the world’s greenhouse gas emissions. But so far the industry has been slow to grab the barbell for the transition to achieve the Australian Government’s targeted net-zero emissions by 2050. And according to industry experts, it is a hard sell given the prevailing industry challenges and the push will likely need to come to policy shove. “Definitely, I think we’re going to need a lot of policy to drive this change,” quantity surveying group Mitchell Brandtman partner Maoibh Russell told a panel discussion at The Urban Developer’s flagship Urbanity conference on the Gold Coast. “We’re looking at DAs every day for new developments and there’s nothing in them at the moment about net zero. “So I think for people to have to make a change it is going to have to be enforced.” But she quickly adds: “At the moment, developers are finding it very expensive just to build what they’re currently doing without the additional factor of net-zero building”. Joe Grasso, founder of Melbourne-based construction group Figurehead, agrees.
10 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
Renders of Figurehead’s 11-storey carbon-neutral office building in Melbourne.
According to a report by engineering firm Hatch, replacing just 50 per cent of traditional concrete with green concrete could cut Australia’s carbon emissions by about 17 million tonnes annually—the equivalent of removing four million cars from the road. It also found that although versions of green concrete may be 5 to 20 per cent more expensive, the cost premium “almost vanishes” to 0.5 to 1.4 per cent when the total installed cost is considered. “We’ve definitely got the skills,” Russell adds. “It’s also just a matter of builders getting used to dealing with different products because they like to use what’s comfortable to them.” Clarity, flexibility But Grasso also notes: “There isn’t really anything that’s mandatory. The NCC [National Construction Code] doesn’t really apply any mandatory requirements when it comes to this sort of stuff. So that’s maybe the next step.” Meanwhile, Ashley points out that any policy changes to accelerate Australia’s path to becoming a net-zero nation need to recognise industry capacity. “It needs to be performance based,” he says. “If we can be really clear about the performance that we’re asking of buildings and precincts but leave flexibility in the hands of the really capable kind of development industry. “That’s ultimately the way to get what we want, but also do it for the least cost, because each project can adopt strategies that are best fit for that particular site.” SoGreen concrete is gaining ground globally, including in the construction of Amsterdam’s Schiphol Airport.
which we wanted to make sure we got the best outcome for our other occupants. “But if you were doing it on a build-to-sell basis it would be unfeasible.” Gavin Ashley, the director of sustainability for Melbourne-based developer Hip V Hype, says the “big one” that will challenge the industry over the next 10 years will be embodied carbon. “[That is] how we can not only focus on the use phase but the construction emissions that got us there,” he says. “That’s the challenge ahead.” It is forecast Australia’s upfront carbon emissions will balloon from 16 per cent to 85 per cent of overall building emissions by 2050 if the industry fails to “make better choices” around the materials it builds with and its construction processes.Ashley says that over the next decade “a big move back to timber construction” would likely help achieve emissions targets. Concrete alternative But Grasso says the buzz in the building world is all about “green concrete”. An alternative to traditional concrete, it incorporates recycled or waste materials as substitutes for cement and aggregates, making it more sustainable and reducing its carbon footprint. Its use has been gaining traction around the world, including in the construction of the Louvre Abu Dhabi and Amsterdam’s Schiphol Airport. In Australia, it has so far replaced traditional concrete in more than 60 projects. “There’s a huge push going forward with green concrete as well as making sure that we’re getting the right results through all of the process that’s required to get a concrete truck to site, and what we can do to better all that,” Grasso says.
August / September 2024 – 11
Investment
AUSTRALIA TO BE TOP DESTINATION IN APAC FOR CROSS- BORDER INVESTMENT VOLUMES
Knight Frank’s Horizon Report III – Look Beyond the Norm found Australia was expected to attract 36% of total cross-border flows in 2024. Japan and Singapore maintain their second and third positions, with approximately 23% and 11% shares of cross-border capital targeting these countries, respectively. Total cross-border investment into Australian commercial property is forecast to be US$10.2 billion (approximately $AU15.5 billion) over 2024, up from US$5.9 billion (roughly $AU9.01 billion in 2023). The Horizon Report III found there would be a significant rebound in cross-border real estate investments in Asia Pacific overall in the second half of 2024, with volumes expected to rise by more than 33% compared to the same period in 2023. The anticipated increase is largely driven by potential Federal Reserve rate cuts, which bode well for commercial real estate investments. This rise will primarily be driven by the office sector, which is expected to attract 30% of the cross-border investment volumes. Australia is predicted to be the number one destination for cross-border capital in the Asia Pacific commercial property market in 2024, according to the latest research from Knight Frank.
12 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
Knight Frank Global Head of Capital Markets Neil Brookes said, “Australia stands out as a prime destination for cross- border investments due to higher-than-average re-pricing compared to the rest of the region. While the adjustment may still have further to go, the gap between valuations and buyer sentiment has narrowed, and the outlook for relative returns across asset classes is shifting back in favour of offices. The substantially higher capitalisation rates in Australian offices mitigate near-term risks and pave the way for strong risk-adjusted returns, which attract international investors.” In Q2 2024, Australia received US$1.9 billion worth of international capital, a 2.5-fold increase compared with Q1 2024, signalling renewed confidence among foreign investors. The office sector was the main driver of this rise, accounting for 63% of total transactions, highlighting the enduring appeal of Australian commercial real estate to international investors, especially those from Japan. Mitsui Fudosan’s acquisition of a 66% stake in 55 Pitt Street for US$879.4 million was a stand-out transaction. This significant transaction not only highlights the continued interest of Japanese investors in Australian commercial assets but also reinforces Australia’s position as a top destination for cross-border real estate capital in Asia-Pacific. Mr Brookes added, “The second half of 2024 is expected to witness a narrowing bid-ask spread, which should encourage more deal-making activity as cross-border investors reappraise this new outlook. Japanese investors have shown a strong appetite for Australian commercial property assets, exemplified by Mitsui Fudosan’s recent acquisition. This pattern is expected to persist as Japanese firms continue their hunt for higher-yielding assets in overseas markets.” Knight Frank’s Chief Economist in Australia, Ben Burston, said deal flow in Australia had been generally constrained since 2022, but Q2 this year saw a strong improvement in sentiment, and with it came a flurry of transactions. “The office and industrial sectors are the most favoured for cross-border capital in Australia, followed by the Living and Retail sectors,” he said. “Sydney’s well-established CBD office precincts have yielded several core opportunities, and the market remains the preferred destination for many cross-border investors, so it was no surprise that Sydney was first to show a material improvement in sentiment and liquidity. “Related to this, well-located prime offices in Sydney have shown signs of yields stabilising after substantial repricing over the past two years. “As transactional evidence accumulates and heightened investor confidence spurs increased market participation, liquidity in the office market will gradually improve and broaden to other markets in coming months. “Meanwhile, the industrial sector continues to be Australia’s most favoured stabilised asset class due to its relatively low risk with long-term growth potential. “Prime industrial yields have stabilised more quickly than other sectors suggesting that pricing adjustment has probably run its course and cross-border investors are likely to return to the market relatively quickly as they seek to boost their portfolio allocation to industrial.“
August / September 2024 – 13
National News
With approximately $1.5 billion worth of Asian capital actively pursuing Australian investments, particularly Japanese investors, it’s safe to say the Australian real estate market will continue to be a big focus into the coming years. Colliers Asia Markets Director Tony Wang said Australia remained in the global top five for cross-border capital destinations in 2024. “Japanese capital leads residential and build-to-rent investments in Australia, while a resurgence of capital from Hong Kong, China, and Singapore is taking advantage of the industrial, retail and office markets. “These sectors offer a stable and substantial yield spread, making them the most significant draw for APAC investors,” Tony Wang said. The Colliers Asia Markets team transacted $256 million in Q1 2024 across 19 deals, with residential development sites standing out, with an impressive $160 million in sales, highlighting the growing trend of offshore Asian investment in this segment. A further $68,010,265 was transacted in Q2 2024, taking the total of Colliers Asia Market team transactions in the first half of the year to $324,673,265. Looking ahead, there is immense potential, last year Japanese investment reached a record $2 billion, reflecting a deepening engagement driven by Australia’s housing dynamics with a demand and supply imbalance. Colliers Investment Services Senior Executive Shaun Seeto said that underscoring the interest and confidence of overseas investors in Australia’s real estate sector, Asian investment into Australia continued to grow. “Asian investment represents about 15 per cent of investment into Australia,” Shaun Seeto said. “However, we are seeing a trend where Asian investors are becoming more educated on the Australian market and they are making more informed and strategic decisions focused on generational wealth rather than fast returns.” Colliers National Director Investment Services Hunter Higgins travelled on an Asian roadshow over 6 days in June where Colliers Australian experts, in partnership with local experts in Tokyo, Shanghai, Guangzhou, and Hong Kong, met with a broad range of institutional and private investors interested in investing in the Australian market. “We showcased a portfolio of properties with a combined total value of over $630 million, covering a range of asset classes including office, retail, industrial, and residential developments,” Hunter Higgins said. “As Brisbane will be the home of the 2032 summer Olympic and Paralympic Games, there was significant interest in assets located in this region, we uncovered maiden capital with their sights set on the SEQ property market. “We shared our latest SEQ market intelligence and presented exclusive development and investment opportunities in front of 140 active off-shore Asian groups, predominately sovereign pension funds, corporations and private family offices who have shown strong interest in investing in Australia.” With Asian capital actively pursuing Australian investments, now is the time to reach out to learn how we can assist you or how to include your property in the next Asia roadshow. ASIAN CAPITAL TO CONTINUE TO FLOW INTO AUSTRALIAN PROPERTY MARKET By Colliers experts Hunter Higgins, Tony Wang and Shaun Seeto
Hunter Higgins National Director Investment Services +61 406 997 936
Tony Wang Director Asia Markets +61 439 577 777
Shaun Seeto Senior Executive Investment Services +61 436 033 704
14 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
INVESTMENT ACTIVITY IN AUSTRALIA’S CAPITAL MARKETS IS GAINING MOMENTUM
By Justin Bond, Knight Frank National Head of Capital Markets
As we move into the second half of 2024, the tide seems to be turning for Australia’s Capital Markets, with indications we are moving through the bottom of the cycle as activity gains momentum following several years of subdued activity. Economic uncertainty has been the major challenge since the middle of 2022, as inflation rose, and with it, the cost of funding, amidst a challenging backdrop globally. Since then, property investment has been on hold to a large degree, with investors waiting to see the extent to which asset values would adjust, as well as how long inflation would persist and how high interest rates would rise. However, the cash rate has now remained stable since last November, with many expecting the next move by the RBA will be a rate cut, and in 18 months’ time rates are more likely to be lower than at the same or a higher level. In the investment market, we are now seeing improving sentiment with a greater alignment of buyer and seller pricing expectations and capital values starting to stabilise. Prime yields have largely stabilised across all sectors, including in offices where the uncertainty and lack of liquidity has been most acute. There have been a greater number of transactions in recent months, boosting volumes for Q2 and establishing a new baseline for pricing, which will likely lead to further activity, marking a turnaround for the market. Investment across the office, retail and industrial markets totalled $6.2 billion in the second quarter, which was the highest quarterly total since Q4 2022 and up by 53% year-on-year. Some of the most notable recent transactions include the sale of a 66% stake in a planned $2 billion tower at 55 Pitt Street in Sydney to Japan’s Mitsui Fudosan, and the settlement of Quintessential’s $250 million acquisition of 240 Queen Street in Brisbane from Brookfield. With more major listings coming to the market, we believe it will be a strong finish to 2024. Offshore investors are leading the activity rebound in Australia’s Capital Markets this year, and this is set to continue, with Australia predicted to be the number one destination for cross-border capital in Asia Pacific in 2024, according to Knight Frank’s latest APAC Horizon report. Australia is expected to attract 36% of total cross-border flows in the APAC region in 2024, ahead of Japan (23%) and Singapore (11%). The continued focus on Australia reflects the perception that our market is more stable compared to other global markets with greater certainty and transparency, strong regulatory frameworks and freehold ownership. As the market shifts firstly to recovery and then on to the next growth cycle, there are many opportunities for both offshore and domestic investors across the sectors. In the institutional office market, the capital value correction seen over the
past two years is expected to be complete by the end of the first quarter of next year. In this sector prime high-quality leading ESG-credentialed assets are in demand, with the premium Sydney CBD market and Brisbane undoubtedly the most desired among institutional buyers. The retail sector has proven to be one of the strongest performing this year, with growing buyer demand, including amongst investors who have previously preferred to invest in other sectors. We believe this demand will be sustained into 2025 as some of the pressures on household incomes start to ease, driving a pick up in retail sales. Moving forward, rapid population growth, coupled with a lack of new retail supply, will underpin retail performance, and this is largely where investor confidence in the sector is coming from. In the retail sector, low-risk assets in strong population hubs are proving to be the most sought after. Meanwhile, there continues to be growing interest in living sectors, with activity currently concentrated in co-living and student accommodation. Build-to-rent is expected to be a stronger focus from 2025 as the cost of debt and construction costs stabilise. The outlook for living sectors is positive as investors seek greater exposure to alternative sectors and the relative stability of residential assets in particular, as evidenced by high demand and growing rents. The focus on living sectors also reflects broad community recognition of the structural demand/supply imbalance in Australia’s residential market, and of the role that living sectors could potentially play in addressing this by delivering more supply to the rental market. Healthcare real estate and the emergent Life Sciences subsector has also generated substantial investor interest in recent years. Factors driving this include the structural undersupply of acute healthcare facilities, the post-COVID realisation of a need for greater onshoring of research, development and manufacturing of medicines, vaccines, and medical supplies, and the strength of Australia’s innovation sector. The sector also offers appealing lease terms, defensive attributes, and a favourable risk- adjusted return profile, providing a hedge against the challenges posed by recent uncertain market conditions. Despite the backdrop of greater investor interest, the sector is still in its nascency in Australia compared to other countries including the UK, USA and Asia. There is a substantial opportunity for Australia to learn from these more mature markets to advance the sector domestically over the next five to 10 years. No matter what sector they’re looking at, property investors will be assessing future growth potential, and determining how to drive performance through income growth in particular. With macroeconomic headwinds gradually
clearing, the fundamentals required for a return to growth in 2025 and beyond are now in place and we anticipate increasing investor demand across multiple sectors.
August / September 2024 – 15
National News
Q2 2024 SNAPSHOT: AUSTRALIAN ALTERNATIVES - LIVING, SOCIAL INFRASTRUCTURE,AND INFRALITE SECTORS
Cushman & Wakefield has released their first quarterly Australian Alternatives Snapshot, highlighting key trends across the living, social infrastructure, and infralite sectors.
$1,000
$900
$800
$700
ALTERNATIVES TRANSACTIONS 2024
$600
$500
$400
Source: Cushman & Wakefield Alternatives Research * Note this chart reflects transactions involving outright purchases or sales of assets with AUD $5m and above.
$300
$200
$100
$0
The first half of 2024 has seen many investors maintain a strong focus on alternative real estate strategies, with total investment volume reaching approximately ~$3.0 billion. However, transaction volumes have remained relatively subdued due to mixed economic signals contributing to a cautious market environment. Despite robust sector fundamentals across alternatives, challenges such as lower liquidity and infrequent pricing benchmarks continue to slow capital deployment in an already uncertain environment. Like other sectors, the gap between buyer and seller pricing expectations remains a significant hurdle, though recent months have shown preliminary signs of narrowing.
16 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
Looking ahead, transaction activity is expected to increase across the alternatives sector, potentially driven by a global interest rate easing. Alternative sectors, particularly within the living space such as student accommodation, build-to-rent (BTR), and retirement living remain positioned for strong investment activity, supported by a structural under supply, steady end-user demand, and in some cases, strong government backing. Living: Resilience in the Face of Change The living sector continues to demonstrate resilience, particularly within the Purpose-Built Student Accommodation (PBSA) sector which remains a priority for many investors, even despite short-term proposed migration cuts. Confidence in the PBSA sector remains bolstered by record-high occupancy rates, largely driven by the broader residential rental market’s tight conditions. The Manufactured Housing Estates (MHE) or land lease communities continues to see a significant amount of activity, with new partnerships and equity infusions signaling a strong growth trajectory. In the retirement sector, significant activity persists, with large platforms entering the market and an uptick in smaller-scale transactions are boosting capital markets. Cushman & Wakefield is forecasting living sector yields to remain broadly stable. Social Infrastructure: Growing Investment and Strategic Focus Investment in social infrastructure remains robust Several Specialist Disability Accommodation (SDA) fund managers actively raising capital and building on the successes of their initial investments. These opportunities continue to attract both wholesale and institutional investors due to compelling risk-adjusted returns. The Housing Australia Future Fund (HAFF), with its AUD $10 billion initial funding, has garnered strong interest from community housing providers and fund managers, aiming to expand social and affordable housing, particularly for Indigenous communities, women, children, and veterans. In the healthcare sector, an increase in transaction activity is predicted to be driven by asset recycling programs and narrowing of bid-ask spread across the sector. Childcare centre demand remains elevated, driven by a concentrated efforts from both the government and the industry to support female workforce participation. This focus on childcare ensures it remains a priority, contributing to stable yields in the sector going forward. Major Transactions and Market Trends in Agriculture, Self-Storage, and Renewable Energy In a significant move for the leased agriculture sector, the Centuria Agriculture Fund has expanded its portfolio with the acquisition of Katunga Fresh, a 21-hectare glasshouse facility in Victoria, valued at AUD $90 million. This acquisition stands out as one of the largest leased agriculture transactions for the quarter, highlighting the sector’s growth and increasing availability of high-value sites. Meanwhile, the self-storage sector continues to show resilience with strong rental growth across major Australian and New Zealand markets. Although occupancy rates have slightly decreased from their peak, settling between 85%-90%, revenue has maintained consistent year-on-year growth since late 2020, indicating early signs of revenue stabilisation. Investor appetite remains strong, as evident by favorable investment metrics in 2024 transactions thus far. On the renewable energy front, government support remains a key driver, highlighted by the Australian Renewable Energy Agency’s (ARENA) AUD $1 billion investment in domestic solar photovoltaic (PV) manufacturing through the Solar Sunshot program. This initiative aims to bolster local production across the PV supply chain, complementing significant government investments in renewable hydrogen and its derivatives. As we move into the second half of 2024, Cushman & Wakefield anticipates increased transacion activity. With global interest rates expected to ease and a narrowing of pricing gaps, investors are focusing on high-demand areas within the living sector. This momentum, combined with structural factors and strong government support, is likely to drive an active period in the alternatives sector.
August / September 2024 – 17
MARKET MOVES VIC DESCRIPTION
VENDOR/ PURCHASER
AGENCY
SALE $
An infill development site was purcahsed by a developer who has experience within the Geelong region. Given the property had a yield study showing potential for 124 house lots (STCA), this experienced developer jumped at the opportunity and purchased the property unconditionally.
97 Hendy Street, Corio
V: State Government P: Melbourne-Based Developer
Gross Waddell ICR's Danny Clark, Andrew Waddell and Glenn Ye
$12 million
A significant corner allotment at the junction of Maroondah Highway and New Street sold. The property, which has been in the same family since 1963, was purchased by a local owner- occupier, with plans to transform it into a prominent showroom.
50 Maroondah Highway, Ringwood
CVA's Stan Dawidowski and Jarrod Moran
V: Local Owner Occupier
$3.255 million
A 120 sqm building sold with a brand-new five-year lease to Toorak Road mainstay Avoca Hill Bookstore. It is on a 162 sqm site in a prime South Yarra location surrounded by local and national tenants. A near-new purpose-built hotel in the Melbourne suburb of Ringwood has been acquired by Serene Capital. Sebel Melbourne Ringwood features 103 guest rooms and suites, Orchard restaurant and bar, conference and events space, a gymnasium and on-site car parking. Vacant possession of hotel management was offered as part of the sale. Melbourne property developer Salvo has transacted for a 61.55-hectare prime landholding in Tarneit in Melbourne’s west, with plans to develop a master-planned community comprising up to 1,700 dwellings with JV partner Casey Capital. A strata full-line Woolworths supermarket has been acquired by a private investor, marking the first full-line metro supermarket sale since Coles Middle Camberwell sold in late 2022.
80 Toorak Road, South Yarra
Fitzroys’ Lewis Waddell and Ben Liu
$2 million
Private
JLL's Nick MacFie and Peter Harper, in conjunction with Stonebridge Property Group’s Rorey James, Justin Dowers and Kevin Tong
96 Maroondah Highway, Ringwood
V: Amber Property Group P: Serene Capital
Undisclosed
1228 Leakes Road, Tarneit
V: Long-Term Private Owner P: Salvo
Direct
$73 million
Craigieburn Road West &, Hanson Road, Craigieburn
Stonebridge's Justin Dowers and Kevin Tong
$17.07 million
V: Private Investor
40-150 & 152-156 Colac Road and 246-248 South Valley Road, Highton
circa $20 million
A vacant residential infill landholding in a highly desirable Geelong location has sold in excess of $20 million.
P: Levande
Colliers' Chris Nanni and Ben Young
1-9 Bellevue Crescent, Preston
An interstate investor has purchased an industrial property in Melbourne’s highly desirable Inner North.
CBRE’s Matthew Romanin, Andrew Bell, and Jake George Cushman & Wakefield's Daniel Wolman, Hamish Burgess, and Joe Kairouz and JLL's Jesse Radisich, Josh Rutman, and Tim Carr CBRE’s Australian Healthcare and Social Infrastructure team of Sandro Peluso, Marcello Caspani- Muto and Jimmy Tat. Cushman & Wakefield’s Daniel Wolman, Oliver Hay, Leon Ma, and Negotiated by Gross Waddell ICR’s Raff De Luise.
$6 million
V: Interstate Investor
Under Instructions from KordaMentha as Receivers and Managers Appointed, a highly versatile development site at 550 Swan Street, Richmond has sold to Fortis, a wholly- owned subsidiary of Pallas Group.
550 Swan Street, Richmond
$13.6 million
P: Fortis
241 Dandenong Road, Windsor
Private aged care operator Infinite Care has secured its first Victorian premises by purchasing a vacant facility in Windsor.
$11.750 million
P: Infinite Care
1 Dean Street, Moonee Ponds
Undisclosed
A private High Net Wealth family has successfully acquired 1 Dean Street, Moonee Ponds. Private
WA Attfield Street, Maddington
VENDOR/ PURCHASER
DESCRIPTION
AGENCY
SALE $
Australian-based investment and funds management company Realside Property has purchased Perth’s Maddington Central in its first retail acquisition.
V: Vicinity Centres P: Realside Property
CBRE’s Simon Rooney and James Douglas
$107 million
76 & 78 Cranford Avenue, Mount Pleasant
A fully leased retail property in Perth’s south has sold in a deal demonstrating the high demand for retail assets in Western Australia.
V: Private Vendor P: Private Investor
Knight Frank's Cory Dell’Olio and Tony Delich
$2.96 million
TAS
VENDOR/ PURCHASER
DESCRIPTION
AGENCY
SALE $
V: Challenger Group P: Nick DiMauro of Adelaide- based private equity firm, DiMauro Group
Tasmanian shopping centre, Channel Court, has been offloaded by Challenger Group, a month after the group sold its stake in a Western Australian shopping centre for $48 million.
29 Channel Highway, Kingston
$82.5 million
JLL's Nick Willis and Sam Hatcher
18 – August / September 2024
THE PROPERTY DEVELOPMENT REVIEW
NSW
VENDOR/ PURCHASER
DESCRIPTION
AGENCY
SALE $
19-27 Devlin Street, Ryde 12 Elizabeth Street, Wetherill Park
The sale of a two-storey freehold office building in Ryde has set a benchmark for the area as one of the largest investment sales in the suburb in over a decade. A 1,423 sqm Wetherill Park industrial warehouse has been sold off-market, and came tenanted with a short-term lease. The East Village Sydney, located on the high-profile corner of Liverpool and Palmer Streets in Darlinghurst has sold in an off-market deal. Known for one of the best rooftops in Sydney, the East Village has been operated by Locky Paech of Goodtime Hospitality for the past 8 years after he and former business partner James Bodel transformed the pub through a significant renovation. A private investor has purchased the Dee Why Grand Shopping Centre in Sydney's North, highlighting the demand for quality strategically located retail assets within the Sydney market.
$9.25 million
P: Undisclosed Cash Buyer
CBRE’s Ray Ahsan and Lord Darkoh
$8.7 million
P: International Investor
CBRE’s Janet Joljian
234 Palmer Street, Darlinghurst
Undisclosed
P: Tipple Time Hospitality
JLL's Kate MacDonald
JLL's Nick Willis and Sam Hatcher in conjunction with Stonebridge's Carl Molony, Philip Gartland and Justin Dowers Commercial Collective's Benjamin Morello and Brad Crouch Colliers' Trent Gallagher, Sam Thomlinson and John Carney in conjunction with One Commercial's Ben Byford and Joshua Charles JLL Hotel & Hospitality Senior Vice President, Kate MacDonald Sebastian Fahey, Sam Hatcher and David Mahood, from the JLL Retail Investments NSW team. Knight Frank agents Anthony Pirrottina, James Masselos and Adam Droubi JLL Hotels’ Managing Director, Ben McDonald and Senior Vice President, Kate MacDonald
15/19 Pacific Parade, Dee Why
V: ISPT P: Private Investor
$60 million
54 Clyde Street, Hamilton North
The former Electric Lamp Manufacturers site was sold to a national investor who plans to renovate the 26-tenanted property.
$31 million
P: National Investor
A large 18,840 sqm industrial development site has been sold to a private purchaser. The site has less than 10% site coverage and sits within an E4 General Industrial zone, allowing for future development to re-use.
26-32 Beaumont Road, Mount Kurin-Gai
$19.75 million
P: Private Purchaser
Sydney’s oldest continually licensed hotel, and home of Australia’s oldest pub brewery, sells to Arthur Laundy & family.
P: Arthur Laundy & Family V: Blair Hayden
Undisclosed
Lord Nelson Brewery Hotel
P: Westbridge Funds Managaement on behalf of Region Group
Northgate Tamworth Shopping Centre
Westbridge Funds Management on behalf of Region Group acquired Northgate Tamworth Shopping Centre for $18.3 million.
$18.3 million
89 Balmain Road, Leichhardt
89 Balmain Road in Leichhardt has sold for $3.18 million, reflecting the highest rate per studio for a co-living site in Sydney’s Inner West.
P: Offshore investor V: Cordial Combined
$3.18 million
The Evening Star Hotel, Surry Hills
Universal Hotels, owned and operated by the Kospetas Family have purchased The Evening Star Hotel in Sydney’s Surry Hills.
P: Universal Hotels V: Private owners
Undisclosed
ADVERTISE IN TPDR
Reach a wide audience pool by advertising in The Property Development Review. Call 03 9631 5476 or Email jamie@readymedia.com.au
Click for More Info
August / September 2024 – 19
THE PROPERTY DEVELOPMENT REVIEW
Targeted Developer Leads
Lifetime Campaign Support
Transparent Pricing
Be Where The Buyers are.
Access Australia’s most active developer & investor database. Since 2015 we’ve cultivated a targeted and active audience-base to provide each development site marketing campaign with high volumes of qualified buyer leads. Every resource you need to generate targeted leads are built into our marketing packages at the one transparent cost. Why be anywhere else? Be where the buyers are. Be Where The Developers Are. Access Australia’s most active developer & investor database. Since 2015 we’ve cultivated a targeted and active audience-base to provide each development site marketing campaign with high volumes of qualified buyer leads. Every resource you need to generate targeted leads are built into our marketing packages at the one transparent cost. Why be anywhere else? Be where the developers are.
20 – August / September 2024
MARKET MOVES CONT’D QLD DESCRIPTION VENDOR/ PURCHASER
THE PROPERTY DEVELOPMENT REVIEW
AGENCY
SALE $
A Melbourne investor has snapped up a high-performing service centre anchored by 7-Eleven in Bellmere, with significant buyer interest in securing a long-term lease with one of the world’s largest convenience retailers. A premium Whitsunday investment has been sold to a private investor. The asset has a net lettable area of 1,719 sqm, with the tenancies including leading national retailers Billabong and Seafolly A syndicate of interstate investors have snapped up a 1,730 sqm site anchored by Snap Fitness with an opportunity for further development.
84 Bellmere Road, Bellmere
Colliers' Hunter Higgins and Sam Polichronis
P: Melbourne-Based Investor
$7.4 million
33 Port Drive, Airlie Beach
P: Private Investor
Burgess Rawson’s Craig Chapman
$7.3 million
26 Main Street (3 Cash Avenue), Samford Village
Colliers' Nick Wedge
$4 million
P: Syndicate of Investors
V: Health Centre Property No 1 Pty Ltd P: Local Private Investor
45 Amelia Street, Fortitude Valley
A freestanding commercial building in Brisbane’s Fortitude Valley, next to the city’s CBD, has sold following a competitive on-market Expressions of Interest campaign.
Knight Frank's Hayden Ryan and Jacob Heinke
$3.9 million
33 Lytton Road, East Brisbane
Sydney-based investment group Maker Invest has purchased the IGA-anchored East Brisbane Marketplace for $16.25 million.
P: Maker Invest
CBRE’s Michael Hedger and Joe Tynan
$16.25 million
A premium government-leased property was purchased by First Foundations Australia. The property, tenanted by Centrelink, features a three-year lease term extending to 2026, with an option to extend to 2029. Centennial sold its newly upgraded Acacia Industrial Park, with the final sale price being over three times the price paid for the site four years ago. After acquiring the 4.7-hectare site for $17.5 in 2019, Centennial completed $12.5 million in upgrades to the warehouse, transforming it from one large warehouse into four separate tenancies. The site was fully leased shortly prior to practical completion.
34-36 Patrick Street, Dalby
Burgess Rawson’s Darren Beehag and Kieran Bourke
$4.65 million
P: First Foundations Australia
131 Beenleigh Road, Acacia Ridge
V: Centennial P: Private Investor
$55 million
Savills' Callum Stenson
Colliers Queensland agents Nick Wedge, Sam Polichronis, Harry Dever and Nick Dowling
1 The Basin, Pelican Waters
A local private Asian investor has snapped up a fully leased, brand new, 1,578 sqm shopping centre anchored by IGA in a show of strong demand for essential service assets.
V: Flux Property Group P: Local Investor
$13.459 million
A local investor has successfully offloaded a freestanding Grill'd after owning the asset for 30 years. The 195 sqm property was purchased by a Victorian investor, with the sale price reflecting a yield of 5.43% and a building rate of $21,538/sqm. A commercial building on an arterial thoroughfare in Brisbane's inner north has sold in an off-market deal, demonstrating the strong demand for freestanding value-add assets in the city fringe. International fund Deutsche Asset & Wealth Management has divested an 18-storey A-grade office tower at 120 Edward Street in Brisbane City. The final price represented a $24 million discount from DWS' purchase price of $143 million seven years ago.
124 Oxford Street, Bulimba
V: Local Owner P: Victorian Investor
RWC Retail's Michael Feltoe and Lachlan O'Keeffe
$4.2 million
185 Kelvin Grove Road, Kelvin Grove
V: JWONG GLOBAL 2022 PTY LTD P: Private Investor
Knight Frank's Jacob Heinke and Hayden Ryan
$2.8 million
V: Deutsche Asset & Wealth Management P: Clarence Property
120 Edward Street, Brisbane City
CBRE's Bruce Baker and Peter Chapple
$119 million
Former QIC, and current board member of Mirvac, Elders and Hostplus, Damien Frawley, has sold an 18,077-hectare organic-certified cattle station, Gowan Station.
V: Damien Frawley P: Shane and Helen Hutton
Ray White Rural's Bruce Douglas and Andrew Turner
$25.5 million
Blackall
140 Dorville Road, Carseldine
A newly built 120 place childcare centre positioned on a 2,756 sqm landholding sold with a new 15-year net lease through to 2039 + options. Another centre was sold before the tenant commenced trade at a yield of 5.44%. Guardian has committed to a new 15-year lease until 2039 and will pay $294,000 pa across the 83-place facility. A local owner-occupier has purchased a 2,421 sqm industrial property to meet their expanding operations needs. The property features a generous concrete hardstand, ample parking, four 10-tonne overhead gantry cranes, temperature-controlled booths, and solar power installations. Goldfields has cemented its move into the south-east Queensland market with another acquisition in the inner-city - a 2002 sq m development site near the James Street precinct in Fortitude Valley.
V: Clarence Property P: Local Private Investor
Stonebridge’s Tom Moreland and Michael Collins
$9.836 million
117 Kangaroo Gully Road, Bellbowrie
V: Clarence Property P: Private Investor
Stonebridge’s Tom Moreland and Michael Collins
$5.4 million
68 Bridge Street, Picton
V: Owner-Occupier P: Owner-Occupier
RWC SC's Nick Ward and Samuel Hadgelias,
$5.65 million
Undisclosed but thought to be north of $16 million
88 Robertson Street, Fortitude Valley
V: Azure Development Group P: Goldfields
JLL’s Tim Jones and Harry Borger
An interstate investor has snapped up a Clontarf retail investment for $1,280,000 within 40 hours of it being presented for sale, showing the huge demand from interstate investors for stable defensive assets in South East Queensland.
80 Hornibrook Esplanade, Clontarf
Colliers Queensland Asia Markets agents Tony Wang and Shaun Seeto
$1.28 million
Private
August / September 2024 – 21
Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148Powered by FlippingBook