The new Newman government is starting to make decisions and trying to get the construction sector going, but are they making it too hard?
BURSTING out of the shed with a stimulus for the fourth pillar of the economy, the new Government’s announcement of plans to redevelop the government accommodation precinct took most of us by surprise.
It wasn’t on any 100-day plan in a ministerial charter letter and at first glance, looks an awkward fit with a cost-of-living and frontline services government agenda.
Having said that, if it is to be, then the Government needs to be confident that it can conceive, scope and run a process for a project that leads to a transaction strongly resembling the one for which they invited submissions in the first place.
For the past 10 years, the property development industry has suffered at the hands of the previous government, being asked to spend millions of dollars responding to government-sponsored bids only to have the process scuttled or worse, wither slowly and expensively on the vine before dying an unrecompensed death without a decision being made.
Tenancy and privatisation offerings at Bowen Hills, Gold Coast Cruise Terminal, Coorparoo TOD, and – don’t mention the war – North Bank, have been failed government processes that have sapped the will of the private sector.
Any executive in a large property group looking to bid for transactions of this scale will report to an executive committee and board located in, most commonly, Sydney or perhaps Melbourne or overseas not Moreton or southeast Queensland.
Besides the leap of faith needed for such a remote board to approve significant expenditure on a bid in which they are one of five or six, it is critical that they can believe the competition itself will prevail through to a transaction for the lucky one.
Government will always have the lowest cost of funds and the private sector will always seek a development margin for the whole-of-life risks inherent in developing a very large single tenant building of this quality.
Respondents to a bid process asking for an offer expressed as a rent per square metre will seek a 15 to 20-year term and yes, this does start to look like a mortgage, which in the past has led the discussion back to who has the cheapest source of funds and so on.
With the William St to Brisbane River precinct, there are also many significant and long-standing departmental positions on turf and technical threshold issues that only the state can resolve through internal machinations.
It is entirely unreasonable and unrealistic to expect the private sector to resolve these in or after a bid process. They need resolution as part of the project brief.
These knowns should be acknowledged, dealt with and resolved in the structure of offers sought via the RFP (request for proposal) process or the errors of the past government may be repeated. When a formal bid process crashes, everyone loses.
The current expressions-of-interest process instigated for the William St precinct has got off to a pretty woolly start. When the process does hit the formal bid phase, we all need the RFP for William St and any associated precinct to deliver a set of well-defined technical requirements and exhibit a transaction design, land tenure, title and lease covenant that collectively describe a project that is both doable for government and bankable for the private sector.
At least then the lucky six or so shortlisted bidders risking up to $1 million each on a bid, can concentrate on providing options for a single piece and not a mixed bag of fruit.
There are many varieties of apple on the market, but at least we can clearly ask for an apple. A process that permits exotic star fruit or that southern favourite, the seedy cantaloupe, will be hard to successfully complete.
* James Basham is a director of DMA Partners
Article published on the couriermail.com.au on June 21 2012
The seaside community getting a new supermarket after signing of 10-year lease
A popular seaside location is finally about to get a new supermarket.
An IGA supermarket is set to open at Noosa Council’s Sunrise Beach shopping complex, within a year, following the signing of a 10-year lease for the anchor tenancy.
The project has been revived after being put on hold earlier this year due to challenging times.
In welcoming the IGA’s signing of the lease, Mayor Clare Stewart said that having an IGA in the Council-owned complex would be a great win for the local community and neighbouring businesses.
“We’re thrilled the IGA has decided sign a lease for the site,” the Mayor said.
“Having an IGA at the Sunrise Beach Shops will provide local residents with another convenient grocery shopping option close to home,” she said.
“Having such a strong anchor tenant will also boost foot traffic to the complex to help drive extra trade for the other quality local businesses also based at the complex.”
The 10-year lease includes options to extend for further periods.
CEO Scott Waters said Council would carry out some work to the property to enable it to accommodate a supermarket, ahead of the IGA’s interior fit-out of the space.
“Council and the IGA will be working as quickly as possible to complete the work in the face of building industry supply chain challenges, so that the supermarket can open as soon as possible,” he said.
Mr Waters said the new lease was good news for ratepayers, as it meant a guaranteed income from the Council-owned commercial asset for at least the next decade.
“Attracting a quality, long-term tenant is the best outcome we can hope for with a commercial property such as this, to help support Council’s strong financial position, which ultimately benefits all of our ratepayers,” he said.
“We look forward to working with the new IGA.”
Article source: www.sunshinecoastnews.com.au
Double Bay mansion hits market with jaw-dropping $28 million price guide
A sprawling mansion in Double Bay has hit the market with an eye-watering $28 million price guide.
Representing one of the largest private landholdings in the uber-affluent locale, 11 Pinehill Avenue is being offered for sale for the first time in over 50 years.
The staggering abode is spread over a scarcely believable 2300-square-metre parcel of blue-chip land, tucked away at the end of a quiet, leafy cul de sac.
The main residence is a breathtaking two-story Federation home with great bones and a resoundingly charming aesthetic.
Boasting a total of six bedrooms and four bathrooms, the abode’s interior has, however, been refurbished and redesigned to present as a much more contemporary and functional proposition.
Features include an expansive formal lounge area, formal dining room, a bar, wine cellar, study, library, professional kitchen, and a master suite with his and hers walk-in robes.
Outside, manicured grounds and established flora are complemented by an expansive pool, spa and lounge area, as well as a lock-up two-car garage.
The eye-watering asking price may sound patently absurd to some. However, considering Double Bay’s median house price currently sits at a not unsubstantial $6.5 million, just the sheer size of the block is probably enough to warrant an asking price nearly four times as much as the median.
And, according to Domain’s data, the platinum postcode’s property witnessed skyrocketing values over the course of 2021, up 52.4 per cent compared to 2020.
So, there’s every chance that, if things in Australia’s hottest property market keep going the way they have been, 11 Pinehill Avenue may well be worth a lot more in just a few short years, crazy as that may sound.
Article source: www.domain.com.au
Hutchinson Builders takes over Cbus Brisbane tower that broke Probuild
Hutchinson Builders will take over the completion of Cbus Property’s troubled residential development in Brisbane, one of most problematic projects for failed construction contractor Probuild.
The awarding of the contract was widely expected, as family-owned Hutchies, the largest Queensland-based builder, was seen as the only contractor capable of taking on the 47-level project.
“Since commencing preliminary works on site three weeks ago, Cbus Property, together with Hutchinson Builders, continues to finalise subcontractor negotiations and prepare a revised construction programme,” Cbus Property chief executive Adrian Pozzo said on Monday.
“Once finalised, we will provide an update to purchasers with a more definitive completion timeline.”
Chairman Scott Hutchinson told The Australian Financial Review in early March he was “quietly hoping” to pick up the job and the announcement makes it second time lucky for the company that came second to Probuild in the 2017 race for the project.
But the project turned into such a drag for the business that Probuild parent WBHO said last year – long before putting the company into administration in February this year – that the project had racked up a $48 million loss.
Sydney-based Roberts Co has acquired Probuild’s Victorian projects and Built has taken over Dexus’ 25 Martin Place project in Sydney. The future of Greaton’s Ribbon project at Sydney’s Darling Harbour is still not clear.
Article source: www.afr.com
Brisbane7 years ago
Millions going into Brisbane homes with Asia boom 2.0 well underway
Property Management7 years ago
7 Common GST Mistakes On Property
Market Place8 years ago
Affordable housing in Queensland coastal suburbs
Ipswich6 years ago
Ipswich Proves Frontier In Affordable Housing
Brisbane6 years ago
Best Brisbane suburbs for rental returns
Residential6 years ago
Brisbane’s cheapest suburbs to rent
Market Place4 years ago
Affordable acreage suburbs within 20km of the Brisbane CBD
Opinion4 years ago
Australia’s best place to invest is here in Queensland