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German giant Union Investment to double Asia-Pacific plays

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An artist’s impression of Brisbane’s South Point development that Union bought last year. Source: Supplied

An artist’s impression of Brisbane’s South Point development that Union bought last year. Source: Supplied

Germany’s biggest open-ended fund manager, Union Investment, aims to fairly quickly double its €1 billion ($1.4bn) of property investments in the Asia-Pacific after making its first foray into Australia last year, according to Eric Cheah, the group’s regional head of real estate.

“We are very focused on Australia — it’s one of our target markets, and one of our priority markets as well,” said Mr Cheah, who comes to Australia every few weeks from his Singapore base.

Union, which has €240bn ­invested globally with just over $26bn of real estate assets under management, struck a $200 million deal to buy the Southpoint office tower in Brisbane from ­Anthony John Group a year ago.

The construction of the 23,500 sq m development at South Bank, which will house Flight Centre’s 2000 Brisbane staff, is being funded by Union.

Australia had always been on the group’s radar, Mr Cheah said. “It was quite a proud moment for the group and we would love to do more,” he said of the Southpoint acquisition. “We would like to double our €1bn investment (in the region) in the short- to medium-term, three to five years.”

Mr Cheah who worked for Hudson Conway on the building of Melbourne’s Crown Casino before moving to Singapore in 2000, said Southpoint’s 10-year weighted average lease expiry would allow the investment to ride out the additional supply coming into the Brisbane market, which is ­already facing high vacancies.

Mr Cheah declined to comment on potential investments, although market sources said the funds giant had been an underbidder on Leighton Properties’ North Sydney office tower, which was sold in 2013 for $413m and has run the ruler over Brisbane’s Waterfront Place, which is under due diligence to Dexus at more than $630m.

Globally, the fund manager invests across commercial property sectors and also owns 47 hotels and residential property. Outside Europe, Union is more focused on CBD locations and would initially look at office investments in ­Australia, Mr Cheah said. In the Asia-Pacific, Japan is its other ­investment focus.

“But over time, as we have a greater allocation to Australia, we would hope to broaden that universe,” he said, noting that hotels and CBD retail here would also make sense.

Mr Cheah said Union’s challenge was to deploy its capital in the increasingly competitive ­global markets.

“We have roughly more than €10m a day that comes through the door,” he said.

While Australia had gained ­attention as an investment destination, quantitative easing had seen the global investment playing field awash with capital, Mr Cheah said.

“We have a 50-year history of being a prudent investor that we want to preserve.”

While on the surface it ­appeared an asset bubble could be forming, Mr Cheah questioned whether the money would “peel away and be less relentless”

“If you stopped QE today, that doesn’t stop the volume of money already printed, so the pressure remains.”

By Turi Condon

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Finance

The property party is over as our biggest bank curbs lending

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The property party is over as our biggest bank curbs lending

Australia’s housing-market extravaganza is over. That’s the call the nation’s biggest mortgage-lender is making when it comes to its own money.

In the past year, the Commonwealth Bank has reduced its exposure to apartment developers by more than $1 billion, or 23 per cent, according to data included in its first-half earnings report, released on Wednesday.

When the nation's biggest lender starts reining back it's a good sign the party is over.

When the nation’s biggest lender starts reining back it’s a good sign the party is over.

What’s more, the bank included a chart in its results highlighting its overall home-loan portfolio is growing notably slower than its competitors.

It’s also pulling back on loans to property investors, which rose just 0.5 per cent compared to 7.5 per cent growth for owner-occupier loans.

Sydney house prices, which surged 75 per cent between February 2012 and July, have now dropped 3.1 per cent from their peak, data released last week showed. But Sydney prices are still up 70 per cent on their cyclical low hit in February 2012.

Melbourne fared somewhat better, thanks in part to rapid population growth, with prices easing 0.2 per cent in January to be 8.0 per cent higher for the year.

CBA records $4.7b half-year profit, but Austrac fine and compliance costs weigh

CBA records $4.7b half-year profit, but Austrac fine and compliance costs weigh

Housing loans have been the driver of Australian banks’ recent run of bumper profits. So when the nation’s biggest lender starts reining back it’s a good sign the party is over.

Originally Published: www.brisbanetimes.com.au

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Finance

New postcode restrictions for home loans

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New postcode restrictions for home loans

In a notice issued to mortgage brokers today the CBA announced it will roll out a range of changes including restrictions on lending in some postcodes.

This includes forcing customers to stump up fatter deposits in order to get a home loan.

It will impact all types of properties including homes and apartments and also borrowers regardless of whether they are owner occupiers or investors.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

In the notice it said from Monday, December 4 the key changes will include:

– Reducing the maximum loan-to-value ratio from 80 to 70 per cent for customers without Lenders Mortgage Insurance (an insurance the customer pays and protects the lender not the borrower.) This means borrowers with a deposit less than 30 per cent must pay expensive LMI costs.

– Reducing the amount of rental income and negative gearing eligible for servicing which will impact investors.

– Change eligibility for Lenders Mortgage Insurance waivers and LMI offers for customers in some postcodes.

Home loan lending with the nation’s largest bank is about to get harder.

Home loan lending with the nation’s largest bank is about to get harder.

CBA said the new Postcode Lookup tool which will start from Monday will allow the bank and brokers to determine whether a borrower can successfully borrow in a particularly region or postcode and it will reduce customers wasting time applying where they are likely to get knocked back on a loan.

CBA has not released the postcodes and regions these changes will impact.

The move is a result of the responsible lending restrictions put on lenders by regulators to cool the red-hot lending market.

Home Loan Experts’ managing director Otto Dargan said these changes are significant and will impact many borrowers.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

“Lenders keep an eye on the economy and their exposure to different property markets and adjust their lending policies to manage their risks,” he said.

“We strongly recommend that home buyers don’t commit to buy a property until they have an unconditional approval from a bank.

“You could win an auction and then find out that your pre-approval is worthless, and then what are you going to do?”

Unconditional approval is when your loan application has been fully approved and is not subject to any terms or conditions.

Originally Published: www.ipswichadvertiser.com.au

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Finance

New postcode restrictions for home loans

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brisbane

brisbane

THE nation’s largest lender is tightening its belt and making it even tougher for potential borrowers to successfully get a loan.

In a notice issued to mortgage brokers today, the CBA announced it will roll out a range of changes including restrictions on lending in some postcodes.

This includes forcing customers to stump up fatter deposits in order to get a home loan.

It will impact all types of properties including homes and apartments and also borrowers regardless of whether they are owner occupiers or investors.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

Commbank is rolling out a range of changing which will make it tougher for customers to successfully get a loan.

In the notice it said on Monday, December 4 the key changes will include:

– Reducing the maximum loan-to-value ratio from 80 to 70 percent for customers without Lenders Mortgage Insurance (an insurance the customer pays and protects the lender, not the borrower.) This means borrowers with a deposit less than 30 percent must pay expensive LMI costs.

– Reducing the amount of rental income and negative gearing eligible for servicing which will impact investors.

– Change eligibility for Lenders Mortgage Insurance waivers and LMI offers for customers in some postcodes.

Home loan lending with the nation’s largest bank is about to get harder.

Home loan lending with the nation’s largest bank is about to get harder.

CBA said the new Postcode Lookup tool which will start from Monday will allow the bank and brokers to determine whether a borrower can successfully borrow in a particular region or postcode and it will reduce customers wasting time applying where they are likely to get knocked back on a loan.

CBA has not released the postcodes and regions these changes will impact.

The move is a result of the responsible lending restrictions put on lenders by regulators to cool the red-hot lending market.

Home Loan Experts’ managing director Otto Dargan said these changes are significant and will impact many borrowers.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

Home Loan Experts managing director Otto Dargan encourages borrowers to get unconditional approval before buying a property.

“Lenders keep an eye on the economy and their exposure to different property markets and adjust their lending policies to manage their risks,” he said.

“We strongly recommend that home buyers don’t commit to buying a property until they have an unconditional approval from a bank.

“You could win an auction and then find out that your pre-approval is worthless, and then what are you going to do?”

Unconditional approval is when your loan application has been fully approved and is not subject to any terms or conditions.

Originally Published: www.ipswichadvertiser.com.au

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