🛑 Starwood Limits Fund Redemptions

Starwood Real Estate Income Trust, managing approximately A$15B, has reduced investor redemptions to 1% per quarter

June 03, 2024

In partnership with

Morning. ☕

As always, it’s been a busy week in real estate. Here’s the agenda for today:

  • Deals and Projects

  • Investment Banking & Private Equity

  • Economics & Data

  • Policy

  • Proptech

Lets dive in.

Deals and Projects

BTR and Co-Living

  • Australian Unity is entering the build-to-rent sector with plans for a 68-storey tower in Parramatta. The proposal includes 611 apartments. (TUD)

Residential

  • Deicorp has obtained planning approval for its 32-storey tower project, in Sydney's inner-west, featuring a mix of residential, retail, and office with an estimated development cost of A$435M. (TUD)

  • UEM Sunrise had finalized residential development plans for the Subiaco Oval precinct in Perth, which included three mixed-use building. (TUD)

  • The Fareham project by Gamuda Land in Melbourne has commenced construction with an estimated development cost of A$90M. (TUD)

  • Urban Property Group has acquired a stalled residential tower project on the Central Coast, set to restart construction immediately on a A$115M first stage. (TUD)

  • Plans for a 27-unit, three-storey development in Darwin's rising suburb of Johnston have been revived by builder-developer Norbuilt. (TUD)

Office

  • Fortis has completed an A$42M eight-storey office building at 65 Dover Street, with 90% of the space leased. (TUD)

  • Holm Developments is planning a sustainable five-storey timber office building on Racecourse Road in Hamilton, Brisbane. (TUD)

Industrial

  • MaxCap and Troon Group have recently finalized a A$70M acquisition of industrial properties in Cheltenham, Melbourne. (RE Source)

  • Perth Airport is gearing up for a surge in logistics activity with the addition of a new industrial facility covering 10,480 square meters. (RE Source)

Hotels & Pubs

  • The Christie family has sold two motels in Perth's inner east for a total of A$57M, with Hiap Hoe purchasing the Great Eastern Motor Lodge for $40 million, featuring 198 rooms on 1.19 hectares. (RE Source)

Alternatives & Land

  • Ryman Healthcare acquires 2ha of land near its Bellarine Peninsula retirement village for A$7.8M. (TUD)

  • Uniting Church is initiating an overhaul of aged-care facilities in Kingscliff, with plans for a seniors-living community featuring 199 independent-living units and a 120-bed residential-care facility. (TUD)

  • Silverstrand Capital, a Singaporean fund, has sold a portion of its Wyuna Aggregation in northern NSW and has listed the remaining 2,840 hectares for sale. (APJ)

Investment Banking & Private Equity

Lendlease secures buyer for US business

  • Lendlease has secured a buyer for its US East Coast operations, with Consigli Building Group set to acquire its New York and New Jersey construction operations.

  • This strategic move aligns with Lendlease's broader objective of divesting its construction businesses in the US and UK over the next 18 months. (TUD)

Lendlease FY24 profit takes big hit

  • Lendlease's profit for the 2024 financial year has been reduced by about one-third to approximately A$305M due to a delay in the competition watchdog's review of the developer's proposed A$1.3B sale of housing estates, impacting its earnings, return on equity, and gearing. (AFR)

Starwood limits fund redemptions

  • Starwood Real Estate Income Trust, managing approximately A$15B, has reduced investor redemptions to 1% per quarter, down from 5%, due to cash constraints from high interest rates affecting commercial property values. This move aims to prevent forced property sales at discounted prices. (AFR)

MaxCap and Troon Group reach A$400M in development pipeline

  • MaxCap and Troon Group have recently finalized a A$70M acquisition of industrial properties in Cheltenham, Melbourne, and secured planning approval for an industrial estate in Clayton South, boosting their development pipeline to $400 million. (AFR)

Economics & Data

Home construction nears 2 year low

  • Home construction and renovation activity have declined to a near two-year low in the March quarter due to tradie shortages, with the total value of residential work falling 1.2% to $19.58 billion, marking the lowest volume since June 2022. (AFR)

NAB: Perth house prices to jump 21% by 2025

  • NAB predicts Perth's home values to rise by 13.7% this year and another 6.2% by 2025, with Brisbane and Adelaide also expected to see significant growth of 12.2% and 12.3% respectively over the next two years.

  • Current trends show Perth's home values have already increased by 7.6% since January, with Adelaide up by 4.2% and Brisbane by 4%. (AFR)

Declining values wipe $58bn from institutional investors

  • The Australian asset management sector saw a significant decline in total real estate assets under management (AUM) by 17.1% from 2022 to 2023, resulting in a A$58B loss for institutional investors. (AFR)

Slow home approvals posing a challenge to owners and renters

  • New home approvals in Australia dropped slightly in April and are down nearly 7% compared to last year, signaling challenges for both homebuyers and renters. Rising demand, especially due to migration, has led to a surge in house prices and record-high median rents. (AFR)

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Policy

NSW housing target to be reconsidered

  • The NSW Government's revision of housing targets has elicited both praise and concern from property sector experts, who emphasize that targets alone won't address the supply issue.

  • Premier Chris Minns announced updated targets for key regions alongside an incentive scheme to assist councils in meeting these new goals, highlighting a broader strategy to tackle housing affordability and retain young residents in the state. (TUD)

Proptech

Superopti offering new fibre solutions for developers

  • Superopti is a new player in the property development scene, offering dependable fibre infrastructure solutions tailored to diverse housing models. They focus on understanding each development's needs and provide revenue share opportunities for developers. (TUD)

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