😋 I'll have 13 data centres with a side of cell towers, thanks!

Morning. ☕

Hope you’re having a nice Easter break.

There was notable M&A activity with Charter Hall, HMC Capital and Knight Frank all making moves. REA-Dynamic Methods fell through. BWP-Newmark is a done deal.

The HAFF and NHAFF programs have shown a positive impact on supply, with bids from the 37 largest housing providers totalling 22,600 units (more than half of the 40,000 unit target).

Rising interest rates are starting to affect homeowners. Fitch Ratings data shows mortgage arrears have reached the highest level since COVID. CoreLogic data shows over 14,000 recent purchases were resold in 4Q23, with 6.5% of them selling at an average loss of A$30k.

Let’s get into it 👇

Mergers, Acquisitions & Private Equity

📡 HMC acquires US data centers and cell towers for A$44M

• HMC Capital is acquiring North American asset manager StratCap for US$28.5M (c. A$43.7M). The acquisition is includes a portfolio of 13 data centers and over 200 cell towers across North America. The deal is set to close in Q2 2024. (Data Centre Dynamics)

🍺 Charter Hall acquires 15% of pub owner HPI for A$97M

• Charter Hall has made a strategic move by acquiring a c. 15% stake in Hotel Property Investments (HPI), a listed pubs landlord worth A$640M. The acquisition is valued at A$97M ($3.35 per share). HPI holds a portfolio of 57 hotel properties valued at A$1.2B. (AFR)

🛑 REA-Dynamic Methods deal is off

• REA Group has terminated its negotiations to acquire Dynamic Methods, a provider of real estate forms, deciding instead to focus on individual growth strategies.

• The c. A$30M deal was called off due to the prolonged acquisition process and commercial considerations. (The Australian)

🎠 Knight Frank buys out McGrath for A$96M

• John McGrath and his board have endorsed a A$95.5M buyout of McGrath Ltd by Knight Frank and Bayleys, at 60¢ per share, a 27% premium on its last trading price but 70% below its IPO price of $2.10 in 2015.

• John McGrath owns a 23.3% stake and will continue as CEO. (AFR)

🤑 BWP Trust closes out Newmark REIT deal

• Despite opposition from Euree Asset Management, BWP Trust has acquired over 58% ownership of Newmark Property REIT. Opposition surrounded the payment of a A$22.5M management fee to Newmark’s executives, given its poor share performance since listing in 2021. The merger is set to close on April 12. (AFR)

Economic Indicators & Markets

🏠 Only 9.1% of respondents plan to buy in the next 6 months

• A Westpac survey reveals a significant decrease in home buying intentions, with only 9.1% of respondents planning to buy in the next six months, the lowest since 2019.

• However, there is strong medium-term buying interest, with over 33% of consumers considering a purchase in the next 5 years (the highest recorded level). (AFR)

🏦 Mortgage Arrears hit 12.1% 

• Mortgage arrears have reached their highest level since the pandemic began, with Fitch Ratings reporting a rise to 1.21% in the December quarter, driven by inflation and interest rate hikes. Further increases are expected in 2024 due to economic factors and household debt levels. (The Australian)

🏡Land getting smaller but costing way more

• Domain's Chief of Research and Economics, Nicola Powell, notes that Sydney's average land size dropped by 4.6% over the past decade, despite a 130.7% surge in price per sqm. This trend is mirrored in other cities like Melbourne and Brisbane (AFR)

Housing Policy

🔼 Surge in bids for HAFF

• The federal government's tender for the A$10B Housing Australia Future Fund saw bids in excess of the 8000 home quota. Community housing providers, fund managers, and government bodies submitted bids totaling 22,600 homes. This surge comes amidst a 12-year low in new housing starts. (AFR)

🏙️ WA faces worsening housing shortfall

• WA is projected to face a housing shortfall of nearly 25,000 homes by the end of 2027, according to new modelling by Property Council WA. (Property Council Australia)

Deals and Projects (A$25M+)

🏢 BTR, Co-Living and Student Accom

• Panettiere Developments has unveiled plans a A$1.5B mixed-use development in Brisbane, comprising 1001 BTR apartments and a retail precinct. (The Urban Developer)

• Singaporean Cambridge RE Partners acquired a student accommodation village in Port Macquarie for A$116M. (The Australian)

• Novus has acquired a site in Melbourne for its second build-to-rent tower, featuring 215 apartments. (The Urban Developer)

• A hardware store and post office in Sydney's Pyrmont are set to be transformed into a 16-room coliving space, following plans submitted by Coso Architecture. (The Urban Developer)

🏠 Residential

• Peet has proposed plans for a new A$6.7B residential development in Flagstone, QLD, aiming to create 1600 homes along with schools, childcare centers, and sports facilities. (The Urban Developer)

• Multiplex has initiated construction on a luxury marina and residence project valued at A$300M in the Gold Coast. (The Urban Developer)

• Azure Development has secured approval for a A$72M project in Brookwater, Springfield, featuring 61 luxury terrace homes. (The Urban Developer)

🛍️ Retail

• Lendlease has received approval for its $1.7 billion Gurrowa Place mixed-use project near Melbourne's Queen Victoria Markets. Completion is expected in 2028. (Lendlease)

• IP Generation is set to acquire a 50% stake in Westfield Tea Tree Plaza, located north of Adelaide, for approximately A$308M, a 20% discount on book value. (The Australian)

• ISPT is selling the The Dee Why Grand shopping centre in Sydney for c. A$127M at a 6.34% yield. (APJ)

• Woolworths has acquired Niddrie Central, a 5,112sqm mall in Melbourne's northern suburbs, for A$51M. (AFR)

• Region Group sold two Victorian shopping centers for sub 6% yields: Wyndham Vale Square for A$25.1M and Drouin Central for A$20.4M. (Real Estate Source)

• Woolworths bought Niddrie Central in Essendon for A$51M, a 45% increase from its previous price. (Real Estate Source)

• IP Generation is acquiring a discount factory outlet in Nunawading, Melbourne, for under A$60M. Acure Asset Management paid A$67M for it in 2016. (Real Estate Source)

🏬 Office

• Charter Hall and QuadReal have sold the former Southern Cross Austereo headquarters in Brisbane to the Shayher Group for A$46M, marking a significant loss from the A$65M they paid for the site three years ago. (Real Estate Source)

• The Bonython, a 1,452sqm office complex in Sydney's Paddington, has been acquired by Annie Cannon-Brookes for A$30M from John Singleton. (AFR)

• Beams Projects plans to construct two 13-storey offices in Melbourne's Collingwood. (The Urban Developer)

🏭 Industrial

• Aware Real Estate has acquired the Eumemmering Business Park in south-east Melbourne for over A$100M. (Real Estate Source)

🔑 Hotels

• The InterContinental Hotel in Sydney's Double Bay has been sold to an investor syndicate for over A$215M. The new owners plan a significant redevelopment worth up to A$700M. (The Australian)

• Invictus Developments has submitted plans to convert a 15-storey office block in central Sydney into a 152-key hotel at a cost of A$29.8M, following its acquisition of the property for A$52.5M.(Mingtiandi)

• Dubai billionaire Ghassan Aboud is expanding his Crystalbrook Collection hotel empire into Australia's capital, Canberra, with plans to open a 238-room luxury hotel at Garema Place in a A$200M deal with local developer TP Dynamics. (AFR)

🌇 Alternatives

• Curtin University in Perth has received approval for a new A$200M, 22,111sqm science building. (The Urban Developer)

• Kingsmede Partners is divesting three self-storage facilities in Perth, totaling 9,726sqm across 1.92ha, with a current 85% occupancy rate and A$2.4M annual income. (The Urban Developer)

• Prime Value Asset Management's dairy arm, Prime Dairy, has made an unconditional agreement to acquire a 700-hectare dairy farm in Tasmania. (APJ)

• Australian Unity sold a three-story medical center in Richmond, Melbourne, for A$24M with a 6.34% yield to a local private investor. (Real Estate Source)

• The Cadbury factory in Tasmania is set for a A$100M redevelopment into a Willy Wonka-inspired tourist attraction. (The Urban Developer)

• Tasman Holiday Parks has acquired the North Star Holiday Resort in Hastings Point, NSW, for a record price believed to exceed A$50M. (The Australian)

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