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Precinct Properties presents a long list of positives from development & in financial structure

Major commercial property owner – and nowadays developer – Precinct Properties NZ Ltd lifted its net profit after tax for the year to June by 57.2% to $254.9 million.

The NZX-listed company’s biggest project at the moment is the $1 billion Commercial Bay development, redeveloping the Downtown Shopping Centre site at the foot of Auckland’s central business district. It’s also developing Bowen Campus in Wellington and has completed developments in Auckland’s Wynyard Quarter.

Image above: The trio of buildings at the centre of Precinct Properties’ strong performance – the existing PwC Tower at right, the new PwC Tower under construction and the existing HSBC House at 1 Queen St, to be redeveloped into a hotel with office above.

Chief executive Scott Pritchard said yesterday Fletcher Building Ltd had provided revised completion dates at Commercial Bay of September 2019 for the retail & December 2019 for the new PwC Tower (across Albert St from the building currently called PwC Tower).

Precinct also announced its plans for 1 Queen St, sitting on the Quay St frontage of the redevelopment, to include a 244-room luxury hotel operated by the InterContinental Hotels Group (IHG) – see separate story.

9% revaluation gain

Mr Pritchard said the quality of Precinct’s portfolio had resulted in a $208.7 million (9%) portfolio revaluation gain to $2.5 billion.

Precinct Properties is the largest city centre real estate owner in New Zealand, and Mr Pritchard said it was committed to its long-term strategy as a city centre specialist.

“The last financial year has delivered another strong result for our business. As we move forward with our strategy, we progressed a number of initiatives and achieved key milestones during the year.

“We have continued to take an active management approach with our investment portfolio & our development pipeline, leveraging Precinct’s market position.”

“The long-term outlook for the Auckland market remains strong, with solid demand drivers for city centre real estate across the office, retail, hotel & residential markets.”

Mr Pritchard said the Wynyard Quarter & Bowen Campus also contributed to this growth, with works progressing well over the last 12 months.

The Precinct Properties precinct: From the ANZ Centre up Albert St, down to the waterfront via Commercial Bay where Precinct is developing the new PwC Tower across the street from the existing PwC Tower, and yesterday announced the redevelopment of 1 Queen St (at right) to contain a hotel with offices on the upper levels.  Other Precinct buildings in this precinct are Zurich House and the AMP Centre.

Commercial Bay update:

Precinct’s reinforced its vision & long-term commitment to the rejuvenation of the central city with the announcement of the $298 million development at 1 Queen St (currently HSBC House), which will include the hotel in the lower half of the building.

Commercial Bay, looking out between the Cloud & Princes Wharf.

This development has been designed to integrate seamlessly with Commercial Bay. Its upper floors will also be remodelled to contain high quality office space & unique food & beverage options, including a rooftop bar.

Commercial Bay & its retail wrap’s Customs St frontage yesterday.

Mr Pritchard said phase one of the Commercial Bay retail remained on schedule, with international powerhouse H&M opening its flagship 3800m² store fronting Customs St in a fortnight, on Thursday 30 August. Passersby have been able to watch H&M’s creation in the new lowrise building beside the 21 Queen St offices of Zurich House, as windows have started to be placed at lower levels of the 39-storey Commercial Bay tower at the corner of Customs & Albert Sts.

“This marks a significant milestone for the transformational development which is reinvigorating the heart of the central city,” Mr Prithcard said. “The superb 4-storey retail offering promises to be the country’s premier H&M destination.

“Phase 2 of the Commercial Bay retail & the new PwC Tower have revised estimated completion dates, following the confirmation of a completion programme from main contractor Fletcher Building Ltd.

The revised completion dates are September 2019 for the Commercial Bay retail & December 2019 the new PwC Tower.

“The programme provided by Fletcher Building has been independently reviewed by Precinct’s expert programmer, RCP, who confirm the revised dates are achievable, subject to the main contractor’s performance.

“Precinct remains confident with the provisions of its construction contract, which protect the business from losses due to contractor delay.

“While any delay in a project is disappointing, we believe Fletchers are maintaining a very high standard of quality during a very challenging period within the construction industry.”

Commercial Bay’s entrance on to Quay St.

The new timeframes also affect prospective tenants: “Precinct continues to work closely with retailers at Commercial Bay to communicate the revised occupation dates. For those occupiers coming into the new PwC office tower, all have lease terms which extend beyond the revised completion dates of the office tower.”

Mr Pritchard said Commercial Bay continued to achieve a good level of leasing enquiry. Precinct had secured retail commitments to 76% and office commitments to 78%: “The $1 billion Commercial Bay waterfront development & lifestyle district is destined to become Auckland’s newest shopping, dining & social hub, offering a vast range of food & beverage outlets.”

Precinct Properties
Precinct Properties annual report
Commercial Bay

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

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Precinct Properties valuations & profit up, debt low

Precinct Properties NZ Ltd increased its net profit after tax by 57.2% to $254.9 million (2017: $162.1 million) in the year to June. The quality of Precinct’s portfolio including its active development pipeline has resulted in a portfolio revaluation gain of $208.7 million, or 9.0%.

Image above: The trio of buildings at the centre of Precinct Properties’ strong performance – the existing PwC Tower at right, the new PwC Tower under construction and the existing HSBC House at 1 Queen St, to be redeveloped into a hotel with office above.

Net operating income (distributable earnings), which adjusts for a number of non-cash items, has increased by 2.5% to $76.6 million ($74.7 million). This equates to 6.32c/share, in line with guidance (2017: 6.17c/share).

Revenue growth of 3.6% was primarily due to the completion of Wynyard Quarter stage 1, which was partially offset by foregone income related to development activity and 10 Brandon St, Wellington. After allowing for these transactions & activity, on a like-for-like basis gross rental income was 3.7% higher. This growth has driven an uplift in NPI by 5.4% to $95.3 million ($90.4 million).

As at 30 June 2018, Precinct’s portfolio value increased to around $2.5 billion following the strong revaluation gain. Precinct’s net tangible assets/share were up 12.9% to $1.40 (2017: $1.24).

Chief executive Scott Pritchard said yesterday: “The last financial year has delivered another strong result for our business. As we moved forward with our strategy, we progressed a number of initiatives and achieved key milestones during the year. We have continued to take an active management approach with both our investment portfolio and our development pipeline, leveraging Precinct’s market position.”

Focusing on a number of capital management initiatives during the year has resulted in $250 million of capital raised through the completion of a convertible notes offer & bond issue. Precinct also sold a 50% interest in the ANZ Centre in Auckland and sold 10 Brandon St in Wellington. These assets totalled $191 million of capital recycled.

“At year end our investment portfolio has continued to benefit from strong occupier markets. Achieving a high overall portfolio occupancy of 99% at year end and weighted average lease term of 8.7 years demonstrates this. Our Auckland portfolio has performed particularly, well with occupancy sitting at 100%, reflecting demand for premium inner-city office space. In Wellington, we have also reduced vacancy.

“In both Auckland & Wellington, we have successfully leased major expiries well ahead of vacancy. At the AMP Centre in Auckland, the QBE expiry has been fully leased at a premium of 17% to previous rentals. At Aon Centre in Wellington, 3 floors have been leased on the former IAG tenancy, with 2 remaining floors becoming available in early 2019.”

Mr Pritchard said the Auckland hotel market was experiencing unprecedented levels of growth in demand, which is forecast to persist through further growth in tourism numbers until at least 2025: “While a number of new hotel projects have been announced in the last 24 months, the increase in supply is expected to still fall short of demand over the short term and reach equilibrium over the medium to long term. This is expected to underpin robust room and occupancy rates.”

Commercial Bay

Commercial Bay remains on track to deliver a yield on cost of 7.5% and an increased profit on cost of 41% (June 17: 31%) or $283 million. Based on current project metrics, there remains a further $100 million of unrecognised development profit expected to materialise on completion.

Bowen Campus

In Wellington, construction works have continued to progress well over the last 12 months. We have now completed the facade installation at Charles Fergusson Tower with on floor works continuing. All works are targeted for completion late December 2018.

At Bowen State Building we have completed the majority of the structural works for the building including the north and south shear walls. The façade is now 90% complete for the building, installed from Level 1 to 10. On floor works are also underway to all levels.

Occupation of Bowen State Building by New Zealand Defence Force is expected in Q3 2019.

Financial highlights:

  • Net profit after tax increased by 57.2% to $254.9 million ($162.1 million)
  • Net property income, up 5.4% to $95.3 million ($90.4 million)
  • Net operating income, up 2.5% to $76.6 million ($74.7 million)
  • Full-year dividend, up 3.6% to 5.8c/share (5.6c/share), representing a 100% payout ratio (under AFFO – adjusted funds from operations)
  • Property revaluation gain of $208.7 million – 9% ($77.5 million)
  • Net tangible assets/share, up 12.9% to $1.40 ($1.24)
  • Earnings guidance for the June 2019 financial year, net operating income of about 6.60c/share, dividend expected to increase by 3.4% to 6c/share

Capital management:

  • $191 million of asset sales, providing capacity for new projects
  • $250 million of non-bank funding secured
  • Post-balance date refinancing of $760 million bank debt facility
  • Strong financial position, gearing of 25.0% (25.1%); pro forma gearing reduced to 19.4% at balance date following asset sales

Commercial Bay:

  • Advancing retail commitments to 76% (46% at June 2017) and office commitments to 78% (2017: 66%)
  • Yield on cost unchanged at 7.5%, with an increased profit on cost following the revaluation of 41% (June 2017: 31%), or $283 million
  • Phase 1 of the retail remains on schedule, with H&M opening its flagship 3800m² store on Thursday 30 August
  • A revised completion programme has recently been provided.

Bowen Campus:

  • Charles Fergusson Tower on track for completion in December & occupation by Ministry of Primary Industries
  • Bowen State Building to be occupied by NZ Defence Force, with lease starting April 2019
  • Yield on cost of 7.0%+, with an increased profit to 18%.

Future development opportunities:

  • Design has advanced for Wynyard Quarter development stages 2, 3 & 4; Precinct anticipates the second stage of the development will start in the next 6 months
  • Building design & marketing underway for precommitment leasing for the remaining development land at Bowen Campus.

Investment portfolio:

  • Auckland fully leased
  • Occupancy of 99% (2017: 100%) and a weighted average lease term across the portfolio maintained at 8.7 years (2017: 8.7 years)
  • 41 lease transactions completed, encompassing over 21,900m² & 598 parking spaces
  • Strong demand for space, with QBE expiring floors leased ahead of vacancy and 3 floors of IAG expiry leased at Aon Centre, Wellington
  • Strong like-for-like income growth of 3.0% – Auckland up 3.1%, Wellington up 2.9%
  • Generator occupancy of 73%, well above expectations; with 75% (9500m²) of its space launched during the year, the Generator business recorded a loss, as anticipated for this trading-up period.

Precinct Properties
Precinct Properties annual report
Commercial Bay

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

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The 1 Queen St redevelopment

Precinct Properties NZ Ltd announced the $298 million redevelopment of 1 Queen St – currently HSBC House – yesterday, to include a luxury hotel operated by the InterContinental Hotels Group (IHG), with office space above.

Images above & below: The redeveloped 1 Queen St, to contain hotel & offices, will sit alongside the Quay St frontage of the Commercial Bay development, which is dominated by a 39-storey tower now under construction.

Precinct chief executive Scott Pritchard said the premium waterfront redevelopment fronting the foot of Queen St, at the corner of Quay St, was designed to integrate seamlessly with Commercial Bay, which is being built on the former Downtown Shopping Centre site running up the rest of the first block of Queen St and facing Customs St East & Albert St, plus a small part of Quay St.

The overall project is 75% precommitted, with a management agreement entered into with IHG and a signed heads of agreement across 3700m² of the office premises. Precinct will fund the development through its existing debt facilities. On completion, the project is expected to generate a stabilised yield on cost of 7.0% and a profit on cost of 15%.

LT McGuinness will be the main contractor. Construction is scheduled to commence in the first quarter of 2020. LT McGuinness has been the contractor on Bowen Campus in Wellington & Wynyard Quarter in Auckland.

Project summary:

  • InterContinental Auckland will be a 244-room luxury hotel occupying levels 1-13 (excluding level 2)
  • Commercial office space will total 8700m², occupying levels 14-20
  • A rooftop bar & hospitality offering will feature on level 21
  • The lower levels of 1 Queen St are already being developed, to be included in the retail & hospitality offer of Commercial Bay
  • 1 Queen St will comprise a single-level basement & 22 upper levels, providing a total gross floor area of 27,500m².
  • The redevelopment will integrate with Commercial Bay from the ground level to level 2.
  • Signed heads of agreement over 3700m² of the office premises, which results in the overall project being 75% precommitted, with an expected yield on cost of 7.0% once complete
  • Entering into a 50% fixed price construction contract with LT McGuinness Ltd (the construction company owned by relatives of Mark McGuinness, head of Willis Bond Ltd, which is developing apartments in the Wynyard Quarter)
  • Construction is scheduled to start in 2020
  • The refurbishment is due for completion in 2022.

Precinct Properties
Precinct Properties annual report
Commercial Bay
LT McGuinness

Related stories today:
Precinct Properties presents a long list of positives from development & in financial structure
Precinct Properties valuations & profit up, debt low
The 1 Queen St redevelopment

Attribution: Company release.

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Cruise spending up 18%

More cruise voyages & passengers boosted cruise ship spending by 18.3% to $434 million in the year to June, Statistics NZ said yesterday.
The $67.1 million increase following a 9.9% rise in the previous 12 months.

Cruise visitors contributed $284 million, up 31.8% ($68.6 million), after a 0.6% decline in 2017, when the number of passengers fell. GST from cruise visitor spending contributed a further $43.4 million. Stats NZ said spending by cruise visitors had grown by 54.2% ($99.9 million) since 2015.

Vessel spend associated with services, including bunkering (fuel), fell 10% ($11.9 million) to $106.6 million.

Auckland & Tauranga had the largest total spending by port – up 11.2% to $131.4 million in Auckland, down 3% to $65.9 million in Tauranga.

Cruise ship passengers increased by 17% (38,000) to 259,000 after a 7% fall in 2017, largely because fewer ships were available for voyages.
Australian citizens made up 44% of all passengers in the 2018 year, US citizens 20%, NZ citizens 13%, UK citizens 8%. The NZ Cruise Association said cruise ships made over 700 port visits. Auckland received 211,000 passengers, up 9% (18,000), and Dunedin received 180,000, up 11% (17,000).

Attribution: Statistics NZ release.

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Heartland Bank lifts earnings 11%

Heartland Bank Ltd increased net profit after tax by 11% to $67.5 million in the year to June. Net operating income rose 15% to $196.8 million.

Chief executive Jeff Greenslade said yesterday the strong growth in profitability was driven by growth in underlying net finance receivables, which were up 12% to $4 billion.

Mr Greenslade said the growth strategy was delivering results in core business – reverse mortgage, motor & small business lending – while the bank’s Australian operations had grown 39%.

Assuming shareholders approve the company’s proposed restructure at the annual meeting on Wednesday 19 September, shares in the new parent company, Heartland Group Holdings Ltd, will begin trading on the NZX & ASX on 1 November.

The bank has entered the new financial year positively, expecting net profit after tax for the June 2019 year to be in the range of $75-77 million – a rise of 11-14%.

Financial highlights for the 2018 year (2017 in brackets):

  • Total comprehensive income, up 14.4% to $71.2 million ($62.2 million)
  • Net profit after tax, up 11% to $67.5 million ($60.8 million)
  • Net operating income, up 15% to $196.8 million ($171.3 million)
  • Impaired asset expense, up 47% to $22.1 million ($15 million)
  • Impairment ratio59% (0.45%)
  • Pretax profit, up 11.5% to $94.3 million ($84.6 million)
  • Basic & diluted earnings/share, 13c (12c)
  • Net tangible assets/share, up 9.5% to $1.04 (95c)
  • Total equity, up 16.6% to $664.2 million ($569.6 million)
  • Net finance receivables, up 12.4% to $4.0 billion ($3.6 billion)
  • Return on equity1% (11.6%)
  • Net interest margin42% (4.46%)
  • Cost:income ratio9% (41.9%)
  • Final dividend5c/share, full-year dividend 9.0c/share

Link: Heartland Bank

Earlier story:
6 August 2018: Heartland aims to add ASX listing in restructure

Attribution: Company release.

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Argosy buys Albany Warehouse

Argosy Property Ltd has unconditionally acquired The Warehouse property at 11 Coliseum Drive in Albany for $26.4 million. The property is next to the Argosy-owned Albany Mega Centre and comprises 7600m² of warehouse, 760m² of office, mezzanine & garden centre and 413 parking spaces.

Argosy chief executive Peter Mence said on Monday the acquisition price represented an initial passing yield of 5.0% and the pre-tax internal rate of return was 6.78%. The property has 6.5 years to run on the initial 12-year lease.

Mr Mence said the acquisition size was within Argosy’s investment policy criteria and the property had met all the necessary due diligence requirements: “We are very pleased to have secured a strategically important property and strengthened our relationship with a longstanding & valued partner in The Warehouse Group. The purchase allows us to now consider a range of organic growth options across the entire Albany Mega Centre site. Longer term, we are excited about the opportunity & value this acquisition can deliver for Argosy & its shareholders.”

Settlement is expected to occur on or around 7 September.

Attribution: Argosy release.

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Summerset lifts underlying profit on fatter margins, feels impact of flatter housing market, looks at Australia

Retirement village operator Summerset Group Holdings Ltd said yesterday strong margins on both sales & resales lifted its underlying profit for the June half by 27% to $45.2 million, in line with the profit guidance provided in early July.

Under IFRS (international financial reporting standards), net profit fell 9.2% to $82 million. Underlying profit includes realised resale gains, development margin & deferred tax expense, minus the fair value movement of investment property. Under IFRS, fair value is included.

Financial & operational highlights (2017 first half in brackets):

Net profit after tax under NZ IFRS, down 9.2% to $81.97 million ($90.25 million)
Investment property fair value movement, down 10.1% to $78.3 million ($87.1 million)
Underlying profit, up 26.8% to $45.2 million ($35.7 million)
Total revenue, up 29.5% to $65.7 million ($50.7 million)
Net operating cashflow, up 7.4% to $92.8 million ($86.4 million)
Total assets, up 25.2% to $2.42 billion ($1.9 billion)
Net tangible assets, up 32.2% to 377.85c/share (285.72c/share)
Basic earnings/share, down 10% to 37.22c (41.37c)
Diluted earnings/share, down 10.2% to 36.53c (40.67c)
Interim dividend, up 54% to 6c/share (3.9c/share)
Total occupation right sales, down 7.4% to 299 (323)
New sales, down 19% to 145 (179)
Resales, up 6.9% to 154 (144)
New units delivered, down 3.5% to 165 (171), but on track for delivery of 450 for the full financial year
Development margin, 17.9% higher at 33% (28%)
Realised development margin, up 21.3% to $25.8 million ($21.3 million)
Gross new sale proceeds, up 3.2% to $78.3 million ($75.9 million)
Resale realised gains, up 38.3% to $14.9 million ($10.8 million)
Sales margins lift returns, fair value fall reflects flatter property market

Chief executive Julian Cook said the underlying profit increase was driven primarily by strong margins on both new & resales: “While sales volumes were lower than the same period of 2017, we are seeing good levels of contracts on homes – both on resales & homes to be completed before the end of 2018 – many of which will settle in the second half of the year.”

He said the lower fair value movement reflected smaller price increases in response to the flattening property market being seen in some areas of the country.

As for the sharp increase in development margin, up from 28% to 33%, Mr Cook said the result was “pleasing, but reflects the particular mix of retirement units settled in this period, and our long-run expectations for development margin are less than this”.

Summerset grew total assets by 25% from a year ago to $2.4 billion.

“We delivered 165 new homes this half year and we are on target to meet our build rate of 450 homes for the year. This is despite continuing pressure from the Auckland construction market. Our key construction activity in Auckland is to complete our Hobsonville village, main apartment buildings at Ellerslie, and new villa builds at Karaka & Warkworth.”

Residents moved into the first homes at Casebrook (Christchurch) & Rototuna (Hamilton) villages in the June half.

Summerset recently received resource consent for its proposed Avonhead village in Christchurch, and is awaiting the outcome of consent applications for proposed villages in Boulcott (Lower Hutt) & Kenepuru (Wellington). Resource consent for its proposed village in St Johns (Auckland) has recently been declined.

“We are currently working through this decision, but remain confident we will be able to progress a successful village on this site,” Mr Cook said. “There is strong demand for all of these villages and we are keen to progress them as soon as possible.”

Company sees gains from staff benefits

In May, Summerset announced additional staff benefits, including a day of leave for staff birthdays, travel voucher prizes every quarter and paid sick leave from the first day of employment. These complement the staff benefits announced in 2017.

“Pleasingly we’ve seen the staff attrition rate at our villages drop by 8% in the last 12 months, and the company-wide attrition rate has reduced almost 7% over the same period. We believe this is a result of both the investment we are making in our staff and the Government’s equal pay settlement.

“However we are seeing the shortages in care staff increase due to the changes introduced to immigration last year by the previous government. We believe it is important the current government recognises the importance of immigration alongside local training & development to ensure there are sufficient qualified & competent people in the aged-care sector.”

Mr Cook said Summerset continued to investigate the feasibility of an Australian expansion. It has opened an office in Melbourne with a dedicated team who are working through the appropriate diligence process. The company said it was making good progress.

Attribution: Company release.

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Greenland & Golden Horse start 1400-apartment job on old Goodman industrial site

Chinese state-owned developer Greenland Group & Golden Horse Group of Hong Kong turned the first sod on Thursday for a 6.9ha 1400-apartment joint-venture project at Erskineville in Sydney’s inner-west, on a former industrial site which Goodman Group sold to Golden Horse in 2014.

Construction partner for stage 1 of the Park Sydney development is local family-owned builder Richard Crookes Constructions Pty Ltd, which has worked on several Greenland projects.

Image above: Park Sydney masterplan, highlighting amenities.

The masterplanned residential community will be developed in 5 stages and will ultimately feature 9 development blocks ranging in height from 2-8 storeys.

Park Sydney, 4km from Sydney’s cbd, will have a 7446m² public park, a supermarket & specialty shops, a fresh food precinct, eat street, medical centre & childcare centre.

Greenland Australia managing director Sherwood Luo said: “Together with Golden Horse Australia, we’ve been planning Park Sydney since 2016, so it’s particularly exciting to see major projects of this scale starting to take shape and watching how they transform the local area.

“We are converting this large former industrial precinct into an engaging & inclusive residential community that will ultimately become home to some 3000 residents.”

The value to Goodman of its exit

Golden Horse Group expanded into Australia in 2013 and bought the former industrial site in Erskineville from Goodman Group the next year. For Goodman (owner of NZX-listed Goodman Property Trust’s management company & cornerstone investor in the trust), that deal was among many as the group sold $A1.9 billion of mostly industrial assets in a year, and reinvested the lot to generate higher development returns.

Builder with long list of staff support programmes

On a different tack, the builder on this project has a lot to say about how it treats its staff – an eye-opener at a time the New Zealand construction sector has been grumbling about contract arrangements, and this government (like the last one) is talking about increasing training for & numbers in the construction industry.

Richard Crookes Constructions says on its careers page: “RCC believes the success of every project depends on the ability of their personnel and the synergy of the project teams… RCC’s business is based on maintaining long-term relationships with clients, partners & subcontractors.”

It also lists a number of staff-supporting views that I’m sure would be novelties if espoused in New Zealand:

  • We build a talent pipeline
  • We expect our staff to engage in the business and be part of its success, growth & evolution. In return we invest in their growth & development. We give people autonomy, support & the resources they need to perform at their best
  • We maintain a flat management structure with an open door policy and an honest & collaborative culture
  • Fitness passport gives individuals & families access to multiple facilities (gyms, swimming pools) which allows you to go as often as you like
  • Exercise incentives, health assessments, mindfit programme, access to trainers, $A100 annual rebate & annual flu vaccinations
  • RCC offers corporate rates with BUPA to all employees in an effort to encourage healthy lifestyles
  • Every employee receives one day off every 6 months – employees are encouraged to use the leave for engaging in health & wellbeing activities, spending time with family & friends or to relax
  • Each employee has the ability to purchase an additional 2 weeks of annual leave/year
  • Maternity & paternity leave is offered when members of the RCC family start or expand their own families
  • We would like your salary to work as hard as possible; for this reason, we offer salary packaging options such as novated leases (a lease arrangement, usually for a vehicle, where the employer takes on the obligations of the lessee to the financier, which ceases if the employee leaves the job)
  • Our staff can access a range of discounts from partnering retailers
  • RCC has a financial advisor in-house who is available to meet with staff one on one
  • We believe in & support females at RCC; one of the programme offerings is our women’s leadership lunch & learns
  • We offer an array of learning & development for our employees through coaching sessions, formal mentoring programmes, external training, role-specific technical training & leadership development programmes across all levels.

Park Sydney
Greenland Australia
Golden Horse Australia
Richard Crookes Constructions

Earlier story:
17 August 2015: Urban renewal lifts Goodman Group

Attribution: Joint venture release, Greenland, Golden Horse & Richard Crookes websites.

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Fitch sees house price slump slowing Australian credit growth

A Fitch research report out this week says the ratings business expects Australian credit growth to weaken as house prices continue to slump.

The research, by 2 Fitch Ratings Inc affiliates, Business Monitor International Ltd & Fitch Solutions Group Ltd, concludes: The ongoing slump in Australian house prices does not bode well for the outlook for the banking sector over the coming quarters as credit growth weakens. This will be compounded by the low interest rate environment & increased oversight by regulators.”

The Fitch researchers expect Australian credit growth to slow to 4.0% in 2018 & 3.5% in 2019.

The graph below, based on Reserve Bank of Australia numbers, shows the percentage change compared to a year earlier:

Fitch Solutions, 8 August 2018: Australian housing market downturn a major headwind for banks

Attribution: Fitch article.

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Reserve Bank holds, projects low cashrate into 2020

The Reserve Bank kept the official cashrate at 1.75% today, and governor Adrian Orr projected that it would stay at that level into 2020.

That’s longer than the bank projected in its May statement. Also, it doesn’t mean a rate rise at the end of that period: “The direction of our next official cashrate move could be up or down,” Mr Orr said.

The bank governor’s view contrasted with recent business survey predictions of a slowing economy, although he hedged his bets, acknowledging that low business confidence can affect employment & investment decisions.

The bank analysis

“While recent economic growth has moderated, we expect it to pick up pace over the rest of this year and be maintained through 2019.

“Robust global growth & a lower $NZ exchange rate will support export earnings. At home, capacity & labour constraints promote business investment, supported by low interest rates. Government spending & investment is also set to rise, while residential construction & household spending remain solid.

“The labour market has tightened over the past year and employment is roughly around its maximum sustainable level. We expect the unemployment rate to decline modestly from its current level.

“There are welcome early signs of core inflation rising. Inflation will increase towards 2%t over the projection period as capacity pressures bite. This path may be bumpy, however, with one-off price changes from global oil prices, a lower exchange rate and announced petrol excise tax rises expected. We will look through this volatility as appropriate, and only respond to any persistent movements in inflation.

“Risks remain to our central forecast. The recent moderation in growth could last longer. Low business confidence can affect employment & investment decisions.

“Conversely, there is a chance that inflation could increase faster if cost pressures can pass through into higher prices and impact inflation expectations.

“We will keep the official cashrate at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low & stable inflation.”

August 2018 Monetary policy statement (PDF 1.69 MB)

Attribution: Bank release.

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