▲ People walking through downtown Sydney as the NSW government starts trying to revitalise the city post-pandemic.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Residential housing in the Sydney CBD may be on the cards as the New South Wales government announces a third CBD summit to hear from business, government and industry groups on how to drive the revitalisation of the city. </p><p></p><p>The summit also intends to explore how people could live in the CBD, opening up the question of how to increase residential housing or mixed-use space.</p><p></p><p>More residents in the Sydney CBD would create foot traffic for businesses and change the mix of businesses that operate in the CBD. </p><p></p><p>The summit also ties into New South Wales’ economic plan to revitalise the Sydney CBD in a Covid-safe way. </p><p></p><p>“In the space of just two years, the way we travel, work and come together has changed so much, but we cannot stop imagining a better future for our CBD,” Premier Dominic Perrottet said.</p><p></p><p>“We know we need to find new solutions, conscious that people need reassurance for their health as well as for the health of our city’s economy.” </p><p></p><p>The summit comes after the Committee for Sydney and ARUP released their Commission into the Future of Sydney CBD report last month. </p><p></p><p>“Right around the world, people dream of visiting our grand harbour city,” Perrottet said. </p><p></p><p> “The lucky ones get to call it home.”</p><p></p><p></p><p></p><p></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cell-sm-3 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/952a48fb-68db-46dd-a25e-f377d7c84323.png" width="960"/></picture><div></div></div></div></div><div class="cell cell-sm-9 cx12"><div class="ci cl"><p><br>Join us for <em>The Urban Developer&#x27;s</em> Property and Economic Outlook vSummit on Thursday, 10 February. <a href="https://www.eventbrite.com.au/e/the-urban-developer-property-and-economic-outlook-2022-tickets-245131814857?aff=tudwebsite0content0supplementary4">Click here</a>.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The report recommended that the government explore options for people to reside in the <a href="https://www.theurbandeveloper.com/articles/-cbd-transformation-idea-prompts-debate">Sydney CBD from build-to-rent schemes</a>, converting serviced apartments into fixed rental properties and looking into community ownership options. </p><p></p><p>It also asked for models that allowed first home buyers to buy into property in the CBD and collaboration between businesses and commercial developers to offer creative housing options near workplaces.</p><p></p><p>“We also need to start thinking about affordable housing in terms of what it can do in terms of creating city and creating diversity, not just cultural diversity but age diversity and employment diversity in the heart of the city,” Museum of Applied Arts and Sciences representative Lisa Havilah said.  </p><p></p><p>The Sydney CBD has very little residential use compared to its main mix of office and retail properties, most of which is reliant on foot traffic from office workers during business hours, which created a lot of instability when the pandemic hit. </p><p></p><p>It kickstarted a debate about whether the effects of the pandemic were cyclical or structural and <a href="https://www.theurbandeveloper.com/articles/-cbd-transformation-idea-prompts-debate">whether it meant there needed to be more office space converted to residential space</a>, something that would mean a lot of investment to bring spaces up to legal liveable standards.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/ece0daa0-ab9d-4ad2-9077-beb6ca7c2f7b.jpg" width="920"/></picture><div><span style="align-content:center;opacity:0.8">▲ Sydney&#x27;s famous townhouses. The Commission For Future Sydney CBD&#x27;s report wants more options for increased residential use in the CBD.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>But even now, as people try to plan for a post-pandemic future in the CBD, investors seem keen on investing in office space. </p><p></p><p>Sydney CBD recorded a high amount of enquiries about office space in 2021, signalling that people were keen to organise leasing office spaces long term despite the pandemic.</p><p></p><p>According to Property Council of Australia data, office market vacancy rates were 9.3 per cent for Sydney CBD, with rates decreasing slightly for premium and Grade A office space.</p><p></p><p>“[2021] was a record year with 634,000sq m of office enquiry, and 2022 has also started well with very strong enquiry despite a slower-than-expected return to the city by many office workers as a result of Omicron,” CBRE director Chris Hanley said. </p><p></p><p>Most of the growth in the interest in office space seems to be coming from the technology sector where there is an increase in employment growth.</p><p></p><p>Restrictions or the lack thereof is also driving interest. </p><p></p><p>“We expect that increasing numbers of people returning to the office and an end to indoor mask mandates will result in a strong uplift in transaction activity,” Hanley said.</p><p></p><p>A <a href="https://www.theurbandeveloper.com/articles/reits-must-adapt-to-the-five-second-commute">third of the nation’s future office space supply</a> (178,760sq m) due to come online in 2022 is in the Sydney CBD, according to the Property Council of Australia’s 2022 office market report.</p><p>A further 7,772sq m is expected in 2023 and 91,000sq m from 2024.</p><p></p><p>Sydney’s demand for office space also increased, according to the report. </p><p></p><p>The demand is spurred by a focus on quality within workspaces as tenants try to tempt their workers back to the office environment after working from home. </p><p></p><p>“Existing quality fit outs and new build fit outs are the key focus for tenants, as opposed to refurbished suites,” Cushman &amp; Wakefield’s national director Jamie King said. </p><p></p><p>“Working from home pressures continue along with a fight for talent, resulting in tenants keen to place make their new office providing a reason for a return from staff.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/164b87a3-d9fd-433f-8634-57968f78755b.jpg" width="1250"/></picture><div><span style="align-content:center;opacity:0.8">▲The Birdcages, a 2016 public artwork in Sydney&#x27;s Angel Lanes. The Commission For Future Sydney CBD report recommends better curation and integration of public artwork into mixed use spaces across the CBD. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Place-making is also part of the commission’s recommendations, stressing that it was important to acknowledge the CBD’s Aboriginal heritage and history and to create spaces incorporating cultural heritage and community. </p><p></p><p>“How do we tell the different stories of different communities across the greater metropolitan area?” 24-hour economy commissioner Michael Rodrigues said. </p><p></p><p>“If that’s done well, then you’ll create places of interest that people just simply want to be at and people will commute to.”</p><p></p><p>It also recommended better curation across the city of spaces for art, artists and public artwork and that creating mixed use spaces would bring people into the CBD.</p><p></p><p>People don’t want to work in single use precincts anymore,” Business Western Sydney’s David Borger told the Committee For Sydney. </p><p></p><p>“We need to have mixed uses in various places for attraction… Sydney precincts need our focus on investment attraction, they need sophisticated government models, and they also need the important ingredient of place-making.”</p><p></p><p></p><p></p><p>Australia Council for the Arts CEO Annette Madden agreed: </p><p></p><p>“The city can be a platform to broker new ways of working,” she said.</p><p></p><p>“It’s about trying to redefine how business and the arts industry can work together to mutual benefit and the benefit of citizens and visitors.”</p><p></p><p>Recommendation 4.9 stated that micro-distribution hubs within the CBD were also important allowing businesses to thrive in the CBD. </p><p></p><p>“Joint use for major facilities is a challenge,” Australia Logistics Council’s former CEO Kirk Conningham told the Committee. “We see our major exports and most people say they are vertically integrated but they are not.”</p><p></p><p>“The next step beyond that is micro distribution centres.”</p><p></p><p>S&amp;P Global Rankings also <a href="https://www.theurbandeveloper.com/articles/reits-must-adapt-to-the-five-second-commute">forecast that more industrial investors</a> would pivot to adapting spaces to function as <a href="https://www.theurbandeveloper.com/articles/dark-store-retail-micro-fulfillment-development">dark stores or micro-distribution centres</a>. </p><p></p><p>The summit will take place this Friday, 11 February at the Museum of Contemporary Art. </p><p></p><p>“This is a once-in-a-generation opportunity to reshape the city of the future and this summit will help do that,” Perrottet said. </p><p></p><p></p></div></div></div></div></div>

Right after the Commission for Future of Sydney CBD's report was released last month, Premier Perrottet announces a third Summit...

Frasers Property Industrial Hits Premium-Grade Logistics Standards

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Landscaped leisure areas, green space and sustainability initiatives are part of Frasers’ new “premium grade” strategy it is launching across its Australian industrial portfolio.</p><p>As the workplace landscape shift post-pandemic, Frasers said that it plans to deliver “healthy, sustainable and high-performing work environments” using sustainable materials, and employee-centric approaches not found in traditional warehouses.</p><p>Under its new modular building design guidelines, drawn up in partnership with BVN Architecture, Frasers said it was aiming to deliver the highest grade of developments in Australia’s booming industrial property sector.</p><p>Frasers said a central part of its “premium estates strategy” was the use of building materials that would minimise the environmental impact caused by developments of the scale typical for this sector.</p><p>The developer will be targeting 5 Star or 6 Star Green Star Design and As Built certified ratings on all logistics estates planned under its strategy.</p><p>Frasers Property Industrial general manager Ian Barter said developers in the logistics sector now needed to deliver projects that positively impacted employees as well as the wider community.</p><p>“Our new concept reflects our commitment to creating next-generation industrial and logistics assets that are ultimately more efficient, healthy and engaging workplaces for our customers to build their futures in,” Barter said.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/5c7db629-bc7c-4326-b1a6-b94eed51b12e.jpg" width="960"/></picture><div><span style="align-content:center;opacity:0.8">▲ ▲ Fraser’s &quot;premium estates&quot; concept has commenced roll out in NSW at The Yards, in Victoria at 4 Ten Epping and in Queensland at Vantage Yatala. Image: Supplied</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>At their exteriors, the amount of hardscaped areas will be reduced at the estates to minimise local heat island effects and improve thermal comfort for employees. </p><p>Frasers is also looking to increase green space in and around its developments with native flora and fauna to feature prominently through public areas while minimising water use and encouraging a regenerative approach to the often bleak industrial landscapes.</p><p>In March, Frasers, alongside Sydney fund manager Altis Property Partners, <a href="https://www.theurbandeveloper.com/articles/frasers-industrial-property-western-sydney-industrial">began construction</a> on a $1-billion estate at 649-763 Mamre Road at Kemps Creek, Sydney.</p><p>The Kemps Creek site is located approximately 6km north-west of the future Western Sydney Nancy-Bird Walton Airport, 15km south-east of the Penrith CBD and 40km west of the Sydney CBD.</p><p>The logistics park, known as The Yards, is <a href="https://www.theurbandeveloper.com/articles/frasers-property-altis-to-develop-118ha-western-sydney-site">one of Sydney’s largest industrial developments</a> and will span 70 hectares.</p><p>Frasers also has a state significant development application lodged for a 64,000sq m logistics building as well as a nine-lot subdivision for a 43ha site at 155-217 Aldington Road, also at Kemps Creek.</p><p>The site is partially bordered by Aldington Road to the east and existing rural lots to the west, north and south.</p><p>The development will include 1200sq m of office space, loading docks, parking and hardstand areas, landscaping, utilities and services.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/d9358243-fd50-457a-898f-475318051fe6.jpg" width="1600"/></picture><div><span style="align-content:center;opacity:0.8">▲ Artist’s render of Fraser&#x27;s plans for 155-217 Aldington Road, Kemps Creek.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>As the industrial and logistics sector <a href="https://www.theurbandeveloper.com/articles/retail-leads-record-charge-for-industrial-space">continues to grow</a>, an additional 1.8 million square metres is forecast to be required in Australia each year to meet demand, which is 25 per cent above historical averages.</p><p>As well, employee numbers in logistics, industrial and trucking are expected to grow by 7.3 per cent by 2025 to around 700,000 Australians.</p><p>Frasers strategy is a change of approach for a rapidly growing sector that is often centred around Amazon, the world’s largest online retailer, where reports of high-pressure targets and employee dissatisfaction are rife.</p><p>Amazon, which has been operating in Australia since late 2017, plans to bring the total number of Amazon fulfilment centres in Australia to six.</p><p>The e-commerce giant opened its first Australian fulfilment centre in Melbourne, followed by centres in Sydney and Perth in 2018 and 2019 respectively.</p><p>A number of workers told the media Amazon’s workplace had been built around a culture of fear where their performance was timed to the second; they were discouraged to use the toilet and sometimes pushed to cut corners including safety procedures.</p><p>Amazon is plotting a further expansion of its Australian operations with plans to build one of the country&#x27;s biggest warehouses, a $500-million robot-run facility at Kemps Creek near Sydney, and another in <a href="https://www.theurbandeveloper.com/articles/goodman-deal-sees-amazon-expand-into-queensland">Goodman Group’s Port Industry Park</a> in Brisbane.</p><p>It also has plans for a fulfilment centre at <a href="https://www.theurbandeveloper.com/articles/amazon-doubles-down-with-new-melbourne-fulfilment-centre">Ravenhall</a> in Melbourne’s west covering 37,000sq m and with capacity for up to 6 million items from its online platform.</p><p>Its growth and expansion, like many developers and investors within the sector, has been accelerated by Covid-19, forcing other retailers—both bricks-and-mortar and pure-play online retailers—to step up investment in digital and e-commerce.</p></div></div></div></div></div>

Landscaped leisure areas, green space and sustainability initiatives are part of Frasers' new “premium grade” strategy it is launching...

5ac2fca0-274b-4d92-93ac-a1f73ef0de72

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>An Asia Pacific consortium has nabbed a 14ha parcel of land from Qantas at Mascot as part of a $800-million-plus deal.</p><p>Asia Pacific logistics company Logos, with the financial backing of Abu Dhabi Investment Authority, has partnered with Australian Super to acquire the site to build a state-of-the-art four-level logistics, e-commerce and last-mile logistics hub. </p><p>The deal also included a long-term sale and lease back of Qantas’ 21,795sq m distribution centre and a further three development sites, totalling 98,645sq m, next to Sydney Kingsford Smith Airport Precinct.</p><p>Logos head of Australia and New Zealand Darren Searle said it was one of the last available scalable <a href="https://www.theurbandeveloper.com/articles/logos-completes-marsden-park-logistics-estate">logistics and commercial development sites</a> in South Sydney.</p><p>“To acquire this site at Mascot is a rare opportunity to further develop a market-leading e-commerce, distribution and commercial hub between Sydney ports and the ultimate distribution destinations in Australia’s main gateway city,” Searle said.</p><p>“The site is a key freight gateway for the airport and offers unparalleled connectivity as a critical link to supply chains around the country.</p><p>“With our existing partners AustralianSuper and Logos Australia Logistics Venture, we are deeply committed to furthering the logistics and distribution landscape in Australia with large-scale, strategic investments, and this land is a rare and valuable opportunity to achieve this. </p><p>“In developing a leading logistics estate ... our plans will create thousands of jobs for the local community.”</p><p>The consortium plans to develop the site to an end value of $2 billion, and has also entered discussions with Qantas about future development options for the sites, including the creation of a dedicated precinct for Qantas, as well as the sale of an additional 3ha of land that adjoins some of the lots being sold.</p><p>The acquisition further expands Logos’ growing development pipeline across Australia.</p><p>In July Logos and Australia Super<a href="https://www.theurbandeveloper.com/articles/moorebank-logistics-park-logos-qube"> acquired the Moorebank Logistics Park</a> for $1.7 billion as part of a joint consortium venture. </p><p>AustralianSuper head of property Bevan Towning said the acquisition highlighted the fund’s appetite to make major direct investments into significant long-term property development opportunities.</p><p>“Growing AustralianSuper’s investment in major logistics assets that are focussed on the growing demand for e-commerce and distribution hubs close to key infrastructure and population centres will match member needs for strong, sustainable long-term returns,” Towning said.</p><p>The transaction increases LOGOS’ assets under management in Australia and New Zealand to about $13 billion.</p><p>The transaction is due to be completed in December. It is expected the consortium will then ffile plans for the development of the last-mile logistics hub. </p></div></div></div></div></div>

Logos, Australian Super and the Abu Dhabi Investment Authority have bought up big in Sydney, laying down $800m for a 14ha block...

pharmaceutical facility development building interior

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Life sciences and pharmaceutical hubs are driving demand for commercial and industrial real estate as the once-niche sector expands rapidly on the back of <a href="https://www.theurbandeveloper.com/articles/healthcare-assets-silverstone-cushman-wakefield">accelerating occupier and investor demand</a>.</p><p>According to CBRE, the life sciences sector—which includes pharmaceutical, biotechnology, medical equipment, food science and healthcare—has strengthened as an asset class over the last 12 months as other sectors suffered.</p><p>While life sciences real estate is proportionately larger and more established in global markets, it is also gaining traction in the local market.</p><p>CBRE Pacific head of capital markets Mark Coster said the local life sciences industry held enormous growth potential owing to the region’s large ageing population, low health expenditure per capita and a rise in pharmaceutical research and development.</p><p>“Australia’s world class healthcare system and an established network of highly-regarded universities and research institutions have ensured the country’s appeal to global life sciences companies,” Coster said.</p><p>“This is underpinning investor interest in life sciences real estate.”</p><p>Melbourne leads the way in Australia, now ranked as one of the top five life sciences hubs in the Asia Pacific region.</p><p>The city is now home to two in five Australian life sciences companies and attracts more than 40 per cent of national medical funding. </p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/54bcb4aa-b85c-4ef4-a9dc-37142e3ac151.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Life sciences companies have increased their need for real estate, from ancillary office space to research facilities and manufacturing sites throughout the pandemic.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Parkville, well-marked as an established inner-city precinct, is also home to the University of Melbourne ranked second globally for university-related biomedical research.</p><p>Melbourne Airport Business Park is also expected to house large-scale facilities in coming years, riding a wave of development and benefiting from macro-trends propelling the industry into a fresh phase of investment and expansion.</p><p>Late last year, biotechnology giant CSL unveiled plans to build a $800 million vaccine manufacturing plant at the Melbourne Airport Business Park, with operations expected to start in 2026.</p><p>Elsewhere, established clusters like Macquarie Park in New South Wales and emerging precincts developing in Brisbane, Adelaide, Perth, and the Gold Coast were “adding to Australia’s appeal”.</p><p>Henry Chin, CBRE Asia Pacific head of research, said that capital markets activity across the region had remained limited, there had been heightened competition for available assets since the start of the pandemic.</p><p>“Life sciences transactions account for less than 1 per cent of annual investment activity, compared to circa 4 per cent of deal activity globally,” Chin said.</p><p>“The obvious entry route is through sale and leasebacks as multinational pharmaceutical companies recycle capital for research and development activities or offload non-essential assets following mergers and acquisitions. </p><p>“We expect other opportunities will include converting older industrial properties into laboratories or cold storage facilities as well the construction of modern life science facilities under public-private partnership frameworks across the region.”</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/75fcb15b-3800-473b-93b9-c8b5b7748434.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Developers are moving quickly to offer customers from the pharmaceutical and medical products sector additional temperature-controlled warehouse solutions. </span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Late last year, Sigma Pharmaceuticals sold cold storage facilities in Brisbane and Sydney to Logos Property for $172 million, while Charter Hall’s recently acquired GlaxoSmithKline’s life sciences campus at Boronia in Melbourne’s east for $106 million.</p><p>Dexus, <a href="https://www.theurbandeveloper.com/articles/dexus-results-asx-2021">the country&#x27;s largest office landlord</a>, spent $140 million acquiring two buildings in Parkville earlier this year as well as the most recent acquisition of <a href="https://www.theurbandeveloper.com/articles/dexus-healthcare-development-sites-brisbane-131m">two sites in Brisbane&#x27;s health precincts Spring Hill and Herston </a>for $130.7 million.</p><p>Dexus has been steadily expanding its exposure to healthcare real estate, since seeding the unlisted Dexus Healthcare Property Fund. four years ago with a combination of assets including an Adelaide hospital, Calvary Private, that was under development at the time.</p><p>The fund’s portfolio has five large assets, including stakes in another major Adelaide medical facility, Australian Bragg Centre, which it acquired late last year as well as the North Shore Health Hub in Sydney, which reached practical completion in May.</p><p>Listed fund manager Home Consortium is targeting a $1 billion initial equity raising for its proposed healthcare real estate offering.</p><p>Centuria, which took a controlling stake in Heathley’s healthcare focused real estate platform two years ago, is ramping up investment into short-stay hospitals and fund manager Real Asset Management also has plans to list a healthcare vehicle.</p></div></div></div></div></div>

The once-niche life sciences and pharmaceutical sectors are driving demand for commercial and industrial real estate...

A lack of stock, strong long-term leases and higher net rent has propelled demand in cold storage real estate amid NSW lockdowns.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Hot demand for cold storage is yielding developers substantially longer lease agreements and higher rents thanks to the scarcity of the asset class.</p><p>Large development groups are pumping millions of dollars into the sector around the country, but it’s unlikely to meet the unprecedented demand for cold storage—also known as refrigerated logistics.</p><p>The asset class is experiencing a surge in pandemic-induced demand which has radically overhauled the food logistics and supply chain.</p><p>Cafes and restaurant closures during lockdowns have resulted in huge <a href="https://www.theurbandeveloper.com/articles/industrial-developers-get-inventive-in-roaring-market">growth in last-mile logistics</a>, while panic buying of supermarket staples and frozen goods coupled with a fierce appetite for buying our groceries online has placed massive pressure on the supermarket sector.</p><p>The market size of the online grocery sales industry is expected to increase by a whopping 46.2 per cent in 2021, according to IbisWorld. </p><p>Other products that require cold storage include healthcare products—including the Covid-19 vaccine—chemicals and wine.</p><p>According to Colliers research, the cold storage logistics market has evolved rapidly during the past decade, transforming from one of traditional storage to a far more sophisticated and technology-focused operation.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/77af4f2f-8de1-4e09-8750-6b29cb03a028.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8"><br>▲ NewCold’s facility at Truganina, Victoria. The Dutch-based company is currently building Australia’s biggest cold store.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Cold-storage warehouses now provide a range of services including order picking, automated warehousing, inventory control and a wider range of temperatures to meet increasing client requirements.</p><p>Colliers values the sector at about $5 billion. It is dominated by several specialised operators, with a number of developers building or refurbishing or building cold storage facilities.  </p><p>Despite the developments in the sector, the local market still remains behind those around the world. Globally, there is about 0.15 cubic metres of refrigerated warehousing space per urban resident. </p><p>According to the Global Cold Chain Alliance, Australia has around half that.</p><h2><strong>Hot property: who’s active in the sector</strong></h2><p>Refrigerated logistics giant NewCold has picked up on the demand, commencing construction on the nation’s largest cold storage warehouse. </p><p>The 43m-high facility, will include 30,000 pallets for ambient and chilled storage, and 85,000 pallet positions for frozen goods.</p><p>Based in Melbourne, NewCold will use state-of-the-art technology, including automated storage and retrieval systems to automatically move and storage products in the high-bay warehouse.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/17bdc25c-c2e1-47b5-88e1-5e91f33d3ab0.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Lineage Logistics is one of the international players active in the Australian market.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Construction on the $160-million expansion began at the end of May and will be operational by next year. Tenants will include brands such as Birds Eye, John West, Leggo’s and Simplot.</p><p>Centuria Industrial boasts a <a href="https://www.theurbandeveloper.com/articles/centuria-makes-171m-industrial-warehouse-move">cold-storage portfolio worth $171 million</a>, which comprises three cold storage assets along the eastern seaboard: Parkinson in Queensland, Girraween in NSW and Derrimut in Victoria. </p><p>The facility is 100 per cent occupied by national and international operators, providing an average initial yield of 5.62 per cent.</p><p>Lineage Logistics is another key player in the local market.</p><p>Meanwhile, DHL invested $160 million in the rollout of temperature-controlled warehouses in Sydney, Melbourne, Brisbane and Perth.</p><p>The <a href="https://www.theurbandeveloper.com/articles/investors-healthcare-property-development">medical sector is also dependent</a> on cold storage, with a CBRE report aimed at investors in the Asia Pacific pointed out that demand for cold storage could rise in Australia as the government looks to increase manufacturing capacity to handle vaccine production.</p><h2><strong>Upward trajectory</strong></h2><p>Cold storage is an asset class with strong potential. Australia has significantly less cold storage capacity compared to the rest of the world, according to the managing director of MA Financial Group, Matthew Lane.</p><p>The sector is well positioned to continue on an upward growth trajectory and is increasingly sought by institutional investors. However, it’s a complex asset class to build and operate, often taking considerably longer to construct than traditional ambient warehouses, he says.</p><p>“The high-cost associated with building these additional elements creates a barrier to entry, and aides in preventing oversupply. And given the high cost to re-locate, the market is characterised by high lease expiry retention rates and low vacancy rates,” he says. </p><h2><strong>Developer includes cold storage</strong></h2><p>Diversified property development group Perri Projects and its joint venture partner Wingate Property are <a href="https://www.theurbandeveloper.com/articles/industrial-developers-thinking-outside-the-box">set to launch an industrial development</a> in central Melbourne. </p><p>The $100-million development will include cold storage as part of the mix, capturing last-mile logistics providers.</p><p>David Scalzo, managing director of Perri Projects says he sees plenty of growth opportunities in the cold storage sector. </p><p>There is strength in numbers, with the likelihood of entire cold storage neighbourhoods popping up around the country, he says.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/771e22f2-489b-4153-896d-52ebcb9b17eb.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Centuria Industrial&#x27;s cold storage facility at Ormeau, Queensland.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Developers wanting to get a foothold in the asset class need to secure a location within 6km of the central city region, on the fringe of industrial areas. </p><p>Strong growth in business offerings such as milk and fruit box delivery to central homes and businesses is fuelling the growth, Scalzo says. </p><p>Perri’s Lennon Mills development will include ambient storage as part of its leasing mix, with three or four ambient storage providers on board. He will future-proof the facility by retro-fitting the cold storage element within the warehouse. </p><p>“It’s essentially a box inside a box, which we could contract build and then lease back to the client. It’s a complex build, but the numbers stack up,” he says.</p><p>The beauty of this asset class is that tenants want to secure longer leases, usually around five years. Fees are usually up to 30 per cent higher than stock warehousing, he says. </p><p>“You invest more, but you also end up with a longer lease and higher rent,” Scalzo says.</p><h2><strong>How to invest</strong></h2><p>Western Australian firm Properties and Pathways is adamant the rise of cold storage will continue. </p><p>The commercial property investment firm points out that products held in cold storage prior to distribution only account for around 7 per cent of total grocery sales.</p><p>Developers wanting to invest in this asset class and reap every dollar of profit possible can expect it to cost between $500,000 and $2 million for a modest-sized, B-grade cold storage asset. </p><p>Targeting big league refrigerated logistics property can cost upwards of $10 million, according to Properties and Pathways.</p><p>More technologies that automate storage and collection within cold storage facilities are priced even higher, increasing their market value. </p><p>Given the lack of stock, the sector also provides stickier tenants as major food brands look to shore up a roof over their stock as the nation continues to favour panic buying.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><em><strong>The Urban Developer</strong></em><strong> Plus (TUD+), our premium membership for property professionals. <br></strong><a href="https://www.theurbandeveloper.com/membership-plans"><u><strong>Click here</strong></u><strong> to learn more. </strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

Rising demand for cold storage due to changing consumer habits is propelling this sector to new heights. Here’s why and what its future looks like…

Ledlin Developments Industrial 

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Melbourne industrial developer Ledlin Developments has experienced rapid growth since incorporating in 2013.</p><p>The firm, headed by father-and-son duo Michael and Oscar Ledlin, delivers industrial and commercial property across Melbourne with projects in Springvale, Carrum Downs and the Mornington Peninsula.</p><p>In this TUD+ Briefing, Oscar Ledlin, now 28, details the group’s rapid rise during the past few years to currently command a $100-million-plus development portfolio.</p><p>Ledlin explains how the group’s integrated model of acquisition, development and construction, as well as harnessing the power of social media, has propelled its trajectory.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><iframe sandbox="allow-forms allow-scripts allow-pointer-lock allow-same-origin allow-top-navigation allow-presentation" class="embed-responsive-item" allowfullscreen="" frameBorder="0" style="max-width:574px" width="100%" height="323" src="https://www.youtube.com/embed/1GH2X8DwvSU"></iframe></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>The future remains bright for Australia’s booming industrial property sector with its value expected to hit $120 billion by 2025.</p><p>The boom in e-commerce and the increasing impatience of consumers expecting same-day delivery of goods ordered online has continued to fuel another year of record take-up of industrial space in 2021 as companies look to optimise and automate their supply chains.</p><p>Ledlin discusses how the group is leveraging its unique selling points and variety of products to deliver high-end inclusions, amenities and target high-end operators.</p><p>The group has also rolled out its new flexi-unit product, designed for higher-density commercial and industrial locations.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><strong>You are currently experiencing </strong><strong><em>The Urban Developer</em></strong><strong> Plus (TUD+), our premium membership for property professionals. </strong><a href="https://www.theurbandeveloper.com/membership-plans"><u><strong>Click here</strong></u><strong> to learn more.</strong></a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/4fb872c4-2507-449c-af93-4c928c2ed849.png" width="800"/></picture><div></div></div></div></div></div></div></div>

  Ledlin Developments has experienced rapid growth in recent years through its integrated model, as well as the power of branding and social media…

Frasers Property Industrial Mamre Road Precinct Western Sydney NSW

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Frasers Property Industrial, alongside Sydney fund manager Altis Property Partners, has broken ground on a logistics estate in western Sydney with an end value of more than $1 billion.</p><p>The site, which occupies <a href="https://theurbandeveloper.com/articles/frasers-property-altis-to-develop-118ha-western-sydney-site">649-763 Mamre Road in Kemps Creek</a>, south-east of Penrith, lies within the rezoned Mamre Road Precinct which is set to become an 850 hectares warehousing industrial hub as part of the Western Sydney Employment Area.</p><p>The <a href="https://theurbandeveloper.com/articles/nsw-mirvac-mamre-road-industrial-precinct">Mamre Road precinct</a> is 10 key precincts in the emerging 11,200ha <a href="https://theurbandeveloper.com/articles/western-sydney-aerotropolis-everything-you-need-to-know">Western Sydney Aerotropolis</a>, which was fast-tracked and rezoned midway through 2020 in a bid to bolster employment as the pandemic gripped the nation.</p><p>The Frasers-Altis industrial park is an amalgamation of a number of separate land parcels acquired from private owners, some as far back as 2017.</p><p>The logistics park, known as The Yards, is one of Sydney’s largest industrial developments, spanning 70 hectares.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/b66e42b1-cb6d-4a33-be73-cb1c8aec3c87.jpg" width="960"/></picture><div><span style="align-content:center;opacity:0.8">▲ The new estate will accommodate up to 400,000sq m of logistics and industrial facilities.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Frasers Property Industrial, which comes under the umbrella of Singapore-listed real estate development giant Frasers Property Limited, owns and manages industrial and logistics properties in Australia and Europe.</p><p>The developer, which currently holds upwards of $8.5 billion of assets under management, will now construct a 400,000sq m of state-of-the-art, sustainably led logistics facilities across its western Sydney super site.</p><p>“[The Yards] will play a vital role in fulfilling both the growing demand for warehousing and logistics space in the region and consumer demand, which we’ve seen accelerate further since the start of the global Covid-19 pandemic,” Frasers Property Industrial chief executive Reini Otter said.</p><p>“[The industrial estate] will be the first Australian industrial community where sustainability, wellbeing and technology are at the heart of the precinct, while also contributing to the region’s economic growth and job creation during a crucial time.”</p><p>For Altis, the partnership with Frasers will give it a third project in Kemps Creek. </p><p>The private equity-backed group manages more than 30 properties worth more than $3 billion on behalf of pension funds, institutional and high-net-worth investors.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/61845b83-03c5-4cbf-a5f4-85dda5063788.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ The precinct is expected to generate over 3,500 jobs during construction and after completion. Image: Damian Graham, Minister Ayres, Tanya Davies, Reini Otter.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Western Sydney industrial land values have skyrocketed amid strong demand for zoned land from developers looking to deploy funds into new projects amid a global boom in logistics driven by e-commerce growth.</p><p>Listed developer Mirvac is also pressing ahead with plans for a 56ha industrial estate in the Mamre Road Precinct to be known as Aspect Industrial.</p><p>Groups such as Boyuan and Scentre are also working on a 344ha masterplanned health, retail and logistics projects within the “Northern Gateway development”.</p><p>Practical completion of stage one of the Frasers-Altis industrial is scheduled for early 2022.</p><p>Earlier this month, Frasers secured the lease for a 15,580sq m speculative warehouse in its 41.3-ha Rubix Connect industrial estate in Melbourne’s Dandenong South to efm Logistics.</p><p>Efm, the largest fourth-party logistics (4PL) provider in Australia and New Zealand, will now centralise its Melbourne operations from two existing facilities in Dandenong South into the new warehouse, which is due to be completed in June.</p></div></div></div></div></div>

Frasers Property Industrial has broken ground on a new logistics estate in western Sydney with an end value of more than $1 billion...

GPT Industrial Truganina

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Property fund manager GPT Group is forging ahead with a new $800 million partnership with Canadian real estate investor QuadReal as its annual earnings fall by almost 10 per cent amid writedowns across its property portfolio.</p><p>GPT and QuadReal will invest $175 million in two prime logistics properties on Australia’s eastern seaboard.</p><p>The joint venture partners will place 20 per cent of the targeted investment into a $137.1 million fund-through development in Truganina, in Melbourne’s west, and a $38 million speculative logistics development at Metroplex Place, Wacol in Brisbane.</p><p>“Growth of our logistics portfolio is a core focus for GPT and we have made strong progress in securing development and investment opportunities in the sector,” GPT managing director Bob Johnston said.</p><p>“The logistics market continues to benefit from structural tailwinds driven by growth in e-commerce, food and pharmaceuticals distribution and the recovery in the housing market.”</p><p>Since 2017, GPT has doubled the value of its logistics assets to $3 billion increasing its exposure to logistics assets as part of a long-term strategy to now be at least 20 per cent of its total portfolio.</p><p>The deal will be welcome news to GPT which recorded a net loss after tax of $213.1 million across 2020, down from $880 million a year earlier, as the pandemic stripped the values across its portfolio.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/d723f753-9ee5-47ba-804c-61a367d53bf2.jpg" width="1024"/></picture><div><span style="align-content:center;opacity:0.8">▲ GPT&#x27;s Queen and Collins redevelopment project in central Melbourne is on track to complete midway through this year.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Moody’s vice president Saranga Ranasinghe said GPT’s results were credit negative, as the pandemic drove a 13.7 per cent decline in the company’s retail asset values while its office assets also suffered a slight valuation decline.</p><p>“Despite higher office vacancy rates across CBD locations, GPT’s office rent collections and occupancy remained high at 98 per cent and 94.9 per cent, respectively, reflecting the strength of its assets and quality of its customers. </p><p>“However, we expect increased incentives to squeeze effective rents (across office rents) over the next 12-18 months as tenants re-evaluate their space needs and delay decision-making.</p><p>“Although gearing and leverage weakened, GPT’s credit metrics remain within rating thresholds and liquidity continues to be strong, with minimal near-term debt maturities,” Ranasinghe said.</p><p>Revaluation across GPT’s logistics portfolio resulted in a 9.3 per cent uplift. </p><p>The developer completed four facilities, two in Queensland and two in New South Wales, across the year totalling 90,000sq m of new logistics space.</p><p>The fund manager has also remained steadfast in its commitment to the commercial sector pushing ahead with plans for upwards of $3.5 billion in development, despite the pandemic impeding investment across the sector last year.</p><p>GPT’s <a href="https://theurbandeveloper.com/articles/gpt-group-queen-and-collins-melbourne">Queen &amp; Collins redevelopment</a>, a redevelopment of the 34-storey former ANZ headquarters in central Melbourne, remains on track to with Probuild expected to reach practical completion in the coming months. </p><p>The developer is also pressing ahead with plans at a 2,871sq m site in Parramatta which it <a href="https://theurbandeveloper.com/articles/gpt-parramatta">consolidated</a> last year. </p><p>GPT said it was in the advance stages of completing a development application for a new office project ranging between 30,000 and 75,000 square metre at the amalgamated site located between 87-90 George Street.</p><p>In response to the uncertain operating conditions, GPT said it will not provide earnings and distribution guidance for 2021 at this point.</p></div></div></div></div></div>

GPT is forging ahead with a new logistics partnership with Canadian group QuadReal despite annual earnings falling by almost 10 per cent...

Sydney recorded the tightest industrial and logistics sector vacancy at 1.8 per cent ahead of Brisbane at 2.7 per cent and Melbourne 3 per cent according to the first CBRE industrial and logistics biannual report.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>The industrial sector is powering through restrictions, with vacancies remaining tight, and minimal disruption to rent in the first six months of 2020. </p><p>Sydney recorded the tightest vacancy at 1.8 per cent ahead of Brisbane at 2.7 per cent and Melbourne 3 per cent according to the CBRE industrial and logistics report.</p><p>The biannual report on facilities greater than 4,000sq m in size reveals that tight vacancy underpinned performance in the sector as the pandemic pushed consumers towards e-commerce.</p><p>Sydney’s outer north west and central west were the main drivers of the state’s low vacancy levels, and the slight dampening in demand due to Covid had minimal impact on rents and incentives. </p><p>Melbourne’s vacancy remained tight as speculative development was placed on hold and unoccupied space was predominantly made up of short-term sublease space from third party logistics companies.</p><p>The CBRE report also shows supply is decreasing in Brisbane, and there is likely to be an undersupply of A-grade stock in coming quarters. </p><p>Related: <a href="https://theurbandeveloper.com/articles/goodman-altis-submit-plans-for-inner-sydney-warehouse">Goodman, Altis Submit Plans for Inner Sydney Warehouse</a></p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><table><thead><tr><th>Location</th><th>Vacancy Rate</th><th>Best Performer</th><th>Worst Performer</th></tr></thead><tbody><tr><th>Sydney</th><th>1.8%</th><th>Outer North West 1.2%</th><th>Central West 3.4%</th></tr><tr><th>Brisbane</th><th>2.7%</th><th>North 0.7%</th><th>West 3.6%</th></tr><tr><th>Melbourne</th><th>3.0%</th><th>South East 2.3%</th><th>North 4.3%</th></tr><tr><th>Perth</th><th>2.9%</th><th>North 1.1%</th><th>East 7.7%</th></tr></tbody></table></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><sub><sup>^ Source: CBRE Industrial and Logistics Vacancy Report H2 2020</sup></sub></p><p>While the world’s economies have felt the impact of the global pandemic, the industrial sector is gaining strength, according to CBRE report authors Kate Bailey and Aiden Bresolin. </p><p>“E-commerce, combined with the need for purchases to be made online have contributed to occupiers expanding their business capacity.</p><p>“Along with changing consumer behaviours to meet the requirements of local lockdown restrictions, it is likely that distribution will continue to increase as this behaviour continues beyond the pandemic period.” </p><p>The industrial and logistics sector vacancy rate <a href="https://theurbandeveloper.com/articles/property-council-office-market-report-july-2020">compares </a>to 9.2 per cent for the office sector in the six months to July, and mixed <a href="https://theurbandeveloper.com/articles/ghost-towns-retail-vacancy-hits-20-year-high">results </a>in retail which has been battered by changes in lockdowns and foot traffic.</p><p>This has led a number of major real estate investment trusts to <a href="https://theurbandeveloper.com/articles/dexus-offloads-office-assets">turn </a>to the sector to “strengthen” portfolios as uncertainty surrounding the pandemic continues.</p></div></div></div></div></div>

The industrial sector is powering through Covid with vacancies remaining tight and minimal disruptions to rent in the first six months of 2020...

GPT's Macarthur Square is one of many retail assets which led to the group reporting a $500 million loss during Covid half yearly results.

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Diversified property group GPT has suffered a heavy hit to its half-yearly earnings, reporting a net loss of $519.1 million on Monday. </p><p>A negative property valuation to the value of $711.3 million heavily impacted the results, with the company deciding to move ahead with logistics developments and put retail projects on hold.</p><p>While an interim distribution of 9.30 cents was given, GPT pulled distribution guidance for the full year “given the unprecedented circumstances that continue to evolve”.</p><p>Funds from operations in the half yearly results were $244.5 million, dropping 23.3 per cent to 12.55 cents per security.</p><p>GPT moved ahead in the resilient logistics sector, completing three developments worth $89.1 million with a weighted average lease expiry of 7.5 years and also acquiring two facilities in Melbourne for $74.6 million with a weighted average lease expiry of 7.6 years</p><p>GPT’s chief executive Bob Johnston said the impact of coronavirus lockdown measures on the operations of their assets was most pronounced in the retail sector. </p><p>“We have had all our assets revalued during the period, with our retail assets revalued by independent valuers in May and again at the end of June as the effects of the pandemic were becoming more apparent,” Johnson said.</p><p>“The independent valuers have made allowances for both the near-term impacts of the pandemic and also the effects that it is expected to have on the broader economy.” </p><p>Related: <a href="https://theurbandeveloper.com/articles/gpt-profit-hit-again">Weak Retail Hits GPT Bottom Line</a></p><p>The group deferred the <a href="https://theurbandeveloper.com/articles/gpt-submit-da-for-sydney-mid-rise-residential-tower">planned</a> retail expansion of the Rouse Hill Town Centre and the Melbourne Central office and retail development and withdrew short and long term incentive plans.</p><p>Despite uncertainty created by Covid-19 occupancy across GPT remains tight with logistics at 99.8 per cent, office at 94.4 per cent and retail at 98.0 per cent.</p><p>Funds management earnings, driven by the group’s wholesale office fund, increased by 6.6 per cent to $24.2 million compared to the previous period.</p><p>GPT also issued $300 million of 12-year medium term notes at a margin of 160 basis points.</p><p>“We are well placed to navigate through the pandemic period. We have been prudent in the way we have managed the business,” Johnston said.  </p><p>“We have a strong balance sheet and liquidity of $1.2 billion that ensures that we are also well-positioned to continue to execute on our strategy.”</p><p>Moody’s vice president Saranga Ranasinghe said despite a weakening in gearing and leverage, GPT’s credit metrics remain within the thresholds for the A/A2 credit ratings.</p><p>“GPT reported credit-negative results for the six months to June 2020 as the coronavirus pandemic drove a 10.5 per cent decline in retail asset values and cash collections from retail dropped to 63 per cent,” Ranasinghe said.</p><p>“However, the trust continues to benefit from the diversification and quality of its asset portfolio, with the improved performance of the logistics segment amid robust demand for logistics assets partially offsetting the weakness in retail. </p><p>“The trust also continues to benefit from strong liquidity, with no near-term debt maturities.”</p></div></div></div></div></div>

Half-yearly reporting season has kicked off to a bad start with diversified property group GPT reporting a net loss of $519.1 million...

25b69609-efde-4510-bd70-0b59528b71db

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Cromwell Property Group has plans to launch a new $800 million European property fund in its latest logistics sector move. </p><p>The deal was struck with Korean real estate investment manager IGIS Asset Management, with binding agreements to purchase seven logistics assets in Italy for $85.7 million. </p><p>In its announcement to the ASX, Cromwell said the seven logistics assets will form the seed portfolio for a new Cromwell European Logistics Fund, which the company plans to launch in the fourth quarter.</p><p>The diversified real estate fund manager has been <a href="https://theurbandeveloper.com/articles/cromwell-gary-weiss-ara">caught</a> in a bitter dispute with its largest shareholder, ARA Asset Management.</p><p>ARA lodged an off-market takeover bid, which last week saw Cromwell <a href="https://theurbandeveloper.com/articles/ara-sharpens-takeover-bid-for-cromwell">urge</a> its security holders to “take no action” on.<strong> </strong></p><p>ARA lodged a bidder’s statement with the ASX detailing its offer to acquire a further 29 per cent of Cromwell at a cash per security price of $0.88. The offer is 15.3 per cent less than Cromwell’s share price at the end of 2019. </p><p>Speaking on its European property fund, Cromwell’s chief investment officer Rob Percy said the move formed part of its “invest to manage” strategy, which the company plans to retain 20 per cent to 30 per cent stakes in each fund in the medium to long term. </p><p>The fund will be focused on core logistics assets throughout Benelux, France, Germany and Italy, with a target total gross asset value of between $650 million to $800 million.</p><p>“Logistics is a ‘high conviction’ sector we believe will prove resilient in these difficult times,” Percy said.</p><p>“The demand for logistics assets is likely to continue to increase, supported by long term structural and demographic trends, especially in urban locations.”</p><p>The seven Italian-based assets, located near the cities of Milan (lead image), Turin, Bologna and Verona are fully let to DHL on long-term leases, with settlement on the deal due in September this year.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><hr/></div></div></div></div></div>

Cromwell Property Group has plans to launch a new $800 million European property fund in its latest logistics sector move. 

Retail vacancy JLL research

<div class="row" data-reactroot=""><div class="cell cs12 cx12"><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p>Vacancy within shopping centres has soared to the highest level in more than 20 years despite the re-opening of retail and rebound in foot traffic.</p><p>Over recent weeks Australian retailers have been gradually reopening physical stores following a bruising few months that decimated overall sales but accelerated online shopping and e-commerce.</p><p>Despite a recent <a href="https://theurbandeveloper.com/articles/abs-retail-trade-sales-figures-">bounce</a> in retail spending after a record-breaking <a href="https://theurbandeveloper.com/articles/online-retail-records-record-month">fall</a> in April, the national average shopping centre vacancy rate increased to 5.1 per cent in June from 3.8 per cent in December 2019.</p><p>According to a recent survey by global agency JLL, CBD locations and traditionally resilient large format retail stores were also affected with vacancy increasing from 4.8 per cent to 6.3 per cent over the same period.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/ca30cd2e-31a8-42ac-8dda-6bf1fbb3f435.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ With the second lockdown in Melbourne running for six weeks, vacancies could rise even higher on a number of Melbourne&#x27;s best-known shopping destinations.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>JLL said it had seen a rebound in sales and foot traffic at the lowest in April across its managed portfolio of approximately 300 centres, however upwards of 10 per cent of stores remained temporarily closed.</p><p>“We remain cautious about the outlook for discretionary retail as stimulus measures roll off later in the year which is likely to contribute to an upward trend in vacancy rates,” JLL senior director of retail research Andrew Quillfeldt said.</p><p>“The events throughout the past few months, which have led to many discretionary retailers planning to shrink their store network, will likely polarise the retail property sector even more. </p><p>“This is likely to drive divergence even further between the performance of prime and secondary quality shopping centres—a trend which has been occurring for some time already.”</p><p>Consumers worried about their health and safety during the pandemic have favoured smaller shopping centres and neighbourhood strip centres over recent months.</p><p>The lockdowns and social restrictions imposed in response to the pandemic have also accelerated the shift to online retailing lifting by 80 per cent during the pandemic, according to Australia Post data.</p></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><div><picture><img src="https://tud-prod-tudmedia-oj9w2zshuo0o.s3.amazonaws.com/raw/images/668dfedf-36bf-4b45-bc66-58624c837401.jpg" width="800"/></picture><div><span style="align-content:center;opacity:0.8">▲ Sales growth at Coles and Woolworths is expected to remain elevated for more than a year as consumers eat more at home.</span></div></div></div></div></div><div class="row ci"><div class="cell cs12 cx12"><div class="ci cl"><p><br>Following the recent uptick in infection rates across Victoria, JLL said there would likely be another spike in sales, similar to that during <a href="https://theurbandeveloper.com/articles/discretionary-retail-hurts-as-stockpiling-benefits-supermarkets-">panic buying</a> in March, April and May, as shoppers stock up their pantries, consume more <a href="https://theurbandeveloper.com/articles/coronavirus-retail-sales-alcohol">food and drink</a> at home.</p><p>“Neighbourhood and large format retail centres have been much more resilient, from a foot traffic, sales and rent collection perspective as these sectors have benefited from the boost in sales of food and household goods,” Quillfeldt said.</p><p>Analysts noted that the commencement of new projects and extensions were the lowest since 2009 at just 22,900sq m across the second quarter this year, as owners scale back capex programs.</p><p>“Development activity is reducing significantly given the focus on converting existing space,” Quillfeldt said.</p><p>“The lower levels of new supply will help rebalance market conditions over the next three to five years.”</p><p>According to a recent report by KPMG, foot traffic in CBD stores plunged 87 per cent in the three months to 27 April, and traffic in large shopping centres fell 66 per cent, compared with a 32 per cent decline in traffic at small centres and a 45 per cent fall at medium-sized centres.</p><p>The Shopping Centre Council of Australia also revealed that 80 per cent of all SMEs have requested rental assistance in the wake of the National Cabinet’s Code of Conduct, announced in April as part of measures to offset the economic impact of coronavirus.</p><p>Westfield operator Scentre and rival Vicinity Centres withdrew earnings guidance, dividend payments and share buyback programs in March, following sharp drops in income directly affecting portfolio valuations.</p></div></div></div></div></div>

Vacancy within shopping centres has soared to the highest level in more than 20 years despite the re-opening of retail and rebound in foot traffic.

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