From the Media

• Source: Couriermail.com.au
  

BRISBANE'S inner city will grow up and out, with City Hall's draft neighbourhood plans for Fortitude Valley and Milton foreshadowing increased building heights - up to 30 storeys in the Valley - and increased population densities.

The Brisbane City Council strategy for the near-city suburbs, approved yesterday, follows plans for more high rise and population growth in South Brisbane and West End.

Now Fortitude Valley could see 22,000 more residents by 2031 and 75,000 more workers.

Lord Mayor Campbell Newman claimed the Valley plan was an opportunity to create a great new community.

"If we do not go up we will continue to have an affordability crisis," Cr Newman said.

Neighbourhood planning chairwoman Cr Amanda Cooper said the community had been clear on focusing the city's growth around local centres and transport.

The Milton plan allows for up to 20-storey developments close to the central business district and mass transport. It also determines that Park Rd will remain a key entertainment and retail hub.

While the draft Milton plan was passed by the full council, Opposition councillors voted against the Valley neighbourhood plan. Labor leader Shayne Sutton said Opposition councillors were against the lack of green space.

• Source: WhereIlive.com.au

There is light at the end of the tunnel for Brisbane commercial property investors, although don't expect anything too soon.

That is the message from the head of Jones Lang LaSalle's Queensland research team, Leigh Warner, who says the outlook for commercial space beyond 2010 is better than expected.

"I think you do need to take a long-term view on investing in the Brisbane office market," Mr Warner said.

"There has been a lot of volatility. but I think the long-term rewards will justify the risks if you know what you're doing." Mr Warner outlined his predictions for 2010 and beyond at the Vincents Property Insight 2010 breakfast today at the Hilton Brisbane.

With rents stabilising, yields stabilising and capital values almost at their trough, Mr Warner said the outlook for next year was that demand would recover, vacancy would continue to rise slightly, rents would stabilise after initial falls and yields would continue to stabilise. "I think there is a big opportunity for investment in Brisbane because the market is poorly understood," he said.

"Some people still think the vacancy rate is heading for 17-18 per cent and I think that creates opportunities when people don't understand it properly.

"The yield gap is at its greatest so the rewards. are at their greatest point in the cycle."

Mr Warner predicted vacancy rates in the Brisbane CBD to peak at 12 per cent, while a lull in supply in the Brisbane fringe market this year meant vacancy rates would drop next year. "It's been a wild ride, it's been a rollercoaster ride for the Brisbane CBD and surrounding markets," he said.

Tenant inquiry had picked up sharply in the CBD but Mr Warner said 2010 would be a slightly slower year for tenant demand, with demand building up in 2011.

For the Brisbane fringe market, there would be a lull as supply dropped off in 2011.

The outlook for yields was "pretty benign" with not much movement in the next couple of years.

However, Mr Warner said there would be strong competition for the "best assets" - those with high green ratings and newer, quality space.

"The next development cycle will be quality driven," he said.

• Source: The Australian

WEALTHY buyers in Brisbane's prestige sector are prepared to spend more than $5 million, but there is not enough top-end stock.

That's the observation from valuer HTW, based on anecdotal evidence from real estate agents.

There have been six sales for more than $7m in the past six months, it says, describing this as "startlingly strong" for the Queensland capital.

In its latest market review, HTW looks at prestige property across the nation and says Brisbane's truly wealthy haven't been the hardest hit by the general economic slowdown, and buyers in this bracket are willing to pay the price when the right property comes along. It is also obvious that these buyers want land, and the bigger the block, the better.

But HTW says the $3m to $5m market seems to have become a hard sell, with riverfront homes in traditionally desirable areas such as Chelmer hitting the market with barely a ripple from buyers.

In the unit market, it says, the Aquila project at New Farm, a Tom Dooley-project, has sold all but one of its 10 whole-floor apartments, which have prices from $5.1m to $6.6m.

Each unit has a 320sqm living area, a 100sqm outdoor area, media room, C-bus automation and a finish "that is about as good as it gets", HTW says.

It notes that the only danger with the high-end apartments is if resales weaken, and cites the Riperian tower as a building to watch to gauge this.

The Riperian broke local records when most of its units sold off the plan for $1.5m to $2.5m in 2005, and again when resales went into the $3m plus range. But now nine of the units are back on the market.

" We understand that in the past those buyers with a lot of available dollars have become frustrated with our city's more conservative high-end construction nature and taken their money to areas such as the Gold Coast, where they really know how to glam up the top end, " HTW says.

The Gold Coast's prestige residential market is not what it used to be but is definitely on its way back, led by the waterfront market, with most sales occurring in Sovereign Islands, Sanctuary Cove and Surfers Paradise.

But HTW notes volumes and prices are down, with several sales by receivers and prices well below those achieved previously.

"However, these sales appear to have found equilibrium and we consider this market to have bottomed," HTW says.

It says that as cost becomes less of a factor in construction budgets, owners wanting something different are including features such as saltwater marine aquariums (costing up to $50,000), glass commercial lifts ($150,000), turntables on garage floors -- a la Batman and Robin -- or even submarine doors to protect their wine from flood.

Residential researcher RP Data says that for house sales across all coastal markets, the Gold Coast -- the biggest coastal city -- was the best performer with 7038 house sales recorded during the past year at a median price of $490,000. Coincidentally, these results topped Brisbane, where the present median house price is $460,000.

HTW says the Gold Coast prestige market is closely linked to volatility of the stockmarket and the performance of Sydney's prestige market, as well as the Gold Coast development industry. "There is no doubt that 2010 is going to be an interesting year closely monitored by many people and that those having the fortitude to make a step now could be well rewarded," it says.

• Source: Brisbane Times

It's Groundhog Day in Queensland's Land Court.

The owner of a major shopping centre - in this case the Gold Coast's Pacific Fair - has accused the Queensland Government of over-valuing the land on which it operates.

The government has insisted its valuation is justified.

The court has ruled the government has falsely inflated the unimproved value of the land by more than $200 million dollars in order to charge the centre owner exorbitant land taxes.

This legislative arm wrestle between the courts and the State Government has happened before, in the past decade, over Chermside Shopping Centre.

What's more, it's likely to be played out in at least another 300 cases awaiting hearing in the Land Court, unless a government bid to adjust the meaning of "unimproved land value" is successful in State Parliament.

What is unimproved land value?

Put simply, unimproved land value is the dollar figure a block of land is deemed worth without any buildings or structures on it.

Currently, it is calculated based on its location and comparable vacant land sales. It is also the basis on which state land taxes and council rates are calculated.

But the State Government believes the unimproved value of a block of land should be increased if the site is home to a lucrative business, rental accommodation or new development. It argues the courts - as with the Pacific Fair Shopping Centre case - are giving the big end of town a multi-million dollar tax break and creating black holes in state and council budgets.

It plans to change the rules - and dodge the Land Court - by way of the Valuation of Land and Other Legislation Amendment Bill, tabled in State Parliament last month.

Mum and dad 'at risk'

If it passes, the property industry warns land taxes will be pushed up by as much as 40 per cent across Queensland, and it won't be just big business that feels the pinch.

The hike will be a blow to the hip-pockets of "mum and dad" residential investors and their tenants, small business owners and suburban home owners alike, because the proposed legislation is not limited to commercial property, independent land valuers say.

"The whole legislation is designed to extract money from the major shopping centres, but [the government] hasn't limited it to that. It filters down to home owners," says Allen Crawford, executive director of Brisbane valuer Chesterton.

He says profits made on new developments and renovated properties will be automatically added to the unimproved land value, meaning neighbours living on almost identical blocks could be charged vastly different amounts in council rates.

"The developer might have land with the unimproved value of $400,000, while his next-door neighbour has land with the unimproved value of $300,000, ironically based on the $300,000 the developer paid for his land.

"The council rates for the developed property will therefore be one third higher than the neighbour's."

However Natural Resources Minister Stephen Robertson has said his battle is strictly with shopping centre behemoths.

"While I understand that the commercial property owners would prefer lower valuations because it means lowers council rates and land tax, our duty is to protect the interests of the community as a whole to ensure consistency," Mr Robertson said in a statement.

"If we don't correct the Appeal Court's interpretation of the law, then we would be accepting commercial property valuations on a fundamentally different basis to other property valuations, which recognise how land is actually used in the real world."

The Minister was not available for comment on the issue this week.

However experienced Brisbane property valuer Rodney Brett says suburban home owners are not immune to the impending legislation.

"The residential home owner is not excluded under the proposed amendments. No one is excluded," Mr Brett says.

"Where there is an increase in the taxable value [of land]...council rates will follow that increase."

Yet Ben Crossan of CSA Valuers says small business owners could bear the brunt of the proposed legislation.

He says small business owners, leasing retail or office space, will be slugged with higher rent bills if the legislation is unchallenged.

"Commercial or industrial [property owners] can pass on land tax to their tenants, who will have little choice to pass on their increased overheads to consumers."

This could mean shoppers pay more for their lunchtime snack at their local fish and chip shop, he says.

Renters will also feel the squeeze if landlords push up weekly rent costs to cover higher land taxes.

Property analyst Michael Matusik claims this will in turn drive investors interstate and soften the Brisbane property market.

"Land tax chewed up 12 per cent of my income from my investment properties and if the state implements this new land tax I will not reinvest in this state again," Mr Matusik says.

Mr Brett brands land tax under the proposed legislation "enterprise tax".

"The fundamental change now, is one whereby, the taxable value will include any additional value brought to the property by virtue of developing. It's no longer unimproved value," Mr Brett says.

Mr Crawford has accused Mr Robertson of falsely implying the Court of Appeal has incorrectly interpreted the meaning of unimproved land value.

"The [courts] have done what they always done since 1944 and that is follow precedent. It is a lie to say [the courts] have changed the interpretation of the law," he says.

"There is a clause in the bill which turns the [definition] of unimproved land value on its head.

"The government has said, 'we'll give it special meaning' [according to] the way we've always valued land' - they have not always done it this way. It's a total lie."

Mr Crawford says "mum and dad" superannuation funds could suffer under the proposed legislation, because the market value of large assets, including shopping centres, would fall under the weight of increased land taxes.

"Mum and dad's superannuation money is tied up in the big end of town - so as far as that's concerned the public should be worried," he said.

Source: Brisbane Times

The demographic of Brisbane's CBD is shifting as corporations leave the riverside for the palatial new surrounds of the North Quarter precinct.

Previously unloved by all but backpackers and train commuters, the North Quarter precinct makes up the section of the CBD incorporating the Roma Street Transit Centre, parklands, North Quay and the new Brisbane Magistrates Court at the northern end of George Street.

Nearly $2 billion has been spent rejuvenating the area in the past five years, including the construction of the Kurilpa Bridge, which links the CBD with the Gallery of Modern Art and Southbank.

Besides the new Magistrates Court and Supreme Court complex, which is due for completion next year, and the renovation of the old McDonnell & East building, office highrises have steadily gone up two of which have been completed in the past couple of months.

Mark Curtain, national director of Jones Lang LaSalle Brisbane, said the success of the precinct was evident in the number of high profile relocations that had taken place.

He said groups such Santos, British Gas, Suncorp, Telstra and state and federal government bodies had packed up their offices in the Golden Triangle - the Eagle Street and Riverside place area - and moved, lured to the North Quarter precinct by more competitive rents, in-house childcare facilities and an abundance of new and exciting amenities.

"Telstra consolidated offices they had all over the CBD into 275 George Street, taking out the largest commercial lease in Brisbane's history," Mr Curtain said.

"There's no question that this development has been a success and it's now being considered as a very viable alternative to the Golden Triangle. You have to give people a reason to move and this precinct has them in spades.

"You've got high-quality office accommodation, fantastic retail such as the gourmet food hall in 400 George Street and the in-built childcare centres and then there's the costing, which was very competitive."

Anna Dunworth of Knight Frank said occupancy rates were high in all of the buildings, particularly in the 400 George Street and 32 Tank Street buildings, which were only completed a few months ago.

She said the North Quarter had quickly become Brisbane's new "law precinct."

"Being so close to the new Magistrates Courts, the Commonwealth Courts and the soon-to-be completed Supreme Courts, barristers and law firms have been keen to move their offices into the area," she said.

"The facilities and retail that are available to them, not to mention the transport links, the Kurilpa Bridge and the close proximity to the Queen Street Mall, make it an ideal place to work from."

John McDonald, from Ray White Commercial, has been involved in leasing out two office towers in the Roma Street Transit Centre and said his job has been made much harder since the new buildings were constructed.

"It's a catch-22 because companies looking for office space want great facilities and the retailers that would get them in, such as Woolworths and Coles, won't commit until the offices spaces are filled," he said.

"It has been a challenge convincing companies to take out office space in the Transit Centre when there's been other offices across the road that are brand new."

However he said even the Transit Centre was getting a full makeover in line with the rest of the precinct.

"Telstra moved out of a total of 29,000 square-metres in November last year and we commenced work immediately once they vacated," he said.

"The refurbishment works will bring a previously B-grade building up to an A-grade standard, with new amenities, air conditioning, foyers and have a 4.5 star Nebars rating.

Mr McDonald said tenants in the area had been very focussed on transport and green amenities such as bike paths and bike facilities.

"The North Quarter has great bike path access especially since the new Kurilpa bridge opened and we're finding a lot of companies are putting things like bike racks, lockers and showers high on their list of needs which I think shows a big shift in their needs."

He said Ray White Commercial was close to announcing its first major commitment to the Transit Centre and that about 3000 workers would move back into the building around July this year.

"Once this happens, this will drive the retail refurbishment,'" he said.