Issue 33 | The Property Development Review

Welcome to Issue 33 of The Property Development Review, exclusively for agents, developers and investors.

ISSUE NUMBER 33

EXCLUSIVELY FOR PROPERTY DEVELOPERS, INVESTORS & AGENTS

LISTINGS The best and latest commercial and development opportunities in Australia.

INTERVIEWS We speak with Australia’s best business leaders.

ANALYSIS Unique perspectives from the deal-makers on the ground.

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THE PROPERTY DEVELOPMENT REVIEW

“STRIVING TO BE THE BEST IS A MISTAKE. IT CREATES AN ILLUSION OF AN ENDPOINT - AND A DELUSION THAT YOU CAN ONLY SUCCEED BY BEATING OTHERS. STRIVING TO BE BETTER SHIFTS THE FOCUS FROM VICTORY TO MASTERY.”

FROM THE CEO

ADAM GRANT

There is much competition in the property industry to be ‘the best’; portray the best image, build the best building and generate the best results. However, whilst being caught up in being ‘the best’ we can often lose sight of what being ‘the best’ truly is. Are you delivering what your clients want on point? Are you focusing on improving your strengths and building on them with ‘the best’ people in your team for customer-centric results? Because results driven from a customer-centric place will most always outsmart the results driven from an ego- centric one. In the long term anyway. Let’s take the mobile phone market as an example. Launching it’s first phone in 1999, BlackBerry were innovators of their time. They were ‘the best’; the first company to introduce mobile email services, unparalleled security features and the QWERTY keypad resembling the desktop. It was the ‘phone to have’ for most corporates which led BlackBerry to peak in sales in 2013 with roughly 85 million users across the globe. Where did they go wrong? Consumer preferences changed and they didn’t. They were ‘the best’, they knew it and took this as their endpoint, instead of trying to master their industry and deliver what the market wanted which were the touchscreens that their competitors were producing. As a result, BlackBerry’s market share dropped to almost a quarter, together with roughly 4500 staff all in the short space of 3 years. BlackBerry eventually attempted to compete and claim back their market however it appeared to be a hasty move as their products simply did not match up in terms of usability and quality anymore. After all, you can’t jump to the top of a mountain, you need to climb, which takes time and skill. And it seems BlackBerry may have been striving for victory, not mastery which is just a momentary short term plan. On the converse, companies such as Apple and Samsung, driven by customer-centricity, market demand and personalisation, succeeded long term

to be ‘the best’ simply by navigating the market, building on their own strengths and what I would assume the best team to deliver. Since last month’s edition we too have continued to expand our team with more than 53 people nationally. We are also continuing to deliver cutting edge campaigns not to mention the large portion of market listings advertised across our platforms CommercialReady and DevelopmentReady, truly striving for mastery with every product line we produce. Rob Langton speaks with Australian businessman and founder of Ahoy, Ian Malouf in his first major in-depth interview, in addition to well- renowned businessman Patrick Allaway , both of whom have captured the attention and interest of many within the industry. Finally, as always, we have kept you up to date with the newest development sites and commercial investment listings, as well as our ‘monthly market moves’ around the Country. Enjoy the read.

ON THE COVER Melbourne Pat Whelen via Unsplash

EDITOR IN CHIEF Frank Materia frank@ readymedia.com.au

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June / July 2022 – 3

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THE PROPERTY DEVELOPMENT REVIEW

CONTENTS

11 THE INTERVIEW Ian Malouf AUSTRALIAN BUSINESSMAN

10 ARTICLE Want to own your own island

12 ARTICLE Sydney’s most exclusive habour waterfront warehouse 14 ARTICLE How Build to Rent is shaking up the residential development landscape

13 THE INTERVIEW Patrick Allaway CHAIRMAN - BANK OF QUEENSLAND

74 WA MARKET OVERVIEW 46 QLD MARKET OVERVIEW 66 SA MARKET REVIEW 16 NSW MARKET OVERVIEW 38 VIC LISTINGS

18 NSW LISTINGS

68 SA LISTINGS 48 QLD LISTINGS 76 WA LISTINGS

June / July 2022 – 5

MARKET MOVES NSW DESCRIPTION

VENDOR/ PURCHASER

AGENCY

SALE $

Alexandria Homemaker Centre

The Homemaker Centre is a 22,417 sqm, two-level hub whose tenants include The Good Guys, Spotlight, and Forty Winks. This latest acquisition for Goodman reportedly netted a 4% yield. The property offers multiple bars, a gaming room with nine machines, a bistro, commercial kitchen, and a large beer garden. The landholding also possesses a freestanding motel with 13 accommodation rooms. The 211 sqm, two-storey corner pub holds a midnight licence and gaming room. The property was sold by a consortium of private investors, which notably includes former NRL player Bryan Fletcher. The purchase is Momento’s second inner-city hotel acquisition. The gaol in the Southern Highlands that was formerly known as the Berrima Correctional Centre has sold to the Blue Sox Group, after a “rigorous” Expressions of Interest process. The shopping centre contains 9,652 sqm of lettable area, with current tenants providing a strong food, services and medical focus, and sits in close proximity to the new Castle Hill Metro Station, as well as QIC's Castle Towers. The Seventh-Day Adventist Church's property investment arm has purchased a 6.5-hectare industrial asset in Berkeley Vale, a village located approximately 100km from Sydney's CBD. The acquisition was made with the intention of the property being a warehouse and distribution hub for the church's Sanitarium health food business. The hotel operates with 12 accommodation rooms, 20 gaming machines and a liquor licence that extends until 3am, making it a valuable asset in the growing Bathurst market. A massive 28,090 sqm industrial complex at 54-74 Dunheved Circuit, St Marys has sold for an initial yield of 3.79%, as an extension of a flurry of activity within the Western Sydney investment market. Zoned IN1 Industrial with additional undeveloped land, the property holds long-term upside potential. Located at 54 McLaren Street, the 167-room, 4 star hotel occupies a 2,549 sqm freehold in one of Australia’s largest corporate catchments, and sits in close proximity to the upcoming Victoria Cross Metro Station, which will better connect the hotel directly to the Sydney CBD. The pub is a period-style facility with a lively front bar, large bistro and commercial kitchen. The new owners intend to conduct minor upgrades before leasing out the property. The 7,037 sqm shopping centre is anchored by a Woolworths outlet, alongside a variety of specialist stores and two kiosks. The site comes with flexible B2 Local Centre zoning, and attracted over 180 purchaser enquiries during an on-market Expressions of Interest campaign. The property at 103 River Street is fit with a bistro, a large beer garden, 20 accommodation rooms and TAB and gaming facilities. Set over a 1,787 sqm site, the Australian Hotel is located a short distance from the beach in Ballina. The cafe located at the base of Mirvac's Latitude harbourside complex in the lower North Shore suburb of Milsons Point has sold for the equivalent of $35,517 per sqm. The 1,087 sqm property contains multiple freeholds, including the famous Noah's Backpackers hostel.

Private

V: Arkadia P: The Goodman Group

$200 million

Red Steer Hotel and Motel

P: Feros Group

Circa $10 million

HTL Property's Xavier Plunkett

The Royal Albert Hotel

V: Consortium of private investors P: Momento Hospitality

Circa $10 million

HTL Property’s Sam Handy and Blake Edwards

Berrima Correction Centre

V: Property and Development NSW P: Blue Sox Group

Colliers' Nick Estephen, Thomas Mosca and Frank Oliveri

$7 million

Castle Mall, Castle Hill

$105 million

V: QIC P: The Hills Shire

Stonebridge's Philip Gartland and Lincoln Blackledge, with McVay Real Estate's Dan McVay

3 Sanitarium Drive, Berkeley Vale

V: ESR-LOGOS REIT P: Australasian Conference Association V: Liam O'Hara P: Syndicate led by Ashton Waugh

Private

$55 million

Kelso Hotel

HTL Property Director, Blake Edwards Circa $16 million

54-74 Dunheved Circuit

Colliers' Carl Pearce and Matthew Flynn $24.5 million

Rydges North Sydney

V: Event Hospitality & Entertainment P: High Street Holdings

CBRE Hotels’ Michael Simpson and Wayne Bunz

$75 million

Jack Duggan’s Irish Pub

V: Glyn & Helen Daunt with Peter & Shannon Barrett P: Regional-based hotel group

MQ & Associates' Leonard Bongiovanni

Circa $6 million

Cameron Park Plaza

$60.25 million

V: Fabcot P: Centuria

Colliers' James Wilson and Alex James-Elliott

The Australian Hotel, Ballina

JLL's Ben McDonald and John Musca

$9.5 million

P: Black Fox Property

$1.03 million

Cafe at 55 Lavender Street, Milsons Point

V: Oriental Cool Pty Ltd

Colliers' Tom Appleby and Beau Mayer

$68 million

2-12 Campbell Parade, Bondi Beach

P: Public Hospitality Group

Colliers' Miron Solomons, Matt Pontey, and Henry Burke, in conjunction with Oxford Agency's Daniel Marano and Ralph Garofano Colliers' Alex James-Elliott and James Wilson

$30 million

Lachlan's Square Village, Macquarie Park

The 5,080 sqm strata complex at 17 Halifax Street features the trade area's only full line supermarket; a Coles outlet that is leased until 2035.

V: The Greenland Property Group P: Revelop

6 –April / May 2022

VIC

VENDOR/ PURCHASER

DESCRIPTION

AGENCY

SALE $

WestWaters Hotel and Entertainment Complex

In Victoria’s highest ever recorded pub sale, the WestWaters Hotel and Entertainment Complex sold offmarket. Occupying a 7,000 sqm site, the complex contains a Mecure Hotel with 98 guest rooms, a bistro and sports bar that feature sports betting and gaming facilities, an indoor heated swimming pool, and extensive on-site parking. NZX-listed retirement village operator Ryman Healthcare have purchased 14-22 Gaffney Street in Coburg North, and have announced plans to develop a $350 million mixed use village, that includes an aged care facility, alongside commercial and retail developments on the southernmost edge of the property. Amber Property Group has purchased five low-rise showrooms at 422-430 Johnston Street, which covers a total of 2,428 sqm. The Commercial 1 zoned block is expected to be entirely replaced once the final unit on the property becomes vacant in 2025. Plans indicate that Amber has considered developing a 10-storey tower on the site. A triple storey art deco asset, located at 267 Little Collins St, has been sold. Sitting on a 203 sqm Capital City 1 zoned block, the site possesses 380 sqm of lettable area, with an annual return of $110,000. Current tenants include music bar Fika Island, who hold a five year lease, and a month-to-month retailer on the ground floor. Real estate developer, Orchard Piper, has agreed to acquire the Mercedes Toorak dealership in Toorak. Orchard Piper is expected to replace the 3,589 sqm holding with a major mixed-use project. A portfolio of Bay Street retail properties in Melbourne's south-east suburb of Brighton have sold for $6.83 million. All three properties were previously owned by an Estate associated with the late Tom Chapman. These properties included 311 Bay Street, and 407 and 409 Bay Street. 311 and 407 Bay Street are both currently occupied with tenants, whilst the versatile 409 Bay Street property is vacant. The asset contains just over 45-hectares of land at 955 Ballan Road, and was one of the largest parcels still available in Manor Lakes, with all of the surrounding farms possessing less than 12-hectares. What was formerly known as the Adina Hotel has been purchased by a Tasmanian- based investor who intends to continue operation of the venue as a hotel. The 2.44-hectare property at 20 Heaths Court was sold for a 4.25% net passing yield, and comes with a tenancy agreement that calls for 3% annual rent rises. Encompassing eight titles, Belmore Plaza is comprised of a two-storey, 867 sqm building on a 1,205 sqm land parcel with flexible Commercial 1 zoning. The 1,786 sqm Commercial 2 zoned plot is currently occupied by two warehouses that were formerly home to a service centre and a Burson Auto Parts outlet. The property is a 9.32-hectare industrial site. The purchaser intends to replace the largely vacant space with a $130 million business park comprised of approximately 55,000 sqm across three buildings. The 10,700 sqm building has had multiple residential redevelopment proposals fail to take shape over the years, but the new owner is optimistic about rejuvenating the site and filling its office vacancies. With direct access to the M8 Western Freeway, 23.4-hectares of land, and an 800-metre street frontage, the property is well positioned for a planned $215 million logistics development. The redundant 12-storey Victorian University campus at 225 King Street has been sold by Victoria University to SLB Development, as VU move into their new 29-storey vertical campus at 370 Little Lonsdale Street. The property is expected to be developed into a homemaker centre that will include a Harvey Norman outlet. This centre will be located directly alongside the Gateway Plaza in Leopold, which is anchored by Bunnings, Coles, McDonalds and Kmart outlets. Currently a farm, the property has recently been identified by the local council for a rezone.

V: Hawthorn Football Club P: Oscars Hotel

$85 million

JLL’s Vice President, Will Connolly and Managing Director, John Musca

14-22 Gaffney Street, Coburg North

P: Ryman Healthcare

Melbourne Acqusitions’ James Latos and Dominic Gibson represented the vendors; Colliers agents Hamish Burgess and Joe Kairouz represented Ryman Healthcare. JLL Property’s Nick Peden, Josh Rutman and Jesse Radisich

$48.2 million

422-430 Johnston Street, Abbotsford

V: Individual owners of showrooms P: Amber Property Group

$22.023 million

267 Little Collins St, Melbourne

V: Peter Vodicka P: Unidentified private investor

$8.45 million

Fitzroys' Chris Kombi.

Mercedes Toorak

V: Family of John Worrell & Karl Hagen P: Orchard Piper

CBRE's Nathan Mufale, David Minty, Scott Hawthorne and JJ Heng, in conjunction with Allard Shelton's Joseph Walton, Christian Hatzis, Michael Ryan and Patrick Barnes. 311 Bay Street: Fitzroys' Mark Talbot and Chris James; 407 & 409 Bay Street: Fitzroys' Mark Talbot and Tom Fisher. Core Projects Manager of Land, Chris Jabs, and Director of Land, Trent Malcomson. Paul Jones of Jones Real Estate, in conjunction with Anthony Kirwan of Colliers International.

$67 million

Bay Street portfolio

V: Estate of Tom Chapman

$6.83 million

955 Ballan Road, Manor Lakes

V: Verrocchi Family P: Central Equity

$62.7 million

Adina West Melbourne

V: Trenerry Property, Victor Smorgon Group, and the Kanat Family P: Tasmanian-based investor

Circa $35 million

20 Heaths Court, Mill Park

V: Private investors

$20 million

Jones Real Estate's Paul Jones.

399 Belmore Road, Balwyn

Fitzroys' Shawn Luo, Chris James and David Bourke. Sutherland Farrelly’s Paul Sutherland and Paul Farrelly.

$5.6 million

P: Local investor

$19 million

122-128 Dover Street, Cremorne

P: Salta Property Group

$41 million

131-149 Somerton Road, Campbellfield

V: Milemaker Petroleum / P: Cabot Properties

CBRE's Daniel Eramo and Joe Brzezek.

$130 million

85 Spring Street, Melbourne

V: Anton Real Estate Partners P: Ross Pelligra

CBRE's Kiran Pillai, Scott McGlone, Mark Coster and Stuart McCann, in conjunction with Knight Frank’s Paul Kempton, Trent Preece and Ben Schubert. Industry Property Group's Andrew Macqueen and Cameron Hunter.

Circa $42 million

1-15 Ferris Road, Cobblebank

P: Frasers Property Industrial

$40 million

225 King Street, Melbourne

V: Victoria University P: SLB Development

JLL's Josh Rutman, Nick Peden, Mark Stafford, and MingXuan Li.

$11 million

92-100 Melaluka Road, Leopold

P: Harvey Norman

Darcy Jarman's Tim Darcy

June / July 2022 – 7

MARKET MOVES WA DESCRIPTION

VENDOR/ PURCHASER

AGENCY

SALE $

Gairdner portfolio

Sharewest Australian farmers with ambitions of further growth have purchased a portfolio of four farms. These farms include the massive, 2,403-hectare Cawarra property on Swamp Road, as well as the adjoining properties of Glenshiel (1,166.8-hectares), Readers (989.9-hectares), and Fairfield (1,162-hectares). 53 Bay View Terrace was sold for $4.15 million, and 319 Stirling Highway was sold for $3.57 million. 53 Bay View Terrace is comprised of 820 sqm, and serves as one of the main entry points to the Claremont Town Centre, whilst 319 Stirling Highway sits on 515 sqm and is a two-storey retail and commercial building which contains Subway, Terri Terri Japanese and Fancy Nails as current tenants.

V: Peacock family P: ShareWest Australian Farmers

$32.4 million

Elders Albany's Simon Thomas

Claremont portfolio

53 Bay View Terrace: LJ Hooker Commercial Perth's Brian Neo; 319 Stirling Highway: LJ Hooker Commercial Perth's Jack Bradshaw

P: A&R Developments

$7.72 million

Kenwick Tyrepower, 1696 Albany Highway The 2,375 sqm property was purchased with a 10-year lease back to the Tyrepower franchise.

V: Tyrepower P: Unnamed interstate investor

Ray White Commercial WA's Josh Sumner and Enrique Reyes

$2.05 million

SA

VENDOR/ PURCHASER

DESCRIPTION

AGENCY

SALE $

The Conservatory on Hindmarsh Square

Located at 131-139 Grenfell Street, the strata-titled asset has offices that are fully leased to SA Health and the federal government’s Australian Trade and Investment Commission. The purchaser has plans to transform the former Australia Post facility into more than 750 residences with six-star amenities over four towers. Additionally, they are intending to develop a retail establishment with over 15,000 sqm in retail, commercial and entertainment space.

$20.9 million

V: Centuria Office REIT P: Sentinel Property Group

CBRE’s Alistair Laycock and Ian Thomas, in conjunction with Knight Frank’s Guy Bennett

237 Grote Street, Adelaide

Price undisclosed

V: Kennards Self Storage P: Gurner

TAS

VENDOR/ PURCHASER

DESCRIPTION

AGENCY

SALE $

Islington Hotel

The 175-year-old establishment is considered one of Tasmania’s finest boutique properties, containing 11 rooms and an impressive art collection, as well as an enviable view of the adjacent Mount Wellington.

Private

Price undisclosed

P: La Vie Hotels & Resorts

NT Beachfront Hotel

VENDOR/ PURCHASER

DESCRIPTION

AGENCY

SALE $

Darwin’s popular Beachfront Hotel has been sold. Featuring facilities such as TAB, a public bar, gaming room, bistro, and dual lane drive-through bottle shop, the Beachfront Hotel is an award-winning freehold that was being offered to the market via an Expressions of Interest campaign.

Circa $25 million

V: Doug Sallis P: Endeavour Group

HTL Property's Brent McCarthy and Glenn Price.

ACT 39 Brisbane Avenue, Barton

VENDOR/ PURCHASER

DESCRIPTION

AGENCY

SALE $

The 4,800 sqm landholding contains three levels of office space above a ground floor and podium car park, and was refurbished extensively recently following Quintessential Equity purchasing the property in 2017.

$41 million

V: Quintessential Equity P: IOOF Investment Services Limited

Colliers' Matthew Winter and Paul Powderly, in collaboration with JLL's Tim Mutton.

8 –June / July 2022

THE PROPERTY DEVELOPMENT REVIEW

QLD

VENDOR/ PURCHASER AGENCY

DESCRIPTION

SALE $

1 Miles Platting Road, Eight Miles Plain

The 3,118 sqm property at 1 Miles Platting Road has 2,808 sqm of net lettable area, spread over a two-storey building.

V: Alceon Group P: Southern Cross Group

$19.735 million

Knight Frank’s Matt Barker and Blake Goddard.

The Commercial Hotel

The Commercial Hotel is situated on a 2,702 sqm site, and possesses a sports bar with a separate TAB area, gaming room, indoor bistro, and walk-in bottle shop. Additionally, it holds four guest rooms and an administration office on the first floor. A large leasehold on the second largest island in the Cumberland group on the Great Barrier Reef has been sold. The expansive 9.3-hectare area with an enviable water frontage and two private beaches property is expected to be developed into a world-class eco resort, with particular emphasis on a world-class food and beverage experience. Over 20 floors, the landholding is comprised of 13,354 sqm of net lettable area, with flexibility in the subdivision of the floors, and is situated a short distance away from a variety of public transport options, including ferries, buses and trains. Currently, the 14-hectare site at 16 Tingira Street is occupied by a liquid and bulk storage facility tenanted as a distribution centre to Incitec Pivot. The asset includes a lease over a 1.5-hectare seabed. The two-storey retail and office building a total net lettable area of 2,030 sqm on a site of approximately 1,521 sqm, and is situated at the junction of Edward Street and Elizabeth Street, within the main luxury retail precinct in Brisbane’s CBD. Housing a Coles supermarket and 11 specialty tenancies, the centre contains 4,253 sqm of retail space, and is poised for continued success, as the Highfields suburb experiences steady growth. Anchored by leases to SupaCheap Auto, Prices Plus and Domino's Pizza, the centre at 5-7 Fortune Avenue contains 1,567 sqm and has delivered annual 9% returns. The retail centre is anchored by Autobarn, Anaconda, and Beacon Lighting outlets.

V: Reconcil Pty Ltd P: Peter Filipovic and Patrick Ryan V: David Marriner & company P: Glenn Piper

Price undisclosed

CBRE Hotels Senior Director, Paul Fraser.

Hook Island

Circa $10 million

CBRE's Tom Gibson.

200 Mary Street, Brisbane

CBRE's Peter Chapple, Bruce Baker and Tom Phipps.

V: Cromwell Property Group P: Wingate

$108.5 million

16 Tingira Street, Pinkenba

$88 million

V: Sentinel Property Group P: Sims

Savills' Toby Hundertmark.

171 Edward Street, Brisbane

V: Dexus P: The Hour Glass

Private

$82.2 million

Highfields Plaza

V: Whistle Funds Management P: Melbourne-based private investor

$16.3 million

Savills' Peter Tyson and Jon Tyson.

Bribie Island Shopping Centre

$9 million

V: Arcana Capital

Savills' Jon Tyson and Michael Harcourt.

Burleigh Home + Life Centre

V: Gordon Corporation P: Private Gold Coast family

Colliers' Steven King and James Wilson, in partnership with JLL's Jacob Swan, Sam Hatcher, and Ned McKendry.

$72.5 million

June / July 2022 – 9

Article

WANT TO OWN YOUR OWN ISLAND? NOW YOU CAN.

BY CALLUM HOFLER

12km from the mainland pier at Bridport, situated in the Bass Strait, is a 1.3km long, 550-metre-wide island.

NINTH ISLAND, BRIDPORT, TAS, 7262

A haven for a wide selection of local animals , including penguins, short-tailed shearwaters, and over 1% of the world’s population of black-faced cormorants, Ninth Island is a true, one-of-a-kind asset. And now, it’s being brought to market by Yong Real Estate. Despite there being approximately 5,000 islands located around Tasmania, only nine are considered freeholds, and Ninth Island is perhaps the most famous of them all. For wine connoisseurs, the name of the island will prove familiar; one of Tasmania’s most revered wine brands is named after this rocky seaboard outpost, as Ninth Island is visible from the northern Tasmanian vineyards, shrouded in ocean mist. With such a vast array of fauna housed at and on its shores, Ninth Island has a conservation covenant that limits access to the island via helicopter only, giving its owner an authentic retreat from the qualms and squabbles of modern life. “It has the best view of any island,” Yong Real Estate agent Peter Huang stated. “You have a 360-degree view from

anywhere. It’s a breathtaking view.” Whilst the island’s shoreline has been designated Tidal Crown Land, managed by the Tasmanian Parks and Wildlife Service, it does contain a large parcel of land that can be developed. Previous owners have floated the idea of constructing an ecotourism facility, and whilst such a plan hasn’t been activated to date, Huang hasn’t discarded the option entirely. “It can be just a private person buying it [as] a private island... Or if you want to have a bigger plan, you could develop it into an ecotourism [facility].” With very few comparable options currently on the commercial property market in Australia, Ninth Island has capital appreciation value based just on its rarity. For those interested in securing a property that has no peer, this one might be the one for you. The sale of Ninth Island is being facilitated by Yong Real Estate agents Harvey Huang and Peter Huang.

10 –June / July 2022

The Interview

THE PROPERTY DEVELOPMENT REVIEW

SCAN OR CLICK TO WATCH TO THE INTERVIEW IN FULL

51 MINUTES

IAN MALOUF

AUSTRALIAN BUSINESSMAN

that would enable him to kickstart his journey in waste management. He would go around and knock on prospective clients’ doors, offering to take their rubbish away. It quickly became a profitable venture. “Back in those days, I might have made $100 by the end of the day, and it was a lot of money... for $10, you could go out and have plenty of beers and a pack of cigarettes... To go out and do something, spend $10 and end up with $90; I cannot tell you how much money that was back then.” But with the success that this new entrepreneurial venture was giving him, Malouf would have to give up his law degree. “Much to my mum’s dismay or dislike, I chose the truck.” It’s safe to say that Malouf doesn’t regret his decision.

After graduating high school at Sydney’s prestigious St Joseph’s

College in 1983, a young Ian Malouf found himself enrolled in a law degree, which he studied…for six weeks. “In hindsight, [it was] definitely the right course. Maybe not to practice, but to have that in your business life, it’s definitely a good course to have.” After six weeks of classes, Malouf had come to a crossroads. “I was able to save up a little bit of money... and then I bought a little truck. Law started to kick in at the same time. Working all day and studying all night was not going to work. So I had to choose one.” That “little truck” Malouf refers to was his first investment; a truck

June / July 2022 – 11

Article

THE VALUE IN SYDNEY’S MOST EXCLUSIVE HARBOUR WATERFRONT WAREHOUSE.

BY SANDRA LOGIUDICE

Steeped in history and cultural significance, Campbell Stores, the oldest sandstone warehouse of its type in the southern hemisphere at “The Rocks”, is now being offered for the first time in almost 150 years.

It is an opportunity open to many , but rightfully achievable for only a privileged few, as the discerning buyer will not only need to reach a premium price expectation but also nurture, preserve and respect what is one of Australia’s oldest and most recognisable heritage buildings. This exclusive piece of Sydney’s waterfront nestled between the Opera House and Harbour Bridge, is a superb example of the mid-nineteenth century warehouse buildings that ‘The Rocks’ are so well known for. Once standing as the main hub of commerce and international shipping transport in Australia, it is now globally recognised as Sydney’s irreplaceable waterfront dining and commercial precinct, a landmark of the Harbour and symbol of it’s era. It has historic significance for its association with the Campbell family, one of the most influential families in early Colonial Australia and is the surviving element of a complex of wharves and stores that began in 1801. “An asset with such a depth of history and significance of being a rare piece of the Sydney Harbour-front makes for a unique asset. An asset that can equally be the crown jewel of a family office or proudly fit in a fund’s portfolio.” Managing Partner and Marketing Agent Eugene Evgenikos of Stanton Hillier Parker stated. “(Further) there are very few, truly waterfront dining precincts

in Sydney let alone properties that enjoy uninterrupted views of the world-famous Harbour Bridge and Sydney Opera House. This is an exquisite property for the astute investor seeking exceptional quality in the asset, tenancy, long WALE, and location.” In addition to its aesthetic beauty and cultural significance, this iconic property is fully occupied, has a long WALE and high occupancy with diversity of income from multiple tenants. There are strong tenant covenants supported by experienced, multiple venue hospitality operators having an average of 30+ years industry experience as well as potential future upside through turnover rental structure and redevelopment opportunities STCA. Mr Evgenikos also comments on the painstaking detail the vendors have gone to, not only refurbish but also curate an asset with the highest calibre of food and beverage operators which befits its “unique harbour-front ‘post card perfect’ location.” These substantial refurbishment works completed in 2019 offer significant depreciation allowances for eligible investors. This world class asset, situated on 4394sqm offers commercial benefits for today and tomorrow and will be sold via Expressions of Interest closing 22nd June 2022.

12 –June / July 2022

The Interview

THE PROPERTY DEVELOPMENT REVIEW

SCAN OR CLICK TO WATCH TO THE INTERVIEW IN FULL

50 MINUTES

PATRICK ALLAWAY

CHAIRMAN - BANK OF QUEENSLAND

currently embroiling the economies of some of the major northern hemisphere powers. “We’ve had really strong growth coming out of COVID. Really good unemployment... [and] we’ve got good investment in infrastructure and construction going on across the economy.” That doesn’t mean he’s ignoring some of the issues that are causing problems. “There are concerns. Asset prices are high. We’ve got very high leverage in the economy.” But ultimately, his assessment is a confident and measured one. “My sense is that we will show a lot more resilience in trading through this [period].”

Despite interest rate hikes, Australia’s economy is proving resilient “If you compare the Australian economy to Europe and the US at the moment, we’re in pretty good shape.” Despite labour chain shortages and inflation, Allaway doesn’t view the financial health of the country in a particularly negative light. In fact, he’s optimistic about our current trajectory. “[Australia’s] inflation rate is probably half of what we’re seeing in Europe and the US.” And given his evaluation of Australia’s unemployment rate and infrastructure sector, Allaway is of the belief that the country has the right qualities to avoid a lot of the pitfalls

June / July 2022 – 13

Article

HOW “BUILD-TO-RENT” IS SHAKING UP THE RESIDENTIAL DEVELOPMENT LANDSCAPE

BY CALLUM HOFLER

Last week, Ready Media Group published an article exploring Pace Development Group’s latest offering , and how it coincided with the rise in popularity for the build-to-rent (BTR) sector. Now, new market research from Cushman & Wakefield is highlighting just how prominent BTR could become, even within the next five years. “It is unlikely that the current supply of Australian housing will absorb forecast demand, pushing rents higher. Population growth supporting tenant demand, higher rents increasing investor returns, and a significant amount of capital targeting Australian housing are all tailwinds for build-to-rent over the next decade.” - Sean Ellison, Cushman & Wakefield Research Manager, NSW What is Build-to-Rent? BTR is a class of real estate assets encompassing institutionally-owned residential buildings. Unlike the more traditional build-to-sell (BTS) model, where a developer might construct an apartment complex and then sell each individual unit, BTR developments are rented to residents subsequent to completion. All of the units are owned and managed by a sole property manager. As income is generated through rent, revenues flow throughout the life of the project, rather than being received in a single lump sum, all whilst the owner faces maintenance and staffing costs. With there being fewer tax incentives for BTR in the residential property market, developers have conventionally eschewed this approach in favour of the BTS model. But this is changing rapidly. Why is it becoming more popular? In Australia, residential property has traditionally not been an institutionally-owned asset class due to relatively low yields and a market and taxation structure that favours capital gains. However, with yields on other forms of commercial investment declining in recent years, BTR is starting to become a viable alternative. Beyond just providing ample return to an investor, BTR also addresses a major concern in Australia right now; the housing supply issue. With demand currently exceeding supply, BTR will hopefully provide low-to-medium income renters with a reserve of affordable tenancy options. It’s this which has motivated the Victorian government to offer land tax concessions for eligible BTR projects that are completed and operational between January 1st 2022

BUILD-TO-RENT IS SET TO TRANSFORM THE RESIDENTIAL

MARKET IN AUSTRALIA

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THE PROPERTY DEVELOPMENT REVIEW

“[Build-to-rent] is a nascent sector... however, BTR is expected to take off, with the market to grow nearly tenfold in the next five years.”

and December 31st 2031. These newfound incentives have created an appetite from developers for the sector. How big is the sector in Australia right now? Currently, there are only 1,859 apartments operating across six projects: one in Victoria, two in Queensland, two in Western Australia and one in New South Wales. But that figure is about to soar. According to Cushman and Wakefield, the number of apartments is set to nearly double every year through 2024. “Currently, construction is expected to peak in 2022 with 12,848 units under construction, though as more projects are planned the construction pipeline in later years is expected to see a bump.” Developers like Assemble, Gurner, Sentinel and Investa are all committing to projects in the BTR space, and this is set to transform both Australia’s residential outlook, as well as specifically Victoria’s place in the sector. Victoria will go from having one operating BTR development, to possessing the majority share of BTR apartments in Australia. The major projects (and the strategies that underpin their locations) On a recent episode of Ready Media Group’s The Roundtable, Rob Langton and Josh Rutman sat down with Mark Fischer, Brian Farrelly and David Hill, to discuss the rise and future viability of BTR projects. Mark Fischer, the Co-Founder and Global Head of Real Estate at Qualitas Group, explained the demographic considerations taken into account when assessing feasible locations for developments. “The right demographic was 25-to-39-year- olds. That was where the biggest pool of rental customers in Australia is currently, and is going to be for the foreseeable future.” During a separate episode, Chris Key, the Managing Director of Greystar Australia, explained that their site selection process has an “urban focus”. “The things we look for in those urban locations: what does the age demographic look like, and do they sort of slot into the right characteristics that would typically rent homes from us. We look at, obviously, transport links. We look at the local offering in terms of lifestyle amenity.” Many of the biggest developments follow these considerations. In 2019, Milieu and Mirvac partnered together to purchase 395-411 Albert Street in Brunswick, a 1.03-hectare landholding made up of 7 consolidated properties, that is set to house over 500 BTR apartments. The

Costs BTR developments typically utilise more

suburb has a much higher percentage of its population aged in its late twenties than the rest of Victoria (16.2% of Brunswick is aged 25-29, compared to just 7.4% of Victoria as a whole). That, in combination with the site’s proximity to Brunswick Station, seem to adhere to the criteria Chris Key and Mark Fischer have laid out. With their demographic consisting of a younger clientele who are looking to live in inner-city areas, BTR developments tend to have a higher mix of studio and one-bedroom apartments than the BTS model. For example, at the aforementioned Brunswick site, of the 501 residential apartments earmarked for construction, 275 are designed as studio or one- bedroom apartments.

amenities, and demographic demands often dictate that they are built in central locations. As such, there is a lack of quality land available for these projects, and the land that is available is highly sought after. Additionally, construction costs are in the process of rising, though this is in part a result of a lack of resources, as a result of the the slowdown in supply caused by the COVID-19 pandemic. Financing “You have to have multi-decade capital available.” - Mark Fischer Given that BTR is a long-term class of asset,

Development Summary for 395-411 Albert Street, Brunswick

developers need to bring significant capital to the table. BTR developments have a more extended cash flow and less initial liquidity, which can make raising funds more difficult compared to alternative models. But part of this issue stems from BTR’s lack of a definition. As Brian Farrelly asked on The Roundtable, “It’s not residential. It’s not commercial. Is it commercial residential?” Whilst student accommodation is considered commercial residential, and is subsequently eligible for a range of concessions, BTR currently sits in a sort of limbo. As landmark BTR projects are developed over the course of the next half decade, institutional lenders will start to develop the historical data necessary to give them more confidence in defining the sector, and the growth rate will, in all likelihood, start accelerating at a compounding speed. In summary... As the share of renters in Australia continues to increase due to immigration and affordability issues, BTR is a practical approach that addresses some of the key issues facing the housing market over the next decade. The rise in BTR development is not an instant fix, particularly without legislated incentives for meeting affordable housing quotas. But given the success of BTR in the USA and the UK, many of the obstacles that the sector has faced in Australia are a product of how new it is. As developers, lenders and governments become more familiar with BTR’s structures, expect the model to grow exponentially.

 With additional BTR projects in suburbs like South Yarra (Greystar is constructing 625 units between two towers on Yarra Street and Claremont Street) and North Melbourne (Hines is developing 220 rental apartments at 36-58 Macaulay Road), it’s clear that for the time being, many of the biggest Australian BTR developments are finding their home in Melbourne’s most desirable urban areas. What obstacles does BTR face in Australia? “I had very early on advice from [Bob Faith], who said to me, “Look, Chris, you’re going to experience people who will tell you that you can’t do it. It’s different here and it won’t work.” He said, “I’ve had that same experience in every place we’ve been to.” And I agreed with him.” - Chris Key Cushman & Wakefield’s market research indicates that BTR faces three primary hurdles as it continues to grow.  Tax Currently, unlike BTS, a BTR developer has to pay the 10% goods and services tax (GST), and additionally, their projects are ineligible for the Managed Investment Trust (MIT) tax concession. For foreign investors, this adds significantly to the capital requirements of a BTR development. But with both the Victorian and the New South Wales governments offering land tax concessions, it appears that it’s only a matter of time before BTR is taxed in a similar way to its BTS brethren. As more states become engaged in the BTR sector, the federal government will likely be induced into revising their legislation, and widespread change could very well follow.

June / July 2022 – 15

NSW MARKET OVERVIEW

NEW SOUTH WALES

NSW Market Overview with Tim Jones How does the property market in (NSW) compare to other states at the moment and what are some key trends that are occurring?

Sellers are having to navigate unprecedented global economic conditions with pandemics, wars, inflation and most recently interest rates, provoking the media into spooking buyers. Who have been key investors over the last 18 months and have you seen a shift from previous years? We’ve probably seen an influx of cashed-up “Mum and Dad” type commercial investors and high net worth individuals and a slight downturn in the number of overseas and self-managed superfund investors due to a tightening of regulations in those sectors. What is your secret to achieving the exceptional results that you have? I consistently try to put myself in the shoes of the party that I’m dealing with, which definitely helps me understand where they’re coming from and what they’re trying to achieve. I’ve never been a pushy salesman either and I think most of the people that I deal with appreciate that about me. There is room for nice guys in our industry and I exclusively hire and nurture nice people, because at the end of the day, you can teach someone to sell, but you can’t teach them to be a nice person!

All of our offices around the country are reporting strong results, with industrial appearing to be most common success story. The Perth market has experienced a remarkable turn-around in fortunes over the past couple of years and the Melbourne market has proven to be remarkably resilient in the aftermath of such substantial Covid lockdown periods. What sectors are most in demand? The industrial sector has been booming for a couple of years now and it continues to go from strength to strength off the back of unheralded demand and limited supply. I expect the industrial market in the Illawarra region to continue to blossom, in spite of the obvious global economic challenges. What do you see as the biggest challenges that face buyers and sellers in todays market? Generally speaking, buyers are still having to deal with low levels of stock and therefore high levels of competition. Additionally, whilst finance is still cheap, the banks can still make it challenging to obtain.

TIM JONES Director MMJ Commercial

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THE PROPERTY DEVELOPMENT REVIEW

What are some of the most significant or rewarding projects that you’ve been involved in and why? Our company is one of the few in the country that has the ability to take a development through from start to finish and I would have to say that some of the most rewarding projects I’ve been involved in, have been when we’ve been able to do that. Identify an opportunity for a client, assist with feasibility work, acquire the site, plan the project, obtain DA approval through our Town Planning department, market the project and ultimately sell the end products What advice would you give property developers today? Make yourself and your requirements known to a couple of the most active agents in your areas of operation, because the last few years has seen a large number of development sites being moved off-market. Be as agile as possible in your dealings as this will give you an advantage over a lot of your competitors. Above all… be able to perform!

June / July 2022 – 17

Property Listings – NSW

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THE PROPERTY DEVELOPMENT REVIEW

June / July 2022 – 19

Property Listings – NSW

20 –June / July 2022

THE PROPERTY DEVELOPMENT REVIEW

June / July 2022 – 21

Property Listings – NSW

102-106 ROBEY STREET Mascot

TWO PRIME ADJOINING SITES WITH EXCEPTIONAL DEVELOPMENT POTENTIAL Situated in the heart of Mascot’s thriving B5 Business Development zoning precinct, 102-106 Robey Street presents an outstanding opportunity to secure two substantial industrial and residential freehold properties in one line.

FOR SALE Expressions of Interest INSPECT As advertised online (or by appointment) CONTACT Chana Levy 0451 654 099 Mark Amos 0422 267 625

The place we call home.

9327 7404 | ballardproperty.com.au

22 –June / July 2022

THE PROPERTY DEVELOPMENT REVIEW

June / July 2022 – 23

Property Listings – NSW

Accelerating success.

DA Approved Childcare Development For Sale

Artist’s impression

Outlines indicative only

35D Sefton Road, Thornleigh For Sale by Expressions of Interest closing Wednesday 13 July at 12pm (AEST)

0418 413 490 Paul McGlynn

0419 990 295 Jordan McConnell

DA Approved for 71 Place Childcare 

1,402m²* Site Area 

2.9 Supply & Demand Ratio 

Occupy, Invest or Develop 

colliers.com.au/p-AUS66017176

* Approx.

Accelerating success.

2 Hectare* Enterprise and Light Industry Site For Sale

Outlines indicative only

55 Lawson Road, Badgerys Creek, NSW For Sale by Expressions of Interest closing on 14 July 2022 at 2pm

0488 748 186 Nick Estephen 0423 086 593 Thomas Mosca

Located in Stage 1 Priority Precinct 

Substantial 2-Hectare Landholding 

Moments from Western Sydney International Airport 

Enterprise & Light Industry Land Use 

Existing 1 Acre of Hardstand and DA Planning 

colliers.com.au/p-AUS66017272

* Approx.

24 –June / July 2022

THE PROPERTY DEVELOPMENT REVIEW

Accelerating success.

Landmark Western Sydney Development Opportunity For Sale

Outlines indicative only

Outlines indicative only

Artist’s impression

6-10 Mount Street, Mount Druitt, NSW For Sale by Expressions of Interest closing Thursday 7 July 2022 at 3pm (AEST)

0418 327 574 Robert Papaleo 0402 678 888 Jozef Dickinson 0404 887 717 Guillaume Volz 0423 021 439 Eugene White

56,895m²* Proposed GFA 

Pre-DA design for 593 apartments 

400m* to Westfield & 600m* to station 

Passing income available 

8,060m²* Site area 

colliers.com.au

* Approx.

June / July 2022 – 25

Property Listings – NSW

Accelerating success.

Accelerating success.

Residential development opportunity For Sale

Unrivalled Value-add Development Opportunity Expressions of Interest

Outlines indicative only

200 Warners Bay Road, Mount Hutton For Sale by Expressions of Interest

1 Lorikeet Drive, Tweed Heads South, NSW

0477 722 566 Ed Crawford 0401 208 088 Ben Curran

0437 875 661 Heath Wakeham 0415 480 874 Marlon Crawford

4,003m²* total site area 

Zoned R3 Medium Density 

30m* frontage to Warners Bay Road 

2,506m²* freehold corner block 

Turnkey / design & construct 

Key location with ample amenity 

colliers.com.au/p-AUS66017083

colliers.com.au/p-AUS66017275

* Approx.

* Approx.

Substantial Land Holding For Sale

Outlines indicative only

Lots 13, 14 & 15, 3-7 Gymea Circuit, Rouse Hill Expressions of Interest closing Wednesday 20 July at 3pm

0418 413 490 Paul McGlynn

Choice of 3 lots 

2,691m²* - 9,576m²* 

Flexible B6 Zoning 

Serviced land ready for development 

0414 276 162 Brett Beazley

realcommercial.com.au/504092475

* Approx.

26 –June / July 2022

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