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🍹A$800M of retirement village up for grabs

RetireAustralia is being marketed for sale by NZSuper, Infratil & Jefferies

April 22, 2024

Morning. ☕

As always, it’s been a busy week. Here’s the TLDR.

NZSuper and Infratil are selling RetireAustralia and it’s portfolio of 28 retirement communities. Macquarie Technology Group purchased a Sydney data centre campus for A$174M from Keppel REIT.

Various hotels traded last week, including the Crescent Hotel and the Woolstore 1888 Hotel. The NSW Government added 6 more stations to it’s Transit Oriented Development Program.

Let’s get into it 👇

Investment Banking & Private Equity

NZSuper and Infratil selling RetireAustralia portfolio

  • RetireAustralia, with a portfolio of 28 retirement communities across NSW, QLD, and SA, is being marketed for sale through Jefferies Australia.

  • The firm reported underlying profit of A$95M for the second half of Dec, a significant increase from A$57M in FY 2022. The portfolio's current book value is A$802M, featuring a 93% occupancy rate as of Dec 31.

  • The average unit value as of June 30 is A$702K, reflecting an increase from the previous year's A$677K. (AFR)

Public Hospitality Group puts pub on market

  • Public Hospitality Group has listed the Empire Hotel in Annandale for sale amid financial strain exacerbated by a failed A$500M refinancing deal with Bain Capital. Empire Hotel was acquired from Oscars Hotels Group in 2021 for c. A$20M.

  • The sale, managed by Savills, is part of PHG's broader efforts to manage debt, which stood at over A$500M last May, with a refinancing discussion with Deutsche Bank currently underway. (AFR)

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Deals and Projects

BTR, Co-Living and Student Accommodation

  • Australasian Property Group is transforming a 3,572sqm site in Bowen Hills into a 31-storey build-to-rent tower, integrating 240 apartments with healthcare services and retail spaces. (TUD)

  • Griffith University is expanding its student accommodation capacity, planning a new 11-storey, 459-bed tower in partnership with Campus Living Villages. (TUD)

Residential

  • Walker Corporation has withdrawn its A$1.3B proposal for the Toondah Harbour development in QLD following a rejection by the Federal Government. The project aimed to provide over 3000 homes and a new marina. (TUD)

  • LAS Group has proposed a A$70M 25-storey residential development at Southbank, Melbourne, featuring 188 one and two-bedroom apartments. (TUD)

  • Cedar Woods has invested A$15.5 million to acquire a 9.78ha greenfield site in Perth to develop 200+ apartments. (TUD)

Retail

  • Vicinity Centres has completed its third retail property sale in WA with Maddington Central for A$107M to Realside. (TUD)

Office

  • Stockland has gained North Sydney Council's approval for the construction of a 42-storey office tower at 601 Pacific Highway in St Leonards. (TUD)

  • Centuria is selling a fully leased office property with development potential on the Brisbane River to Exceed Capital, in an off-market deal worth c. A$30M. (RE Source)

Industrial

  • Centuria Industrial REIT has launched its A$116M M80 Connect industrial estate in Melbourne's north, boasting 45,375sqm across 5 warehouses. (TUD)

  • Merlino Development Group has purchased a 6.3ha industrial site in Pennington, Adelaide for A$25.5M. (RE Source)

Hotels

  • Redcape Hotel Group sold the Crescent Hotel in Fairfield to Gallagher Hotel Group for A$47.5M, part of Redcape's strategy to divest over A$200M in assets and unfreeze its unlisted fund. (AFR)

  • Shakespeare Property Group bought the Woolstore 1888 Hotel in Sydney for A$55M. (AFR)

  • The Singh family, prominent in the Gold Coast poultry industry, has purchased the former 179-key Pacific Hotel in Brisbane for A$44.8M, rebranding it as Mercure Brisbane Spring Hill. (AFR)

Alternatives & Land

  • Macquarie Technology Group has purchased a Sydney data centre campus at Macquarie Park from Keppel DC REIT for A$174M, reflecting a 3.6% yield and a 35% premium over the previous valuation. The deal includes a re-investment of A$90 million by Keppel into Macquarie bonds. (Mingtiandi)

  • Forza Capital has sold a 3,880 square meter car park in Melbourne, featuring a four-storey structure with 470 bays, for A$14.6M. (TUD)

  • Ecove Group is set to transform the Rhodes Fire Station site in Sydney with plans for two towers, one 17 stories and the other 21 stories high, situated next to Rhodes train station. (TUD)

Capital Flows

SMSF limited recourse borrowing increased by 10%

  • Investors that have maxed out their personal borrowing capacity are increasingly turning to self-managed super funds (SMSFs) for further loans.

  • In the past year, limited recourse borrowing within SMSFs surged by 10%, reaching nearly A$62B. (AFR)

Japanese investment reached a record A$2B last year

  • Japanese investment in Australian real estate reached a record A$2B last year, reflecting a significant interest in housing and commercial properties.

  • This investment surge was evidenced by 53 deals across various sectors, including 13 property transactions, doubling from the previous year. (AFR)

Economics & Data

Office tenants racing for premium towers

  • Prime CBD office towers have experienced a net absorption of +190,300sqm over the past year, contrasted by a significant decline in secondary buildings, which saw a net reduction of -233,700sqm.

  • Despite a steady national CBD office vacancy rate of 14.7%, there's a clear shift towards premium amenities and services in office buildings, pushing lower-grade buildings towards obsolescence unless repurposed. (AFR)

Data centre builders facing shortage of heavy cranes

  • The national crane index notes a rise from 13 to 22 cranes required for data center projects, contrasting with a slight decline in overall crane numbers from 882 to 869.

  • This surge in demand reflects the growing need for computing power and the physical expansion of data centers from single to multi-story buildings. (AFR)

Caravan park revenue up 12%

  • Holiday and caravan parks saw a significant revenue increase during the summer, with average earnings up by 12% to A$641K due to cost-of-living pressures prompting families to choose more budget-friendly vacation options.

  • This rise in revenue continued over the Easter holidays, with a 9% increase in average revenue compared to the previous year. (AFR)

Policy

NSW Gov invests A$196M in Snowy Mountains

  • The New South Wales Government is investing A$196.3M in seven strategic projects in the Snowy Mountains and Jindabyne regions to boost infrastructure, tourism, and housing. (TUD)

6 more stations included in NSW Transit Oriented Development Program

  • The NSW Government has expanded its Transport Oriented Development planning reforms to include 6 additional stations, bringing the total to 37. The stations, Cardiff, Cockle Creek, Belmore, Lakemba, Punchbowl, and Woy Woy, were selected with input from local councils. (PCA)

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