Welcome to Issue 54 of The Property Development Review, exclusively for agents, developers and investors.
JULY / AUGUST 2024 - ISSUE NUMBER 54
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.
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THE PROPERTY DEVELOPMENT REVIEW
July / August 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
16 AUCTION HUB
Upcoming Commercial Auctions
22 NSW MARKET OVERVIEW Jordan McConnell Investment Services 24 NSW MARKET OVERVIEW Paul Savitz Savills 21 NSW DEVELOPMENT Clare Burnett Mirvac Files Next Stage of 900-Home Estate 42 VIC DEVELOPMENT 26 NSW LISTINGS 60 QLD DEVELOPMENT Taryn Paris 46 VIC LISTINGS 43 VIC MARKET OVERVIEW Mark Stafford JLL
06 THE INTERVIEW DAN WHITE Ray White Group
Expressions of interest are open to unlock thousands of homes in the Arden precinct.
State-Funded Apartment Tower Proposed for Southport
61 QLD MARKET OVERVIEW Sam Biggins Knight Frank
64 QLD LISTINGS
EDITOR IN CHIEF Frank Materia IN-HOUSE WRITER
84 WA DEVELOPMENT Lindsay Saunders 80 SA LISTINGS 78 SA MARKET OVERVIEW Sam Alexander Cushman & Wakefield
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 Union Quarter in Spotswood Victoria
8
THE INTERVIEW DENIS WAGNER Wagner Corporation 10 NATIONAL NEWS
Cedar Woods, Tokyo Gas Target Subiaco for Third JV
86 WA MARKET OVERVIEW
Knight Frank and Bayleys complete acquisition of McGrath and announce new board of directors
James Baker, Richard Cash, Sarah Krahner, Yashwini Halai, Aidan Austen Colliers
12 PRODUCTIVITY Taryn Paris
88 WA LISTINGS 95 NT LISTINGS 96 TAS LISTINGS
Productivity an Albatross Around Industry’s Neck
14 MARKET MOVES
The Latest Transaction Activity & Key Deals
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FROM THE CEO
As we embark on the new fiscal year, it’s an opportune moment to recap on our recent achievements, which have consistently added significant value for both our agent partners and users. This past year, on DevelopmentReady we introduced our new Market Intelligence Report which provides key insights into local development pipelines and amenities. This tool supports developers due diligence efforts when evaluating the commercial viability and overall suitability of potential property sites. In our ongoing commitment to innovate the property marketing sector, we proudly unveil our newest offering: the “Pre-Market Offering”. This pioneering product enables vendors and agents to showcase properties to targeted developer and investor audiences before they hit the market. Looking ahead to the next financial year, we are eager to build upon our successes, offering even greater value to agents listing development sites and commercial investments. Concurrently, we remain dedicated to assisting our users on their journey to finding their next property project. In our exclusive series, “The Interview,” Rob Langton sits down with Dan White, Managing Director of Ray White Group and Founder/ Chairman of RW Capital. Dan shares insights into the spectacular Ray White Group’s journey, his own career path, and important lessons learned from his professional experiences. Additionally, Rob engages with Denis Wagner, Co-Founder of Wagners, and Director of Wagner Corporation. Denis discusses his family’s ties to Toowoomba, the
evolution of Wagners, and the essential skills for career success, plus giving us a glimpse into the future of the Wagner family legacy. This edition also features key content from returning contributors, The Urban Developer’s Clare Burnett, who discusses Mirvac’s next stage for its 900-home estate in the New South Wales region of Macarthur. And Taryn Paris explores productivity in the construction sector; the planning risk, productivity challenges and construction costs stagnating development productivity across the nation. We also delve into Development Victoria’s Arden Precinct project, highlighting
opportunities to partner with the Victorian Government in unlocking new housing. Finally, as always, we feature the latest commercial and development sites currently available for sale across the country, noteworthy transactions and market insights plus more. Enjoy the read! Nick Headshot - TPDR Intro Page
NICK MATERIA CEO - Ready Media Group
July / August 2024 – 5
The Interview - EXCLUSIVE
SCAN OR CLICK TO WATCH THE VIDEO INTERVIEW IN FULL 50 MINUTES
DAN WHITE
With Rob Langton
RAY WHITE GROUP
Joining our program on this episode in what is a unique & exclusive profile is Dan White - a 4th generation, executive member of the venerable White family real estate dynasty who currently serves as Managing Director of Ray White Group & Chairman of White & Partners. Established in 1902, the Ray White Group is Australia’s largest & most successful real estate agency business, encompassing some twelve thousand plus members working across over a thousand agency offices throughout Australia, New Zealand, Indonesia, Singapore, Hong Kong & the Middle East. A born entrepreneur, Ray White launched his eponymous firm aged twenty-three in Queensland’s Crows Nest, initially selling a diverse range of goods including livestock, machinery, wholesale produce and insurance before re-locating the business to Brisbane in 1922 & focusing solely on transacting residential real estate. In 1945, Ray’s son Alan joined the business, signifying the second generation of family ownership of Ray White - under Alan’s leadership, the company embarked on a period of strong expansion throughout Queensland with the opening of the group’s 10th office, simultaneously dealing with the increased threat of large, National competitors entering the market. As a third generation member of Ray White Group, the company’s current chairman Brian White AO joined the family business in 1970, initially working in office leasing & marketing before leading the expansion of the company’s presence throughout Brisbane with the opening of another six offices.
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In 1976 and aged just 31, Brian was appointed Managing Director of Ray White and over the course of the next thirty-nine years, undertook a complete transformation of the business, commencing in the mid 1980’s with the introduction of the franchise model followed by geographical expansion across Australia (New South Wales, Victoria, South Australia & Western Australia) as well as internationally in Indonesia, Hong Kong & Singapore. Now it’s fourth generation of family leadership, Dan White was appointed Managing Director of the Ray White Group in 2015 wherein he leads the businesses diverse global operations, managing turnover that exceeds $35bn per annum, as well as serving as Founder & Chairman of the family’s private investment office, Ray White Capital, a business he established in 2001. In this exclusive interview, Dan discusses the remarkable journey & success behind the Ray White Group, his personal career trajectory & learnings from his time at Arthur Anderson and Macquarie Bank, the opportunities and challenges involved in running a 12,000 person international business and the importance of legacy in maintaining the sustainability of the Ray White Group business for its future custodians.
July / August 2024 – 7
The Interview
SCAN OR CLICK TO WATCH THE VIDEO INTERVIEW IN FULL 50 MINUTES
DENIS WAGNER
With Rob Langton
WAGNER CORPORATION
Joining our program on this episode is Denis Wagner, Co-Founder & Non Executive Chairman of Wagners and Director of Wagner Corporation. With a family association to Queensland’s Darling Downs region that predates an astonishing one- hundred-and-fifty years, Wagners & Wagner Corporation are unquestionably two of Australia’s largest and most successful businesses, with operations across manufacturing, construction, commercial property, aviation and mining services. Tracing its roots back to 1896 when your great grandfather started business in this region, Wagners was officially established in 1989 as a partnership between Denis, his father Henry & siblings John and Neill Wagner. The firm launched with a single concrete plant, added a second in 1996 and by 2010 was operating 19 concrete plants in fixed locations throughout Queensland in addition to expanding it’s construction materials operations both domestically and globally including in composite fibre technologies, bulk haulage, aggregates & earth-friendly concrete. Over the course of the past three decades, Wagners has solidified its reputation with the firm being selected by blue-chip companies throughout Australia to deliver an enviable list of landmark projects - in 2012, Wagners undertook its own Nation-changing project with the construction of the circa $200m Wellcamp Airport, the first commercial airport to be built in Australia since the 1960’s.
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In less than two years, construction of Toowoomba’s Wellcamp Airport was complete, with seventy-five scheduled flights a week including direct cargo flights into Asia - the precinct now also includes Wellcamp Business Park, a 500 hectare estate that incorporates aviation maintenance & training, manufacturing, factory outlets, transport logistics, warehousing & distribution and commodity processing. Across both the listed entity, Wagners, and the private family business, Wagner Corporation, the Wagner Family now employ some 1,100 personnel with revenues exceeding $500m per annum. In this rare and exclusive profile, Denis discusses the family’s long-held ties to Toowoomba, the launch and evolution of both Wagners and Wagner Corporation, the fundamental lessons & skills required for success that he’s learnt across his career & what the next chapter in the remarkable Wagner family story will look like over the years ahead.
July / August 2024 – 9
National News
KNIGHT FRANK AND BAYLEYS COMPLETE ACQUISITION OF MCGRATH AND ANNOUNCE NEW BOARD OF DIRECTORS
McGrath Limited
Knight Frank, together with Bayleys, New Zealand’s largest full- service real estate company, have announced the completion of a joint acquisition of Australian residential real estate group, McGrath Limited, having finalised the acquisition of a controlling stake in the company by way of a scheme of arrangement.
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Following shareholder and regulatory approvals, the Scheme of Arrangement became legally effective on June 17, with the quotation of McGrath Shares on the ASX suspended on the following day. On June 27, the scheme of arrangement was implemented, with the settlement of the acquisition now effected. McGrath’s new board of directors will comprise McGrath founder and CEO John McGrath, Knight Frank Australia CEO James Patterson, Knight Frank Global Head of Residential Rupert Dawes, Bayleys Managing Director Mike Bayley and Bayleys Finance Director Ken MacRae. John McGrath will continue at McGrath as Chief Executive and Managing Director and will retain his 23.3% shareholding in the company. John McGrath commented on the merger, saying, “We are delighted to be joining forces with two of the greatest real estate brands in the world. Knight Frank is the most prestigious residential agency globally, providing us and our customers instant access to the best global network and the most sophisticated international buyers in the world.” “Our goal is to build Australia’s leading and finest real estate brand over the next few years and this new partnership and network puts us in a strong position to do just that.” Knight Frank and New Zealand-based Bayleys, both privately owned, have had a strategic relationship since 2018. The firms’ acquisition of McGrath has seen the residential real estate network return to private ownership after being listed on the ASX since 2015. For Knight Frank, the McGrath acquisition demonstrates the firm’s commitment to Australia, with the country further consolidating its position as Knight Frank’s largest presence outside the UK. In fact, the partnership elevates Australia and New Zealand to one of the largest regions within Knight Frank’s global network, with the number of offices in its Australian network now surpassing its UK business. Together, Knight Frank and McGrath have 171 offices across Australia. Meanwhile, Knight Frank, Bayleys and McGrath combined have a footprint of 276 offices across Australia, New Zealand and the Pacific Islands. Knight Frank is the largest privately owned real estate agency in the world, with more than 740 offices globally, in over 50 markets, with more than 25,000 people. This includes strategic relationships with Douglas Elliman, Berkadia and Cresa in the US, SMTB in Japan, as well as Bayleys in New Zealand. Knight Frank Australia Chief Executive Officer, James Patterson, said, “This acquisition represents another significant milestone in Knight Frank’s international expansion journey, allowing us to consolidate the business’ residential footprint globally, whilst leveraging our expertise and extensive reach to create enormous opportunity for McGrath and their customers. Bayleys started 50 years ago in the basement of the family home in an average suburb of Auckland. Today, the business spans 105 offices throughout New Zealand and the Pacific Islands, employing over 2,300 personnel, completing 14,000 transactions and settling in excess of $15 billion in property annually. The growth and success of Bayleys have been underpinned by its family values and ability to innovate and diversify, not only across geographies but across service lines – in New Zealand, Bayleys commands 48% of the commercial market nationally, 38% of the farm sales market and 16% of the national residential market, which increases to 34% market share in the $3 million-plus bracket. Bayleys are significant players in residential and commercial property management, valuations and mortgage broking. Bayleys Managing Director, Mike Bayley, said Bayleys was hugely excited about the opportunity to support the growth and diversity of McGrath: “Bayleys views the partnership with McGrath and Knight Frank as a collaboration of leading real estate companies servicing markets on both sides of the Tasman whilst providing unprecedented global reach.
July / August 2024 – 11
Productivity
PRODUCTIVITY AN ALBATROSS AROUND INDUSTRY’S NECK
Source: Australian Constructors Association
Author: Taryn Paris Urban Developer
“We’re down to an average of three days a week onsite, I’m tearing my hair out.”
2024 with the level remaining just above the 2015–2019 average. “With the end of the Covid productivity bubble, labour productivity seems to have reverted to the stagnation we’ve seen for most of the past decade,” Robson said. Workforce follows the public money Australian Constructors Association chief executive Jon Davies says that significant real wage rises and stagnant productivity is forcing up construction costs, which is directly affecting the viability of projects big and small. “The disparity of wages between government and private sector projects has left the private sector unable to compete,” Davies says. “We can’t afford to continue with business as usual; project planning needs to be improved and construction costs need to be lowered to ensure the country can afford the infrastructure it needs.” Construction industry wage and productivity growth Arcadis executive director of cost and commercial management Matthew Mackey says the current industrial relations landscape is also weighing down the industry. “Amid the post-pandemic recovery, Australia’s construction sector continues to grapple with political turbulence and industrial strife, escalating costs and stifling productivity, which is threatening the very viability of projects and businesses,” Mackey says. “Risk allocations including those associated with the changing industrial relations environment are significant impediments to business viability.” Cost of construction ‘only going up’ The cost of construction looks like it will continue its upward trajectory with the CFMEU Victoria inking a deal for a 21 per cent pay rise in the next four years, while its NSW counterpart has one-
That was the lament of one developer, who did not wish to be identified, while many others just like them acknowledge the odds are stacked against them at the moment. Planning risk, productivity challenges and construction costs are proving a major stumbling block for many at the coal face. And these challenges are exacerbated by the nation’s $230-billion infrastructure pipeline and its ambitious 1.2 million houses national accord, all to be delivered in the next five years. While Infrastructure Australia’s 2023 Infrastructure Market Capacity report notes governments had taken actions to smooth the five-year pipeline, some significant capacity constraints remain, namely, skills shortages, non-labour supply challenges and the nation’s stagnating productivity. Infrastructure Australia forecast a deficit of 131,000 full-time trades and labour workers this year, and says that deficit is growing at its fastest pace, and labour cost escalations are rampant. But there is precious little developers can do to address that albatross around the construction industry’s neck. The Productivity Commission’s latest productivity bulletin paints a fairly dire picture. It shows labour productivity stagnated in the March quarter across the board, with the construction industry going backwards. Productivity Commission data shows construction industry productivity fell 1.8 per cent last year—and notes businesses are working harder for less output. This presents a major challenge for a nation facing a housing crisis and an uphill battle to accommodate people, while housing starts are not keeping pace with population growth. Productivity Commission deputy chair Dr Alex Robson said there was no labour productivity growth during the 12 months to March,
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In 1985 the number of construction workers aged 15-24 years was 21 per cent. This is now down to 15 per cent, while the number of workers over the age of 55 has increased from 7 per cent to 17 per cent. “We have an older workforce and less people coming in … and that’s causing some issues,” Kerwood says. There will also be a “big transition” for skilled labour into renewable energy and net-zero projects into the medium term. “If it’s about approvals, then unfortunately there has to be an appetite for that,” he says. Innovation a priority Kerwood says there needs to be more political impetus for expediting projects and ensuring the teams in councils and planning panels are well resourced to meet demand. “Statistics show that productivity hasn’t shifted greatly in the past 20 years,” he says. But Kerwood says the adoption of new technologies, facade systems and prefabrication are ways in which the industry could circumvent the great labour challenge, “but you need leadership in this space”. Something he and Building 4.0 CRC chief executive Professor Mathew Aitchison agree on. Last month Aitchison told The Urban Developer he believed that government needed to create a “culture of innovation”. He is a big proponent of modern methods of construction and says Australia’s high-cost, low-tech building sector is an ideal target for the disruption that many experts say is heading towards the industry.
upped its southern brethren, hammering out a 24 per cent pay deal in the four-year period with compounding—the biggest in its history. One construction business recently told The Urban Developer there was a marked difference in productivity on EBA and non-EBA sites, while another said it could deliver projects 30 per cent cheaper and 30 per cent faster on non-EBA sites. According to Turner & Townsend’s International Construction Market Survey for 2024, Sydney remains Australia’s most expensive city in which to build at $4463 per sq m, while Brisbane has nabbed second place at a rate of $4145.62 per sq metre. Turner & Townsend head of real estate for Australia and New Zealand Julian Kerwood says it is all about the imbalance of labour supply and demand. And it’s no more pronounced than in the Sunshine State, which faces a tough grind in delivering serious housing targets and an Olympic Games in eight years. “We are the third most expensive region in the world for construction labour costs,” Kerwood says. “And it’s only going up. “Some markets are heating up, notably Queensland, Western Australia and South Australia, and then you’ve got other markets that are cooling a little bit. “Brisbane is the hottest market, but then there’s this inability to get labour and it puts pressure on the cost side of things,” he says. Construction labour supply imbalance Indeed recent data from the National Centre for Vocational Education Research indicates the pandemic apprenticeship boom is well and truly over. The 50 per cent wage subsidy for employers taking on apprentices during the pandemic ended in June, 2022, and building and construction apprenticeship commencements dropped 22 per cent in the year to December 2023. Close to 42,000 people began a building and construction-related apprenticeship in 2023, down from 54,035 in 2022. Master Builders Australia chief executive Denita Wawn has warned that prolonged construction labour shortages would lead to a $57-billion reduction of Australia’s gross domestic product in the next five years “Despite a sizeable workforce of over 1.35 million people, the industry is facing acute shortages with an annual exit rate of 8 per cent, of which we are currently only replacing half of that rate,” she said.
Pre-fabrication presents an opportunity to disrupt in the construction space. Kerwood says pre-fabrication businesses are often at the mercy of market cycles and he has seen many fold off the back of government decision- making. “The support to the pre-fabrication industry has been hot and cold. The government needs to support the industry with a steady pipeline of work,” he says. He says the private sector will not be able to scale up without investment commitments from government. And while the Victorian Government has announced it is toning down its big spending Big Build program to free up capacity, Kerwood says there are challenges with this reasoning. He says we risk losing highly skilled labour to international markets with big pipelines of infrastructure projects. “You’ve got to be careful not to turn it down too quickly, it’s a balancing act,” he says. “The reality is there’s a big infrastructure spend on the books and potentially it only gets more difficult from here.”
WorldSkills Australia competitor Bailey Loenneker, a fourth-year refrigeration apprentice, will compete at the world titles in France in September. Image: WorldSkills Australia While much of the narrative around solving labour shortages has focused on ensuring the right mix of skilled migrant workers, Kerwood says it’s a fraught conversation. “The skilled labour needs to be in the areas that you need it, not just the right skills but in the right regions,” he says. But the ageing population is also biting in the construction industry.
July / August 2024 – 13
MARKET MOVES VIC DESCRIPTION
VENDOR/ PURCHASER
AGENCY
SALE $
Burgess Rawson has facilitated the transactions of nine assets at Oreana’s development, ‘The Square Berwick'. The prime neighbourhood activity centre is appropriately positioned in the thriving south-east growth corridor.
Burgess Rawson’s Romanor Falconer, David Napoleone, Justin Kramersh and Shaun Venables Jones Real Estate's Paul Jones, Luke Peric and Sam Guest Burgess Rawson’s Beau Coulter, Justin Kramersh, and Sam Mercuri, in conjunction with Dixon Commercial’s Andrew Dixon and Oscar Dixon
121 Grices Road, Clyde North
V: Various P: Various
$14.1 million
163 Toorak Road, South Yarra
Melbourne cafe mogul and Founder of Only Hospitality Group, Julien Moussi, has swooped on an iconic South Yarra property which adjoins the train station.
P: Julien Moussi
$3.8 million
A New South Wales-based private investor has purchased a prime commercial asset in Wodonga. The two-level building spans 3,811 square metres and is situated on a 2,811 square metre corner site with a 107-metre combined street frontage.
38-40 High Street, Wodonga
$6.4 million
P: NSW-Based Private Investor
13 Metropolitan Avenue, Nunawading
A prime industrial property at 13 Metropolitan Avenue was sold to a local occupier after a sales campaign managed by CVA's Jarrod Moran and Stan Dawidowski.
CVA's Jarrod Moran and Stan Dawidowski
P: Local Occupier
$2.61 million
Icon Developments, wholly owned by Japanese property and construction giant Kajima, has exchanged contracts to acquire a strategic logistics site, which will be developed into a $90m+ multi-unit logistics estate with a proposed NLA of 28,000 sqm. AW Industrial, represented by Al Armstrong and Max Weinzierl, has successfully concluded the sale of a significant 12.414-hectare block of Industrial 2 zone land on behalf of a private vendor. After 66 years of ownership, vendors have successfully sold two adjacent Brunswick warehouse showrooms. The properties were ultimately sold to two different purchasers: 270-272 Victoria Street was acquired by an investor for $1,700,000 reflecting a yield of 3.4%. At the same time, 274 Victoria Street was purchased by an owner-occupier for $1,260,000. A significant 3,004 sqm land parcel in Mansfield has been purchased by an undisclosed private buyer. Located at the foothills of Victoria’s Alps, the landholding is positioned on a high-exposure corner with a 71m frontage to Malcolm Street and a 36m frontage to Chenery Street.
1 Broadfield Road, Broadmeadows
P: Icon Developments & Elanor Investors Group
Direct
Undisclosed
130 Heales Road, Lara
V: Private Vendor P: Developer
AW Industrial's Al Armstrong and Max Weinzierl
$26.31 million
Combined $2.96 million
270-272 & 274 Victoria Street, Brunswick
Gross Waddell ICR's Raff De Luise and Julian Materia
P: Two Separate Investors
25-27 Malcolm Street, Mansfield
$1.475 million
V: Private Purchaser
Jones Real Estate's Tim Spargo
GURNER and Qualitas have acquired full ownership of the Jam Factory from fund manager Newmark Capital Limited. GURNER and Qualitas initially purchased a 35 per cent ownership of the site in 2021 for $75 million and bought out Newmarks remaining 65 per cent. The partnership plans to develop the site into a $2.75 billion mixed-use precinct. Direct
Circa $125 million
500 Chapel Street, South Yarra
V: Newmark Capital Limited P: GURNER & Qualitas
QLD
VENDOR/ PURCHASER
DESCRIPTION
AGENCY
SALE $
A mixed-use development site in Brisbane’s southwest with approval for residential small lot houses and a childcare centre has sold for more than $7 million following strong buyer demand.
V: YM Private Pty Ltd P: Brisbane-Based Development Group
70 Fleming Road, Chapel Hill
$7.2 million
Knight Frank's Christian Sandstrom
5 Bahrs Scrub Road, Bahrs Scrub
Market-leading fund manager Clarence Property has sold Harmony Early Learning, a locally based childcare business in SEQ, with the final sale price reflecting a 5.8% yield.
$6.51 million
V: Clarence Property
CBRE’s Harrison Coburn
National Business, Cohen Handler Buyers Agents, have purchased one of Brisbane’s most recognisable buildings at 68 Commercial Road. Improved by four storeys of commercial, retail and residential spaces, the 1,862 sqm building sits on a 519 sqm Mixed-Use zoned site.
68 Commercial Road, Newstead
P: Cohen Handler Buyers Agents
Undisclosed
JLL's Tim Jones and Harry Borger
79 Boundary Street, West End
The 100 year old Soda Factory in Brisbane’s West End, which came anchored by a Coles Supermarket alongside 21 additional retailers.
V: Region Group P: HNW Private Investor
CBRE’s Joe Tynan and Michael Hedge
$42 million
V: Woolworths P: Melbourne-Based Private Investor
96 Bellmere Road, Bellmere
Woolworths has sold the recently opened Warbu-Bellmere Shopping Centre, with the final sale price setting a benchmark for neighbourhood centre transactions in 2024. Global asset manager Brookfield has offloaded an A-grade office tower at 240 Queens Street. The office tower was purchased by Quintessential, marking their second major purchase in 12 months, following the $293.1 million acquisition of 1 Margaret Street in Sydney last year. An investor has made their first foray into shopping centre investment with the purchase of Nambour Central on the Sunshine Coast.
CBRE’s Michael Hedger and Joe Tynan JLL's Paul Noonan, Seb Turnbull, Kate Low and Jack Sullivan in conjunction with Knight Frank's Justin Bond and Ben Schubert Colliers' Harry Dever and Nick Dowling
$37.75 million
240 Queens Street, Brisbane
V: Brookfield P: Quintessential
$250 million
18 Ann Street, Nambour
V: PPI Funds Management P: Private Investor
$9.2 million
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THE PROPERTY DEVELOPMENT REVIEW
NSW
VENDOR/ PURCHASER
DESCRIPTION
AGENCY
SALE $
German billionaire and co-owner of one of the world's largest agricultural machinery companies, Cathrina Claas-Muehlhaeuser, has acquired a 2287-hectare agricultural property in the Liverpool Plains region.
V: Mooney Pastoral Co. P: Cathrina Claas- Muehlhaeuser
Tuwinga', Traills Road, Bundella
Elders' Chris Malone and Ben Green $17.3 million
Knight Frank's Demi Carigliano, Anthony Pirrottina and Harrison Burcher
27 Railway Road, Meadowbank
A site known as ‘The Wedge’, situated immediately adjacent to Meadowbank Train Station in Sydney’s west with DA and CC approval for a three-storey mixed-use development sold.
V: Sasco Pty Ltd P: Salute Group
$2.2 million
Another unit block in Sydney, known as 'The Pines', has sold in a deal negotiated by Knight Frank, taking the agency’s total recent sales for the property type in the city to nearly $19 million.
88 Francis Street, B ondi Beah
V: The Hersch Family P: International Investor
Knight Frank's James Masselos, Adam Droubi and Demi Carigliano
$19 million
V: Healthco HealthCare & Wellness REIT P: Local Private Investor
173 Majors Bay Road, Concord
A trophy Sydney-based childcare facility sold after 7 days on the market, which came leased to Endeavour Early Education.
Stonebridge's Kevin Tong, Michael Collins and Tom Moreland Burgess Rawson’s Kieran Bourke and John Ingui in conjunction with Knight Frank’s Ben Churven and Luke Field Knight Frank’s James Masselos, Anthony Pirrottina, Demi Carigliano and Harrison Burcher, with buyers’ agency Costi Cohen representing the buyer
$13.2 million
147 Crown Street, Wollongong
A 1,025 sqm former NAB in Wollongong’s prized Crown Street Mall that sits within an E2 Commercial Centre Zone transacted.
$4.592 million
P: Local Investor
Three neighbouring commercial freehold buildings commanding a prime corner position on Sydney’s iconic Victoria Road at Drummoyne have been sold in one line. The properties in Sydney’s inner west occupy 961 sqm with two street frontages – Victoria Road and Day Street – and have future development potential with views over the Parramatta River and Sydney Harbour.
V: Yazzy Ptd Ltd P: Offshore Private HNW Investor
66 – 72 Victoria Road, Drummoyne
$7.5 million
387 Lake Road, Glendale
IP Generation has purchased the 19-hectare Stockland Glendale shopping centre, marketing the largest NSW sub-regional transaction in over 18 years.
V: Stockland P: IP Generation
$315 million
Colliers' Lachlan MacGillivray.
A worn-down strip retail shopfront was offloaded as part of a deceased estate, with the final sale price at more than double the reserve of $2.5 million, and a 2000% uplift from the original purchase price in 1995.
245 Rowe Street, Eastwood
V: Deceased Estate P: Local Occupier
Colliers' Harry Bui and Andrew Bui
V: Belcorp P: Offshore Private HNW Investor
Knight Frank's Demi Carigliano, Anthony Pirrottina and Adam Droubi
1 Sparkes Lane, Camperdown
A near-new block of 10 apartments on a 400 sqm block at has sold and was purchased by a private offshore high-net-worth purchaser from Belcorp, with a short settlement in place.
$7.4 million
A four-level block of 16 strata-titled apartments on a 1,277 sqm site with on-grade parking has sold in one line. The property, which is less than 5 years old, holds a current passing income of $457,000, but a potential rental income of more than $484,000.
5-7 Windsor Road, Merrylands
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July / August 2024 – 15
Auction Hub
Our top picks of the latest commercial auctions from around the country
80, 86 & 90 Mt Alexander Road, Travancore, VIC, 3032
238a-240 Rundle Street, Adelaide, SA, 5000
1 Nerang Street , Nerang, QLD, 4211
67 Main Street, Mornington, VIC, 3931
333 Main Western Road, Tamborine Mountain, QLD, 4272
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THE PROPERTY DEVELOPMENT REVIEW
Upcoming Commercial Auctions
Address
Property Type
Auction Time
Auction Location
Agency
Est Income.
121 Payneham Road, St Peters, SA, 5069
Property Vacant 24 Jul 2024 10:30AM On-site
Offices, Child/ Healthcare, Retail
LJ Hooker Commercial Adelaide Coastal Commercial
1 Nerang Street, Nerang, QLD, 4211
Retail, Other, Child/Healthcare
$225,000 p/a 24 Jul 2024 11:00AM In-room - Level 1/16 Queensland Avenue, Broadbeach
80, 86 & 90 Mt Alexander Rd, Travancore, VIC, 3032
Fitzroys
Retail
Contact Agent
24 Jul 2024 01:00PM On-site
24 Strathmore Road, Caves Beach, NSW, 2281
Commercial Collective
Industrial
$116,939 p/a
31 Jul 2024 11:00AM In-room + Online - 10 Newcomen Street, Newcastle NSW 2300
67 Main Street, Mornington, VIC, 3931
Gross Waddell ICR Retail
$111,458 p/a
2 Aug 2024 01:00PM On-site
16 Tollbar Avenue, North Rothbury, NSW, 2335
Burgess Rawson Retail, Other, Land
$346,790 p/a 6 Aug 2024 10:30AM In-room - Yallamundi Rooms, Sydney Opera House
238a-240 Rundle Street, Adelaide, SA, 5000
McGees
Retail, Offices
$130,883 p/a 8 Aug 2024 11:00AM On-site
1-2 Sunderland Ct, Seaford, VIC, 3198
Retail, Land, Other
$119,397 p/a
8 Aug 2024 01:00PM Contact Agent
Ray White Commercial Glen Waverley
333 Main Western Road, Tamborine Mountain, QLD, 4272
RWC - Gold Coast Hotel/Leisure Property Vacant 15 Aug 2024 11:00AM In-room - Gold Coast Turf Club, Bundall
401 Clayton Road, Clayton, VIC, 3168
Gross Waddell ICR Retail
$83,200 p/a
16 Aug 2024 12:00PM On-site
Ready to inspect, invest, or just take a look around? Visit commercialready.com.au
July / August 2024 – 17
Share and track property documents.
InstaDocs data room streamlines the due diligence process by providing secure and easy access to documentation for buyers and tracking capabilities for agents.
Visit instadocs.com.au
18 – July / August 2024
THE PROPERTY DEVELOPMENT REVIEW
Here’s what leading agents are saying
“I am thrilled with how InstaDocs has transformed our workflow and has now become an integral part of the smooth delivery of our services.” “From the moment we started using InstaDocs, we immediately noticed a significant boost in efficiency. The platform’s intuitive interface and powerful features have revolutionized the way we handle our documentation delivery. No longer do we wrestle with cumbersome manual paperwork or confusing file management systems. InstaDocs has simplified everything. It is now a standard inclusion in all our appointments. InstaDocs has not only positively impacted our workflow but has also elevated the overall productivity and added a layer of capturing contact details & client engagement with the disclosure documents. If you’re searching for a way to simplify your documentation processes and track engagement then, InstaDocs is the answer you’ve been looking for.”
“I’ve been using InstaDocs for my campaigns for a few months now and I’ve been really impressed with it.” “The platform is super easy to use and performs seamlessly. The user engagement tracking has made it much easier for us to identify the buyers who are genuinely interested in the asset - This enables me to know who to qualify during a campaign. Since InstaDocs comes with the DevelopmentReady package, it adds a lot of value to the listing package, and I’ll certainly continue using these datarooms in the future.”
Nick Estephen Director, Joint Head of Sydney South West Colliers
Robert Dunne Director, Commercial Sales, Brisbane Savills
“To say that I am a fan of this dataroom is an understatement. It has made my life as a commercial real estate agent so much easier. ” “Past practice of selling sizable or complicated real estate has relied on multiple due diligence files being set up or the use of dropbox or commercial datarooms run by others. All these practices had their drawbacks and difficulties. The ability to control our own dataroom and monitor the usage has improved efficiency, client reporting and most importantly response times with buyers. The team behind InstaDocs are quick to respond to any queries we may have and are certainly receptive to new ideas. I look forward to working with InstaDocs for a long time.”
“InstaDocs provides ease, qualification, and control. The platform provides a fast and user-friendly ability to store and communicate large amount of documents.” “We are able to completely control who has access to the information and verify applicants prior to permitting access to the data room. I would recommend this platform as it is widely accepted within our industry which makes it easy for everyone to use. Improved functions such as drag and drop have had a major impact on reducing the time uploading information and together with 1-click functions and individual downloadable ability provides further control over the information.”
Brett Wilkins Director of Capital Markets, WA RWC
Richard McCouaig Associate Director Sales & Leasing Commercial, Gold Coast Cushman & Wakefield
July / August 2024 – 19
20 – July / August 2024
THE PROPERTY DEVELOPMENT REVIEW
New South Wales Development
MIRVAC FILES NEXT STAGE OF 900-HOME ESTATE
The estate is less than 10km from Mirvac’s Crest project at Gledswood Hills.
Author: Clare Burnett Urban Developer
Mirvac has filed plans for a residential subdivision in Sydney’s south-west as part of its much larger estate masterplan.
“high-quality urban design outcome through its delivery of varied lot typologies which will deliver future residential dwellings”. It will contain 13 lots smaller than 300sq m, but the majority are between 350sq m and 500sq m, with a handful over 1000 square metres. According to the development applications, the surrounding area is characterised by emerging low and medium-density residential development within Oran Park, which is targeting 7540 homes, and Turner Road precincts. The Oran Park town centre is 2km north of the site, which itself is attracting developer interest. Mirvac acquired the overall 80ha site at Cobbitty in 2021 when it was offloaded by fund manager Roberts Jones, which had bought the land in turn from McIntosh Bros for $232 million in 2018.
The 7.9ha site at 13 Pottery Street and 589 and 591 Cobbitty Road at Cobbitty, in the semi-rural town in the Macarthur region, about 70km from Sydney’s CBD. The parcel is south-west of the Oran Park Precinct, according to documents filed with the Camden Council by the APP Group. The site is part of the Cobbitty by Mirvac residential estate, which will eventually deliver 900 homes, and playing fields, recreation and community facilities. In this application, Mirvac is seeking a 93-lot Torrens title subdivision and associated earthworks, including remediation of contaminated land. The developer wants to build nine internal roads, install drainage infrastructure and utilities, and subdivide the lot into 89 residential lots, three residue lots and another for a future park. Future yield for the subdivision is expected to be 107 homes, according to the application, and the project will deliver “high-quality housing” in the growth area with a
July / August 2024 – 21
NSW MARKET OVERVIEW
NEW SOUTH WALES
Jordan McConnell - National Director, Joint Head of Sydney West & National Head of Premium Investments | Investment Services
Thank-you for the opportunity to share your insights as part of The Property Development Review publication - what are the key trends occurring across the Premium Investments and specialized commercial asset classes so far in 2024. With continued market forces flowing on from 2023, driven by an increased interest rate environment, inflationary pressures, and rising construction costs, 2024 has witnessed purchasers broaden their search for move viable projects with reduced risk exposure and higher returns. One notable is the focus on regional and semi-regional locations, where land acquisition costs are significantly lower than traditional markets. In these areas stock availability and competition are not as tight, allowing for more efficient and cost-effective development approaches. Underpinned by population growth, decentralisation and new land releases have paved the way for specialised assets such as childcare, fuel and quick service retail (QSR), all of which are experiencing considerable demand from the market. Reflecting on the deals that you’ve transacted in the first half of the year, how are you observing market sentiment amongst commercial property investors & do you anticipate any material shift in sentiment or activity over the course of the next six months. Q1 2024 commenced with a hive of activity and a general confidence towards
the market; this sentiment plateaued heading into Q2 with construction costs and inflation not stabilising as many had anticipated. These factors were further influenced by suggestions of additional interest rate rises expected later in 2024. We expect that the second half of 2024 will see some of the more conservative purchasers adopting a more cautious “wait and see” approach to purchasing. With this said, we are still observing many vendors planning to head to market over the next six months so we do expect transactions to continue, especially given the substantial number of private purchasers with cash reserves waiting to make acquisitions. This activity is expected to be seen across the majority of the specialised commercial asset classes as well as more traditional development/ investment sectors. In terms of capital, what’s driving buyer interest into premium investments and specialised commercial asset classes over & above more traditional real estate sectors. Continuing the theme of shifting focus to regional locations, buyers are finding that by adopting a more decentralised approach to developing and investing in specialised assets, they are able to generate comparative or even higher IRR on these projects. For example, a childcare developer can acquire a larger parcel of land than they would in a metro location, alleviating the need to incorporate a
JORDAN MCCONNELL
22 – July / August 2024
THE PROPERTY DEVELOPMENT REVIEW
basement into the design of the project and thereby reducing overall development costs for the project. Additionally, in well trafficked regional locations, a developer looking to develop a service station or QSR can acquire a site at a lower cost but still achieve commensurate rental returns from an operator. Notable examples of this can be seen in the recent Ampol Portfolio sale, transacted by Colliers. This national portfolio includes repositioning opportunities across key regional and sub-regional centers. Having assisted major companies like Ampol, these strategic opportunities are always extremely well received by the market. This recent portfolio and similar offerings in recent years have garnered high levels of enquiry and demand from private and professional buyers given the diverse and unique nature of the landholdings and their locations throughout prominent regions of Australia. Based on your conversations with clients, what are the benefits of investing in specialised commercial assets & to what extent has the more defensive income profile & stable nature (portfolio hedging) of these assets been a drawcard, particularly for new investors. In times of uncertainty, we traditionally see investors shift their focus towards more secure defensive assets that offer tenure security, covenant stability and projectable long-term returns (often which may be used as a hedge against inflation with CPI rental increase mechanisms). This sees specialised assets such as medical, childcare and other social infrastructure options highly desirable for private and institutional purchasers. At Colliers, we take a full integrated methodology to how we approach these specialised assets, leveraging our experience in selling assets at all stages of the lifecycle - whether is during conception/ raw-development, DA approved development or completed/investment sale -we add value and assist our clients throughout their journey. We’ve worked with clients seeking early advice on an opportunity prior to their aquisition, guided them through the planning phase post-acquisition, utilising our relationships with tenants to pre-commit an operator for the site, and then facilitate the divestment of the development once approved or packaged as an investment upon completion.
Both Institutional property groups and private investors have generated a significant amount of activity within the specialised commercial real estate sector to-date, how have you seen the two approaching the market in 2024? In recent years, Institutions have typically been the most active across specialised commercial assets, particularly at the larger end of the scale and when dealing with portfolios. However in 2024, we have seen a number of key Institutions taking a more considered approach to the sector and even considering divest of assets that are no longer align with their core strategies. This shift has presented opportunities for the private sector to take a more active approach to acquisitions in the space. Despite this, buyer appetite for high quality opportunities remains high; in a recent childcare portfolio \, Institutional purchasers looking at the portfolio in-one-line faced considerable competition from private buyers on an individual basis further demonstrating the demand at both ends of the market for these sorts of opportunities. Our portfolio strategy, allowing for assets to be acquired in-one- line, in part or individually ensures all buyers have the opportunity to participate in the process whilst creating a competitive environment to ensure value is unlocked for our vendors. Thanks for sharing your perspectives - in closing, are there any other major investment trends or market themes that you’re analysing within an alternative real estate context that are pertinent for commercial property investors. In addition to those assets which are ultimately becoming familiar to the market, newer specialisations - such as day hospitals, co-living, data centers and self-storage - which were typically controlled by the institutional market due to their scale, are gradually becoming better understood and sought after from the private market. Our team of experts have experience and exposure to all facets of the development markets from commercial, industrial and healthcare, with the ability to advise and unlock value for our vendors and their specialised projects.
July / August 2024 – 23
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