City Centres Still Lack Life

Australian cities are lacking life with the number of people moving around city centres barely changing from late July and remain well below pre-pandemic levels.

Conditions in Melbourne and Sydney are getting worse while other cities have shown little improvement according to Roy Morgan and UberMedia.

The analysis tracked mobile location data of people visiting the CBD, excluding residents, comparing results between late January, the week of 27 July and 18 October.

Movement in Adelaide CBD is closest to pre-Covid levels at an average of 78 per cent, ahead of Perth at 74 per cent.

Meanwhile in places where large outbreaks have occurred city activity has dropped further since the middle of the year with Melbourne falling from 27 per cent to 15 per cent and Sydney from 48 per cent to 44 per cent.

Activity in Brisbane has picked up 5 per cent from the middle of the year but still sits at 66 per cent below pre-pandemic levels.

Impact of Covid on city centre movement

^Source: Roy Morgan, UberMedia; percentage compared to January-February data

This level of activity in city centres is a concern for major landlords with retail rent expected to drop 20 per cent and office market rent under pressure until employees return to the workplace.

Roy Morgan chief executive Michele Levine said the analysis shows that a pre-vaccine Covid-normal is very different to conditions seen earlier in the year.

“In cities including Adelaide and Perth there has been little to no local transmission of the virus for months—not since late April for Perth and not since early May for Adelaide—more than five months ago,” Levine said.

“Both have increased slightly since late July but remain well below the levels that hospitality and retail businesses in the city centres are accustomed to.”

Activity in Melbourne is expected to pick up following the end of heavy lockdowns.

“The staged re-opening of retail and hospitality businesses in Melbourne this week is a step in the right direction but city office workers are still being encouraged to work from home for the foreseeable future and mask wearing remains mandatory in the Victorian capital,” Levine said.

“The movement data for the Melbourne CBD is set to increase substantially in the next few weeks and retailers and traders in the city will be closely watching to see how quickly Melbourne can close the gap on interstate counterparts such as Sydney or Brisbane.”

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Investors De-Risk With Childcare Real Estate

Early learning real estate has remained resilient through Covid-19, affirming its long-term stability with long leases and strong returns.

The $11.2 billion sector, which significantly supports workforce participation, has long enjoyed bipartisan support, receiving some of the earliest specialist stimulus packages provided to any sector by government.

In April, the sector was thrust into the national spotlight after $1.6 billion funding boost was handed down by the federal government in order to in support parents working through challenging conditions brought about by the pandemic.

Appetite for the asset class has also reemerged due to improved fundamentals and an easing of oversupply issues following an influx of private investors over recent years seeking steadfast investment opportunities.

Investors have also be drawn to the increased quality of new centres and the services with which they provide, which have in turn attracted longer term leases and healthier returns.

Burgess Rawson director, and childcare centre specialist, Adam Thomas said the government’s commitment to the sector earlier in the year had underscored the essential nature of the asset class and its importance to the economy.

“The government sent a clear message to the business community at the beginning of the pandemic that ‘big business’ would not receive a financial lifeline,” Thomas said.

Thomas will be joining The Urban Developer alternative real estate vSummit on Thursday, 12 November on a panel dedicated to childcare real estate.

▲ The industry comprises mainly of long-day-care providers, representing 61.5 per cent.

“Despite the early learning sector having several $50 million plus operators, support was immediately provided with around one million families receiving the assistance.”

Leading into the coronavirus pandemic, there was still some residual damage lingering in the sector following the collapse of Eddy Groves’ ABC Learning a decade ago.

The collapse left many investors nervous about the notion of childcare centre investment relative to their stage of life and tolerance to risk.

However demand has picked up over recent years, with approximately 1.3 million children across Australia accessing some form of funded early learning education leading into 2020.

According to recent figures from Burgess Rawson, Perth and Canberra experienced the highest growth over the past twelve months, with upwards of 2,600 locations leased to new early learning centres across both cities, accounting for 75 per cent of deals.

“Investors are looking to de-risk and seek clean, passive investments,” Thomas said.

“Childcare as an asset class continues to offer attributes that investors are favouring such as long net leases, quality tenants underpinned by land value and intrinsic business value.”

During the pandemic, occupancy rates fell sharply across many portfolios, with the industry challenges concerning revenue decline widely publicised.

Despite this, childcare providers received 50 per cent of fees based on a February reference period, plus Job Keeper, enabling many providers to record a net profit increase.

Related: Experts Address Alternative Asset Class Outlook

▲ Recent data from Burgess Rawson demonstrates a strong pipeline of development and leasing opportunities currently avaliable across Australia.

“[Over the next 12 to 24 months] centre occupancy rates may contract, driving innovation by operators,” Thomas said.

“We predict a greater level of investment by operators in existing centres to better compete.

“This will also lead to a stabilising of rent per place which historically has increased exponentially.”

Average rents have increased by 30 per cent across Australia from $2,000 in 2015 to $2,864 in 2020.

Yields have compressed across both regional and metro areas. Metro yields in key capital cities of Sydney and Melbourne have compressed by 53.4 per cent to an average of 5.39 per cent.

“The national framework has increased barriers to entry and this in turn will mute some oversupply concerns and increase the quality of the operator,” Thomas said.

“The low cost of money and volatility in alternative investment classes will continue to drive commercial property investment and underpin yields.

“However, it is expected that yields will stabilise with the rents which will bring certainty to the market for investors.”

Thomas said post-Covid forecasting has continued to predict an overall industry growth over the next five years of 2.2 per cent to $12.4 billion.

Thomas will be joined by fellow panelists Arena chief executive Rob De Vos, Charter Hall fund manager Travis Butcher and Guardian Childcare and Education chief executive Warren Bright on Thursday 12 November.

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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ANZ reveals 95,000 loans were in COVID-19 deferral

Some 95,000 ANZ customers were accessing the bank’s COVID-19 assistance after experiencing financial difficulty due to COVID-19.

The bank said it had deferred home loans repayments for around 95,000 out of more than 1 million mortgages during the pandemic.

ANZ said there were 55,000 accounts where six month deferrals had been completed as at October 15.

Some 79 per cent are returning to full payment, 20 per cent had requested a further deferral, and 1 per cent have restructured their loan or sought additional support.

More than half of those home loan borrowers have either ended their deferral arrangements or advised ANZ what they intend to do when the loan repayment holiday ends.

The quantum was reportedly down 10 per cent month-on-month.

“I would like to acknowledge the terrific work of our 39,000 people who have done a great job for our customers and shareholders in very difficult circumstances despite competing priorities over this extended period,” the ANZ boss Shayne Elliott said.

ANZ also took a look at the credit transactions in its customers’ accounts, and advised 80 per cent have “stable or improved income”.

The revelation came as ANZ reported its full-year net profit dropped 40 per cent to $3.58 billion in the 2019-20 financial year.

ANZ still plans to pay shareholders a final dividend of 35 cents per share.

The ANZ website advised customers may be able to put your home loan repayments on hold for up to six months (but interest will continue to be charged on your loan during this period). You will not be required to make any repayments to your home loan during the assistance period.

During the assistance period when repayments are on hold, interest will continue to be charged on your home loan and will need to be paid back over your remaining loan term.
This is known as interest capitalisation.

The total loan amount owed therefore increases when repayments are on hold during the assistance period.

It also revealed ANZ has more than 236,000 commercial lending accounts in Australia with around 23,000 having received a deferral on their business loan repayments.

As at 15 October, 15,000 business loan accounts have completed their deferral or advised their intended action at maturity.

Of these deferrals 1,600 have received a four month extension with 60 percent of those being from Victoria and impacted by the longer lockdown.

On customer sentiment, speaking to bluenotes via video-link from the bank’s Melbourne headquarters with its group executive Australia retail & commercial Mark Hand said although Australia’s economy is recovering well from the COVID-19 crisis, “customers are still feeling anxious about the future.”

“[Australia has had] many years of economic growth. So it’s been a long time since our customers have seen anything like a recession,” he says. “It’s important in times like this [for] customers to ask questions, to go back to their trusted advisors.”

“Take a breath, have conversations with people that have been through this scenario. Talk to your banker and really think about how you want to manage for the next six or so months.”

In New Zealand ANZ has more than 529,000 home loan accounts in New Zealand with around 24,000 having received a deferral on their loan repayments. As at 15 October, there are 10,000 accounts in NZ currently on a deferral plan, representing 2% of the total New Zealand mortgage book.

This article is republished from propertyobserver.com under a Creative Commons license. Read the original article.

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Brisbane’s property market holds strong, rises despite COVID-19 recession

A global pandemic and COVID-19-related recession have proved no match against the steady reliability of Brisbane’s property market, with new data revealing both house and unit median prices are rising.

Despite the economic uncertainty of 2020, the latest Domain House Price Report, released Thursday, found Brisbane house prices rose 1.3 per cent over the September quarter to a new median of $714,500.

House prices are also 6.6 per cent higher than they were this time last year when the median was $670,000.

Brisbane’s battered unit market has begun the slow crawl back from a year of price falls, rising 2.2 per cent to $419,000 over the past three months, with low owner-occupier stock and bottomed-out interest rates fuelling the first quarterly price rise in 12 months.

Median house prices, south-east Queensland

HOUSES
Region	Sep-20	Jun-20	Sep-19	QoQ	YoY
Brisbane	$714,500	$705,000	$670,000	1.3%	6.6%
Ipswich	$430,000	$440,000	$418,000	-2.3%	2.9%
Lockyer Valley	$402,500	$390,000	$379,500	3.2%	6.1%
Logan	$485,000	$475,000	$448,500	2.1%	8.1%
Moreton Bay	$512,500	$507,500	$480,000	1.0%	6.8%
Redland	$565,000	$560,000	$545,000	0.9%	3.7%
Scenic Rim	$533,500	$505,000	$472,500	5.6%	12.9%
Somerset	$402,500	$397,000	$364,000	1.4%	10.6%
Gold Coast	$669,000	$665,000	$642,000	0.6%	4.2%
Sunshine Coast	$650,000	$640,000	$610,000	1.6%	6.6%

Source: Domain House price report, September quarter, 2020

Embed this table

Place Kangaroo Point agent Simon Caulfield said within Brisbane, the city’s prestige market was nothing short of skyrocketing, with a lack of stock fuelling a price rise.

“If I had to predict the next six months, I think properties in that $1 million to $2 million price range will see even more price increases,” Mr Caulfield said.

This article is republished from domain.com under a Creative Commons license. Read the original article.

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Time & Place acquires 940sqm Southbank site

Property developer Time & Place has acquired a 940sqm landholding in Southbank for about $29 million.

The island site at 84-90 Queensbridge Street, which sits within the Crown precinct, was purchased in an off-market transaction direct with the vendor, New Sky Group.

Time & Place is working closely with Callum Fraser to completely redesign the development within the substantial height envelope of the previously approved planning permit.

The redesign provides an opportunity for Time & Place to apply its new vision for high density residential living, in a format that responds to dynamic lifestyles, security, comfort and investment needs, as well as addressing challenges presented by COVID-19.

The developer intends on pushing the envelope when it comes to design of the project, with a focus on sustainability and a view to activating surrounding public space.

Southbank more widely is set to undergo a regeneration as part of the City of Melbourne’s $38m City Road Masterplan project.

This property forms part of a strategic acquisition phase for Time & Place.

It follows the developer’s June acquisition of 173 Burke Road, Glen Iris, in partnership with Woolworths.

“Southbank has become renowned for glass towers, this won’t be another one of those. We’re looking to deliver something edgy, with a New York feel, and activate a space that the public will want to engage with.”

“We’re pulling together a team of market leaders who share our values to create a project with a strong legacy that will have a lasting impact on Southbank and help its transition into one of Australia’s most livable suburbs,” Time & Place director, Tim Price said.

Other Melbourne projects by the developer include Victoria Place, located at 200 Victoria Parade.

Time & Place launched the $280 million commercial development, designed by FJMT, in 2018.

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Perspective 488 in Gold Coast’s Palm Beach launches late October

Sherpa Property Group has unveiled plans for a luxury collection of 11 residences in Gold Coast’s exclusive Palm Beach.

The Perspective 488 project will include seven full-floor beachfront apartments with three bedrooms and four bathrooms on the north east beachfront corner of 27^th Avenue and 488 The Esplanade.

The 328sqm full-floor luxury residences are now selling from $2.7 million with the grand opening of the project taking place in late October.

Sherpa acquired the site for more than $11 million.

Spanning 10 metres of private beach frontage, the residences offer expansive outdoor entertaining areas, open-plan living and dining and the opportunity to convert the study into a fourth bedroom.

Other features of the property include a communal pool and barbecue area and ocean views, with over 23 metres of ocean frontage.

“Each home has a penthouse feel with views from every angle”, the marketing reads.

The property is being marketed by CBRE’s residential sales team.

Sherpa has also started offering freehold homes within the Gold Coast’s Rainbow Bay. Demolition to make way for the residences, branded as Freedom Beach Homes, begin October.

This article is republished from propertyobserver.com under a Creative Commons license. Read the original article.

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Bloom on Wesley Now Under Construction by Developer-Builder Raise Projects

The 36-apartment, luxury Bloom on Wesley complex in Lutwyche is now under construction by Raise Projects, with expected completion in Spring 2021.

Rare in the Queensland boutique apartment industry for developing and building their own projects, Raise Projects is creating Bloom on Wesley specifically for owner-occupiers. The apartments boast oversized floor plans with seamless indoor/outdoor flow from balconies to interiors and are complemented by a resort-style rooftop filled with a heated infinity pool, gym/meditation room and alfresco entertaining and barbeque area. Engineered timber flooring, ducted air-conditioning, two bathrooms and a study nook or multi-purpose area are features of every apartment, while each kitchen stuns thanks to high-end European appliances, stone island benchtops and custom-crafted finishes exclusive to Bloom on Wesley.

Featuring a beautiful lobby reminiscent of a five-star hotel, this address also includes two lifts for ease of residential access, premium security with CCTV to all common areas and secure parking for residents and visitors.

Raise Projects has shifted its focus for Bloom on Wesley to create these luxury apartments for owner-occupiers, as the company previously built projects for the investor market including Trillion on Chalk at Lutwyche and Chloe on Clarence at Indooroopilly, both of which sold out before completion.

Founder and Managing Director of Raise Projects, Ramy Raymond, said producing homes for discerning owner-occupiers allowed his team to get extremely creative with their development projects, by designing and building a special lifestyle for buyers in great locations.

He said by Raise building its own designs in-house, they were also able to tailor and customise aspects of each apartment layout for owners while the build was still in its infancy. “Raise Projects only develops and builds one project every 12 to 18 months, which allows us to hone our exacting standards and guarantee quality control over every aspect of the apartments and lifestyle we are creating.

“We are able to offer incredible value at Bloom on Wesley by making the apartments a larger floor size than others on offer in the area and by including products such as luxury oak timber flooring, top-line Zip taps, colour-matched and integrated cabinetry in our joinery and more, all for a price point from $549,000 for a two-bedroom apartment and $745,000 for a three-bedroom apartment.

“The reason we can deliver this is because many elements of our build are custom-designed and custom-crafted exclusively for Raise Projects, and tailoring a layout can be done in-house with convenience and ease.

“By doing everything internally, we operate seamlessly between our development and building team members to deliver a shared vision for the project, so that the renders a buyer sees today will be the product we are now building, and the one they walk into through their front door at settlement.” Mr Raymond said while the team’s current focus was Bloom on Wesley at Lutwyche, Raise Projects also has projects in the pipeline for Teneriffe in Brisbane and other areas throughout South-East Queensland.

The Bloom on Wesley Apartments are being marketed in house by Hannah Howard for Raise Projects at hannah@raiseprojects.com.au or 0401 539 928.

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Corcoris Races Ahead with Gold Coast Plans

Melbourne-based developer Corcoris Group is planning to build a hotel, apartments and rooftop restaurant adjacent to the Gold Coast Turf Club.

If approved, the plans will see an empty triangular block on Racecourse Drive, Bundall turned into a six-storey mixed-use development designed by C&K Architecture.

This includes 109 units, 111 hotel-rooms, office space, retail, function facility and dining options across two buildings positioned in a “fan-like” shape.

There will be a rooftop restaurant atop the smaller building, along with four levels of hotel rooms and a ground-level lobby.

The outer building will have car parks and commercial use spaces on the ground floor with four levels of units above.

▲ The horse-shoe shaped apartments line the Gold Coast Turf Club racetrack while the hotel has street frontage on Racecourse Drive, Bundall.

A centrally-placed wedge of communal space will connect the buildings and there are also plans for a track-side infinity swimming pool.

“The unique character of the equine precinct and expansive views over open flat terrain engage the new built form with its context and close proximity to the heart of the city and cultural precinct,” the development application states.

“The ability for the communal open space to adjoin large open spaces like the racecourse create a large borrowed park-like landscape for the residents, with a unique character of horses, jockeys and trainers.”

Related: Melbourne Cup 2020, Flemington Apartments on Track

▲The apartments, rooftop restaurant and an infinity pool overlook the racetrack and Surfers Paradise skyline.

The 12,230sq m site was sold to NC & MJC Super Pty Ltd for $3.2 million in 2015 and sits inland from Surfers Paradise, in the Bundall equestrian precinct.

The planning process by Corcoris Group started in late 2019 with the development application on exhibition to the public until 6 November.

Meanwhile, the Gold Coast Turf Club has locked in funding for an all-weather synthetic track, in-field tunnel and refurbishment of other surfaces and lights.

Racing Infrastructure Fund, the Gold Coast Turf Club and Racing Queensland will fund the project which is expected to start after the 2021 Magic Millions Carnival.

This article is republished from theurbandeveloper.com under a Creative Commons license. Read the original article.

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Melbourne and Sydney housing markets continue to decline: HTW Housing Clock

Melbourne and Sydney have remained as declining housing market, according to the latest national property clock from valuation firm Herron Todd White.

Two months ago HTW had Melbourne houses starting to decline, with Sydney already deemed a declining market.

There was worse news to come from Sydney’s Central Coast, whose housing market last month was at the bottom of the market.

HTW still believe there’s further to go for the region joining Sydney and Melbourne as a declining market.

Brisbane and Ipswich have however jumped ship straight from declining markets to those starting their recovery this month.

Good news for Sydney’s other popular weekender hotspot, the Southern Highlands, whose housing market has continued to rise. Joined by Mildura who only last month began their recovery.

 

Hobart, Adelaide and Canberra continued to look strong, with houses at the peak of the market. Geelong has also started to approach the peak this month, joining the Sunshine Coast.

The housing markets in Broome and Bundaberg and the Southern Tablelands are at the bottom joined this month by Albany. Darwin meanwhile has joined Perth among others as it begins it’s housing recovery

With COVID-19 impacting real estate markets nationally, and even globally, valuers at Herron Todd White are asking “Will Spring spring in 2020?”

“The resilience of residential property markets has surprised many this year, with a mix of factors including reduced interest rates and wage support all playing their part,” Herron Todd White’s monthly report advises.

“One Federal Government scheme that originally drew a deal of scepticism was HomeBuilder – a program designed to stimulate the construction industry and protect employment in the building sector.”

This article is republished from propertyobserver.com under a Creative Commons license. Read the original article.

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