Archive | Securities – overseas

Goodman-GIC joint venture settles Bayleys House purchase

The joint venture between the NZX-listed Goodman Property Trust & Singapore sovereign wealth fund GIC Pte Ltd has settled its $62.3 million purchase of Bayleys House in the Wynyard Quarter.

The deal was announced on 12 May.

The acquisition of Bayleys House and the $86.2 million purchase of the neighbouring Datacom Building, which settled in May, take joint venture company Wynyard Precinct Holdings Ltd’s portfolio to 7 buildings worth over $470 million.

The 6-storey 8106m² Bayleys House backs on to the Fonterra Centre, also in the portfolio. Fonterra at 109 Fanshawe St, and Bayleys at 30 Gaunt St, also front Halsey St in the VXV Precinct which has been developed by ASX-listed Goodman Group on leasehold land owned by Viaduct Harbour Holdings Ltd.

The 7-storey 16,735m² Datacom building is across VXV Plaza from Bayleys, on the corner of Gaunt & Daldy Sts.

Predominantly leased to real estate specialist Bayleys, technology provider IBM & law firm Mayne Wetherell, Bayleys House’s leases incorporate fixed review structures and have a weighted average term of 9 years. The ground-lease obligations are structured for a period of 15 years.

Goodman Group undertook the development on a build-to-lease basis. The purchase price reflects an initial yield of 7.6% on contract rentals, and additional fitout rent increases the passing yield to 8.8%.

Earlier story:
14 May 2017: Goodman-GIC joint venture adds Bayleys House to portfolio

Attribution: Company release.

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Goodman-GIC joint venture adds Bayleys House to portfolio

The joint venture between the NZX-listed Goodman Property Trust & Singapore sovereign wealth fund GIC Pte Ltd has added Bayleys House in the Wynyard Quarter to its portfolio.

That acquisition for $62.3 million, and the $86.2 million purchase of the neighbouring Datacom Building, which settled on Friday, take joint venture company Wynyard Precinct Holdings Ltd’s portfolio to 7 buildings worth over $470 million.

The recently completed 6-storey 8106m² Bayleys House backs on to the Fonterra Centre, also in the portfolio. Fonterra at 109 Fanshawe St, and Bayleys at 30 Gaunt St, also front Halsey St in the VXV Precinct which has been developed by ASX-listed Goodman Group on leasehold land owned by Viaduct Harbour Holdings Ltd.

The 7-storey 16,735m² Datacom building is across VXV Plaza from Bayleys, on the corner of Gaunt & Daldy Sts.

John Dakin, chief executive of the Goodman trust’s manager, Goodman (NZ) Ltd, said the partnership strategy provided scale for the trust and gave it greater exposure to Auckland’s fastest-growing commercial precinct.

“Featuring large flexible floorplates and incorporating sustainable architectural elements & energy-efficient building systems, the lowrise office property is designed to a 5 green star rating. It is also expected to achieve a 5-star NabersNZ base building rating when assessed in 12 months’ time.”

Predominantly leased to real estate specialist Bayleys, technology provider IBM & law firm Mayne Wetherell, Bayleys House’s leases incorporate fixed review structures and have a weighted average term of 9 years. The ground-lease obligations are structured for a period of 15 years.

Goodman Group undertook the development on a build-to-lease basis. The purchase price reflects an initial yield of 7.6% on contract rentals, and additional fitout rent increases the passing yield to 8.8%.

The acquisition, which remains conditional on the approval of the landowner, is expected to settle in June.

On settlement, the joint venture’s portfolio will contain 88,000m² of office space for about 20 tenants. When future lease commitments are incorporated, the portfolio will have an occupancy rate of 96% and a weighted average lease term of over 9 years.

Earlier stories:
27 March 2015: Fletcher & Goodman sign up for new Wynyard Quarter building
7 November 2014: Goodman Group buys another Wynyard development block

Attribution: Company release.

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Frank Lowy & sons talk the ingredients for future retail

Westfield Corp Ltd chair Frank Lowy told the company’s annual meeting in Sydney last week its focus on flagship assets had kept it ahead of the competition. His sons, Peter & Steven, who are co-chief executives, elaborated – including a new focus on apartment development at some sites.

Westfield restructured in 2014, creating Westfield Corp as owner of its northern hemisphere assets and Scentre Ltd as owner in Australia & New Zealand, all still flying the Westfield flag.

Westfield Corp made $US1.4 billion profit in 2016, including over $US1 billion in revaluation gains, which Frank Lowy said was largely driven by the value generated from its development programme: “Our strategy is to create & operate flagship assets in leading markets that deliver great experiences. We are focused on innovation. Our aim is to create a digital platform that complements our physical portfolio and provides a better connection between retailers, brands & consumers.”

Decline of the secondaries

He said 2 factors were impacting the US retail environment: “The first is the decline of what we refer to as secondary centres, and the second relates to the US department store business.

“On the issue of secondary centres – it has been evident to us for some time that the US is ‘over-retailed’. Put simply, there is too much retail space in that market. This has put pressure on any retail asset which is not considered to be the primary asset in the relevant market.

“At Westfield, for more than a decade, we have been discussing publicly the division of the shopping centre industry – between flagship assets & secondary assets.

“Since 2010 we have been steadily reducing our investment in secondary assets and increasing our focus on the best assets in the best markets – the assets we refer to as flagship centres.

“The difference in performance between flagship centres & secondary assets is obvious when you look at our portfolio metrics. Our flagship assets, which today represent 82% of our portfolio, command higher rents and have higher levels of occupancy & sales growth.

“In executing our flagship asset strategy since 2010, we have divested 29 secondary centres in the US & UK, with a total value of $US 7 billion. We have also joint-ventured 22 assets, raising $US4.6 billion of additional capital. Those proceeds have been reinvested in our $US9.5 billion development programme which is now underway – all with the aim of creating the highest quality retail portfolio in the world.

“When our current development programme is completed in 2020 or 2021, we expect that 90% of our portfolio will comprise flagship centres, with 9 of those centres expected to achieve sales of more than $US1 billion, pounds or euros each year.

Department stores finding new life in malls

“The second factor impacting US retail is the well publicised decline in the US department store business. As most of you know, Westfield has been involved in the shopping centre business in the US since 1977. Since the mid-1980s, we have witnessed a decline in the importance of the department store business in that market. The current weakness is the culmination of a trend which has been in progress for a very long time.

“It is now generally accepted that retailers in the US, including the department stores, need less physical stores to service the markets in which they operate. Recognising this trend, in recent years we have bought back department store space and repurposed that space to introduce new & more productive retailers – retailers who have greater capacity to attract shoppers to our centres. Our expectation is that this trend will continue in future years.

“The department stores also recognise the value of locating their stores in our flagship assets. At the moment, a number of different department stores are opening new stores in our developments whilst closing many stores in other locations. It is these factors which have driven us to reposition the Westfield portfolio toward flagship assets to ensure that the changes in the retail environment have a positive, rather than a negative, impact on the company.

In 2016 our flagship centre strategy was in evidence with the launch of Westfield World Trade Centre. Westfield owned the retail component of the Twin Towers on 9/11 and the journey to its rebirth was long & complex, but the result is something that our company, and the city of New York, can be very proud of. Our centre forms part of an incredible landmark, something befitting the history, culture & people of New York.

Westfield advances digital programme

“In 2016, we took a further step in the evolution of our digital programme. In the shopping centre industry we know we must constantly change & evolve. In the digital world we must move at a faster pace, constantly testing new technologies, and using our data to deliver the best experience.

“To achieve this we have created Westfield Retail Solutions to take a broad approach to digital products, data analytics & all aspects of the Westfield business to create seamless solutions for our consumers, retailers and brand partners.”

Peter Lowy.

Peter Lowy told the annual meeting: “On completion of our development programme, we will have a portfolio of between $US45-50 billion, with 9 centres expected to have annual retail sales in excess of $US1 billion and average flagship specialty sales of over $US1000/ft² ($NZ15,480/m²).

Residential opportunities

“It is worth noting that, in additional to our retail development programme, we have significant residential rental opportunities. We have identified the opportunity to build about 8000 apartments in the US & UK on land already in our portfolio. We plan to partner with third-party capital to fund the construction of many of these opportunities. These opportunities will enhance the value of our portfolio by maximising the value of our existing real estate. In 2018, we expect to commence a 1200-apartment project at Stratford in London and a 300-apartment project at UTC in San Diego.”

Big brands become the new retailers

Steven Lowy.

Steven Lowy said: “We operate in an increasingly connected world, where technology & consumer behaviour moves at a much faster pace than was the case a decade or 2 ago. Retail formats are continually adapting, and not always in predictable ways. It is true that online retailing and the use of digital technology is on the rise. But it’s equally true that this is opening up new & exciting opportunities for Westfield.

“New retail formats that didn’t exist a few years ago are now among the most popular features of our shopping centres. Companies that were never regarded as ‘retailers’ are taking space in our centres – car companies like Ford, Citroen & Tesla are creating exciting new spaces to showcase their latest products. A host of global brands like Pepsi, JP Morgan Chase, Samsung, Lexus & Senheisser now feature on our state-of-the-art digital advertising screens and launch new products from London to New York to Los Angeles & San Francisco.

Other global brands are also increasing their presence in Westfield centres. Technology companies like Apple & Microsoft and the global fashion & cosmetics brands like Zara and H & M and Sephora.

“The food, leisure & entertainment aspect of our business has undergone a revolution – where once we merely provided a shopfront for a retailer selling food, we now host vibrant food concept stores like Eataly, which provide a whole new level of product & experience. In fact, food & dining now plays a vastly more important role in our centres than it used to. At Stratford in London, there are more than 80 food retailers.

“We are able to do this, to stay at the forefront of our industry and respond quickly to change, because we have continued to execute a consistent strategy. This strategy boils down to 2 key objectives: to continually improve the quality of our physical assets while integrating digital & other new technology to deliver great experiences. Both elements of this strategy are reflected in the makeup of our senior executive team.

New type of executive

“Of course, we continue to rely heavily on our traditional real estate & shopping centre management expertise. But we have also recruited executives from the digital, entertainment & advertising sectors. [Westfield Retail Solutions executive director] Don Kingsborough has been building a technology team drawn from companies like Google & PayPal, and we recently acquired a small Broadway production company to build our capacity to create even better experiences in our centres.

The £600 million redevelopment of Westfield London is 6 months ahead of schedule and we expect the project to launch in early 2018. Upon completion, it will be the largest shopping centre in Europe. Our 2 London centres already generate around £2.2 billion of retail sales from 75 million annual customer visits. The $1.1 billion expansion of Valley Fair started last year. Valley Fair is currently one of the most productive centres in the US, with annual specialty sales of around $US1200/ft² ($NZ18,575/m²).

“The chairman briefly described the major changes underway with department stores globally, but especially in the US. Again, by anticipating this long-term trend, Westfield has been able to benefit.

“As underperforming department stores close in less attractive markets, they are opening new stores in our flagship development projects. We will see a new Nordstrom store open at Century City in Los Angeles and another at UTC in San Diego. Bloomingdales will open a new store at Valley Fair in Silicon Valley. France’s biggest department store, Galeries Lafayette, will open their first store in Italy in our new centre in Milan, and John Lewis will have a new store at Westfield London.”

Link:
Westfield Corp

Attribution: Company AGM speechnotes.

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WestCity back on market

Westfield shopping mall owner Scentre Group Ltd has put WestCity in Henderson back on the market, this time through Auckland agency Whillans Realty Ltd & Sydney agency McVay Real Estate Australia.

Whillans hasn’t opened a public campaign yet, but provided the images to support McVay’s Sydney campaign.

6 of Scentre’s 40 malls are in New Zealand, and WestCity is the last still wholly owned by the company after it sold 49% of 5 of them – Albany, Manukau, Newmarket, Riccarton & St Lukes – to Singapore’s sovereign wealth fund, GIC, at the end of 2014.

Scentre put WestCity & the other 3 New Zealand centres on the market last year and sold 3 in November – Glenfield to Ladstone Holdings Ltd, Queensgate in Lower Hutt & Chartwell in Hamilton to the Diversified fund managed by Stride Property Ltd – for a combined $549 million.

According to the Australian Financial Review yesterday, McVay is looking at an $A175 million price tag for WestCity, which sits on 5ha across the rail tracks from the former Waitakere City Council chambers. The mall has 3 anchor tenants, cinemas & 130 specialty stores in a net lettable area of 36,144m², and 1492 parking spaces.

Agency director Sam McVay said intensification of the surrounding area would underpin growth, but loosening of development limits under the new unitary plan meant the mall itself could be further developed to 18 levels of apartments.

Earlier stories:
24 February 2016: Lowy says first results vindicate Scentre restructure
27 November 2015: Scentre sells 3 malls to locals, one to go
25 February 2015: Scentre to sell the other 4 NZ malls
7 November 2014: GIC buys into 5 NZ Westfield malls

Attribution: McVay, Australian Financial Review.

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Lendlease becomes Barangaroo tenant and promotes multi-storey timber office construction

Lendlease Corp moved into its new headquarters in the 168-tall tower 3 of Barangaroo South’s International Towers on Friday, 11 years after being shortlisted in the design competition for the new Sydney financial district between the harbour bridge & Darling Harbour and 6½ years after winning the state government contract to develop stage 1.

2000 of the construction company’s employees are moving from 5 locations into 24,500m² on levels 8-19 of Tower 3’s 39 floors.

Work practices

Chief executive & managing director Steve McCann said the new headquarters showcased Lendlease’s capability – it’s owned by a Lendlease-managed fund, was built by the company, is in a precinct transformed by its urban regeneration business and is in a tenancy that demonstrated the group’s understanding of vibrant, productive workspaces for employees & customers.

Under the team-based working model, instead of belonging to an individual desk, employees belong to a team neighbourhood of 15-20 people, and each neighbourhood has access to a range of spaces. Spaces include a team table, the anchor point for each team; working walls for visual communication; enclosed spaces known as pods; breakaways, for less formal & ad hoc collaboration; and focus points, for tasks requiring concentration.

Levels 13 & 14 feature a 6m high breathing green wall containing over 5000 plants. Mr McCann said the active, modular green wall system was scientifically proven to accelerate the removal of air pollutants, such as carbon dioxide & volatile organic compounds. “In addition, it cools the surrounding air temperature, resulting in energy efficiency and health & wellbeing gains.”

Tower 3 is one of the largest highrise office buildings to have received a 6 star green star office design v3 rating from the Green Building Council of Australia.

As well as noting that staff will have access to over 1000 bike racks, 40% of their work stations are stand-up desks. Lendlease made some observations about work practices in its business, and said the research that informed its new workplace strategy & design revealed:

  • 41% of its people occupy a work point seat at any time
  • 36% are away, on site or working away from the office
  • 23% will be around & about, mainly in meetings or refreshing
  • 54% of their work is process-type, interruptible & routine
  • 53% of their work is done collaborating with others, and
  • 46% of their work requires deeper thinking, focus & to be ‘in the zone’.

Barangaroo South project progress

The whole of Barangaroo South adds about 270,000m² of premium office space to Sydney – similar in scale to the Marina Bay financial centre in Singapore & Canary Wharf in London. 3 towers named International Towers Sydney have been built, 2 now occupied:

Tower 1, PwC, HSBC, Marsh & McLennan, Servcorp
Tower 2, Westpac, Swiss Re, Gilbert + Tobin
Tower 3, KPMG, Lendlease

  • $A4 billion of funding secured for the whole precinct
  • Unitholders in the Towers 2 & 3 owner, Lend Lease International Towers Sydney Trust, are the Canadian Pension Plan Investment Board (50%), Australian Prime Property Fund Commercial (25%), Lend Lease Trust (15%) & APG (10%)
  • Tower 2 completed & opened 1 July 2015. Tower 3 opening mid-2016 and Tower 1 to open end 2016
  • Barangaroo Reserve (6 ha of parkland) opened by NSW Government in mid-2015.
  • 7000 office workers have moved into Tower 2 and 25 retailers are trading in the precinct; on completion there will be over 80 retail outlets
  • $A40 million public art fund ($A20 million for Barangaroo South) established, with first indigenous artwork unveiled late 2015
  • Transport for NSW’s construction of Wynyard Walk & Barangaroo Ferry hub is ongoing
  • Planning assessments in progress for concept plan amendment (modification 8) & Crown Hotel
  • Application to come for Renzo Piano-designed 1 Sydney Harbour towers.

Trust also buys 6-storey laminated timber office building

An impression of the 6-storey Barangaroo timber-structure office building.

An impression of the 6-storey Barangaroo timber-structure office building.

As its own new headquarters in Barangaroo South neared completion, Lendlease Corp announced on 24 June that the owner of 2 of the 3 office towers in the precinct, Lend Lease International Towers Sydney Trust, would also acquire an innovative 6-storey engineered timber office building.

The building, designed by Jonathan Evans & Alec Tzannes of Tzannes Associates, is aimed at setting a new benchmark in the use of sustainable building materials. It’s due for completion next year.

It will have 5 office floors above ground-floor retail, net lettable area of 6850m², and will be built at the Sussex St junction between the old central business district and the new Barangaroo.

The building will be constructed from cross-laminated timber (CLT) & glue-laminated timber (glulam). CLT has a lower carbon footprint than other building materials, the production process produces zero waste, and timbers are sourced from certified sustainably managed forests. Much of the building can be prefabricated and assembled on site.

Mr Tzannes said: “Looking from the bridges leading to Barangaroo, through the clean glass skin, the multi-storey timber structure forms the character of the architecture, that from inside creates an interior environment reminiscent of the spaces often found in Sydney’s historic timber or cast iron & brick buildings from the era when warehouse buildings were crucial to Australia’s maritime economy.”

International House Sydney is Lendlease’s third CLT building in Australia, joining 2 in Melbourne – Forté Apartments and the Library at The Dock. The library is Australia’s first 6-star green star public building and is made from engineered timber & reclaimed hardwood.

Links: Lendlease
Barangaroo
Barangaroo South
International House Sydney

Earlier stories:
21 December 2009: Lend Lease wins Barangaroo stage 1
25 March 2006: 11ha of park in Sydney’s East Darling redevelopment
7 August 2005: East Darling Harbour design competition goes to round 2

Attribution: Company releases.

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Venning rejoins now-ASX listed Investar 4 years after selling it

Campbell Venning of Masterton has rejoined the Real Estate Investar business as head of property 4 years after selling it to Australian interests.

He’s also sold another of his companies, The Property Factory Ltd, to the Gold Coast-based Real Estate Investar Group Ltd for $NZ550,000 in cash, and sold Positive Real Estate Ltd to local buyers in April.

Real Estate Investar Group provides online investment services to Australian & New Zealand property investors. When it listed, the company talked of having 190,000 members using its services at the listing date and targets to lift membership to 200,000 by last month and to 250,000 by the end of this year.

However, when it released its half-year financial report to 31 December 2015 in February, its performance & financial highlights were:

  • Members increased by 43.5% in a year to 152,439
  • Subscribers increased by 18% to 2699
  • Total revenue increased by 6%, from $A1.8 million to $A2 million
  • Referral revenue increased from $A67,431 to $A310,706 for the half-year, and
  • Pro forma ebitda improved from an $A537,079 loss to an $A318,538 loss.

Investar listed on the ASX in December after issuing 25 million shares in a public offer at A20c, 10.6 million shares to Fairfax Media Ltd & 6.6 million shares to convertible noteholders. Including 29.2 million shares classified as restricted securities for 24 months and not quoted, and some smaller parcels restricted until May & August this year, Investar has 84.5 million shares.

Trading opened at A19.5c on 10 December and the price has declined to a range of A5-8c/share since 1 April, bottomed at A4.9c/share on 25 May but rose half a cent to A6.3c on Friday. Market capitalisation has dropped from $A16.9 million to $A5.3 million.

Investar chief executive Clint Greaves, who previously worked for property developer Latitude Group Ltd in New Zealand, said on Friday the Property Factory had experience in investment property sales as well as access to exclusive listings in New Zealand that were relevant to the Investar membership base: “The acquisition accelerates Investar’s property sales business by providing the skills & capabilities to sell investment-grade properties, in many instances at wholesale prices.

“The property sales business is expected to generate significant revenue growth from sales commissions & associated services.”

Mr Venning’s new role will be to offer buyer’s agency, house & land and off-the-plan packages to the company’s property investor members.

“The opportunity to join the Real Estate Investar Group is a significant one – the company has a high level of engagement with property investors throughout Australasia, and I am excited to be able to help those 190,000+ members secure even better investment property opportunities,” he said.

Since 2000, Mr Venning has led a number of local & international real estate businesses, including a property education franchise, an investor-focused development business, an Australian technology start-up offering specialised investor tools, and Positive Real Estate Ltd, which specialises in residential investment stock.

Link: Real Estate Investar

Attribution: Company releases, Companies Register, ASX.

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World property W20Apr16 – Goodman continues Chinese growth

Goodman opens 11ha Shanghai facility 97% leased

Sydney-based Goodman Group opened its 11ha Goodman Qingpu Centre industrial & business facility in a state-level development zone in Shanghai, the Zhangjiang Qingpu Hi-Tech Park, last Wednesday amid plentiful indications of further business.

It’s the group’s first 3-storey distribution facility in China and, by completion, it had achieved 97% occupancy with leases to 3 companies:

  • 63,130m² to e-commerce company JD.com, an existing Goodman customer in Tianjin, Kunshan & Chengdu
  • 22,602m² to Shanghai Kuichun Industry, a nationwide distributor of imported food & beverage products, and
  • 21,155m² to Japanese distributor & supply chain company Kintetsu World Express.

Goodman Group, cornerstone unitholder & manager of the NZX-listed Goodman Property Trust, manages 432 properties internationally, worth $A33.4 billion, and 41 properties worth $A7.5 billion in greater China (including Hong Kong & Taiwan).

Chief executive Greg Goodman said the group had a Chinese development work book of 17 projects totalling 800,000m²: “An increasing number of our developments are preleased, indicating the maturity of the market as more companies incorporate their future property space needs into their overall business planning. Goodman has received encouraging demand with over 60% of these projects precommitted, with a high level of inquiry on the balance of the space, from both local & international customers.”

Goodman & the Canada Pension Plan Investment Board increased their equity allocation to the Goodman China Logistics Partnership by $US1.25 billion in December to take advantage of the current operating conditions and undersupply of prime industrial space in China.

Attribution: Goodman

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property Sat5 Mar16 – Melbourne Quarter approval, big development outside Brisbane

Lendlease’s Melbourne Quarter gets stage 1 approval
$A6 billion development campaign opens for aspiring Brisbane cbd competitor

Lendlease’s Melbourne Quarter gets stage 1 approval

Victorian planning minister Richard Wynne approved the first stage of Lendlease Group’s $A1.9 billion Melbourne Quarter development on Thursday.

Mr Wynne said the precinct on Batman Hill, between Collins & Flinders Sts and across the road from Southern Cross station, would improve the link between the Hoddle Grid (the rectangle marked out 180 years ago as Melbourne’s centre) & Docklands. The approval includes a 2000m² elevated park to be built over part of Wurundjeri Way & Collins St, called Melbourne Skypark & expected to be complete in 2018.

A 30,000m² 19-level commercial tower has also been approved for Aurora Lane & Collins St. It will have 177 car spaces & 210 bike spaces.

All up, the development will have 7 commercial & residential buildings, 110,000m² of office space, 4500m² retail net lettable area, and 3 towers on Flinders St will contain 1700 apartments.

The managing director of Lendlease’s urban regeneration business in Australia, Jonathan Emery, said: “With its apartment neighbourhood located next to a thriving commercial district, Melbourne Quarter offers the opportunity to live next to work, which is increasingly appealing for young professional owner-occupiers & investors with a keen eye on the leasing market.

“Lendlease’s urban regeneration footprint across the globe has revealed that an increasing number of city dwellers are aspiring to live close to work, and where they have access to all a city has to offer – restaurants, shopping, public transport, workplaces & education. Melbourne Quarter delivers on this need.”

On completion, it is expected to be home to 10,000 workers & 3000 residents.

Links: Melbourne Quarter
Victorian Government, 3 March 2016: Elevated park & office tower approved for Docklands

$A6 billion development campaign opens for aspiring Brisbane cbd competitor

The developer of a city on the outskirts of Brisbane, which it wants to become a competitor of Brisbane’s central business district, launched an expressions of interest campaign on Monday for a medium-density apartment project with an estimated $A6 billion end value.

Springfield Land Corp chair Maha Sinnathamby, who bought the original 2860ha of Greater Springfield 30km south-west of Brisbane with business partner Bob Sharpless for $A7.2 million in 1990, has grown it to a population of 32,000 and is aiming for 86,000 by 2030.

He’s seeking development & capital partners to deliver the 10,000-apartment City Centre North project, and ancillary commercial & retail space, next to the rail station & transit hub in the heart of Greater Springfield over the next 15 years. UBS AG’s Australian branch, as financial advisor, is running the expressions campaign.

Springfield is a suburb of Ipswich, a city of 180,000 people, but has been changing fast. It’s had $A12 billion invested in it, and about $A600 million/year is being spent on construction. The University of Southern Queensland has just completed an $A45 million expansion of its campus, the Orion Springfield Central shopping centre has undergone an $A154 million expansion, and new office buildings include GE’s $A72 million Queensland headquarters, opened last year.

Mr Sinnathamby, 76, studied engineering in Sydney in the 1960s, and emigrated to Australia from Malaysia in the 1970s after working at the World Bank & Asian Development Bank. He said this week: “The City Centre North apartment project represents an exciting next step in the evolution of Greater Springfield, as an alternative to the Brisbane cbd, providing greater housing & work choices to the diverse mix of Greater Springfield residents across age cohorts & market segments. It also represents an opportunity for another visionary group to join existing major stakeholders who have been active in the development and commercialisation of Greater Springfield.”

Link: Greater Springfield

Image: Lendlease’s Melbourne Quarter (left foreground).

Attribution: Lendlease, Victorian Government, Greater Springfield

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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World property Sun28Feb16 – Multiple Goodman projects in UK, London City Airport sells, Melbourne port lease

Goodman teams up to develop Anglesea UK portfolio
Canadian & Kuwaiti consortium buys London City Airport
Deal agreed to sell Melbourne port lease

Goodman teams up to develop Anglesea UK portfolio

Goodman Group & Anglesea Logistics Partnerships have leased a spec warehouse in the Derby commercial park in the English Midlands to the group that owns the global lifestyle brand Ted Baker, No Ordinary Designer Label Ltd, as Goodman lifts its production of logistics space around the UK.

Asset manager & trader Anglesea Capital 0 LLP entered a joint venture with Goodman in November 2014, and has entered into a partnership funding joint venture with Lone Star Real Estate Fund III for this partnership, while Goodman has agreed to sell 4 more logistics assets containing 220,000m² to the joint venture.

The £25 million Ted Baker building, Angle 325, is a 30,000m² high-spec warehouse including 1400m² of office. It’s being fitted out and is due for completion at the beginning of May. It will be the retailer’s pan-European distribution centre, handling all operations for its retail, wholesale & e-commerce businesses in Europe and operating 24/7.

Goodman has spent £175 million developing the 66ha Derby commercial park at Raynesway, 3km from the centre of Derby, and has just opened a 59,000m² design/build national distribution facility there for Kuehne & Nagel and Heineken. It has 2 more spec warehouses lined up for construction at Andover in Hampshire & London Medway for the Anglesea partnership.

Sydney-based Goodman is also at full stretch in Europe. It signed up in January to develop a 130,000m² facility for online fashion, shoe & accessory retailer Zalando SE.

Link: Goodman UK

Canadian & Kuwaiti consortium buys London City Airport

3 Canadian pension fund managers and a Kuwaiti infrastructure investor agreed on Friday to buy London City Airport from Global Infrastructure Partners (75%) & Highstar Capital LP (25%). They haven’t disclosed financial details. The transaction is not subject to any regulatory approvals and is expected to close on 10 March.

The airport was opened near Canary Wharf in the Royal Docks in 1987 and Global Infrastructure Partners took control of it in 2006.

The new owners are Alberta Investment Management Corp (Aimco), on behalf of its clients OMERS (originally the Ontario Municipal Employees Retirement System), the Ontario Teachers’ Pension Plan & Wren House Infrastructure Management Ltd. Wren House is the infrastructure investing arm of the Kuwait Investment Authority.

Link: OTPP release

Deal agreed to sell Melbourne port lease

The Victorian State Government & opposition coalition agreed terms on Thursday enabling the sale of the lease on the port of Melbourne.

State Treasurer Tim Pallas said the 50-year lease should be sold early next year. While he’s been kept clear of the transaction, he’d been told 4 consortiums were lined up to buy the lease.

The Labor government agreed on Thursday to an opposition demand to amend the law enabling the lease, restricting compensation for the buyer. Compensation will be payable if the Government opens a second port within 15 years and the original port hasn’t reach its agreed capacity.

The port lease law is scheduled to be passed on Tuesday 8 March.

Attribution: Goodman, Anglesea, OTPP, GIP, Victorian Government

Regular leads: Europe Real Estate, Mingtiandi, Planetizen

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Lowy says first results vindicate Scentre restructure

Scentre Group Ltd chair Frank Lowy said yesterday the Westfield mall owner & operator’s strong results for 2015 validated the rationale for creating the reorganised Australia-NZ business.

Mr Lowy, who will retire at the annual meeting in May but will continue to chair the northern hemisphere operation, Westfield Corp, said: “Scentre Group’s pre-eminent portfolio & unique market position have provided a strong operating performance & excellent returns for securityholders since the group was established as a separate entity.”

Scentre made $A2.7 billion net profit (the 2014 figure, a profit of $A6.6 billion, wasn’t comparable because of restructuring). The 2014 profit attributable to continuing operations after tax, before charges & credits relating to the restructure, was $A1.8 billion. In 2015 it rose 52% to $A2.73 billion.

Funds from operations for the 12 months grew by 3.8% to $A1.199 billion (A22.58c/security), which Mr Lowy said would have been 5% if the group hadn’t undertaken a large selldown of assets. The group’s 12-month distribution of A20.9c/security was in line with the forecast.

Chief executive Peter Allen said: “We are very pleased with these results, which highlight the quality of our portfolio and the benefits of curating the right retail mix for our shoppers. The secure cashflows from our shopping centres, together with our accretive development programme, will provide growth in income through the economic cycles.”

In New Zealand, Scentre has $NZ2.4 billion of assets under management out of a total $A42 billion, and the capitalisation rate on the New Zealand assets is much higher – 6.98% versus 5.51% for the Australian malls.

6 of the group’s 40 malls are in New Zealand, only one of the 6 (WestCity at Henderson) now wholly owned after Scentre sold 49% of 5 of them – Albany, Manukau, Newmarket, Riccarton & St Lukes – to Singapore’s sovereign wealth fund, GIC, at the end of 2014. Scentre put its other 4 New Zealand centres on the market and sold 3 in November – Glenfield to Ladstone Holdings Ltd, Queensgate in Lower Hutt & Chartwell in Hamilton to a fund managed by Stride Property Ltd – for a combined $549 million.

The ownership change doesn’t mean Scentre has forgotten New Zealand – Albany, Newmarket & St Lukes are included in its $A3 billion development pipeline.

Mr Allen said the group’s $A1.5 billion of revaluations in 2015 were driven by growth in underlying income, the completion of developments and a firming of capitalisation rates across the portfolio.

At 31 December, Scentre had a strong balance sheet – total assets of $A31.8 billion, a gearing ratio of 33.3% & liquidity of $A3.7 billion.

Comparable specialty sales in the Australian portfolio grew 5.3% for the 12 months, averaging $A10,826/m² for the year. In New Zealand, those sales grew 6.6% to $NZ12,117/m².

Mr Allen said comparable property net operating income increased 2.6% for the 12 months, higher than the forecast range of 2-2.5%, reflecting lower vacancies & additional income streams.

The group is forecasting 3% growth in funds from operations this year.

Earlier stories:
27 November 2015: Scentre sells 3 malls to locals, one to go
25 February 2015: Scentre to sell the other 4 NZ malls
7 November 2014: GIC buys into 5 NZ Westfield malls

Attribution: Company release.

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