💸 Abu Dhabi money coming down under

Morning. ☕

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

Abu Dhabi-based ADQ will begin investing in Australia via infrastructure investor Plenary. Australian data centre company AirTrunk has started a A$15B sale process.

IP Generation is purchasing a shopping centre in Glendale from Stockland for A$315M.

The Student Accommodation Council released a report arguing that international students, who account for 4% of Australia’s rental market, are not responsible for Australia's housing crisis. The City of Melbourne has been in the press this week with a couple of green initiatives.

Details below. 👇

Investment Banking & Private Equity

Abu Dhabi money comes down under

• Abu Dhabi-based ADQ has acquired a 49% stake in Plenary for A$1B, buying out Canadian pension CDPQ’s 20% share and planning to boost Plenary’s presence in global markets including Australia, the Middle East, Asia, the UK, and Europe.

• This strategic move marks ADQ’s first investment in Australia, aiming to enhance infrastructure development and generate sustainable financial returns through a new co-development and investment platform. (APJ)

AirTrunk undergoing A$15B sale process

• AirTrunk is engaged in a sale process valued at A$15B, marking one of the largest deals in the data center sector this year.

• Key bidders for AirTrunk include Blackstone, DigitalBridge Group, and IFM, with financial advisories from firms such as Barrenjoey Capital Partners, Deutsche Bank, and Morgan Stanley.

• Owners Macquarie and PSP acquired an 88% stake at a $3 billion valuation four years ago. (AFR)

Deals and Projects

BTR, Co-Living and Student Accommodation

• Nil.

Residential

• An 89-storey skyscraper planned on the Iluka site in Surfers Paradise is back on the market through Canford Estate Agents, nearly a decade after its initial proposal and approved for mixed-use development. (TUD)

• Contreras Earl Architecture has unveiled plans for a six-story apartment building in Taringa, Brisbane. (TUD)

• Landmark Group is proposing a 280-apartment development at 4 Delmar Parade and 812 Pittwater Road in Dee Why, incorporating a 30% height bonus from the NSW Government for adding affordable housing. (TUD)

• Third.i has proposed an eight-story shoptop building at 51-57 Bayswater Road in Rushcutters Bay, featuring two retail spaces and 12 three-bedroom apartments designed by Woods Bagot. (TUD)

Retail

• IP Generation is purchasing the Stockland Glendale shopping center in New South Wales from Stockland for a speculated A$315M. (RE Source)

• Blackfox Property has purchased the Shepparton Retail Hub for A$11.61M, reflecting a 7.25% acquisition yield. (RE Source)

• City of Melbourne has given the green light to Salter Brothers for their 35-storey mixed-use skyscraper at 487-503 Collins Street, which will integrate with the heritage-listed Rialto and Winfield buildings. (TUD)

• Artemus Group has acquired Sydney's landmark Manly Wharf and the Manly Wharf Hotel for $110 million from TMG Developments. (TUD)

Office

• F. Mayer Imports has updated a commercial masterplan for Mascot, Sydney, proposing a campus-style development with five eight-story towers over a four-story carpark, totaling 48,645sqm of A-Grade office space. (TUD)

Industrial

• An offshore investment house has acquired a key processing and distribution hub operated by Cleanaway in Shepparton, Victoria, for A$7M, reflecting a 5.89% net passing yield. (RE Source)

• Penrith City Council sold a 16.29ha industrial site in Emu Plains to Akura and its capital partners, setting the stage for a future industrial subdivision. (APJ)

Hotels & Pubs

• Wee Hur's plan to build an 18-storey student accommodation tower while preserving only the facade of the heritage-listed Crown and Anchor Hotel in Adelaide has faced strong local opposition and criticism for "hideous facadism." (TUD)

• The Schwartz Family Company has purchased the Leura Gardens Resort in the Blue Mountains for A$25M, a 25% premium over its previous sale price. (TUD)

• The Light Brigade Hotel in Sydney is for sale for A$20M, after last being purchased for about A$9M in 2015 by the Bayfield family, who have since upgraded the venue. (AFR)

• Franze Developments has put the recently completed Holiday Inn & Suites Geelong on the market, expecting over A$70M. (APJ)

• A syndicate have invested over A$13M into the acquisition of the Mantra Hotel in Albury, expecting a 15% yield. They bought the hotel for A$26.2M. (AFR)

Retirement

• Central Element has acquired a A$17M site in Lower North Shore for a retirement community and is planning to develop an eight-storey seniors living project in Greenwich. (TUD)

• Pariter is partnering for its second golf course development, this time planning a 250-apartment-plus-aged-care facility project at Cumberland Golf Club in Greystanes, Sydney. (TUD)

Healthcare

• The former St John of God Pinelodge Clinic in Dandenong, Melbourne, has sold for A$11.68M with a 3.55% yield, featuring a secure government lease, 4040sqm of space, and 93 car parks. (RE Source)

• The Karalee Medical Centre in Chuwah, Brisbane, has been purchased for A$7.1M with a 6.5% yield, housing several healthcare tenants in a 997sqm facility. (RE Source)

Alternatives & Land

• A multi-level car park near Melbourne's Queen Victoria Market, owned by Kim Lim Australia and featuring over 550 parking bays and ground floor retail space, is listed for sale at A$120M. (AFR)

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Economics & Data

Building supplier Lutum goes into administration

• Lutum, a supplier of roofing tiles and masonry products, has entered voluntary administration with $20 million in debts, just three years after being spun off from Boral.

• The company is facing significant financial strain due to rising gas costs, construction delays, and labor shortages (AFR)

Buying is cheaper than renting in just 11% of Australian suburbs

• Only 11% of suburbs find buying a unit cheaper than renting, a significant drop compared to previous years due to soaring property prices and higher rents.

• The proportion of suburbs where purchasing a house is more economical than renting has sharply declined to just 2.5% of all suburbs as of March, influenced by increased interest rates and property values. (AFR)

Proptech

AirTrunk secures solar energy deal in Hong Kong

• AirTrunk has secured a major renewable energy deal in Hong Kong to support rising power demands driven by AI technologies, aiming for 100% renewable energy by 2025 through a procurement agreement with CLP Power and installing solar capacity across 17,000 locations. (AFR)

Policy

International Students are not to blame for Housing Crisis

• International students constitute only 4% of Australia's rental market and are not the main contributors to the housing crisis.

• Factors such as smaller households, intrastate migration, and repurposing rooms for home offices are affecting rental supply and affordability more significantly.

• The current rate of purpose-built student accommodation (PBSA) development is inadequate, with a need for 66,000 new beds by 2026 to keep international students from entering the private rental market.

• The Student Accommodation Council emphasizes the need for government cooperation to overcome planning and legislative challenges in expanding PBSA, which would help alleviate the rental market pressure. (PCA)

City of Melbourne standing up for “most abused waterway”

• The City of Melbourne has taken a firm stance on the ecological restoration of Moonee Ponds Creek, which is described as Melbourne's "most abused waterway." The issue surfaced due to a proposed amendment that aims to align the boundaries of the Port of Melbourne’s Planning Scheme with the declared port area gazetted in October 2021.

• This change would enable BlackRock and other shareholders to continue their projects within the specified sites under the planning scheme's guidelines. (TUD)

Melbourne CBD's University Square to Undergo Green Transformation

• The City of Melbourne has endorsed the concept design for the second stage of the University Square project in Carlton, aimed at enhancing this key green space to better serve its proximity to the university and health precinct and the new Parkville Station. (TUD)

Sydney planning update allows up to 75% more floorspace for BTR

• The City of Sydney is updating its planning rules to boost build-to-rent (BTR) developments, offering developers 20% to 75% extra floor space for such projects, depending on the site.

• The changes, open for public feedback, aim to increase rental housing stock and revitalize city vibrancy by preventing unoccupied apartments.

• Additional incentives include a 20% increase in floor space for co-living accommodations aimed at students and low-income workers near major educational institutions. (RE Business)

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