Brisbane is often, perhaps mockingly, referred to as a “big country town” but that label could more appropriately be applied to a single building in the CBD.
Skytower, nearing completion at 222 Margaret Street, is so big it can house the entire population of Longreach.
Skytower soars to the city’s tallest allowable height of 274 metres, with construction set to wrap up by June.
The ear-popping elevator ride to the 90th floor takes almost two minutes, where construction is almost complete on what the developers claim is the highest infinity pool on Earth.
Tradies working on the bellwether building spend their lunch hour towering over the city and enjoying the views from a height that dwarfs surrounding skyscrapers and reduces trucks to the size of ants.
As the builders polish off their packed lunches – and if the haze abates – they say they can catch a glimpse of Stradbroke Island’s sand dunes or the Gold Coast’s skyline.
Sydney-based property developer Billbergia, investment company AMP Capital and Hutchinson Builders are behind the project, nicknamed the “Christmas bon-bon”for its three distinct sections.
About 650 apartments in the bottom two thirds are now occupied, while builders work to finish the top section by June.
At the top of each section is a pool, gym and streamroom, but only occupants in the top section will have access to the infinity pool.
Ten years ago, the plan for the Margaret Street site looked very different.
The “Vision Tower” was slated to win the race to be Brisbane’s tallest building – until the global financial crisis and the site was sold off to Billbergia.
Vision was to be a curved, 283-metre skyscraper with an observation deck, 13 floors of commercial space and 376 residential apartments over 72 floors.
Construction on Vision did not pass the excavation stage. The resulting huge hole in the ground sat dormant after developer Austcorp went into receivership in 2009 and famously filled up with water during the Brisbane flood of 2011.
Brisbane City Council gave the green light for Skytower to go ahead in 2014 after years of false starts, and construction kicked off the following year.
The tower has been settled in stages in order for the senior debt to be paid down and to avoid the chaos of 3000 people moving in at the same time.
Billbergia spokesman Rick Graf said the exclusive top eight floors, filled with penthouses, had not yet been released to market but were expected to go on sale by the end of the year.
The largest penthouse was expected to sell for about $8 million, though Mr Graf played coy on the value of the apartment, which spans three levels.
“It is not only a large building, but it is refined, elegant and beautifully finished,” he said.
“When everyone gets a chance to walk through the main foyer later this year, they will be very impressed.”
Mr Graf said about 90 per cent of the 900 apartments already sold were snapped up by Australian buyers, many from south-east Queensland.
The Australian Financial Review reported some owners discounted apartments by up to 10 per cent to make a sale.
Apartment 1316 of Skytower was purchased off the plan for $696,960 in 2015 and sold by owner Hyoung Suk Kwon for $608,880.
While Skytower was the first to reach Brisbane’s height ceiling, it will not be the last.
Five other buildings have received Brisbane City Council approval to reach the aviation-enforced 274-metre limit.
155 Edward Street
Aria Property Group was approved to build an 82-storey gold-coloured tower on the corner of Edward and Elizabeth streets, near St Stephen’s Catholic Cathedral.
300 George Street (The One)
The 82-storey residential tower is part of the $800 million Brisbane Quarter at the old law courts on George Street. The One will sit alongside a 39-storey office building and the 32-storey W Brisbane Hotel.
217 George Street (No.1 Brisbane)
No. 1 Brisbane will tower above Brisbane’s busy Queen Street Mall and plans promised the skyscraper to include a bar, retail and a public entertainment space.
240 Margaret Street
This 91-storey skyscraper will neighbour the “Christmas bon-bon” on Margaret Street and will include 783 units.
30 Albert Street
Singapore-based developer Aspial, which also bought the site at 240 Margaret Street, is constructing a “vertical community” with elevated gardens on Albert Street.
The six towers touching the city limits are part of a massive growth across Brisbane’s CBD which are set to transform the Queensland capital by 2022.
Lord mayor Graham Quirk said Brisbane was a growing city with about 50 CBD skyscrapers expected to be built over the coming 20 years, to accommodate the demand for commercial and residential growth.
“More people are living in the Brisbane CBD than ever before and by 2031 an additional 80,000 employees will be working in the city centre,” he said.
“Brisbane’s CBD skyline has the potential to accommodate buildings of a greater height than the current maximum of 274 metres and it is important that we have a broader discussion about this opportunity, to avoid missing out on economic investment and local jobs.
Cr Quirk said there was still a “clear interest from industry to go higher”.
“With aviation safety as a clear priority, we should still be able to have areas of the city where we might be able to go to 300 metres to provide some flexibility in the medium-term,” he said.
“I want to ensure we protect our city’s strong aviation safety record but I think we should have a sensible conversation around flight paths and future technological changes in aviation that may create the potential for, if not all, some parts of the city to at least be able to go higher.”
Lynas up 14pc to 15-month high
That is all from us today.
Thank you for your time and your comments. Tomorrow the bureau of statistics is releasing building permit data for April. The March numbers were down 15 per cent month on month and the consensus view is none or minor growth of 0.1 per cent for April.
The S&P/ASX 200 has closed 0.7 per cent lower at 6440 points. It traded at that level for most of the day with very little change between 11am and close.
Lynas was the outstanding performer today with a rise of 15.5 per cent to $2.76. Ausdrill had the next biggest move with a gain of 2.3 per cent to $1.53, which highlights how extraordinary Lynas was today compared to the rest of the market. Altogether 42 companies closed higher.
On the down side, Downer EDI dropped 9.1 per cent to $7.16 and Nufarm dropped 5.8 per cent to $4.05 on reports by News Corp it is assessing its balance sheet with a view to possible asset sales.
But the points were really taken off by a 1.3 per cent fall in CSL to $204.50 and a 0.6 per cent drop in BHP Group to $38.36. Wesfarmers, Woolworths, and Transurban all softened. The most traded stock was South32 with 24.2 million shares trading hands and the price falling 2.3 per cent to $3.36.
Shares in highway health food retailer Oliver’s are up 59 per cent to 3.5 cents after it told the market it will return to profit in 2019-20. The company is booking a loss of $5.3 million for the current financial year. The former board and chief executive were turfed out in March and the new team has ended “outrageous cash burn“. Oliver’s has closed several stores and “stopped the unproductive activities at head office”.
In January the previous board advised of a half-year loss of about $3.5 million and Oliver’s incurred a loss of $1.8 million in the three months from January to March. Since the new board has taken over it delivered a break-even position for the April to June quarter.
“Olivers will post a trading loss for the 2019 financial year of around $5.3 million, all of it incurred prior to the actions and initiatives of the current Board and the new senior management team.”
The board expects to see a return to profits and “with it the ability to pursue a number of very exciting and potentially viable opportunities”.
The markets is down 46 points to 6438.5 as we head towards the closing bell. The S&P/ASX 200 fell 50 points on opening to 6419 and has been unable to get above 6440 all day. Just 49 companies are trading higher.
The most points are being taken away by a 1.5 per cent drop in CSL, and 0.8 per cent fall in BHP, and a 1.7 per cent fall in Wesfarmers.
Adding the most points today is National Australia Bank with a 1 per cent rise, and Lynas has rallied 14 per cent to $2.73. Telstra is 0.4 per cent higher after confirming more job cuts and being on track with its T22 program. And Nine Entertainment is up 1.5 per cent.
On Monday I posted about a regional Chinese bank taken over by regulators. Today two Asia-based economists for ANZ Bank released a note saying they think it is an isolated incident and will not trigger systemic risks.
The Baoshang Bank had a significant credit risk and was owned by a large private company which used to be heavily involved in the domestic financial market, according to ANZ economists Betty Wang and ZhaoPeng Xing. However, the takeover did increase short term funding costs, which will impact smaller banks and have spill-over effect on small and private enterprises.
“Some key indicators of [Chinese] city commercial banks have deteriorated in the past two years amid the nation-wide deleveraging campaign. The average capital adequacy ration (CAR) of banks decline to 12.64 in first quarter of 2019 from 12.75 per cent at the end of 2017,” they wrote in a note to clients. “Meanwhile, the non-performing loan ration rose to 1.88 per cent in first quarter 2019 from 1.52 at end of 2017. However, we do no think that this reflects a pandemic risk in the sector.”
They also note China has accumulated a lot of hidden debts, particularly in shadow banking.
“Assuming control of Baoshang could be a trial undertaken by the authorities to clean up such activities which have posed hurdles to the monetary transmission mechanism. The flurry of comments from different senior Chinese regulators in the past few days also signal that preventing financial risks is priority for China even amid the economic downturn.”
Lynas Corporation is one of the most strategic assets traded on the ASX and could eventually triple production from its 200 million-year-old rare earths deposit in Western Australia, according to fund manager Newgate Capital Partners. Newgate chief investment officer Tim Hannon said the Mount Weld mine, where the Lynas board met this week, boasted the largest and highest quality rare earths deposit in the world. The Lynas share price surged more than 10 per cent to $2.64 in early trading on Wednesday, way above the indicative $2.25-a-share price offered by Wesfarmers as part of a conditional $1.5 billion takeover tilt on March 26.
The board meeting at Mount Weld, including a barbecue with community leaders, comes as Lynas considers either Mount Weld or an industrial estate on the outskirts of Kalgoorlie for a first-stage processing plant as part of a $500 million capital works program.
The new plant would remove low-level radioactivity from rare earths material before it is shipped to the main Lynas processing hub in Malaysia for downstream processing. The company expects the move to clear the way for Malaysia to renew its operating licence, which is due to expire in September.
Brisbane’s ‘ugliest building’ to go as bus and rail moves underground
Brisbane buses will follow trains underground at Roma Street Station as the government forges ahead with Cross River Rail plans, without the federal help it hoped to get from a Shorten Labor government.
A new underground train station had already been promised for the inner-Brisbane transit hub, but deputy Premier Jackie Trad announced on Friday that the bus interchange would also be moved below.
Ms Trad, who is also Infrastructure Minister, said it would provide a “seamless connection” between rail and bus.
“That means public transport becomes very, very reliable but also very accessible,” she said.
Described by Transport Minister Mark Bailey as “one of the ugliest buildings in Brisbane”, the run-down Brisbane Transit Centre on Roma Street will be demolished in 2020, to make way for the interchange.
He said the 650-metre busway would be located directly under the Roma Street station plaza.
“Queenslanders are backing public transport, with a record 182 million trips taken across the south east last financial year, including an average of 19,000 people using the current Roma Street bus station each day,” Mr Bailey said.
“Once Cross River Rail is operational, 36,000 passengers are expected to use Roma Street every day to transfer between buses and trains, which is why we’re upgrading this important hub, taking hundreds of cars off the road and easing congestion.”
Ms Trad said the bus/train interchange would support crowds as large as 20,000 travel to and from events at the proposed Brisbane Live arena.
The entertainment centre would sit on an elevated structure above existing railways, road and property at Roma Street.
Queensland will be “going it alone” with funding the $5.4 billion Cross River Rail project after the Coalition failed to provide any help in the federal budget.
Federal Labor promised to give $2.24 billion if they won government, but that went up in smoke with Saturday’s electoral defeat.
But Ms Trad said Queensland had not included the $2.24 billion promised by federal Labor in the 2019-20 Queensland budget for the Cross River Rail project.
Brisbane’s NEXT Hotel and CBD Retail sold – Tom Gibson, Simon Rooney JLL
The NEXT Hotel & CBD Retail in Brisbane has sold to Salter Brothers (formerly SB&G Group) in a deal brokered exclusively by JLL.
Tom Gibson, Vice President of JLL’s Hotels & Hospitality Group, together with Simon Rooney, Head of Retail Investments – Australasia for JLL, brokered the deal off-market.
The property includes a 304-room hotel operated by NEXT Story Group and a prime retail component occupying an envious location fronting Queen Street Mall in Brisbane CBD.
Simon Rooney, Head of Retail Investments for JLL, said ‘mixed-use CBD retail assets in prime locations are typically tightly-held and are in high demand nationally, demonstrated by two recent acquisitions – MLC Centre in Sydney (50%) for $800 million and 80 Collins Street in Melbourne for $1.476 billion – both acquired by Dexus. Locally, Marquette Properties recently acquired 130 Queen Street for approximately $77 million.
“The asset benefits from its location on one of the strongest retail strips in Australia. Retailers continue to seek locations which maximise foot traffic and exposure for their business which ultimately underpins tenant demand for super-prime retail strips and precincts, especially in CBD markets nationally.
Andrew Quillfeldt, Senior Director of Retail Research for JLL, said, “CBD retail is one of the strongest performing retail sectors at present. It’s supported by positive underlying drivers such as strong residential population growth as a result of the last development cycle, strong white collar employment growth, strong tourism growth and key infrastructure upgrades in most markets. The combination of factors is driving retail spending and tenant demand within CBD markets.
Formerly known as Lennons Hotel Brisbane, the now edgy 4.5 star hotel is primed for growth with its close proximity to the $3.6 billion Queens Wharf Casino, the $2 billion Brisbane Live entertainment precinct and the recently opened $200 million Howard Smith Wharves project.
“This is a timely acquisition for Salter Brothers to enter Brisbane as the market begins to mature with its record wave of private and public demand-supporting projects underway,” Mr Gibson said.
Brisbane is currently in the midst of a market repositioning, with over $12 billion worth of private and public infrastructure projects including a second runway, new cruise terminal and underground railway projects. Furthermore, with the addition of new and overdue luxury hotel product, such as the W Brisbane, Westin Brisbane, Calile James Street and Emporium South Bank, the market is establishing itself as a major global gateway city.
“With Sydney and Melbourne hotel markets becoming increasingly difficult to enter, we are receiving record interest for other core markets that feature attractive short- to medium-term market fundamentals, as evidenced by the recent liquidity seen in Brisbane and Perth,” Mr Gibson said.
For Year-To-Date through April 2019, the total number of room nights sold in Brisbane has increased by 3.5%, showing the market’s resilience through the addition of new supply.
Melbourne-based Salter Brothers is a global fund manager with a focus on specialist property, credit & private equity, including the ownership of multiple hotel assets in America and Australia. With the addition of NEXT Brisbane, Salter Brothers hotel portfolio now expands to over 2,400 rooms with seven hotels across Sydney, Melbourne, Canberra, Brisbane and the Gold Coast.
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