LMA

/LMA

About LMA

This author has not yet filled in any details.
So far LMA has created 7 blog entries.

VIC Office Market Report Lunch

Click here to launch PDF file: Office Market Report Slides Feb 2017

By | February 5th, 2017|Uncategorized|0 Comments

Unlisted Property Funds

Unlisted property funds allows for a system for buyers searching for commercial and industrial property to take part in a investment purchase they might not possess the funds to normally invest themselves.

Unlisted property funds or trusts are also known as syndicates, are an alternate method to purchase large property. Traders purchase ‘units’ in a trust qualities or holding investment property, that are handled with one of our qualified investment managers.

Usually the first capital remains used before property resource(s) comes once the trust ends, and any net profits are spread amongst the buyers. Throughout the trust’s existence, investors receive income distributions which are settled at set times (e.g. monthly or quarterly).

As the managers of the trust, Terraplex handles the related management maintenance and book collection. The home category might be industrial, retail, professional or various others including schools.

Gearing levels in unlisted property funds are usually moderate (in comparison) and so fit more fairly inside the banks hunger for financing in the present environment.

There are numerous elements when evaluating a possible investment within an unlisted property fund that buyers should think about:

  • Investment strategy. Does it fit your earnings and/or money development requirements?
  • Gearing. Financing to price (LVR) percentage of between 30 and 50 percent is recognised as affordable, while resources which are over 50 percent targeted ought to be analysed with greater scrutiny.
  • Loans. What are the risks linked to the readiness of the loans removed interest cover percentages or from the confidence?
  • Fees. Costs must be based on net, not gross assets, which prevents administrators being paid for improved gearing. Nevertheless, may be the performance paid on the reasonable challenge?
  • Asset quality. Search for trusts committed to long leases with powerful tenants to make sure quality cash flows.
  • Values. How so when does the account value underlying assets? A completely independent 3rd party does it?
  • Related party deals with friends family or colleagues. The supervisor must reveal plans strongly related investment decisions.
  • How may be the supervisor determining NTA on day-one? Are purchase costs written down or being capitalised?
  • What data does the supervisor supply to traders on a continuing basis?
  • Distributions. Are they being protected from money unrealised revaluation increases or additional borrowings or being paid from operating income?

Terraplex have many customers who’ve committed to unlisted property funds which have seen tremendous success. If you are interested in more information about our unlisted property funds and property trusts contact us today.

By | January 31st, 2017|Uncategorized|0 Comments

Using Superannuation to Buy Investment Property

Terraplex – A Boutique Australian Property Investment Company

Terraplex is a boutique Australian property investment management and investing company specialising in the acquisition and management of investment grade commercial property.

Terraplex’s company objective is to provide its investors with access to Australian real estate investment opportunities which deliver superior returns and generate sustainable income and capital growth through prudent acquisition and active management. The opportunities are provided in simple investment vehicles that offer complete transparency.

We offer investors the focus, energy and commitment of a ‘boutique’ fund manager, whilst providing institutional grade reporting and deal sourcing capabilities which allows our property investment company to avoid conflicts and inefficiencies that often exist with larger organisations.

smsf to buy property

By | December 23rd, 2016|Uncategorized|0 Comments

June 2016 – Emerald Hill Retail Precinct South Melbourne

PROPERTY SUBDIVISION

We recently received approval from Heritage Victoria for the proposed subdivision into 12 allotments. This approval was conditional on four conditions, three of which were painting (some of which we were already intending to do). The fourth point related to some patching of some rendering on certain chimneys. Our consultants Lovell Chen advise us this is a very good outcome.

As prefaced in the last update, we now have the majority of approvals required for the subdivision from the various Authorities, which is very pleasing.

The painting will require specialist resources as it includes the extensive verandah and restoration of the painted façade above the Bendigo Bank. We are sourcing quotes at present. The large number of power lines along the Clarendon Street frontage make it a more complex job as we need to deal with CitiPower, Yarra Trams and of course Council.

RETAIL STRIP MARKET

Terraplex continues to closely monitor the retail market in similar established shopping strips. The market remains very strong with yields regularly ranging in the 3.0% to 4.00% band.

There was a very encouraging sale at 278 Clarendon Street in April. The shop was leased to hamburger franchise Grilled and sold for $3.36m which reflected an initial yield of 3.4%. Another sale in May at 182-188 Clarendon Street was a standout result with an owner occupier paying $5.985m for a retail showroom. It was $2m over the reserve price.

CBRE are auctioning a retail shop at 268 Park Street which is very close to our property. There was some very interesting information in their marketing material which we thought we would share with investors:

• Population growth throughout South Melbourne is being driven by a number of small to medium size boutique developments. There are around 800 apartments under construction in the immediate area which will lead to an increase in the area’s population leading to higher foot traffic and larger retail spend.

• South Melbourne residential house prices have grown by an average of 19.65% per annum since 2013.

01a

• 40% of South Melbourne’s population is aged between 20-39 with significant discretionary income to spend on food and fashion.

02a

A summary of key demographic indicators in the area as noted by CBRE are outlined below:

03a

By | June 1st, 2016|Uncategorized|0 Comments

187 Todd Road, Port Melbourne – May 2016

The Port Melbourne investment market continues to be tightly held. Major works continue in the immediate vicinity with the massive extension of Web Dock well underway.

The GMH site opposite our building remains in exclusive due diligence with Goodman Group. They are planning a major commercial/industrial development on this strategic land holding. Closer to the CBD, construction has commenced at a number of residential development sites. The new Planning Minister is still reviewing the Fisherman’s Bend planning controls so no new permits are being approved pending the outcome of the review.

There have been a number of sales of permitted sites in Fisherman’s Bend with Little Property recently selling a site in Lorimer Street for $60m. The site had approval for 940 apartments in two towers and was purchased by a Shanghai based developer. It is this buyer’s first acquisition in Australia.

There continues to be a lot of infrastructure spending in the area with major intersection/road upgrades at Todd Road where it connects with the Westgate Freeway.

Leasing

In our last update, we informed investors of a pending leasing of the balance of space on level 2. We are pleased to advise that leases have been signed with K Line for a term of 7 years. K Line is moving out of another Terraplex asset 570 St Kilda Road and this move was facilitated and negotiated by management. K Line initially appointed a tenant representative to review their accommodation needs. After focussing on a couple of options, we were able to negotiate a suitable new leasing deal for both parties.

Emirates Leisure Retail (operator of the Hudson’s Coffee business) moved into their new offices in February and a new Hudson’s Coffee Cart commenced operations in the foyer in March. It has been an excellent addition to our building. As part of our ongoing capital improvement program, we have re-tiled the walkway to the entrance and added a wooden deck to the right hand side of the main entrance. Hudson’s Coffee will be using this area for outdoor seating.

The building is now fully leased for the first time since our acquisition back in May 2014. More importantly, our list of occupants is first class and the WALE (weighted average lease expiry) is an attractive 5.5 years.

Fisherman’s Bend update

The Fisherman’s Bend precinct was formally adopted by the previous Liberal State Government. Since Labour came into power, they have reviewed the precinct and recently made some significant changes to the boundary. Our building is now included (which is very positive) and we are seeking advice as to how this will impact 187 Todd Road. This is one of the largest urban renewal projects in Australia, which will significantly transform this area over the next 30-50 years.

Recent Sales

Port Melbourne continues to be a tightly held market. There are no recent comparable sales to report.

Real Estate Fundamentals are Strong – Tim Church UBS, Head of Real Estate Australasia

1) Interest rates and the A$ have been supportive for Real Estate Valuations

01c

2) And the outlook remain “lower for longer”

02c

Appendix 2 – Hudson Coffee Fitout

03c

By | May 23rd, 2016|Uncategorized|0 Comments

570 St Kilda Road, Melbourne – May 2016

The supply of office space in the St Kilda Road office market has shrunk by almost 20% from its peak in 1992. In the last 6 months, over 15,000m2 of space has been withdrawn for residential redevelopment alone which is equivalent to two buildings the size of 570 St Kilda Road. Virtually no new office construction has occurred in the last 25 years to compensate for the withdrawal. Due to the diminishing supply and consistent demand, the vacancy rate in St Kilda Road is forecast to fall to 15 year lows in the next 18 months. Office rents have continued to grow and importantly incentives have fallen, the net effect being very positive to building owners in St Kilda Road. Investment yields have compressed over the last 12 months and are predicted to firm further due to the “low for longer” interest rate cycle we find ourselves in.

The confirmation of construction of the new Domain rail station will be a big boost for the precinct. With Melbourne projected to be Australia’s largest city by 2030 and the growing momentum by people preferring to live closer to places of work, buildings like 570 St Kilda Road will continue to be eagerly sought by investors.

 

By | May 23rd, 2016|Uncategorized|0 Comments

658 Church St, Richmond – May 2016

The city fringe office market continues to perform very well from a leasing and sales perspective. There has been six years of positive net absorption of office space and continued steady employment growth which augurs well for the inner suburban office markets. Major companies are focussed on attracting and keeping quality staff and this has resulted in a move to vibrant, well public transported suburbs like Richmond.

With no new office supply and the CBD office vacancy rate predicted to decrease further, city fringe office rents are predicted to increase with prime properties anticipated to outperform.

MARKET UPDATE

The investment market has started the year on a very strong note. Frasers (previously Australand) has sold Building 10 in the Richmond Corporate Park to an overseas investor BlackRock for $45.5m.The sale price reflected a tight yield of 7.21% and a capital value of $5,761/m2. This is the largest office investment sale in Richmond for over 12 months. It is situated in an inferior location to our buildings.

 

The leasing market continues to be very strong with limited supply in the Richmond/Cremorne precinct. Bauer Media recently leased 823m2 for 5 years on the ground floor of Building 8 in the estate. The rental rate was $365/m2 with a low incentive of 12% which is excellent news for our building.

Real Estate Fundamentals are Strong – Tim Church UBS, Head of Real Estate Australasia

1) Interest rates and the A$ have been supportive for Real Estate Valuations

01

2) And the outlook remain “lower for longer”

02

3) Real estate remains one of the highest yield asset classes

03

4) While volatility is the new normal in global equity and commodity markets the relatively stable real estate has been the beneficiary of the flight to safe asset classes

04

5) Over the next 20 years, a further A$380 billion of demand for real estate investments will come from Australian superannuation

05

By | May 1st, 2016|Uncategorized|1 Comment