📈 Wall Street predicting +15% for REITs over next 12 months

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

• Proptech

• Policy

Lets dive in.

Deals and Projects

BTR, Co-Living and Student Accommodation

• Addenbrooke sold a Sydney site, initially intended for a land swap with A2B, to City West Housing for an undisclosed amount. The site will be developed into 138 affordable housing apartments. (AFR)

• Urban Property Group was approved for a 48-storey, 350-unit BTR project and a 35-storey commercial tower located next to Parramatta Station. (TUD)

• Approval was granted for the Novus on Harris BTR project in Parramatta. (Aliro)

Residential

• John Symond, founder of Aussie Home Loans, is selling his Sydney home, Wingadal, which is expected to fetch over A$200M. (REA)

• Bathla Group proposed a A$286M development for 667 apartments in Cabramatta. (TUD)

• Captag Investments are planning a 90-unit project with childcare in Carlingford. (TUD)

• KW Resort Management refiled plans for a 23-story, A$86M mixed-use tower in Wyong. (TUD)

Retail

• IP Generation sold Richmond Mall for A$35M, achieving a 5.73% yield. (APJ)

Office

• Cedar Woods Properties has completed a 7 storey office in Melbourne. (TUD)

• Sydney Metro received approval for a double-tower development at Hunter Street. (TUD)

• A commercial masterplan in Mascot proposes five towers with 48,645 sqm of space. (TUD)

Industrial

• Centuria bought Katunga Fresh glasshouse in Victoria for A$100M at a net yield of c. 6%, expanding its total glasshouse portfolio to $450M. (AFR)

• The former Heinz plant in Girgarre is for sale, featuring 9.204 ha and 11,075 sqm of buildings. (APJ)

Hotels & Pubs

• Accor introduced its Pullman brand to Tasmania as part of a A$95M redevelopment. (AFR)

• Gurner received approval for a A$250M luxury resort in Port Douglas.(APJ)

• The hotel component of the Art on the Park tower in Melbourne was sold to the Chen family for approximately A$70M. (RE Source)

• IHG and Kokoda Property are preparing to open Brisbane's first Kimpton Hotel as part of a A$1.5B development. (AFR)

Retirement

• Aspen Group submitted plans in SA for a dual-purpose development including a 181-home retirement community on a 10.6 ha site acquired for A$2.6M. (TUD)

Childcare

• Clarence Property sold a childcare center in Ripley for A$7.6M. (RE Source)

Alternatives & Land

• Qantas Super has invested A$200M into agricultural properties managed by goFARM. (AFR)

• ASK acquired the outgoing Mr Donut headquarters in Mordialloc for A$13M, intended to be used for self-storage. (RE Source)

• The Break Surf & Stay wave park, a A$100M investment, is set for a 2026 launch in Aldinga. (TUD)

• The Sands Torquay golf course resort in Victoria is back on the market. (TUD)

Investment Banking & Private Equity

Wall Street predicts +15% rally in US REITs over next 12 months

• Wall Street analysts forecast a 15% rally in real estate stocks over the next 12 months, with REITs expected to see a 14% increase, buoyed by a recent drop in Treasury yields and stabilization in long-term borrowing costs.

• The Fed's indication of maintaining current interest rates has bolstered investor confidence, potentially driving a recovery in real estate values. (AFR)

More calls for change at Lendlease

• Institutional investors, including Allan Gray who manages a 6.2% stake, are advocating for a leadership overhaul at Lendlease. They are pressing for the replacement of Chairman Michael Ullmer to initiate a cultural transformation.

• Lendlease is preparing for a strategic review next month amid criticisms over management and its international strategy, against a backdrop of a declining market value. (AFR)

WeWork cuts new restructuring deal that spurns Adam Neumann

• WeWork, supported by SoftBank, has finalized a restructuring agreement to provide A$690M in financing to facilitate its exit from Chapter 11 bankruptcy, sidelining a proposal from co-founder Adam Neumann.

• This arrangement grants majority ownership to Yardi, while SoftBank will maintain up to 36% of the reorganized company, pending court approval. (AFR)

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Economics & Data

Office tower values expected to decline by a further -10%

• Office tower values are anticipated to decline by an additional 10% this year, completing a forecasted total drop of 25% from peak to trough due to high interest rates and shifts towards remote work.

• Recent transactions suggest stabilizing values, with cap rates expected to level out soon. (AFR)

Stockland reporting +18% increase in MPC home sales

• Stockland reported an 18% increase in new home sales within their master-planned communities during the third quarter, totaling 1242 homes. Inquiries in these communities also significantly increased, rising to 4325 from 2581 in the previous quarter. (AFR)

Proptech

Dexus planning to harness battery storage for new industrial projects

• Dexus is set to incorporate commercial-grade batteries in all new industrial buildings, covering over a million square meters of space equipped with battery storage. This initiative is projected to save more than $4.6 million in energy costs and eliminate approximately 27,450 tonnes of carbon emissions annually.

• For the first facility, energy cost savings are forecasted at about $4.60 per square meter, leading to annual savings of around $92,000. (Dexus)

Backflip raises US$15 million in Series A funding

• Backflip provides tech-enabled services for real estate investors, including short-term loans and tools for potential house flipping investments.

• The funding round was led by FirstMark Capital, with the startup having raised US$95 million in total through equity and debt. (TechCrunch)

Matterport acquired by CoStar at a 212% premium

• Matterport, which specializes in creating digital replicas of physical spaces, has been acquired by CoStar for US$1.6B. The deal values Matterport shares at US$5.50 each, representing a 212% premium over the previous closing price. (TechCrunch)

Policy

BTR FIRB changes welcomed but not enough

• Treasurer Jim Chalmers' recent changes to FIRB rules now allow foreign ownership of existing BTR properties to boost investment in Australia's rental housing sector.

• Industry leaders and the Property Council have welcomed these changes but still see the 30% withholding tax on managed investment trusts as a significant obstacle, emphasizing the urgent need for further tax reforms to fully leverage foreign investment. (AFR)

Red tape slowing down A$10B HAFF program

• The A$10B Housing Australia Future Fund aims to develop 40,000 affordable homes over five years but faces delays as many regional builders lack required Commonwealth safety certification, affecting up to 70% of the projects.

• The certification process takes about 8-10 months, presenting a significant barrier for smaller contractors and potentially increasing project costs without improving safety. (AFR)

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