🥂 Scape to give students 3,000 spots to chill

Morning. ☕

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

Lendlease is in the press again, with HMC Capital upping their stake in the business ahead of a potential restructure. Our mates in the US have had a residential rally off the back of Blackstone’s A$15.2B acquisition of Apartment Income REIT.

Hale Capital is seeking A$300M for an infil industrial strategy. NextDC is looking for A$1.32B to expand it’s portfolio of data centres.

Student Accommodation operator Scape set up a A$1B JV with APG and Ivanhoe Cambridge to develop 3000 student accommodation units, seeded with 1000 rooms in Melbourne's Gurrowa Place.

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Investment Banking & Private Equity

HMC Capital buys another 5% of Lendlease ahead of potential restructure

• HMC Capital has boosted its stake in Lendlease to over 5% ahead of a crucial investor meeting, showing faith in the company's potential despite its shares falling nearly 50% in the last five years and its market cap halving to around A$4.4B over two decades.

• This move comes amidst pressures from major investors like Tanarra Capital for Lendlease to slash costs and exit its international construction business, with the collective ownership of these major shareholders reaching about 15%. (AFR)

A$15.2B Blackstone acquisition spurs rally in US apartment sector

• Blackstone's A$15.2B acquisition of Apartment Income REIT has sparked a significant rally in the US apartment landlord sector. The industry index surged over 4%, marking its largest one-day increase in nearly four months.

• The acquisition, part of Blackstone's broader housing investments, involves an all-cash deal at a 25% premium. (AFR)

Bain Capital cuts ties with Public Hospitality Group

• Bain Capital Credit has ended its business with Public Hospitality Group due to failure to meeting contract conditions, signaling troubles for the heavily indebted property group. (AFR)

Capital Flows

Hale Capital seeking A$300M for infil industrial

• Hale Capital has partnered with Oxford Properties, LaSalle Investment Management and Warburg Pincus to raise A$300M for last-mile logistics facilities in major urban areas, focusing on "infill" sites for multilevel logistics hubs. Hale Capital manages 13 assets worth $1.4 billion, with a A$4B pipeline. (AFR)

Data centre operator NextDC seeking A$1.32B for expansion

• NextDC, an ASX-listed data centre operator, is raising A$1.32B to expand its facilities in Sydney and Melbourne due to the surge in demand fueled by the generative AI and cloud services booms. (Australian Property Journal)

Economics & Data

Scape keeping its builders afloat

• Scape took measures to prevent three out of its five contract builders from going under amidst rising costs and supply chain challenges. This action comes as 2067 companies, nearly 28% of the total, have fallen into insolvency this financial year. (AFR)

Property loan values increase 22% y-o-y

• In Feb 2024, new housing loan commitments to investors in Australia increased by 1.2%, with the total value of new home and investment property loans reaching A$26.4B. This represents a 21.5% year-on-year increase. (Urban Developer)

Policy

840-day wait for a townhouse approval

• Melbourne architect Michael Smith has faced an extended 839-day wait for council approval on a straightforward townhouse project. Despite efforts to streamline planning, councils contend that high construction costs hinder project commencements, contributing to the region's deepening housing crisis. (AFR)

New NSW height limits are confusing

• NSW's new planning reforms have caused confusion in the property sector, particularly regarding height limits for infill developments. Despite industry requests for clarity, the government has not provided definitive guidance on the height limits under the new regulations. (AFR)

NSW Design and Building Act increasing strata costs

• The implementation of NSW's Design and Building Practitioners Act 2020 has led to a significant surge in repair costs for strata buildings.

• The act, introduced after structural issues at Opal Tower and Mascot Towers, mandates extensive and costly repairs even for minor defects. (AFR)

Proptech

Aurecon using AI to help with construction

• Aurecon's AI platform Recall is reshaping construction by providing expert answers on structural design queries, potentially revolutionizing productivity.

• Australian companies show high trust in AI, with 79% considering it essential within 2-3 years. However, concerns about industry destabilization and AI biases persist, driving the need for rigorous oversight. (AFR)

WA bets A$200K on modular housing 

• Evoke Living Homes has opened a new modular and prefabricated homes factory in Northam, Western Australia, with the support of a $200,000 Regional Economic Development grant from the state.

• Evoke's new factory, equipped with advanced manufacturing technologies, seeks to increase production capacity by 20% and minimise construction delays. (Urban Developer)

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Deals and Projects (A$25M+)

BTR, Co-Living and Student Accommodation

• Student Accommodation operator Scape has partnered with Dutch pension fund APG and Canadian firm Ivanhoe Cambridge to develop 3000 student units. The A$1B JV is seeded with 1000 rooms in Melbourne's Gurrowa Place. (AFR)

• Marrapacca is developing a 16-storey co-living tower in Parramatta, replacing a car park, with retail spaces and communal areas. (Urban Developer)

• AsheMorgan's proposed build-to-rent project in Melbourne's Docklands, comprising two towers with a total of 925 apartments, has received preliminary approval from the City of Melbourne's planning committee. (Urban Developer)

• DevelopmentWA sold land in Midland, Perth, to Bluerock Projects for a build-to-rent project which will feature 51 affordable units in what is being called WA’s largest timber frame apartment complex. (Urban Developer)

Residential

• Moremac Property Group acquired a 250ha site in Beaudesert, QLD, with plans to develop a 900-1000 lot community. (Urban Developer)

• Tocu Group is planning a unique seven-storey residential tower in Brisbane's West End, featuring 42 apartments with a curvaceous facade. (Urban Developer)

Retail

• Walker Corporation has shifted gears from a three-storey retail building to propose a 38-storey mixed-use tower in Adelaide's Festival Plaza. (Urban Developer)

• Centennial and Parkstone Funds Management have acquired a A$107 million regional Queensland shopping center, Hinkler Central. (Urban Developer)

• QIC is planning a 2.4MW rooftop solar farm for Canberra Centre, aiming to reduce energy demand and support environmental goals. (Urban Developer)

• Salta Properties sold a permit-ready shopping center site in Plumpton, Sydney, to Revelop for A$20M. (RE Source)

• Developer David Marriner sold a Melbourne flagship Chanel building for A$75M, a significant increase from the A$7.4M he paid a decade ago. (AFR)

Office

• Investa's plan for a 28-storey office tower in Melbourne's CBD received unanimous support from the Future Melbourne Committee. (Urban Developer)

Industrial

• ESR-LOGOS REIT sold a logistics facility in Melbourne to Arrow Transport for A$65.5M, a 7.4% premium over its valuation. (Australian Property Journal)

• Charter Hall is set to develop the first stage of the Western Sydney International Airport business precinct, introducing 40,000 sqm of warehousing, offices, a 150-room hotel, and dining facilities. (Australian Property Journal)

• Citiwest Group has submitted plans for a 30-warehouse project in North Geelong, featuring two-story warehouses with office spaces. (Urban Developer)

• Sydney's Central, a dual-level industrial development in Lidcombe, is now complete, adding 40,000 sqm of sustainable warehousing space to the market. (Australian Property Journal)

Hotels

• Hills Shire Council has approved a A$35M well-being-focused community center designed by Plus Architecture. The development will be situated on a 47,438 sqm site overlooking Box Hill. (Urban Developer)

Alternatives & Land

• Construction of the A$456M Nyaal Banyul Geelong Convention and Event Centre is progressing, with the installation of the first tower crane at the site. (Urban Developer)

• A large development site in Hadspen, near Launceston in Northern Tasmania, is up for sale, offering the potential for a 600-lot subdivision and town center. (Australian Property Journal)

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