(SYDNEY) Australia’s economy is booming, so the question of why the opinion polls show the government heading for defeat in elections on Saturday puzzles Prime Minister John Howard.
The conservative leader has gone from suggesting the electorate must be joking to complaining that Asian growth is getting the credit that is rightfully his for the performance of the economy. ‘I ask myself why is it that the polls are so bad for the government at present,’ he mused aloud recently while talking up his government’s achievements during more than 11 years in power. ‘I think one of the reasons is that the Labor Party has successfully created the impression that it doesn’t matter who is in government, the economy will continue to grow.’
Mr Howard’s ministers have been equally plaintive, with Foreign Minister Alexander Downer likening the government’s economic success to the winning ways of the nation’s world champion cricket team.
‘If the Australian cricket team is winning, which it is at the moment, you don’t go around and sack the whole team,’ he said.
But that, according to the opinion polls, is exactly what the Australian electorate plans to do to the government on Saturday, installing in its place the centre-left Labor Party led by Kevin Rudd.
While the election is about more than the economy, hip-pocket issues have dominated the campaign and analysts say Mr Howard is partly right when he complains that he is not given credit for the economic boom.
‘Most people realise the main strength of the economy comes from overseas factors rather than anything the government has done,’ said Wayne Errington, academic and co-author of a biography on the prime minister.
Rapid growth in Asian countries such as China and India has seen a blow-out in demand for Australia’s vast mineral resources, firing up the economy and cutting unemployment to 30-year lows.
But the very strength of the growth has presented a problem for Mr Howard, Mr Errington told AFP, with inflationary pressures forcing six interest rate hikes since the last election and putting pressure on mortgage-belt home buyers. ‘That in itself wouldn’t be a big problem apart from the fact that Mr Howard made a lot of the promise to keep interest rates low at the last election so it brings up all sorts of credibility problems.’ But Mr Errington and others believe the government has been hurt most on the economic front by its new union-busting labour laws, which critics say erode job security and wages by forcing workers to sign individual contracts.
‘What they’ve done with industrial relations is they’ve found a way to insert a sense of uncertainty into people’s well-being amongst all of this economic prosperity,’ said Monash University’s Nick Economou.
Despite the economic boom ‘there are great disparities in wealth, large numbers of people not doing so well’, he told AFP. Opinion polls show that the government is deeply unpopular even in some of the most affluent parts of Australia, suggesting that the electorate’s gripes go beyond the economy.
Source: AFP (Business Times 19 Nov 07)
Showing posts with label Australian Property. Show all posts
Showing posts with label Australian Property. Show all posts
Monday, November 19, 2007
Thursday, November 15, 2007
New Zealand’s housing market is slowing in response to record-high interest rates
New Zealand’s housing market is slowing in response to record-high interest rates, Reserve Bank governor Alan Bollard said, adding to signs the central bank won’t raise borrowing costs again.
‘We’re now seeing monetary policy having its impact on the housing sector in quite a significant way,’ Mr Bollard told a parliamentary committee in Wellington on Tuesday. ‘It’s having the sort of impact it needs to have.’
Mr Bollard raised the official cash rate four times between March and July to a record 8.25 per cent, sending home loans costs higher and crimping property sales. House sales fell 23 per cent in October from a year earlier, according to the Real Estate Institute.
‘The housing market is certainly going in the direction the Reserve Bank wanted,’ said Khoon Goh, senior economist at ANZ National Bank Ltd in Wellington. ‘There are a lot of upside risks to inflation, so they need to see housing slow even more.’
Just two of 16 economists surveyed by Bloomberg News say rates will rise before June 30 next year. Eleven forecast no change and three expect a cut.
Mr Bollard said pressure on food and fuel prices globally meant inflation will be near the top of the 1-3 per cent range he is required to target.
In September, he forecast consumer prices will rise 3 per cent in the year ending Dec 31.
Inflation is ‘not dead unfortunately, not even sleeping,’ he said.
Because housing is slowing, Mr Bollard can ’sit back and maintain his wait-and-see stance,’ said Mr Goh. There is nothing in recent reports to make the central bank change from a neutral stance, he said.
House prices have surged 41 per cent the past three years to a record and are about six times the average disposable income. The rapid increase in this ratio suggests house prices are overvalued, the central bank said last week. The long-run average ratio is about three times.
Mr Bollard also said demand may be abating for the New Zealand dollar from investors who borrow cheaply in yen to invest in the nation’s higher-yielding assets.
‘The pressure has moved from the New Zealand dollar to other countries, I would say particularly to the Australian dollar and the Canadian dollar, which are both under quite considerable pressure from carry trades,’ Mr Bollard said. ‘They’re the ones having a tougher time at the moment.’
The New Zealand dollar has gained 15 per cent against the US currency in the past year. Mr Bollard said he shares concerns of exporters who have said the strength and volatility of the currency has crimped earnings.
Still ‘we don’t think the strength and volatility has been as damaging as some would say,’ he said. ‘Export volumes have held up.’
The parliamentary committee is concluding an inquiry into the framework of monetary policy following concerns that Mr Bollard was raising interest rates to curb the housing market at the expense of exporters being hurt by a rising currency. — Bloomberg
Source : Business Times - 15 Nov 2007
‘We’re now seeing monetary policy having its impact on the housing sector in quite a significant way,’ Mr Bollard told a parliamentary committee in Wellington on Tuesday. ‘It’s having the sort of impact it needs to have.’
Mr Bollard raised the official cash rate four times between March and July to a record 8.25 per cent, sending home loans costs higher and crimping property sales. House sales fell 23 per cent in October from a year earlier, according to the Real Estate Institute.
‘The housing market is certainly going in the direction the Reserve Bank wanted,’ said Khoon Goh, senior economist at ANZ National Bank Ltd in Wellington. ‘There are a lot of upside risks to inflation, so they need to see housing slow even more.’
Just two of 16 economists surveyed by Bloomberg News say rates will rise before June 30 next year. Eleven forecast no change and three expect a cut.
Mr Bollard said pressure on food and fuel prices globally meant inflation will be near the top of the 1-3 per cent range he is required to target.
In September, he forecast consumer prices will rise 3 per cent in the year ending Dec 31.
Inflation is ‘not dead unfortunately, not even sleeping,’ he said.
Because housing is slowing, Mr Bollard can ’sit back and maintain his wait-and-see stance,’ said Mr Goh. There is nothing in recent reports to make the central bank change from a neutral stance, he said.
House prices have surged 41 per cent the past three years to a record and are about six times the average disposable income. The rapid increase in this ratio suggests house prices are overvalued, the central bank said last week. The long-run average ratio is about three times.
Mr Bollard also said demand may be abating for the New Zealand dollar from investors who borrow cheaply in yen to invest in the nation’s higher-yielding assets.
‘The pressure has moved from the New Zealand dollar to other countries, I would say particularly to the Australian dollar and the Canadian dollar, which are both under quite considerable pressure from carry trades,’ Mr Bollard said. ‘They’re the ones having a tougher time at the moment.’
The New Zealand dollar has gained 15 per cent against the US currency in the past year. Mr Bollard said he shares concerns of exporters who have said the strength and volatility of the currency has crimped earnings.
Still ‘we don’t think the strength and volatility has been as damaging as some would say,’ he said. ‘Export volumes have held up.’
The parliamentary committee is concluding an inquiry into the framework of monetary policy following concerns that Mr Bollard was raising interest rates to curb the housing market at the expense of exporters being hurt by a rising currency. — Bloomberg
Source : Business Times - 15 Nov 2007
Friday, October 26, 2007
It has taken four consecutive interest rate increases to record high levels but New Zealand’s central bank looks to have finally taken the heat out
It has taken four consecutive interest rate increases to record high levels but New Zealand’s central bank looks to have finally taken the heat out of its biggest inflation worry - the housing market.
Still, the Reserve Bank of New Zealand is unlikely to let its guard down any time soon because other pockets of the economy, including a tight labour market and a booming dairy sector, are putting upward pressure on consumer prices.
That is likely to keep the central bank’s cash rate of 8.25 per cent, the highest in the industrialised world and a major draw for investors seeking high yields, at current levels well into 2008, economists say.
‘The Reserve Bank is having success in the housing arena, but the problem is that the slowdown in the housing sector is just not diffusing through to the rest of the economy,’ said Cameron Bagrie, chief economist at ANZ-National Bank.
‘Realistically, we’re going to have to see house prices fall.’ A house has long been the main investment asset for New Zealanders and so a key factor for the central bank in deciding monetary policy.
Government agency Quotable Value says residential house prices have climbed steadily for nearly 20 years, barring a slight dip in 1998.
The absence of a capital gains tax, an immigration-driven population expansion and consumer-friendly lending practices have all contributed to property prices nearly doubling between 2001 and 2007.
The property market cooled briefly last year but regained strength earlier this year, prompting the central bank to resume tightening monetary policy by lifting interest rates by a total of one percentage point.
‘The slowing housing market is core to RBNZ view of the economy slowing,’ said Shamubeel Eaqub, director of investment research at Goldman Sachs JBWere. ‘This has been a major source of inflation and activity and a major amplifier of the economic cycle. They need this housing market to slow and slow for a prolonged period of time.’
Housing data, showing median house prices levelling off and sales coming down sharply, suggest a slowdown has already begun.
The Real Estate Institute of New Zealand said annual price gains eased to 12.3 per cent in September from 12.9 per cent in August. Its figures show monthly sales have fallen for four straight months.
With lenders more risk averse following the global credit squeeze, growth in net migration easing and longer-term mortgage rates remaining elevated, many analysts think the current slowdown is here to stay.
Finance Minister Michael Cullen told Reuters in an interview last week he was also seeing appropriate signs of a slowdown in the housing market though inflation remained a concern.
The central bank forecast in September that annual house price inflation, currently around 13 per cent, would slow to around 10 per cent by the end of the year and would then continue easing through 2008. It expects prices to start falling in 2009.
The RBNZ will review its policy today, although all 17 economists in a Reuters poll predicted interest rates would remain at 8.25 per cent.
Most of the 17 economists expect the central bank to stay put at least until mid-2008 because record low unemployment, rising wages and the prospects of higher farmers’ income from the global dairy boom will provide fuel for inflation. — Reuters
Source : Business Times - 25 Oct 2007
Still, the Reserve Bank of New Zealand is unlikely to let its guard down any time soon because other pockets of the economy, including a tight labour market and a booming dairy sector, are putting upward pressure on consumer prices.
That is likely to keep the central bank’s cash rate of 8.25 per cent, the highest in the industrialised world and a major draw for investors seeking high yields, at current levels well into 2008, economists say.
‘The Reserve Bank is having success in the housing arena, but the problem is that the slowdown in the housing sector is just not diffusing through to the rest of the economy,’ said Cameron Bagrie, chief economist at ANZ-National Bank.
‘Realistically, we’re going to have to see house prices fall.’ A house has long been the main investment asset for New Zealanders and so a key factor for the central bank in deciding monetary policy.
Government agency Quotable Value says residential house prices have climbed steadily for nearly 20 years, barring a slight dip in 1998.
The absence of a capital gains tax, an immigration-driven population expansion and consumer-friendly lending practices have all contributed to property prices nearly doubling between 2001 and 2007.
The property market cooled briefly last year but regained strength earlier this year, prompting the central bank to resume tightening monetary policy by lifting interest rates by a total of one percentage point.
‘The slowing housing market is core to RBNZ view of the economy slowing,’ said Shamubeel Eaqub, director of investment research at Goldman Sachs JBWere. ‘This has been a major source of inflation and activity and a major amplifier of the economic cycle. They need this housing market to slow and slow for a prolonged period of time.’
Housing data, showing median house prices levelling off and sales coming down sharply, suggest a slowdown has already begun.
The Real Estate Institute of New Zealand said annual price gains eased to 12.3 per cent in September from 12.9 per cent in August. Its figures show monthly sales have fallen for four straight months.
With lenders more risk averse following the global credit squeeze, growth in net migration easing and longer-term mortgage rates remaining elevated, many analysts think the current slowdown is here to stay.
Finance Minister Michael Cullen told Reuters in an interview last week he was also seeing appropriate signs of a slowdown in the housing market though inflation remained a concern.
The central bank forecast in September that annual house price inflation, currently around 13 per cent, would slow to around 10 per cent by the end of the year and would then continue easing through 2008. It expects prices to start falling in 2009.
The RBNZ will review its policy today, although all 17 economists in a Reuters poll predicted interest rates would remain at 8.25 per cent.
Most of the 17 economists expect the central bank to stay put at least until mid-2008 because record low unemployment, rising wages and the prospects of higher farmers’ income from the global dairy boom will provide fuel for inflation. — Reuters
Source : Business Times - 25 Oct 2007
Sunday, July 15, 2007
Property malaise hits Westfield
Property malaise hits Westfield
Email Print Normal font Large font Carolyn Cummins
July 13, 2007
Advertisement
AdvertisementRETAIL investors in Westfield are believed to have had second thoughts on a $450 million capital raising, amid suggestions the underwriters were left with a hefty shortfall.
Goldman Sachs JBWere says the take-up rate on the retail portion of the Westfield deal was a low 30 per cent, with the shortfall largely taken up by sub-underwriters at the original issue price of $19.50.
The shortfall, as well as a general malaise in the listed property trust sector, accounted for a weak sharemarket showing by the trusts yesterday. Recent underperformers Centro Properties and Goodman International continued to come under pressure and did not look like bouncing back in the near term.
About 153 million Westfield securities were offered to the market, of which about 36 million was held over for retail investors.
Final figures for the retail issue will be revealed today or early next week, but at first blush the offering pitched at $19.50 a security was more expensive than a new Westfield security (ex distribution) on the sharemarket.
Westfield's securities closed at $19.99 before yesterday's trading halt. But those securities include the 54.4¢ final distribution. To make the retail issue palatable at the offer price, Westfield should have been trading at $20.05 or higher ($19.50 plus the 54.4¢ distribution).
The underwriters to the retail issue, Credit Suisse and JPMorgan, were last night working the phones to ensure the sub-underwriters, ABN Amro Rothschild, Citibank, Deutsche Bank and Merrill Lynch, could place the stock with their clients.
Westfield announced the $3 billion capital raising on June 12 at $19.50 a security. It was split into an institutional offering, which was completed on June 14, and yesterday's offering.
None of the new securities were entitled to the final distribution of 54.5¢. The new stock will not rank equally with the existing Westfield stock until August, when the final distribution is paid to existing investors.
Since it is a split issue, the institutional securities have been trading since June 14. But with the volatility of the global real estate market, they have traded as low as $19.17, and closed on Wednesday night (before the retail offer) at $19.42, 8¢ lower than the issue.
One fund manager said if a retail investor wanted to buy the new stock, they could have done so at $19.17, and questioned why they would pay $19.50.
The other concern was that once all the new securities are converted to Westfield shares, the price may still be lower given the state of the LPT sector.
Goldman Sachs JBWere said all the LPTs were lower yesterday as investors sold down to pay for the Westfield issue.
But rising bond yields had hit global LPT indices hard in the past month, the broker said.
For June, the ASX 200 Property Index was down 4.66 per cent, the Tokyo Stock Exchange REIT Index was down 6.23 per cent, and the FTSE 350 Real Estate Index was down 4.67 per cent. Thanks to China's economic boom, the Hang Seng property index was up 6.69 per cent and Singapore up 0.35 per cent.
Email Print Normal font Large font Carolyn Cummins
July 13, 2007
Advertisement
AdvertisementRETAIL investors in Westfield are believed to have had second thoughts on a $450 million capital raising, amid suggestions the underwriters were left with a hefty shortfall.
Goldman Sachs JBWere says the take-up rate on the retail portion of the Westfield deal was a low 30 per cent, with the shortfall largely taken up by sub-underwriters at the original issue price of $19.50.
The shortfall, as well as a general malaise in the listed property trust sector, accounted for a weak sharemarket showing by the trusts yesterday. Recent underperformers Centro Properties and Goodman International continued to come under pressure and did not look like bouncing back in the near term.
About 153 million Westfield securities were offered to the market, of which about 36 million was held over for retail investors.
Final figures for the retail issue will be revealed today or early next week, but at first blush the offering pitched at $19.50 a security was more expensive than a new Westfield security (ex distribution) on the sharemarket.
Westfield's securities closed at $19.99 before yesterday's trading halt. But those securities include the 54.4¢ final distribution. To make the retail issue palatable at the offer price, Westfield should have been trading at $20.05 or higher ($19.50 plus the 54.4¢ distribution).
The underwriters to the retail issue, Credit Suisse and JPMorgan, were last night working the phones to ensure the sub-underwriters, ABN Amro Rothschild, Citibank, Deutsche Bank and Merrill Lynch, could place the stock with their clients.
Westfield announced the $3 billion capital raising on June 12 at $19.50 a security. It was split into an institutional offering, which was completed on June 14, and yesterday's offering.
None of the new securities were entitled to the final distribution of 54.5¢. The new stock will not rank equally with the existing Westfield stock until August, when the final distribution is paid to existing investors.
Since it is a split issue, the institutional securities have been trading since June 14. But with the volatility of the global real estate market, they have traded as low as $19.17, and closed on Wednesday night (before the retail offer) at $19.42, 8¢ lower than the issue.
One fund manager said if a retail investor wanted to buy the new stock, they could have done so at $19.17, and questioned why they would pay $19.50.
The other concern was that once all the new securities are converted to Westfield shares, the price may still be lower given the state of the LPT sector.
Goldman Sachs JBWere said all the LPTs were lower yesterday as investors sold down to pay for the Westfield issue.
But rising bond yields had hit global LPT indices hard in the past month, the broker said.
For June, the ASX 200 Property Index was down 4.66 per cent, the Tokyo Stock Exchange REIT Index was down 6.23 per cent, and the FTSE 350 Real Estate Index was down 4.67 per cent. Thanks to China's economic boom, the Hang Seng property index was up 6.69 per cent and Singapore up 0.35 per cent.
Thursday, July 12, 2007
New Zealand house prices fell from record highs while sales dropped in June, a survey showed yesterday, suggesting the market may be cooling
New Zealand house prices fell from record highs while sales dropped in June, a survey showed yesterday, suggesting the market may be cooling and backing views interest rates will remain on hold in the near future.
The Real Estate Institute of New Zealand (REINZ) said the national median house price eased 0.7 per cent to NZ$347,500 (S$410,335) from May, but was up 12.1 per cent on the same month a year ago.
Institute members sold 7,474 houses compared with 9,285 the month before, and sales were 11.3 per cent lower than a year earlier. REINZ said the data should be treated with some caution because it had brought forward the reporting date for the survey.
Analysts said the figures showed more definitive signs that the market, which is a key inflation concern of the Reserve Bank New Zealand, is cooling.
‘The latest outcome will also give the RBNZ more than just ‘tentative’ signs that the housing market is slowing,’ Nick Tuffley at ASB Bank, said.
‘We are more confident that the RBNZ will remain on hold in July, though there remains the risk the RBNZ hikes later in the year if the economy (and housing market) do not appear to be slowing sufficiently to rein in inflation.’
The New Zealand dollar showed limited reaction to the data, trading around US$0.7750.
Last month, the RBNZ raised its official cash rate for the third straight time, setting it at 8 per cent, citing concerns about robust domestic spending and the upbeat housing market.
The RBNZ did not provide an outlook in its June policy statement but governor Alan Bollard told Reuters in an interview it would not ease monetary policy until it saw a clear slowdown in housing and consumer demand.
Fourteen of 17 analysts in the latest Reuters poll expect the central bank to keep rates on hold at its review on July 26, although the median risk for a rate rise is put at 40 per cent.
The REINZ said the methodology change may have reduced sales by around 8 per cent, or 600 sales, based on past June month averages and may also have affected median house prices.
Nonetheless REINZ national president Murray Cleland said the market was clearly showing signs of a slowdown, although it was still unclear if it was due to interest rate increases.
‘The other factor is that we are now well into winter and that has a heavy influence on people’s inclination to transact property,’ he said.
The median number of days taken to sell a house was unchanged at 30 days from April. ‘These indicators suggest the housing shortage remains as the main dynamic in the residential property market with too many buyers chasing too few houses,’ Mr Cleland said.
Prices in seven of REINZ’s 12 regions fell, while those in five areas rose.
Source: The Business Times, 12 July 2007
The Real Estate Institute of New Zealand (REINZ) said the national median house price eased 0.7 per cent to NZ$347,500 (S$410,335) from May, but was up 12.1 per cent on the same month a year ago.
Institute members sold 7,474 houses compared with 9,285 the month before, and sales were 11.3 per cent lower than a year earlier. REINZ said the data should be treated with some caution because it had brought forward the reporting date for the survey.
Analysts said the figures showed more definitive signs that the market, which is a key inflation concern of the Reserve Bank New Zealand, is cooling.
‘The latest outcome will also give the RBNZ more than just ‘tentative’ signs that the housing market is slowing,’ Nick Tuffley at ASB Bank, said.
‘We are more confident that the RBNZ will remain on hold in July, though there remains the risk the RBNZ hikes later in the year if the economy (and housing market) do not appear to be slowing sufficiently to rein in inflation.’
The New Zealand dollar showed limited reaction to the data, trading around US$0.7750.
Last month, the RBNZ raised its official cash rate for the third straight time, setting it at 8 per cent, citing concerns about robust domestic spending and the upbeat housing market.
The RBNZ did not provide an outlook in its June policy statement but governor Alan Bollard told Reuters in an interview it would not ease monetary policy until it saw a clear slowdown in housing and consumer demand.
Fourteen of 17 analysts in the latest Reuters poll expect the central bank to keep rates on hold at its review on July 26, although the median risk for a rate rise is put at 40 per cent.
The REINZ said the methodology change may have reduced sales by around 8 per cent, or 600 sales, based on past June month averages and may also have affected median house prices.
Nonetheless REINZ national president Murray Cleland said the market was clearly showing signs of a slowdown, although it was still unclear if it was due to interest rate increases.
‘The other factor is that we are now well into winter and that has a heavy influence on people’s inclination to transact property,’ he said.
The median number of days taken to sell a house was unchanged at 30 days from April. ‘These indicators suggest the housing shortage remains as the main dynamic in the residential property market with too many buyers chasing too few houses,’ Mr Cleland said.
Prices in seven of REINZ’s 12 regions fell, while those in five areas rose.
Source: The Business Times, 12 July 2007
Wednesday, July 11, 2007
Land and General to revitalise property unit
Land and General to revitalise property unit
By BUSINESS TIMES
LAND and General Bhd (L&G) is planning to revitalise its property division and expects to launch its first major mixed housing project for the year in Sri Damansara, Selangor.
L&G, which has remained low profile after undertaking a restructuring exercise to pare down debts and dispose of its non-core assets, expects to launch the project by year-end, or early next year, its managing director Mike Krishnan told Business Times.
“We will launch some projects in a few years but will plan the development slowly. We are now looking at Sri Damansara, where we have some 16.2ha to 20.3ha (40-50 acres) for a mixed development,” he said.
L&G is engaged in property development and management, education services, and oil and gas exploration.
It achieved a profit of RM7.6 million and a revenue of RM96.3 million for the year ended March 31 2007, largely contributed by the property business.
The company has integrated township developments in Lembah Beringin, Bandar Sungai Buaya, Villa Puteri and Bandar Sri Damansara.
Krishnan added that L&G is looking for opportunities to develop properties in Malaysia and elsewhere.
“We will be concentrating on property development businesses in Malaysia and looking for opportunities in Australia,” he said.
Its unit, Land & General Australia (Holdings) Pty Ltd, is developing Hidden Valley in Melbourne, comprising 950 residential allotments and a Golf & Country Club, sprawled over 972ha2,400 acres.
The project is in its second stage of development and revenue from the unsold allotments will be generated over the next eight years. So far 349 allotments have been sold with a total gross revenue of A$30.1 million (RM89.1 million).
By BUSINESS TIMES
LAND and General Bhd (L&G) is planning to revitalise its property division and expects to launch its first major mixed housing project for the year in Sri Damansara, Selangor.
L&G, which has remained low profile after undertaking a restructuring exercise to pare down debts and dispose of its non-core assets, expects to launch the project by year-end, or early next year, its managing director Mike Krishnan told Business Times.
“We will launch some projects in a few years but will plan the development slowly. We are now looking at Sri Damansara, where we have some 16.2ha to 20.3ha (40-50 acres) for a mixed development,” he said.
L&G is engaged in property development and management, education services, and oil and gas exploration.
It achieved a profit of RM7.6 million and a revenue of RM96.3 million for the year ended March 31 2007, largely contributed by the property business.
The company has integrated township developments in Lembah Beringin, Bandar Sungai Buaya, Villa Puteri and Bandar Sri Damansara.
Krishnan added that L&G is looking for opportunities to develop properties in Malaysia and elsewhere.
“We will be concentrating on property development businesses in Malaysia and looking for opportunities in Australia,” he said.
Its unit, Land & General Australia (Holdings) Pty Ltd, is developing Hidden Valley in Melbourne, comprising 950 residential allotments and a Golf & Country Club, sprawled over 972ha2,400 acres.
The project is in its second stage of development and revenue from the unsold allotments will be generated over the next eight years. So far 349 allotments have been sold with a total gross revenue of A$30.1 million (RM89.1 million).
Monday, June 25, 2007
Australian Valad Property To Acquire UK-based Scarborough For Enterprise Value Of A$2 Bln.
Australian Valad Property To Acquire UK-based Scarborough For Enterprise Value Of A$2 Bln. - Update []
6/24/2007 10:13:25 PM Monday, Australia-based property funds management company Valad Property (ASX.VPG) announced it would acquire the privately held Scarborough for an enterprise value of A$2 billion. Scarborough has considerable direct property ownership, funds management and development operations in the United Kingdom.
To fund the acquisition, Valad said it would raise A$1.2 billion through the issue of new securities under three for four non-renounceable entitlement offer. The new securities will have an application price of A$1.92, which is a discount of 7.7% to the VWAP, adjusted for the June distribution of 5.67 cents.
Valad's executive chairman Stephen Day, said the acquisition would permit Valad leverage its business model into the UK and European property markets through a highly successful business, which employs over 250 property professionals in 16 offices across 11 countries.
The acquisition builds on Valad's international expansion headed by Peter Hurley, the group's Executive Director and Global Transactions. He will move to London to take charge of the company's expanded European operations. He is also expected to join the Scarborough boards including that of pan-European funds management company Teesland Plc, which is 72.3% owned by Scarborough. Teesland will remain listed on the London Stock Exchange.
The combined group will employ nearly 400 professionals directing property funds and investments across the property risk/return spectrum in 15 countries.
On consummation, Valad's market capitalization based on the issue price will increase to about A$2.8 billion. Valad's assets under management will increase to A$16.8 billion from A$6.6 billion with the inclusion of Scarborough's operations that consist of a diversified UK and European property portfolio of 89 properties, a 72.3% interest in a listed UK and European real estate funds management business.
Valad said Mr. McCabe, who is Scarborough's largest shareholder and also chairman of Sheffield United Plc, would join the Valad's board of directors. The vendors of Scarborough will invest A$140 million of their consideration in Valad and further key Scarborough management will make a A$10 million investment in Valad. Stephen Day and Peter Hurley, in aggregate, will subscribe for A$9 million in new securities.
JP Morgan advises Valad. JP Morgan, Macquarie Bank and UBS are joint book runners and underwriters and Citigroup is comanagers.
Connect Holdings Reveals Completion Of Cash Offer For Pacific Internet [PCNTF]
6/24/2007 9:35:50 PM Connect Holdings Ltd. said that its voluntary conditional cash general offer to acquire all the issued shares of Singapore-based Pacific Internet Ltd. or Pacnet (PCNTF) for US$11.00 net in cash per share, without interest, was declared unconditional in all respects and successfully closed on 22 June 2007.
The company said that the depositary for the offer advised it that as of 22 June 2007, 7.21 million shares, representing approximately 52.01% of the issued shares of PacNet were validly tendered in and not withdrawn from the offer. Further, the company said that all validly tendered shares were accepted for payment, and added that payment would be made promptly in accordance with the terms of the offer.
6/24/2007 10:13:25 PM Monday, Australia-based property funds management company Valad Property (ASX.VPG) announced it would acquire the privately held Scarborough for an enterprise value of A$2 billion. Scarborough has considerable direct property ownership, funds management and development operations in the United Kingdom.
To fund the acquisition, Valad said it would raise A$1.2 billion through the issue of new securities under three for four non-renounceable entitlement offer. The new securities will have an application price of A$1.92, which is a discount of 7.7% to the VWAP, adjusted for the June distribution of 5.67 cents.
Valad's executive chairman Stephen Day, said the acquisition would permit Valad leverage its business model into the UK and European property markets through a highly successful business, which employs over 250 property professionals in 16 offices across 11 countries.
The acquisition builds on Valad's international expansion headed by Peter Hurley, the group's Executive Director and Global Transactions. He will move to London to take charge of the company's expanded European operations. He is also expected to join the Scarborough boards including that of pan-European funds management company Teesland Plc, which is 72.3% owned by Scarborough. Teesland will remain listed on the London Stock Exchange.
The combined group will employ nearly 400 professionals directing property funds and investments across the property risk/return spectrum in 15 countries.
On consummation, Valad's market capitalization based on the issue price will increase to about A$2.8 billion. Valad's assets under management will increase to A$16.8 billion from A$6.6 billion with the inclusion of Scarborough's operations that consist of a diversified UK and European property portfolio of 89 properties, a 72.3% interest in a listed UK and European real estate funds management business.
Valad said Mr. McCabe, who is Scarborough's largest shareholder and also chairman of Sheffield United Plc, would join the Valad's board of directors. The vendors of Scarborough will invest A$140 million of their consideration in Valad and further key Scarborough management will make a A$10 million investment in Valad. Stephen Day and Peter Hurley, in aggregate, will subscribe for A$9 million in new securities.
JP Morgan advises Valad. JP Morgan, Macquarie Bank and UBS are joint book runners and underwriters and Citigroup is comanagers.
Connect Holdings Reveals Completion Of Cash Offer For Pacific Internet [PCNTF]
6/24/2007 9:35:50 PM Connect Holdings Ltd. said that its voluntary conditional cash general offer to acquire all the issued shares of Singapore-based Pacific Internet Ltd. or Pacnet (PCNTF) for US$11.00 net in cash per share, without interest, was declared unconditional in all respects and successfully closed on 22 June 2007.
The company said that the depositary for the offer advised it that as of 22 June 2007, 7.21 million shares, representing approximately 52.01% of the issued shares of PacNet were validly tendered in and not withdrawn from the offer. Further, the company said that all validly tendered shares were accepted for payment, and added that payment would be made promptly in accordance with the terms of the offer.
Through the roof
Tony Rindfleisch
June 24, 2007 12:00am
HOME owners - and those looking to buy - have been warned to strap themselves in for the ride of their lives as property prices head into a new stratosphere.
Melbourne's median house price juggernaut is gaining speed and is set to crash through the $1 million barrier over the next decade.
Home affordability, already at its toughest level in 50 years, is expected to become worse as prices jump by an average of 150 per cent over the next 10 years.
These predictions are based on an assumption that price trends of the past 40 years will be repeated over the next decade.
If the rate of growth experienced in Melbourne since 1967 continues until 2017, the median house price will hit seven figures late that year.
Data from the Real Estate Institute of Victoria show house prices have increased an average of 9.6 per cent a year over the past 40 years.
The Melbourne median price has climbed from $9700 in March 1967 to $380,000 in March this year.
Based on past growth, the median is tipped to top $400,000 next year and $500,000 in 2010.
From 2013, median-priced houses will increase in value by more than average adult wage.
In Toorak, median-priced properties, now at $2.9 million, will hit $7.25 million after 10 years -- and increase by almost $700,000 the following year.
In Brighton, average houses are tipped to jump from $1.6 million to $4 million over the next decade.
In Melton, today's $185,000 house will cost $462,000 in 10 years and in Cranbourne, houses that now cost $225,000 will fetch $562,000.
In Doncaster, prices are set to jump from $530,000 to $1.32 million; in Reservoir from $328,000 to $820,000; and in Footscray from $370,000 to $925,000.
And these are only median prices. Many houses in every suburb will increase by far more than the average.
Property analyst Michael Matusik said it was generally accepted that housing was affordable when costs were less than 30 per cent of household income.
"The percentage of income needed to service a typical mortgage is now 35 per cent in Victoria," he said.
Median Melbourne houses cost about 6.5 times average annual income, up from between three and four times income over the past 50 years, he said. In the next 10 years, Melbourne houses could cost 10 times average wages.
Mr Matusik said unless Australia's tax and land supply systems were changed, low-income families would be forced to rent for life.
A senior consultant at property industry research firm BIS Shrapnel, Angie Zigomanis, said in the present low-inflation environment, house prices were unlikely to increase 9.6 per cent every year for a decade, as they had done on average over the past 40 years.
A more realistic growth rate would be about 6 per cent, which would be 3 to 3.5 per cent ahead of inflation, Mr Zigomanis said.
REIV president Adrian Jones said he had seen three property booms during his 40 years in real estate -- and inner city properties were experiencing similar conditions now.
In the past year, land prices in Balwyn had jumped by up to 50 per cent, he said.
Mr Jones said people who thought house prices would eventually reach a ceiling should think again.
"When inflation stops, house prices will stop going up," he said.
In Singapore, home owners took mortgages for 50 years and retired before paying them off, he said.
In Japan, owners committed their descendants to pay off their homes on 150-year mortgages because affordability within a lifetime went beyond the reach of most people decades ago.
"Most international real estate agents believe property is still under-priced in Australia," Mr Jones said.
Asked how today's children would be able to buy a house, Mr Jones said they would have to lower their expectations and buy a humble flat to build their equity.
Independent property adviser Monique Wakelin said it would not become easier for people to buy.
Nevertheless, 75 per cent of Australians enjoyed the luxury of home ownership, a statistic comparable with few other countries.
"Who owns an actual house in New York? Or in London or Paris?" Ms Wakelin said.
Barry Plant Group director Barry Plant said buyers should purchase what they could afford to get on the property ladder.
"It doesn't matter where you buy, as long as you get a foothold in the market and you're not renting, even if you borrow 90 per cent of the price," Mr Plant said.
June 24, 2007 12:00am
HOME owners - and those looking to buy - have been warned to strap themselves in for the ride of their lives as property prices head into a new stratosphere.
Melbourne's median house price juggernaut is gaining speed and is set to crash through the $1 million barrier over the next decade.
Home affordability, already at its toughest level in 50 years, is expected to become worse as prices jump by an average of 150 per cent over the next 10 years.
These predictions are based on an assumption that price trends of the past 40 years will be repeated over the next decade.
If the rate of growth experienced in Melbourne since 1967 continues until 2017, the median house price will hit seven figures late that year.
Data from the Real Estate Institute of Victoria show house prices have increased an average of 9.6 per cent a year over the past 40 years.
The Melbourne median price has climbed from $9700 in March 1967 to $380,000 in March this year.
Based on past growth, the median is tipped to top $400,000 next year and $500,000 in 2010.
From 2013, median-priced houses will increase in value by more than average adult wage.
In Toorak, median-priced properties, now at $2.9 million, will hit $7.25 million after 10 years -- and increase by almost $700,000 the following year.
In Brighton, average houses are tipped to jump from $1.6 million to $4 million over the next decade.
In Melton, today's $185,000 house will cost $462,000 in 10 years and in Cranbourne, houses that now cost $225,000 will fetch $562,000.
In Doncaster, prices are set to jump from $530,000 to $1.32 million; in Reservoir from $328,000 to $820,000; and in Footscray from $370,000 to $925,000.
And these are only median prices. Many houses in every suburb will increase by far more than the average.
Property analyst Michael Matusik said it was generally accepted that housing was affordable when costs were less than 30 per cent of household income.
"The percentage of income needed to service a typical mortgage is now 35 per cent in Victoria," he said.
Median Melbourne houses cost about 6.5 times average annual income, up from between three and four times income over the past 50 years, he said. In the next 10 years, Melbourne houses could cost 10 times average wages.
Mr Matusik said unless Australia's tax and land supply systems were changed, low-income families would be forced to rent for life.
A senior consultant at property industry research firm BIS Shrapnel, Angie Zigomanis, said in the present low-inflation environment, house prices were unlikely to increase 9.6 per cent every year for a decade, as they had done on average over the past 40 years.
A more realistic growth rate would be about 6 per cent, which would be 3 to 3.5 per cent ahead of inflation, Mr Zigomanis said.
REIV president Adrian Jones said he had seen three property booms during his 40 years in real estate -- and inner city properties were experiencing similar conditions now.
In the past year, land prices in Balwyn had jumped by up to 50 per cent, he said.
Mr Jones said people who thought house prices would eventually reach a ceiling should think again.
"When inflation stops, house prices will stop going up," he said.
In Singapore, home owners took mortgages for 50 years and retired before paying them off, he said.
In Japan, owners committed their descendants to pay off their homes on 150-year mortgages because affordability within a lifetime went beyond the reach of most people decades ago.
"Most international real estate agents believe property is still under-priced in Australia," Mr Jones said.
Asked how today's children would be able to buy a house, Mr Jones said they would have to lower their expectations and buy a humble flat to build their equity.
Independent property adviser Monique Wakelin said it would not become easier for people to buy.
Nevertheless, 75 per cent of Australians enjoyed the luxury of home ownership, a statistic comparable with few other countries.
"Who owns an actual house in New York? Or in London or Paris?" Ms Wakelin said.
Barry Plant Group director Barry Plant said buyers should purchase what they could afford to get on the property ladder.
"It doesn't matter where you buy, as long as you get a foothold in the market and you're not renting, even if you borrow 90 per cent of the price," Mr Plant said.
CP Land expanding Queensbay Mall
CP Land expanding Queensbay Mall
Digg this story Add to your del.icio.us account
By DAVID TAN
CP Land is expanding the Queensbay Mall, which had attracted various potential buyers. However, CP group executive chairman Tan Chew Piau said nothing had materialised so far.
He said CP Land was undertaking an expansion exercise to add 400,000sq ft of lettable floor area in view of the growing demand for retail space.
“CP Group views Queensbay Mall, which is 95% occupied, as a long term investment,” he said, adding that there were approaches by the Emplyees’ Provident Fund (EPF) and other investors but nothing had materialised.
He was responding to a report that Queensbay Mall had been sold to EPF for about RM400mil.
CP Land will launch the sales of 130 units of corporate suites, known as BayCapital next month. The BayCapital office block is one of the MSC compliant buildings next to Queensbay Mall, which is along the Penang Cyber City corridor.
Tan said CP Land would also develop a two-storey 10,000 sq ft purpose-built glazed showroom (part of BayCapital) later this year.
“The showroom is suitable for banks and high-end automobile showrooms,” he said.
Tan added that about 65% of the 160 units of BayStar exclusive condominiums, had been sold prior to the official launch.
CP Land will introduce the BayVillas, comprising 80 units of individual landed homes, fronting the sea next year.
“We have commenced construction of the Citro Hotel, scheduled for opening at the end of 2008. The Eastin Group will manage it. We are introducing another hotel, called Eastin Penang, next year,” he said.
Tan said CP Land was now collaborating with Japanese property consultants to turn the gated and guarded residential properties within the Queensbay project as second homes for Japanese.
“They are attracted to the project because of its proximity to Queensbay Mall, medical centres, Pulau Jerejak, which has been earmarked for eco-tourism activities, the Penang International Airport, and Penang Bridge,” he said.
Tan said in the pipeline for the Queensbay project, CP Land would develop a specialist medical centre to attract medical tourism, and a fisherman’s wharf, similar to the one in Darling Harbour in Sydney.
“We will also develop jetties and marina-related activities at the wharf,” he said.
Tan said Queensbay , with an estimated gross development value of more than RM2bil, was being transformed into a major landmark for integrated tourist activities.
“The entire project is surrounded by essential amenities such as local universities and colleges, shopping malls, hypermarkets, nearby housing estates, and future eco-tourism projects,” he said.
Digg this story Add to your del.icio.us account
By DAVID TAN
CP Land is expanding the Queensbay Mall, which had attracted various potential buyers. However, CP group executive chairman Tan Chew Piau said nothing had materialised so far.
He said CP Land was undertaking an expansion exercise to add 400,000sq ft of lettable floor area in view of the growing demand for retail space.
“CP Group views Queensbay Mall, which is 95% occupied, as a long term investment,” he said, adding that there were approaches by the Emplyees’ Provident Fund (EPF) and other investors but nothing had materialised.
He was responding to a report that Queensbay Mall had been sold to EPF for about RM400mil.
CP Land will launch the sales of 130 units of corporate suites, known as BayCapital next month. The BayCapital office block is one of the MSC compliant buildings next to Queensbay Mall, which is along the Penang Cyber City corridor.
Tan said CP Land would also develop a two-storey 10,000 sq ft purpose-built glazed showroom (part of BayCapital) later this year.
“The showroom is suitable for banks and high-end automobile showrooms,” he said.
Tan added that about 65% of the 160 units of BayStar exclusive condominiums, had been sold prior to the official launch.
CP Land will introduce the BayVillas, comprising 80 units of individual landed homes, fronting the sea next year.
“We have commenced construction of the Citro Hotel, scheduled for opening at the end of 2008. The Eastin Group will manage it. We are introducing another hotel, called Eastin Penang, next year,” he said.
Tan said CP Land was now collaborating with Japanese property consultants to turn the gated and guarded residential properties within the Queensbay project as second homes for Japanese.
“They are attracted to the project because of its proximity to Queensbay Mall, medical centres, Pulau Jerejak, which has been earmarked for eco-tourism activities, the Penang International Airport, and Penang Bridge,” he said.
Tan said in the pipeline for the Queensbay project, CP Land would develop a specialist medical centre to attract medical tourism, and a fisherman’s wharf, similar to the one in Darling Harbour in Sydney.
“We will also develop jetties and marina-related activities at the wharf,” he said.
Tan said Queensbay , with an estimated gross development value of more than RM2bil, was being transformed into a major landmark for integrated tourist activities.
“The entire project is surrounded by essential amenities such as local universities and colleges, shopping malls, hypermarkets, nearby housing estates, and future eco-tourism projects,” he said.
Friday, June 22, 2007
Lend Lease leads field for USAF housing deal
Lend Lease leads field for USAF housing deal
Florence Chong
June 21, 2007
ACTUS Lend Lease, the US subsidiary of Lend Lease Corp, is the preferred tenderer for a $US400 million ($475 million) US Air Force housing project.
The contract is worth $US50 million more than anticipated, a spokeswoman said.
Lend Lease has been in exclusive negotiations with the US Air Force for the second phase of the family housing project at Hickam Air Force Base in Hawaii.
The negotiations are expected to be finalised next financial year.
The latest contract involves developing, constructing, renovating and managing about 1120 houses over 50 years.
The project has an initial development value of about $US400 million over seven years.
Actus Lend Lease is already working on the first phase, which involves about 1350 houses and has an ongoing five-year initial development expenditure of $US240 million.
Actus was selected in March as the preferred bidder to develop military family housing at three US Air Force bases in California and Colorado.
So far, it has secured between 23 per cent and 30 per cent of the contracts to come out of the $US20 billion military privatisation program.
It owns and manages more than 38,000 houses in the US, valued at about $US5 billion, under 50-year concessions.
Florence Chong
June 21, 2007
ACTUS Lend Lease, the US subsidiary of Lend Lease Corp, is the preferred tenderer for a $US400 million ($475 million) US Air Force housing project.
The contract is worth $US50 million more than anticipated, a spokeswoman said.
Lend Lease has been in exclusive negotiations with the US Air Force for the second phase of the family housing project at Hickam Air Force Base in Hawaii.
The negotiations are expected to be finalised next financial year.
The latest contract involves developing, constructing, renovating and managing about 1120 houses over 50 years.
The project has an initial development value of about $US400 million over seven years.
Actus Lend Lease is already working on the first phase, which involves about 1350 houses and has an ongoing five-year initial development expenditure of $US240 million.
Actus was selected in March as the preferred bidder to develop military family housing at three US Air Force bases in California and Colorado.
So far, it has secured between 23 per cent and 30 per cent of the contracts to come out of the $US20 billion military privatisation program.
It owns and manages more than 38,000 houses in the US, valued at about $US5 billion, under 50-year concessions.
Super rush may coincide with city investor influx
Super rush may coincide with city investor influx
COMMENT
Majella Corrigan
June 23, 2007
JUNE 30 is nearly here, and as the window closes on the chance to put large sums of money into superannuation, it could also herald the much-mooted return of the investor to capital city markets.
In trying to make decisions, however, investors face mixed signals.
Yes, rents are rising and yes, there's a shortage of rental property in many eastern seaboard capital cities.
The big questions are where the strong capital growth will be, and how far away is that growth? According to valuers Herron Todd White, if interest rates remain static, or better still, fall, Melbourne's residential market is likely to outperform its eastern capital city counterparts.
Demographic and population change, yield growth combined with falling vacancy rates, and lagging building approvals are all good news for Melbourne.
So it should see the best growth of any capital city in the next few years.
"First homebuyers and investors should take notice and position themselves accordingly with the market poised to begin its growth cycle again within the next 12 months," HTW's review says. The big factor in Melbourne's favour generally is that last year its population grew by nearly 70,000 - more than any other capital city.
Not only is Melbourne a big destination for skilled migrants, but it no longer suffers a net loss in interstate migration, HTW says.
In the inner city and Docklands the apartment glut, synonymous with Melbourne for so long, has been mostly absorbed, the valuer says.
Any recovery is expected to be led by investors, who are now seeing vacancy rates dip to a 25-year low of 1.2 per cent (partly because those who can't afford to buy must rent) and returns increase for the first time in eight years.
While rents rose in 2006, so did interest rates, meaning there was no impetus for investors to buy.
Stable or lower rates will further improve cash flow, making it easier for investors to take the plunge.
Despite this, HTW says the average yield is still 4 per cent across the entire residential sector, so at least two years of rental growth of 10 per cent or more is needed to push yields up to their pre-boom levels.
Meanwhile in inner Sydney some agents are reporting zero vacancies, and rents have broadly risen 5 per cent. In the inner west, the rental increase is probably much higher.
In Sydney's outer west, the rental market is described as "red hot", because of a lack of investors. Units near transport are getting close to 10 per cent yields, but HTW says it's hard-pressed to point to any capital value growth areas in this apartment sector.
This is probably a good point for investors to remember.
There are dual reasons for investing - yield and price growth - and they both can't go up dramatically at the same time.
Buyers governed solely by yield could find capital growth elusive if they haven't chosen wisely.
COMMENT
Majella Corrigan
June 23, 2007
JUNE 30 is nearly here, and as the window closes on the chance to put large sums of money into superannuation, it could also herald the much-mooted return of the investor to capital city markets.
In trying to make decisions, however, investors face mixed signals.
Yes, rents are rising and yes, there's a shortage of rental property in many eastern seaboard capital cities.
The big questions are where the strong capital growth will be, and how far away is that growth? According to valuers Herron Todd White, if interest rates remain static, or better still, fall, Melbourne's residential market is likely to outperform its eastern capital city counterparts.
Demographic and population change, yield growth combined with falling vacancy rates, and lagging building approvals are all good news for Melbourne.
So it should see the best growth of any capital city in the next few years.
"First homebuyers and investors should take notice and position themselves accordingly with the market poised to begin its growth cycle again within the next 12 months," HTW's review says. The big factor in Melbourne's favour generally is that last year its population grew by nearly 70,000 - more than any other capital city.
Not only is Melbourne a big destination for skilled migrants, but it no longer suffers a net loss in interstate migration, HTW says.
In the inner city and Docklands the apartment glut, synonymous with Melbourne for so long, has been mostly absorbed, the valuer says.
Any recovery is expected to be led by investors, who are now seeing vacancy rates dip to a 25-year low of 1.2 per cent (partly because those who can't afford to buy must rent) and returns increase for the first time in eight years.
While rents rose in 2006, so did interest rates, meaning there was no impetus for investors to buy.
Stable or lower rates will further improve cash flow, making it easier for investors to take the plunge.
Despite this, HTW says the average yield is still 4 per cent across the entire residential sector, so at least two years of rental growth of 10 per cent or more is needed to push yields up to their pre-boom levels.
Meanwhile in inner Sydney some agents are reporting zero vacancies, and rents have broadly risen 5 per cent. In the inner west, the rental increase is probably much higher.
In Sydney's outer west, the rental market is described as "red hot", because of a lack of investors. Units near transport are getting close to 10 per cent yields, but HTW says it's hard-pressed to point to any capital value growth areas in this apartment sector.
This is probably a good point for investors to remember.
There are dual reasons for investing - yield and price growth - and they both can't go up dramatically at the same time.
Buyers governed solely by yield could find capital growth elusive if they haven't chosen wisely.
Property investors are in ATO's sights
Property investors are in ATO's sights
Nicki Bourlioufas
June 23, 2007
PROPERTY investors need to watch out because they are probably on the Australian Taxation Office's hit list this year for a tax check.
More than 1.4 million people claimed more than $21 billion in rental deductions in their 2005-06 tax returns.
This financial year, the ATO has written to 45,000 individuals considered at risk of not complying, reminding them to check the accuracy of their claims before lodging returns.
According to the ATO, it will examine about 6000 at-risk cases.
It will check the accuracy of capital gains declared by investors and match the data against records from state and territory revenue and land-title offices.
It will also check figures provided by investors to third parties such as banks.
Yet, the fact remains, the opportunity for deductions in investment properties are often greater than for borrowing to invest in shares because of the number of deduction possibilities.
For a margin loan, the main expense is interest but there are two categories of rental property expenses that investors can claim.
First, expenses in the year they are paid: council rates, repairs, maintenance, insurance, land tax and property management fees, as well as interest costs on an investment loan.
Second, expenses deductible over several years: borrowing transaction costs, the costs of depreciating assets and capital works deductions on structures.
Getting it right
FROM 2007-08, the ATO will issue pre-prepared returns.
Taxpayers will be able to go online to access an income-tax return prepared by the Commissioner of Taxation and based on past data that will include income from salary and wages, interest and dividends.
"That just shows you how much information they now have on individual taxpayers and how much they are collecting," PricewaterhouseCoopers tax partner Mike Forsdick says.
If an investor's tax-deductible expenses on a property exceed the rental income, the loss can be offset against other income, such as salary, to reduce tax payable. In this way, negative gearing is most beneficial to investors who pay tax at the highest marginal rate of 45 per cent because the ATO covers almost half their loss.
"Borrowing costs are tax-deductible, but only over several years, Mr Forsdick said.
"These costs, which include loan establishment fees, mortgage insurance and stamp duty on the loan, must be deducted over life of the loan or five years, whichever is shorter.
Investors can't claim costs associated with buying or selling a property, although these elements may form part of the cost base of the property for capital gains tax purposes.
When deductions are made, the property must be available for rent.
"You can only claim expenses if the property is available for rent," Forsdick says. "If a property is sitting empty, you can still claim expenses if it is available for rent, but if it isn't available, you can't claim expenses for that period."
The higher the expenses on a property investor's tax return, the more likely they would be checked by the taxman, so it was important to keep good records, Forsdick says.
"It's not uncommon for the ATO to send out questionnaires to people who own investment property, particularly if there are large deductions," he says.
A common sticking point is repairs.
Those related to the wear and tear of assets in the building are tax-deductible, but repairs or renovations carried out to get a property ready for rent or for capital improvements are not expenses.
"One of the traps is spending money getting a property into shape before renting it out," Forsdick says.
"Expenses incurred to get a property ready for letting are capital expenses and must go on the cost base of the property for capital gains tax purposes."
Depreciation allowances can enhance after-tax returns.
Investors can depreciate capital works deductions for the construction cost of residential buildings built after July 1985 and for structural improvements, and depreciation can be claimed for wear and tear on fixtures and fittings in the property. Buildings are depreciated at a rate of 2.5 per cent or 4 per cent a year, depending on when they were built.
The cost of a house built in 1990, for example, can be claimed at 2.5 per cent for 40 years until 2030, provided it is used as an investment property.
According to property depreciation specialist Depreciator, up to 80 per cent of property investors don't correctly claim depreciation on their investment properties.
Depreciator general manager Scott Brunsdon estimates that depreciation deductions on a new house can amount to $10,000 a year, and those for a seven-year-old house could be between $3000 and $4000.
"Deductions on new units in large complexes can, in many cases, be around $14,000 per year for the first couple of years," Brunsdon says.
Napier and Blakeley tax depreciation services regional manager David Liddelow says, investors generally would get more deductions for a new high-rise development than for a house because there were more plant depreciation allowances.
"With a house, you can depreciate the structure and depreciable assets, but you don't have the shared facilities," he says.
Liddelow says investors who buy into strata properties can claim depreciation allowances for common property.
"When you buy into a strata property, you are entitled to a share of the depreciation, usually based on the unit entitlements of the strata plan," he says.
A tax depreciation schedule is an important element of owning an investment property.
It lists all items in an investment property that are falling in value, as well as annual depreciation allowances, including capital works deductions.
Some new properties come with a TDS, but investors would be prudent to get their own report prepared, Liddelow says. "We are a little bit wary of a free TDS as it may not list all deductions you're entitled to," he says.
Although a TDS is prepared by a quantity surveyor, the numbers are often used by an accountant to complete a tax return.
Nicki Bourlioufas
June 23, 2007
PROPERTY investors need to watch out because they are probably on the Australian Taxation Office's hit list this year for a tax check.
More than 1.4 million people claimed more than $21 billion in rental deductions in their 2005-06 tax returns.
This financial year, the ATO has written to 45,000 individuals considered at risk of not complying, reminding them to check the accuracy of their claims before lodging returns.
According to the ATO, it will examine about 6000 at-risk cases.
It will check the accuracy of capital gains declared by investors and match the data against records from state and territory revenue and land-title offices.
It will also check figures provided by investors to third parties such as banks.
Yet, the fact remains, the opportunity for deductions in investment properties are often greater than for borrowing to invest in shares because of the number of deduction possibilities.
For a margin loan, the main expense is interest but there are two categories of rental property expenses that investors can claim.
First, expenses in the year they are paid: council rates, repairs, maintenance, insurance, land tax and property management fees, as well as interest costs on an investment loan.
Second, expenses deductible over several years: borrowing transaction costs, the costs of depreciating assets and capital works deductions on structures.
Getting it right
FROM 2007-08, the ATO will issue pre-prepared returns.
Taxpayers will be able to go online to access an income-tax return prepared by the Commissioner of Taxation and based on past data that will include income from salary and wages, interest and dividends.
"That just shows you how much information they now have on individual taxpayers and how much they are collecting," PricewaterhouseCoopers tax partner Mike Forsdick says.
If an investor's tax-deductible expenses on a property exceed the rental income, the loss can be offset against other income, such as salary, to reduce tax payable. In this way, negative gearing is most beneficial to investors who pay tax at the highest marginal rate of 45 per cent because the ATO covers almost half their loss.
"Borrowing costs are tax-deductible, but only over several years, Mr Forsdick said.
"These costs, which include loan establishment fees, mortgage insurance and stamp duty on the loan, must be deducted over life of the loan or five years, whichever is shorter.
Investors can't claim costs associated with buying or selling a property, although these elements may form part of the cost base of the property for capital gains tax purposes.
When deductions are made, the property must be available for rent.
"You can only claim expenses if the property is available for rent," Forsdick says. "If a property is sitting empty, you can still claim expenses if it is available for rent, but if it isn't available, you can't claim expenses for that period."
The higher the expenses on a property investor's tax return, the more likely they would be checked by the taxman, so it was important to keep good records, Forsdick says.
"It's not uncommon for the ATO to send out questionnaires to people who own investment property, particularly if there are large deductions," he says.
A common sticking point is repairs.
Those related to the wear and tear of assets in the building are tax-deductible, but repairs or renovations carried out to get a property ready for rent or for capital improvements are not expenses.
"One of the traps is spending money getting a property into shape before renting it out," Forsdick says.
"Expenses incurred to get a property ready for letting are capital expenses and must go on the cost base of the property for capital gains tax purposes."
Depreciation allowances can enhance after-tax returns.
Investors can depreciate capital works deductions for the construction cost of residential buildings built after July 1985 and for structural improvements, and depreciation can be claimed for wear and tear on fixtures and fittings in the property. Buildings are depreciated at a rate of 2.5 per cent or 4 per cent a year, depending on when they were built.
The cost of a house built in 1990, for example, can be claimed at 2.5 per cent for 40 years until 2030, provided it is used as an investment property.
According to property depreciation specialist Depreciator, up to 80 per cent of property investors don't correctly claim depreciation on their investment properties.
Depreciator general manager Scott Brunsdon estimates that depreciation deductions on a new house can amount to $10,000 a year, and those for a seven-year-old house could be between $3000 and $4000.
"Deductions on new units in large complexes can, in many cases, be around $14,000 per year for the first couple of years," Brunsdon says.
Napier and Blakeley tax depreciation services regional manager David Liddelow says, investors generally would get more deductions for a new high-rise development than for a house because there were more plant depreciation allowances.
"With a house, you can depreciate the structure and depreciable assets, but you don't have the shared facilities," he says.
Liddelow says investors who buy into strata properties can claim depreciation allowances for common property.
"When you buy into a strata property, you are entitled to a share of the depreciation, usually based on the unit entitlements of the strata plan," he says.
A tax depreciation schedule is an important element of owning an investment property.
It lists all items in an investment property that are falling in value, as well as annual depreciation allowances, including capital works deductions.
Some new properties come with a TDS, but investors would be prudent to get their own report prepared, Liddelow says. "We are a little bit wary of a free TDS as it may not list all deductions you're entitled to," he says.
Although a TDS is prepared by a quantity surveyor, the numbers are often used by an accountant to complete a tax return.
NSW push for APEC tourism
NSW push for APEC tourism
Glenda Korporaal
June 22, 2007
REGIONAL areas of NSW are planning promotions to attract Sydney tourists during the APEC meeting in September, Sydney Chamber of Commerce executive director Patricia Forsythe said yesterday.
September 7, a Friday, has been declared a public holiday for workers in the Sydney area, as APEC leaders arrive in the city for their meeting over the weekend.
Ms Forsythe said the Hunter Valley was already gearing up to attract people from Sydney on three-day packages.
"One of the economic spin-offs from APEC could be that there will be a boost to tourism in other regions," she told an APEC seminar in Sydney.
Ms Forsythe said the APEC meeting would be a boost for the state despite the fact that Sydney businesses would bear the cost of the extra holiday.
A public holiday in NSW would cost the state an estimated $327 million.
She predicted that regional shopping centres would benefit as Sydney workers stayed away from the CBD over the weekend and shopped closer to home.
"The Friday may well be a bumper trading day for shopping centres outside the Sydney CBD."
Ms Forsythe said she hoped that extensive international media coverage of APEC-associated meetings - which will take place over the week starting September 2 and bring in more than 1500 media personnel from the 21 APEC countries - would provide a net gain to Sydney business.
While there would be little conventional business done over the weekend, the event would be a chance to showcase the city and encourage more international businesses to set up offices there.
Ms Forsythe said Sydney had become a centre for international business and finance in Australia.
Some 400 international business leaders will be coming to a two-day summit ahead of the APEC leaders meeting.
"It will be an opportunity for them to see what Sydney does well," Ms Forsythe said.
Glenda Korporaal
June 22, 2007
REGIONAL areas of NSW are planning promotions to attract Sydney tourists during the APEC meeting in September, Sydney Chamber of Commerce executive director Patricia Forsythe said yesterday.
September 7, a Friday, has been declared a public holiday for workers in the Sydney area, as APEC leaders arrive in the city for their meeting over the weekend.
Ms Forsythe said the Hunter Valley was already gearing up to attract people from Sydney on three-day packages.
"One of the economic spin-offs from APEC could be that there will be a boost to tourism in other regions," she told an APEC seminar in Sydney.
Ms Forsythe said the APEC meeting would be a boost for the state despite the fact that Sydney businesses would bear the cost of the extra holiday.
A public holiday in NSW would cost the state an estimated $327 million.
She predicted that regional shopping centres would benefit as Sydney workers stayed away from the CBD over the weekend and shopped closer to home.
"The Friday may well be a bumper trading day for shopping centres outside the Sydney CBD."
Ms Forsythe said she hoped that extensive international media coverage of APEC-associated meetings - which will take place over the week starting September 2 and bring in more than 1500 media personnel from the 21 APEC countries - would provide a net gain to Sydney business.
While there would be little conventional business done over the weekend, the event would be a chance to showcase the city and encourage more international businesses to set up offices there.
Ms Forsythe said Sydney had become a centre for international business and finance in Australia.
Some 400 international business leaders will be coming to a two-day summit ahead of the APEC leaders meeting.
"It will be an opportunity for them to see what Sydney does well," Ms Forsythe said.
Household debt hits record levels in Australia
Household debt hits record levels
David Uren, Economics correspondent
June 22, 2007
HOUSEHOLDS are spending, on average, a record 11.9 per cent of their income servicing debt following the interest rate increases late last year.
Reserve Bank figures released yesterday showed the interest burden had risen by two percentage points since the last federal election, as higher interest rates were levied on increased debts.
John Howard said the heavier debt burden reflected rising affluence.
"It is the case that people are buying ever more expensive houses, and they are doing that because of a number of factors," the Prime Minister said. "One of them is that interest rates are lower and people can borrow more."
Labor Treasury spokesman Wayne Swan said the rising interest burden showed that Mr Howard was out of touch in his claim that families had never been better off.
"Eight interest rate rises despite his promise to keep rates at record lows are hitting Australian families hard."
The average household is now supporting debts that are 58.7 per cent greater than their total annual income, whereas at the last election, debts were 41.3per cent more than a year's income.
However, the Reserve Bank's figures on household finances show that assets are rising faster than debt. Households now have assets, including housing, superannuation and other investments, that are equal toeight times their annual income.
This is a capital gain over the past three years equivalent to 60 per cent of a full year's income.
It is not only housing debt that is rising. Margin lending to buy shares has soared 40 per cent over the past year to reach $30.2 billion in March.
Credit card debt rose at its fastest rate in three years, increasing by 8 per cent to just under $40 billion.
"The data suggests that Australians are more confident about their ability to take on more debt, as well as meeting the greater servicing burden," CommSec economist Martin Arnold said yesterday.
"Debt levels are rising, but we are choosing to use the debt more productively to buy assets that traditionally rise in value, like shares and property."
David Uren, Economics correspondent
June 22, 2007
HOUSEHOLDS are spending, on average, a record 11.9 per cent of their income servicing debt following the interest rate increases late last year.
Reserve Bank figures released yesterday showed the interest burden had risen by two percentage points since the last federal election, as higher interest rates were levied on increased debts.
John Howard said the heavier debt burden reflected rising affluence.
"It is the case that people are buying ever more expensive houses, and they are doing that because of a number of factors," the Prime Minister said. "One of them is that interest rates are lower and people can borrow more."
Labor Treasury spokesman Wayne Swan said the rising interest burden showed that Mr Howard was out of touch in his claim that families had never been better off.
"Eight interest rate rises despite his promise to keep rates at record lows are hitting Australian families hard."
The average household is now supporting debts that are 58.7 per cent greater than their total annual income, whereas at the last election, debts were 41.3per cent more than a year's income.
However, the Reserve Bank's figures on household finances show that assets are rising faster than debt. Households now have assets, including housing, superannuation and other investments, that are equal toeight times their annual income.
This is a capital gain over the past three years equivalent to 60 per cent of a full year's income.
It is not only housing debt that is rising. Margin lending to buy shares has soared 40 per cent over the past year to reach $30.2 billion in March.
Credit card debt rose at its fastest rate in three years, increasing by 8 per cent to just under $40 billion.
"The data suggests that Australians are more confident about their ability to take on more debt, as well as meeting the greater servicing burden," CommSec economist Martin Arnold said yesterday.
"Debt levels are rising, but we are choosing to use the debt more productively to buy assets that traditionally rise in value, like shares and property."
J Holland sells resorts
J Holland sells resorts
Fiona Cameron
June 22, 2007
JOHN Holland has sold out of three north Queensland resort developments to focus on its core construction engineering business.
John Holland, a subsidiary of Leighton Holdings, announced yesterday that it had sold its interests in the developments for an undisclosed sum to its joint venture partner, Queensland-based Satori Resorts.
Satori is owned by Warren Witt of the Queensland-based Witt Property Group and businessman Rod Lamb, an executive director with Sedgman Ltd.
The joint venture owns sites at Little Cove and Mission Beach, where it has development approvals for planned resorts with end values of $108 million and $104 million respectively.
It has not finalised its purchase of the Ella Bay site, but settlement is due once development approval is granted.
Fiona Cameron
June 22, 2007
JOHN Holland has sold out of three north Queensland resort developments to focus on its core construction engineering business.
John Holland, a subsidiary of Leighton Holdings, announced yesterday that it had sold its interests in the developments for an undisclosed sum to its joint venture partner, Queensland-based Satori Resorts.
Satori is owned by Warren Witt of the Queensland-based Witt Property Group and businessman Rod Lamb, an executive director with Sedgman Ltd.
The joint venture owns sites at Little Cove and Mission Beach, where it has development approvals for planned resorts with end values of $108 million and $104 million respectively.
It has not finalised its purchase of the Ella Bay site, but settlement is due once development approval is granted.
Myer sale pays for privateers
Myer sale pays for privateers
Turi Condon, Property editor
June 22, 2007
PRIVATE equity group Newbridge Capital looks set to reap a startling $300 million profit on the sale of the iconic Melbourne Myer store, just a year after it helped to buy the Myer department store chain out of the languishing Coles Myer empire.
The trophy site, which will be redeveloped over the next two years and reopened in 2009 after a $1.2 billion revamp, was yesterday bought by the Commonwealth Bank's retail property trust and giant Singapore investor GIC for a record-breaking price of almost $600 million.
The revamp will see the structure, whose facade will remain, backed by buildings designed like wrapped parcels and a giant glass dome above the historic Bourke Street emporium, in a project to be developed over five years.
The Commonwealth Bank's $4.8 billion CFS Retail Property Trust, in which Melbourne billionaire John Gandel has a 20 per cent stake, and its partners beat development heavyweight Lend Lease in the final round of bids, and exclusive negotiations are expected to be finalised in two to three weeks. The agreement was signed late yesterday afternoon.
The sale price shot up from over $500 million in the first round of bidding run by agent CB Richard Ellis.
Coles finally raised the white flag on the department store chain last year, selling it to Newbridge and the founding Myer family (which has about 8 per cent) for $1.4 billion.
Newbridge is thought to have paid as much as $300 million of the purchase price for the site, valued at $200 million two years ago. It was unsuccessfully offered for sale last year.
The CFS trust became the front runner in recent weeks, with the deal believed to hinge on Myer not losing income by trading thoughout the development process.
Myer will move into the new 42,000sqm Bourke Street store when it is completed in late 2009. The balance of the development of the new Lonsdale Street buildings, intersected by Melbourne-style laneways, then gets under way in earnest.
Darren Steinberg, head of listed property for the Commonwealth Bank's Colonial division, flew to Singapore this year to tempt that Government's real estate head Seek Ngee Huat to join its bid.
Yesterday, Mr Steinberg said Colonial had forged strong relationships in the investment community and, with its partners, would deliver an impressive building with an end value of $1.2 billion.
GIC, which manages more than $100 billion of foreign reserves - about 10 per cent invested in real estate - is already a big investor in Australian property, paying $717.5 million for a half-stake in Westfield's Parramatta shopping centre last month.
Myer is expected to account for 40 per cent of the income of the new development, leasing the Bourke Street store for up to 20 years.
Turi Condon, Property editor
June 22, 2007
PRIVATE equity group Newbridge Capital looks set to reap a startling $300 million profit on the sale of the iconic Melbourne Myer store, just a year after it helped to buy the Myer department store chain out of the languishing Coles Myer empire.
The trophy site, which will be redeveloped over the next two years and reopened in 2009 after a $1.2 billion revamp, was yesterday bought by the Commonwealth Bank's retail property trust and giant Singapore investor GIC for a record-breaking price of almost $600 million.
The revamp will see the structure, whose facade will remain, backed by buildings designed like wrapped parcels and a giant glass dome above the historic Bourke Street emporium, in a project to be developed over five years.
The Commonwealth Bank's $4.8 billion CFS Retail Property Trust, in which Melbourne billionaire John Gandel has a 20 per cent stake, and its partners beat development heavyweight Lend Lease in the final round of bids, and exclusive negotiations are expected to be finalised in two to three weeks. The agreement was signed late yesterday afternoon.
The sale price shot up from over $500 million in the first round of bidding run by agent CB Richard Ellis.
Coles finally raised the white flag on the department store chain last year, selling it to Newbridge and the founding Myer family (which has about 8 per cent) for $1.4 billion.
Newbridge is thought to have paid as much as $300 million of the purchase price for the site, valued at $200 million two years ago. It was unsuccessfully offered for sale last year.
The CFS trust became the front runner in recent weeks, with the deal believed to hinge on Myer not losing income by trading thoughout the development process.
Myer will move into the new 42,000sqm Bourke Street store when it is completed in late 2009. The balance of the development of the new Lonsdale Street buildings, intersected by Melbourne-style laneways, then gets under way in earnest.
Darren Steinberg, head of listed property for the Commonwealth Bank's Colonial division, flew to Singapore this year to tempt that Government's real estate head Seek Ngee Huat to join its bid.
Yesterday, Mr Steinberg said Colonial had forged strong relationships in the investment community and, with its partners, would deliver an impressive building with an end value of $1.2 billion.
GIC, which manages more than $100 billion of foreign reserves - about 10 per cent invested in real estate - is already a big investor in Australian property, paying $717.5 million for a half-stake in Westfield's Parramatta shopping centre last month.
Myer is expected to account for 40 per cent of the income of the new development, leasing the Bourke Street store for up to 20 years.
Saturday, June 16, 2007
Harcourts Smith Brothers Voted #1 By Blacktown Public
Harcourts Smith Brothers Voted #1 By Blacktown Public
Fri, 15 Jun 2007
The Harcourts Smith Brothers office in Blacktown was announced last week as the winner of the Blacktown City Local Business Awards for Outstanding Real Estate Agency.
Director of Harcourts Smith Brothers, Jason Smith said he was honoured his office had received the award which he emphasised reflected his team’s commitment to consistent high standards from the initial front office greeting through to ongoing contact with past clients after helping them achieve their property goals. He also wanted to acknowledge and thank their vendors and buyers who they appreciated working with on a repeat basis and also the high level of referral business they received from their loyal clients.
Mr Smith said the criteria for the award started with a nomination from the public followed by a ‘secret shopper’ experience in which nominated businesses were assessed on various aspects including customer service, and concluded with an awards evening where the winners were announced.
While the office has been nominated in past years, this is the first time they have won. “We have a very well established team of just on 15 who really do go the extra mile with all those little things we often take for granted, but our clients really appreciate and point out when we survey them.”
With 12 years of real estate experience, Jason and his brother Mark Smith rebranded their successful Blacktown business to Harcourts just on a year ago. Already renowned for their commitment to leading edge systems, Jason Smith said, “rebranding to Harcourts really set us on the right track to move to the next level.” A strong believer in combining high levels of personal customer service with the latest technology, the office maintains high levels of client contact with weekly reports and updates using tools such as SMS messaging, and online buyer searches operating 24/7.
CEO of Harcourts New South Wales, Walter Nanni, said, “The Harcourts Smith Brothers team has been consistently successful in Harcourts’ Annual Awards so it comes as no surprise that they should be voted number one by the community where they work.”
Fri, 15 Jun 2007
The Harcourts Smith Brothers office in Blacktown was announced last week as the winner of the Blacktown City Local Business Awards for Outstanding Real Estate Agency.
Director of Harcourts Smith Brothers, Jason Smith said he was honoured his office had received the award which he emphasised reflected his team’s commitment to consistent high standards from the initial front office greeting through to ongoing contact with past clients after helping them achieve their property goals. He also wanted to acknowledge and thank their vendors and buyers who they appreciated working with on a repeat basis and also the high level of referral business they received from their loyal clients.
Mr Smith said the criteria for the award started with a nomination from the public followed by a ‘secret shopper’ experience in which nominated businesses were assessed on various aspects including customer service, and concluded with an awards evening where the winners were announced.
While the office has been nominated in past years, this is the first time they have won. “We have a very well established team of just on 15 who really do go the extra mile with all those little things we often take for granted, but our clients really appreciate and point out when we survey them.”
With 12 years of real estate experience, Jason and his brother Mark Smith rebranded their successful Blacktown business to Harcourts just on a year ago. Already renowned for their commitment to leading edge systems, Jason Smith said, “rebranding to Harcourts really set us on the right track to move to the next level.” A strong believer in combining high levels of personal customer service with the latest technology, the office maintains high levels of client contact with weekly reports and updates using tools such as SMS messaging, and online buyer searches operating 24/7.
CEO of Harcourts New South Wales, Walter Nanni, said, “The Harcourts Smith Brothers team has been consistently successful in Harcourts’ Annual Awards so it comes as no surprise that they should be voted number one by the community where they work.”
Brewery site sold to Singapore developer
Brewery site sold to Singapore developer
Email Print Normal font Large font Catharine Munro Urban Affairs Editor
June 13, 2007
Advertisement
AdvertisementIN ONE gulp, a Singaporean developer has swallowed the biggest block of land in the inner city.
Stanley Quek yesterday announced he had paid $208 million for the 5.8-hectare Carlton & United Breweries site in Chippendale, predicting that in three to four years he would look back chuffed at his bargain.
After a wrangle between the Lord Mayor of Sydney, Clover Moore, and the state Minister for Planning, Frank Sartor, in 2005 over building restrictions on the site, Dr Quek has permission to build 11 towers of apartments and office space.
"What we want is to create a village that people can work and play in," said Dr Quek, who is chief executive of Frasers Property.
Dr Quek said he was aiming to offer affordable real estate, having just completed the Lumiere apartments on the site of the old Regent Theatre in George Street, using the internationally acclaimed architect Norman Foster to fill in one of Sydney's oldest black holes.
"It's for people who want to live in Glebe but can't afford Glebe prices," Dr Quek said.
But the "village" will be in the context of Mr Sartor's height restrictions for 1666 apartments and 90,000 square metres of commercial and retail space. Dr Quek plans to build to the maximum height restriction of 110 metres for the buildings, which front Broadway opposite the towers of the University of Technology, Sydney. There will also be a park.
Cr Moore, from whom Mr Sartor took control of the planning for the site in 2005, the year the brewery closed, has criticised the restrictions for exceeding the 70- to 100-metre limit that the council wanted in the area.
Frasers Property will have to cough up the $208 million in just over two weeks to meet the demands of the brewer's owner, Fosters Group, which wants a settlement before the end of the financial year.
An attempt to sell the site failed when the developer Australand abandoned its option to buy it for $203 million in March 2005, after disagreeing with the City of Sydney about how densely it could build.
While plenty of office blocks have had a higher price tag, the CUB site is believed to be the most costly piece of land that will be developed from scratch.
Dr Quek promised to hold design competitions for about three of the 11 towers.
He is also obliged to retain 29 of the 33 buildings on the site, which are considered of heritage value.
Any plans will still be subject to development approval by the City of Sydney. Yesterday Cr Moore said she expected excellence in design and community consultation.
"These buildings are an important part of Sydney's history, and the character of Chippendale and together these buildings make up a very special heritage precinct," she said.
The site is also the subject of another court action over climate change. Matthew Drake-Brockman, an inner-city student, argues that the Department of Planning did not take climate change into account in developing the planning controls.
Dr Quek dismissed the threat of court action, saying ecologically sustainable standards would be observed, but he was vague on what features the building would have.
"We will make sure it is as green as possible," he said, citing solar panels and double glazing as two features that might be included in the site.
Email Print Normal font Large font Catharine Munro Urban Affairs Editor
June 13, 2007
Advertisement
AdvertisementIN ONE gulp, a Singaporean developer has swallowed the biggest block of land in the inner city.
Stanley Quek yesterday announced he had paid $208 million for the 5.8-hectare Carlton & United Breweries site in Chippendale, predicting that in three to four years he would look back chuffed at his bargain.
After a wrangle between the Lord Mayor of Sydney, Clover Moore, and the state Minister for Planning, Frank Sartor, in 2005 over building restrictions on the site, Dr Quek has permission to build 11 towers of apartments and office space.
"What we want is to create a village that people can work and play in," said Dr Quek, who is chief executive of Frasers Property.
Dr Quek said he was aiming to offer affordable real estate, having just completed the Lumiere apartments on the site of the old Regent Theatre in George Street, using the internationally acclaimed architect Norman Foster to fill in one of Sydney's oldest black holes.
"It's for people who want to live in Glebe but can't afford Glebe prices," Dr Quek said.
But the "village" will be in the context of Mr Sartor's height restrictions for 1666 apartments and 90,000 square metres of commercial and retail space. Dr Quek plans to build to the maximum height restriction of 110 metres for the buildings, which front Broadway opposite the towers of the University of Technology, Sydney. There will also be a park.
Cr Moore, from whom Mr Sartor took control of the planning for the site in 2005, the year the brewery closed, has criticised the restrictions for exceeding the 70- to 100-metre limit that the council wanted in the area.
Frasers Property will have to cough up the $208 million in just over two weeks to meet the demands of the brewer's owner, Fosters Group, which wants a settlement before the end of the financial year.
An attempt to sell the site failed when the developer Australand abandoned its option to buy it for $203 million in March 2005, after disagreeing with the City of Sydney about how densely it could build.
While plenty of office blocks have had a higher price tag, the CUB site is believed to be the most costly piece of land that will be developed from scratch.
Dr Quek promised to hold design competitions for about three of the 11 towers.
He is also obliged to retain 29 of the 33 buildings on the site, which are considered of heritage value.
Any plans will still be subject to development approval by the City of Sydney. Yesterday Cr Moore said she expected excellence in design and community consultation.
"These buildings are an important part of Sydney's history, and the character of Chippendale and together these buildings make up a very special heritage precinct," she said.
The site is also the subject of another court action over climate change. Matthew Drake-Brockman, an inner-city student, argues that the Department of Planning did not take climate change into account in developing the planning controls.
Dr Quek dismissed the threat of court action, saying ecologically sustainable standards would be observed, but he was vague on what features the building would have.
"We will make sure it is as green as possible," he said, citing solar panels and double glazing as two features that might be included in the site.
Australian sales of newly built homes climbed to a one-year high in April, adding to signs of a rebound in the property market.
Australian sales of newly built homes climbed to a one-year high in April, adding to signs of a rebound in the property market.
Sales of new homes advanced 7.1 per cent from the previous month to 8,776, the Housing Industry Association said in an e-mailed statement yesterday. Sales of detached houses climbed 7.2 per cent and apartment sales increased 6.5 per cent.
Jobs growth and rising incomes have stoked demand for housing, adding to signs of accelerating economic growth. The economy expanded at the fastest pace in more than three years in the first quarter, the unemployment rate fell to a 33-year low in May and home-building approvals surged in April.
‘The April bounceback in sales is certainly very encouraging,’ said Harley Dale, chief economist at the association in Canberra. ‘Still, we want to see further gains in May and June before saying this is the beginning of a sustained recovery in housing.’
The Housing Industry Association represents the nation’s building companies. The series is compiled from a sample of the largest 100 residential builders in Australia and provides a leading indicator of housing.
Source: The Business Times, 14 June 2007
Sales of new homes advanced 7.1 per cent from the previous month to 8,776, the Housing Industry Association said in an e-mailed statement yesterday. Sales of detached houses climbed 7.2 per cent and apartment sales increased 6.5 per cent.
Jobs growth and rising incomes have stoked demand for housing, adding to signs of accelerating economic growth. The economy expanded at the fastest pace in more than three years in the first quarter, the unemployment rate fell to a 33-year low in May and home-building approvals surged in April.
‘The April bounceback in sales is certainly very encouraging,’ said Harley Dale, chief economist at the association in Canberra. ‘Still, we want to see further gains in May and June before saying this is the beginning of a sustained recovery in housing.’
The Housing Industry Association represents the nation’s building companies. The series is compiled from a sample of the largest 100 residential builders in Australia and provides a leading indicator of housing.
Source: The Business Times, 14 June 2007
Saturday, June 9, 2007
Doubts on property firm's value Ben Butler
Doubts on property firm's valueBen Butler
But only if the company's valuations hold up.
Inflated property valuations was one of the key reasons given by the corporate watchdog when it stopped the company raising any more money on April 23.
ACR collapsed last Monday owing 7000 investors $330 million and its bankers about $220 million.
More than 350 investors turned out to yesterday's meeting at the Grand Hyatt.
Those attending were mostly older people. Several said they were pensioners.
More than 800 irate investors attended a meeting in Sydney, forcing organisers to arrange an overflow room.
Administrator Greg Hall of PricewaterhouseCoopers, speaking by link-up from Sydney, said projects under development would be finished.
"There will be a sizeable return to noteholders ultimately, but the size and the timing of that is not yet known," he said.
Under questioning from sceptical investors, Mr Hall admitted the company's book valuation of $624 million in assets was unlikely to hold.
"I think it's unlikely that valuations of that order will be achieved, but I can't give you any guidance on what valuations are likely," he said.
Investors will only see a return if there is anything left after paying the group's bankers.
Investor David Roberts, who sunk $50,000 into ACR, said he didn't find the administrators' presentation reassuring.
He estimated a return of 20 per cent to 30 per cent.
Mr Roberts said he felt sympathy for people who had put all their money into ACR.
"I've lost a lot for my family, but again I knew what I was doing," he said.
One woman attended on behalf of her son, a 25-year-old urban designer from Brunswick who left for an overseas holiday yesterday.
Her son had $20,000 invested in the company, but withdrew $10,000 in December.
"He said he had a bad feeling," she said.
PricewaterhouseCoopers was appointed administrator to the investment part of the group at 2pm yesterday. McGrathNicol, who were appointed by group directors Sam Pogson and Murray Lapham, remain in charge of development arm Estate Property Group.
The group is the third high-risk property investment scheme to collapse in the past two years.
Perth group Westpoint fell over owing investors up to $600 million.
Sydney company Fincorp went broke owing more than $295 million.
But only if the company's valuations hold up.
Inflated property valuations was one of the key reasons given by the corporate watchdog when it stopped the company raising any more money on April 23.
ACR collapsed last Monday owing 7000 investors $330 million and its bankers about $220 million.
More than 350 investors turned out to yesterday's meeting at the Grand Hyatt.
Those attending were mostly older people. Several said they were pensioners.
More than 800 irate investors attended a meeting in Sydney, forcing organisers to arrange an overflow room.
Administrator Greg Hall of PricewaterhouseCoopers, speaking by link-up from Sydney, said projects under development would be finished.
"There will be a sizeable return to noteholders ultimately, but the size and the timing of that is not yet known," he said.
Under questioning from sceptical investors, Mr Hall admitted the company's book valuation of $624 million in assets was unlikely to hold.
"I think it's unlikely that valuations of that order will be achieved, but I can't give you any guidance on what valuations are likely," he said.
Investors will only see a return if there is anything left after paying the group's bankers.
Investor David Roberts, who sunk $50,000 into ACR, said he didn't find the administrators' presentation reassuring.
He estimated a return of 20 per cent to 30 per cent.
Mr Roberts said he felt sympathy for people who had put all their money into ACR.
"I've lost a lot for my family, but again I knew what I was doing," he said.
One woman attended on behalf of her son, a 25-year-old urban designer from Brunswick who left for an overseas holiday yesterday.
Her son had $20,000 invested in the company, but withdrew $10,000 in December.
"He said he had a bad feeling," she said.
PricewaterhouseCoopers was appointed administrator to the investment part of the group at 2pm yesterday. McGrathNicol, who were appointed by group directors Sam Pogson and Murray Lapham, remain in charge of development arm Estate Property Group.
The group is the third high-risk property investment scheme to collapse in the past two years.
Perth group Westpoint fell over owing investors up to $600 million.
Sydney company Fincorp went broke owing more than $295 million.
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