Ranked fifth, Sydney recorded prime retail rates at US$1,018 per square foot per annum, Melbourne ranked seventh at US$851 and Brisbane ranked ninth at US$739.

Hong Kong was listed as the most expensive retail market in the world, recording rates at US$4,328 per square foot per annum.

The city’s prime rents are approximately 150 per cent higher than New York and more than 400 per cent higher than London, Paris and Sydney.

The survey revealed that strong demand from international retailers, as well as a modest supply pipeline, is behind the record-high prime rental rates.

CBRE Regional Director of Retail Services, Josh Loudoun, said vacancy rates in prime retail markets in Australia’s capital cities remained extremely low and continued interest from international retailers has added to this growth.

“We attribute this to a few key factors, including the fact that annual retail sales growth is back in line with longer term averages. Retailers are reporting far greater consistency in sales and this providing a base level of confidence not seen since 2010,” Mr Loudoun said.

“This lack of supply is what creates competition among the handful of retail categories that can sustain the high occupancy costs in the super prime market.”

The limited supply of prime space throughout the Asia Pacific region helped maintain rent levels, especially in Sydney, where there is a high demand from international retailers set to enter the market later this year.

Brisbane’s prime rental rate increased 15 per cent and rose two positions from last quarter due to a strong turnover and limited supply forecast for Brisbane’s Queen Street Mall.

Growth in the Brisbane retail sector is expected to continue due to the mining and natural resources industries supporting the local economy and the market’s population growth sparking signs of future retail growth.

The top four retail markets – Hong Kong, New York, London and Paris – showed no increase in prime rents this quarter, proving their resilience through international retailers looking at long-term expansion strategies in each market’s top locations.

However, Mr Loudoun also said Australia’s super prime rents acted as a barrier for new brands entering the market due to high occupancy and labour costs.

“We have seen this with groups like Hollister choosing to target shopping centre locations and with Top Shop opening on Chapel Street, Melbourne and Williams-Sonoma opening its first Australian store at Bondi Junction in Sydney,” he said.

Prime Retail Rent Ranking, Ranking by US$ per Sq. Ft. per Annum Basis

The sites are situated at:

• 224-250 LaTrobe Street, Central Melbourne
• 9-23 MacKenzie Street, East Melbourne 
• 229-241 Franklin Street, West Melbourne

They represent one of the most impressive portfolios to go to market in Melbourne for more than a decade.

CBRE Melbourne City Sales Director, Mark Wizel, said the portfolio has attracted many active buyers from a range of local and off shore developers and land bankers.

“Over the last two years the Melbourne CBD has seen over $600 million of development site acquisitions from Malaysia, Singaporean and mainland Chinese groups resulting in strong growth in prices being achieved for well-located development sites,” said Mr Wizel.

The first property on LaTrobe Street is valued at $40 million, has an area of 3,197 square metres, is located opposite the CBD’s largest shopping centre, includes a 10 storey basement car park and two floors of retail shops.

“This property has substantial development upside. It has the potential to accommodate several major high-rise buildings as well as providing enormous scope for multi-level retail tenancies,” he said,

“It will provide the successful buyer with an opportunity to create the Melbourne CBD’s next landmark building.”

The MacKenzie Street property is valued at $20 million and comprises 388 apartments across 35 levels, and 151 car parks, totaling 2,036 square metres of space in one of the CBD’s most sought after precincts.

The last property includes a 1,548 square metre, two-level warehouse and is valued at $16 million.

Colliers International Managing Director, John Marasco, said Melbourne’s inner city population has increased 6.1 per cent over the past five years, highlighting the driving demand for CBD residential accommodation.

“Therefore, high quality sites in prime Melbourne CBD locations are becoming scarce and difficult to acquire which no doubt is also being driven by the consistently strong performance of the high rise residential apartment market that continues to attract buyers both locally and from abroad,” Mr Marasco said.

The properties are to be sold individually or in any combination and are for sale by International Expressions of Interests, closing Friday June 21 at 3pm.

The twice winners of the prestigious RIBA Stirling Prize were selected ahead of internationally renowned US firms Adrian Smith and Gordon Gill (Chicago) and Kohn Pedersen Fox (New York),

The selection panel was made up of representatives from Crown, Lend Lease, the Barangaroo Delivery Authority and the NSW Department of Planning and Infrastructure.

According to the Crown website, WEA’s proposal took inspiration from nature and presented a complex architectural form that derived a sculptural form reminiscent of three twisting petals (see below).

Importantly, the shape of the upper and intermediate levels of the tower is designed to maximise views of the Sydney Harbour Bridge and the Sydney Opera House.

WEA’s portfolio of architectural projects include the striking Guangzhou International Finance Centre which is currently the world’s eighth tallest building, along with the Gardens by the Bay development in Singapore which features giant, sustainably-cooled conservatories.

As previously reported on TheUrbanDeveloper.com, Crown Resorts Chairman James Packer said he was extremely impressed with the high quality of the short-listed panel and highlighted the importance for ‘breathtaking’ design in such an iconic location.

“Sydney deserves one of the world’s best hotels…Crown Sydney will be the most iconic building constructed in this city since the Opera House.

“I want this building to be instantly recognisable around the world and feature on postcards and memorabilia promoting Sydney. That’s how you attract international tourists, create jobs and put Sydney on the map.”

380 leasing deals were completed over the first three months, across the shopping centre group’s portfolio of 38 malls in Australia.

Excluding new projects, these leases represented 2.2% of specialty retail space across the Australian portfolio.

Specialty stores range from hair and nail salons, to fashion boutiques and apparel chains.

The rent reductions were offered against a subdued retail backdrop with specialty sales up just 0.3% for the quarter.

Westfield reported that the timing of Easter as well as 2012 being a leap year negatively impacted retail sales in the quarter.

“Whilst retail conditions remain subdued the productivity of the portfolio remains high at $9,863 per square metre (psm) with continuing demand for space from both domestic and international retailers,” said Westfield in its quarterly update.

Despite these slow conditions in Australia’s retail space, the Group’s overall global operations over the first three months of this year were in line with expectation, according to the report.

During the quarter, Westfield commenced $700m of new projects including the $400m redevelopment of the Westfield Mt Gravatt in Brisbane (above), the US$150m redevelopment at Garden State Plaza in New Jersey and the US$90m redevelopment at Montgomery in Maryland.

The Westfield Group also entered into an agreement with O’Connor Capital Partners to form a US$1.28b joint venture that comprises a portfolio of six regional Westfield malls in Florida.

The Group also decided to dispose of its joint venture interest Brazil, however it continues to review opportunities in the South American market.

Leasing demand in the United States remains solid with over 330 deals executed in the three months representing over 843,000 square feet.

Average specialty rent, as of 31 March 2013, was up 2.6% to US$65.05 per square foot (psf), for the 12 months. Growth over expiring rents for all deals, excluding projects, was up 18.0% for the quarter.

The strong performance of the UK’s Westfield London and Stratford City continues with retail sales for the March quarter up 2.6% and 7.7% respectively. Combined annual sales from the two London centres is now in excess of  £1.9bn.

Westfield’s global portfolio comprises 100 shopping centres in 4 countries with around 22,000 retail shops, 1.1bn annual customer visits and over $40bn in annual retail sales.

The global portfolio at 31 March 2013 was 97.4% leased, up 20 basis points compared to the same period last year.

The Group expects to commence between $1.25bn and $1.5bn of new developments in 2013 (WDC share: $300m-$500m).

The 2013-14 Federal Budget marks the end of a tumultuous financial year in Australian politics, as Julia Gillard and Wayne Swan hand down what could be their last budget.   During the past six years, the Government had focused on returning the budget to surplus this financial year.  However, as recent months unfolded, it became clear this would not be delivered and instead has been promised for 2016-17.

The 2013-14 Budget is widely recognised as Prime Minister Gillard’s last attempt to win significant votes ahead of the September election, and is a clear representation of ‘Labor values’.

Several commitments made in the 2012-13 Budget have been either cancelled or deferred as the Government balances its priorities.

The important numbers

• Budget deficit of $18 billion in 2013-14
• Budget forecast to be balanced by 2015-16, surplus by 2016-17
• Economic growth of 2.75% in 2013-14
• Unemployment rate of 5.75% in 2013-14

Winners

• Schools: the Gonski education reforms funded for six years, including $2.9 billion for the next four years

• Health: $64.6 billion in funding, including $1.9 billion in funding the national disability insurance scheme, DisabilityCare (through an increased Medicare levy)

• Transport infrastructure: $3 billion will be allocated to fund road projects in Sydney, Melbourne and Brisbane out of a total $24 billion allocated for new road and rail infrastructure

Losers

• Middle class welfare: the $5,000 Baby Bonus has been axed from 1 March 2014

• The well-organised wealthy: earnings of more than $100,000 on superannuation pensions and annuities will be taxed at 15 per cent, instead of being tax-free

• Universities: $2.3 billion will be cut from universities to fund Gonski education reforms

• Foreign aid: Millennium development goals deferred for another year

Macroeconomic

Taxation and Superannuation

After last year’s substantial changes to personal income tax rates, this year the Government opted to maintain the status quo. Additionally, the planned increase to the tax-free threshold in 2015 will now be deferred due to the falling global carbon price and the subsequent loss of Government revenue.

Taxation

Corporate tax loopholes are in the Government’s sights, with $4.2 billion projected to be saved over four years. Large multinationals are being particularly targeted with rules regarding companies’ ability to shift profits to countries with lower taxes being tightened.

There are no changes to negative gearing or capital gains tax.

Superannuation

The announced changes to the taxation of superannuation will deliver a smaller saving than previously expected – $821 million over four years, rather than the $900 million that was initially hoped for.

The Government will impose a 15 per cent tax on earnings above $100,000 from retirement accounts, with people earning more than $300,000 a year to pay 30 per cent as opposed to the 15 per cent paid by everyone else.

It’s not all bad for superannuation however, with up to $500 being provided for people earning less than $37,000 to compensate them for tax paid on super at a cost of $15 million over five years.

Infrastructure, Property and the NBN

Infrastructure

Infrastructure was one of the winners in this Budget, with $24 billion committed to the next wave of major projects.  This will see the total investment sit around $60 billion between 2008-09 and 2018-19.

The spend lies not only in metropolitan locations, but with a significant focus on delivering infrastructure to regional Australia.  There is a push to encourage greater private sector involvement in providing infrastructure to the nation, with the Government using the Sydney’s F3 to M4 road project as the leading example.

Major metropolitan budget initiatives include:

• $3 billion will be allocated to fund road projects in Sydney, Melbourne and Brisbane
• $718 million for Brisbane’s Gateway North Upgrade
• $1.8 billion commitment for Sydney’s WestConnex road (M4 extension and M5 duplication) and $400 million for the F3-M2 ‘missing link’ in Sydney
• $525.1 million to widen the M80 Ring Road in Melbourne
• $448 million upgrade to Adelaide’s South Road, including widening the roadway and creating three road overpasses and a rail overpass

Regional initiatives:

• $500 million committed over ten years through the Nation Building Program towards a package of works upgrading the Midland Highway in Tasmania
• $4.1 billion for the Bruce Highway over ten years from 2012-13
• Upgrades to the Warrego Highway in Queensland and $418 million for the Swan Valley Bypass in Western Australia

Source: 2013 Federal Budget

Property

A very quiet budget for the property sector, with:

• No changes to negative gearing benefits
• No change to stamp duty on property transactions
• No increases on the First Home Owners Grant
• First home buyers still not allowed to access to their superannuation to purchase a property.

The main property initiative in this Budget was the $112 million trial program to assist the elderly to downsize their homes, with no effect on their pensions, via a means test exemption of up to $200,000 for ten years.

A $100 million investment in natural disaster mitigation designed to lower insurance premiums was also featured.

NBN

As the single largest infrastructure project in the nation’s history, fibre rollout to more than 4.8 million premises is scheduled to be underway or completed by mid-2016.

The budget has promised greater competition for Australian businesses at national and international level with the delivery of NBN.

Digital Budget initiatives:

• An additional $7.2 million over three years to assist businesses to engage in the digital economy
• $5.7 million over two years to support 14 new local councils to improve online service delivery
• $9.9 million over four years to assist senior Australians to contribute and participate online

Source: 2013 Federal Budget

Transport

Transport infrastructure was one of the big winners this year, with $24 billion in funding allocated to road, rail and port projects across Australia. The Government has expanded investment into urban regions in a bid help relieve congestion and improve liveability in Australia’s major cities.

Funding has also been allocated for two key urban public rail projects: Brisbane’s Cross River Rail and the Melbourne Metro.  Brisbane’s Cross River Rail could be given the green light following the announcement of $715 million in Federal Government funding, despite this only covering around 25 per cent of the entire project.

These projects have been targeted to significantly increase rail capacity and reduce the traffic grind that commuters face every day in Melbourne and Brisbane.

Key initiatives include:

• $24 billion in road, rail and ports across Australia over the next six years
• $715 million in funding for the Cross River Rail project in Brisbane
• $3 billion for the Melbourne Metro
• $4.1 billion in funding for the Bruce Highway and the long-running upgrade of the Pacific Highway in the Northern Rivers – significantly cutting journey times to the Gold Coast

Matthew Hart is a Director of BBS Communications Group in Brisbane. At BBS, Matthew has managed the media relations and communication activities of high-profile national clients, including Eagle Boys Pizza, Delfin Lend Lease, Early Learning Services, and Retail Food Group. Matthew is also a key member of the BBS media training team and has trained executives from the likes of Queensland Rail, Stanwell Corporation, Surf Lifesaving Queensland and Griffith University on the art of handling positive and negative media inquiries.

We did expect to see an increase in the level of sales from the December 2012 baseline; however these results overwhelmed even our expectations.

The combination of six new off-the-plan project releases, affordable prices, increased investment demand, a weaker December quarter and most importantly Brisbane’s changing real estate cycle contributed to the sales surge.

While the March quarter recorded twice the amount of sales as the December quarter and 40% more than the same period 12 months ago, the weighted average price softened slightly to $518 000.

The figure of $518 000 is only 1% below the December period previously and 2% above the same quarter last year which further establishes the market trend and ongoing demand for affordable inner city investment product.

Exemplifying the consistency and stability in the market is the 12 month rolling average price of $537 219 has been relatively unchanged now for three consecutive quarters.

Interestingly, the March Quarter signalled a changing supply and demand in the current Inner Brisbane market.

Historically we have seen consumers in Brisbane display an inherent preference for two bedroom apartments opposed to one bedroom apartments.

Sentiment and price has definitely driven demand and sales for one bedroom stock in recent years. This quarter however, there were an almost even proportion of one bedroom and two bedroom apartment sales of 49% and 48% respectively, signalling a return to the two bedroom investment preference.

Buyers remain price conscious and of the 625 unconditional sales, the $350 000-$450 000 price point was most popular, totalling 37% of the transactions for the quarter.

The six new projects launched to the market in the March Quarter had a lot to do with the sales surge.

Austin located in South Brisbane and to be developed by Aria Property Group, was the clear performer recording 140 unconditional sales to sell out its stock.

Stage 1 of Galileo’s Arena (pictured above), also located in South Brisbane sold very well and recorded 93 unconditional sales with only one apartment remaining for sale in the first release.

Without discounting the results above, I would like people to analyse them with caution.

The substantial increase in sales could be a quarterly aberration, due to a significant number of new and very successful project release.

Place Advisory do not foresee this lever of transactions to be a consistent result moving forward, but rather an indicator that there is significant market depth and demand for residential apartment in Brisbane.

CBD

With little change seen in the CBD, the subsequent sales results remain constant and consistent. Overall, 30 unconditional sales were recorded in the Brisbane CBD at a weighted average sale price in line with the wider market place – $510,000.

North of the River

The North of the River apartment market, which spans 32 various projects, recorded the highest levels of unconditional new and off the plan apartment sales across the Inner Brisbane market (301 unconditional transactions), slightly outperforming the South of the River market by only 7 transactions.

South of the River

The South of the River residential apartment market recorded continued strengthening through the first three months of 2013. Long identified as one of Brisbane’s up and coming hotspots, the region now challenges the Inner North of the River precinct on a quarterly basis for the highest number of unconditional sales.

For a copy of the full report please click on this link

As Director of Place Advisory, Lachlan’s role is to gather both internal and external market intelligence to gain a comprehensive understanding of residential projects and provide product specific advice to clients.  This reduces associated risk and provides the information necessary for them to make an informed decision.  He has worked closely with a number of developers, from site conception through to product delivery and provided advice to those including Lend Lease, Australand, Laing O’Rourke and Leighton Properties.

A 124-metre steel spire was installed last Friday, pushing the skyscraper’s height to 1776 feet, commemorating America’s independence in 1776.

The tower was built at a cost of $3.9 billion, giving it the title of most expensive office building in the world.

Previously known as the Freedom Tower, the building is located in the northwest corner of the site where the former World Trade Center towers were destroyed in the 11 September 2001 attacks.

The tower was originally designed by Daniel Libeskind, the architect behind the master plan for the entire Ground Zero site, however after it underwent numerous revisions, US firm Skidmore, Owings & Merrill LLP was brought in to oversee its design.

Source: Wikipedia.com

Debate has been circulating as to whether the tower’s spire is actually a removable antenna – a vital distinction in measuring building height.

The Council on Tall Buildings and Urban Habitat, a Chicago-based organization considered an authority on such records, says an antenna is something simply added to the top of a tower that can be removed. By contrast, a spire is something that is part of the building’s architectural design.

Without the spire, One World Trade Centre would be shorter than the Willis Tower in Chigao, which stands at 1,451 feet and has, until now, the title of tallest building in the US, not including its antennas.

The world’s tallest building, Burj Khalifa in Dubai, stands at around 2,722 feet.

The Twin Towers were about 1,360 feet tall, not including the antenna on one of them.

The spire at One World Trade Center will serve as a television and radio antenna, and it will feature an LED-powered light that will be visible from tens of miles away, said Scott Rechler, the vice chairman of the Port Authority of New York and New Jersey, which owns the lower Manhattan trade center site. The light, which will change colors, is to be activated in the next few months.

When finally completed it will offer 241,000 square metres of commercial office space as well as observation decks, TV broadcasting facilities and restaurants.

One World Trade Centre has been developed by the Port Authority of New York and New Jersey who retain ownership of the tower.

Larry Silverstein of Silverstein Properties is the leaseholder and developer of the complex, controlling the balance of the site under a 99-year lease agreement.

Other key players include private real estate company Durst Organisation who purchased a 5% equity stake in the tower for a $100m investment.

Durst are responsible for supervising the building’s construction, and managing the tower on behalf of the Port Authority, having responsibility for leasing, property management and tenant installations.

By September 2012, around 55 percent of the building’s floor space had been leased, with key tenants including magazine publisher Conde Nast, the government’s General Services Administration and Vantone Holdings China Center, which will provide business space for international companies.

The tower has been constructed by local contracting firm Tishman Realty & Construction. 

Another building on the site, Four World Trade Centre, was completed last year, while Ground Zero features two fountains sunk into the site of the former Twin Towers.

The new zones are broadly consistent with the draft zones that were released for public comment last year, with only minimal changes between the final and draft versions. Implementation of the new zones will see greater flexibility for commercial and retail development across a wider range of metropolitan and regional locations, including opportunities for small supermarkets (up to 1800m²) to locate ‘as of right’ in a wider range of commercial and industrial locations.

Please click here for a PDF copy of the Zoning Reforms.

The Ministerial Advisory Committee appointed to consider the new zones has broadly supported the Government’s approach. While the majority of the Committee’s recommendations have been adopted in the final zone package, several recommendations were not pursued, notably:-

• The proposed introduction of a new Commercial 3 Zone to provide for bulky goods retailing;
• The introduction of a requirement for a Net Community Benefit Assessment to be provided to support applications for new retail floor space in Commercial 1 Zones; and
• A maximum floor space of 1,500m² for as of right supermarkets in the Commercial 2 Zone.

Headline summary of proposed reforms:-

1.     Changes to Floor Space caps

• Floor area caps across metropolitan Melbourne removed in all Commercial zones;
• Floor area caps in Metropolitan Melbourne that sit in schedules to other planning zones and overlays (for example, the Comprehensive Development Zone) will be removed by December 2013;
• Floor space caps will be retained in metropolitan Growth Areas for new suburbs that are in included in an Urban Growth Zone (ie: where the commercial hierarchy is establishing rather than mature);
• Councils in regional and interface areas around metropolitan Melbourne will retain the ability to schedule in floor space caps for shop and office uses.

2.     Commercial 1 Zone

• Removes permit requirements for all retail uses (except for adult bookshop);
• Removes permit requirements for accommodation uses (subject to satisfying a 2 metre frontage condition);
• Is otherwise similar to the existing Business 1 Zone in its purpose and provisions.

3.     Commercial 2 Zone

• Allows a range of retailing uses as of right, including:

- Restricted retail premises (bulky goods);
- Supermarkets up to 1,800m², located within the Urban Growth Boundary and which adjoin or have access to a road in a Road Zone;
- Shop(s) with a combined floor area up to 500m² where adjoining or having access to a road in a Road Zone, and food and drink premises up to 100m².

• Allows a permit to be obtained for supermarkets greater than 1,800m² for land within the Urban Growth Boundary where accessible via a Road Zone.
• Office, Warehouse and Industry are as-of right uses, whilst accommodation is prohibited.

4.     Industrial zones

• Removes the 500m² default floor space area restriction for office, but allows Councils to specify a floor area cap for office uses in the schedule.
• Within the Industrial 3 Zone; allows as of right:-

- Supermarkets up to 1,800m² on land within metropolitan Melbourne with access to a Road Zone;
- Shop(s) totalling 500m² where adjoining or on the same land as a supermarket, and having access to a Road Zone;
- Convenience shops.

5.     Proposed Policy Changes

• The Ministerial Advisory Committee has recommended minor changes to the State Planning Policy Framework to support the implementation of the new zones. In particular, the Committee has recommended changes to Clause 17.01-2 in relation to  ‘Out of Centre’ development as follows:-

“Ensure that out-of-centre proposals are only considered where the proposed use or development is of net benefit to the community in the region served by the proposal or provides small scale shopping opportunities that meet the needs of local residents and workers in convenient locations”. (new addition in bold)

The State Government has not yet announced whether there will be changes made to the SPPF as part of the VC Amendment on 1^st July 201

6.     Key impacts of the reformed Commercial Zones include:

• Increased flexibility for supermarket uses to locate in a much broader range of locations;
• Flexibility for large offices to locate outside activity centres in industrial/business precincts;
• Potential reduction in the need for permit approvals and the complexity of permit applications;
• Potential enlargement of activity centre boundaries, with peripheral land previously zoned Business 2 or 5 now enjoying the same zone entitlements as the core Business 1 areas;
• Significantly enhanced flexibility for Business 2 and 5 land (new Commercial 1 Zone), given as-of-right shop allowances and abolition of floor space caps;
• Significantly enhanced flexibility for Business 3 and 4 zoned land (new Commercial 2 Zone) which now allow shop uses subject to a permit, and small supermarkets as of right;
• Removal of caps in shopping centres across the metropolitan area and in growth area locations not included in a UGZ.

This article first appeared in the Urbis Think Tank. Urbis is an interdisciplinary consulting firm offering services in planning, design, property, social planning, economics and research. Working with clients on integrated or standalone assignments, Urbis provides the social research, analysis and advice upon which major social, commercial and environmental decisions are made. With over 300 staff Urbis is uniquely positioned to handle projects from the simplest to the most complex.

Last month BESIX Group entered into an agreement to acquire the major shareholding from long-term Watpac Board member and major shareholder, Mr Kevin Seymour AM, and other parties for an estimated $20 million.

Watpac Chair, Chris Freeman AM, said he welcomed the Foreign Investment Review Board’s decision, which formally concludes the significant transaction.

“BESIX Group is the largest Belgian Construction Group working worldwide. Its investment in Watpac provides a stable, sophisticated platform for BESIX Group to expand its international operations and increase its exposure to Australia’s construction sector,” Mr Freeman said.

“The Watpac Board is very pleased to welcome BESIX Group as our major shareholder.”

BESIX Group was founded in Belgium in 1909 and is one of the world’s largest privately-owned construction groups, operating in 17 countries in Europe, Africa, the Middle East and Australia and employing 20,000 people worldwide.

The company specialises in the construction of buildings, infrastructure, marine works, sporting facilities and civil engineering projects and has a forward order book totalling EUR 3.5 billion.

BESIX Group was part of the joint venture that delivered the world’s tallest tower, the 800 metre ‘Burj Kahlifa’, in Dubai in 2010.

Current projects include the EUR 1.5 billion Ferrari Experience theme park in Abu Dhabi (pictured).

Mr Freeman said BESIX Group’s shareholding acquisition will build value, capacity and capability within the Group