2013 Autumn
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THE PROPERTY REVIEW<br />
<strong>Autumn</strong> Quarter <strong>2013</strong><br />
www.towerlondon.com<br />
1
Summer Quarter 2012- <strong>2013</strong><br />
Message From John Tower<br />
4-5<br />
The property market is being<br />
stimulated by investors.<br />
Refurbishing Properties 6<br />
Depreciation 6<br />
What can Tower & London do for you? 7<br />
Residential Sales 8-17<br />
Residential Leasing 18-21<br />
What Drives Yields? 22-23<br />
Commercial Sales 24-25<br />
Commercial Leasing 26-27<br />
Our Offices 28<br />
Enquiries regarding this magazine should be made to:<br />
Tower & London<br />
38 Alfred Street, Milsons Point NSW 2061<br />
Phone: (61) 2 9956 6500 Fax (61) 2 9956 6522<br />
Email: reception@towerlondon.com<br />
Disclaimer:<br />
The information contained in this publication is for general information purposes only. Readers are advised that while an earnest effort has been taken to<br />
ensure the information in this document was obtained from reliable sources, Tower & London gives no guarantees or warranties, written or implied, over<br />
the accuracy of the information provided. Tower & London Pty Limited disclaims all responsibility for any loss or damage suffered as a result of the use of the<br />
contents of this publication. The views expressed in this publication are those of the writers and do not necessarily reflect the views of the publisher.<br />
Photography kindly supplied by Lionel Tregret (for contact details please contact Tower & London).<br />
THE PROPERTY REVIEW<br />
A quarterly magazine<br />
published by<br />
Tower & London<br />
2 3
The property market is being stimulated by investors.<br />
Confidence is returning to the property market largely as a result of interest rate reductions; in fact, it<br />
generally started late last year when we noticed offers matching the asking price were coming in soon<br />
after the property was listed. One measure that many commentators use is the Auction Clearance<br />
Rates: in February and March <strong>2013</strong> these rates in Sydney were 65% and 64% respectively, according<br />
to Domain’s APM. Overall, Sydney’s house prices have increased slightly over the past 12 months from<br />
December 2012; yet, home unit prices increased by about 6% over the same period, this could also<br />
be attributed to increase in sales<br />
of, the usually higher priced, new<br />
developments.<br />
The same pattern is followed<br />
in Sydney’s Lower North shore<br />
property where the house values<br />
increases have been modest<br />
over the same period above,<br />
unit prices have increased at a<br />
higher pace; for example, in the<br />
North Sydney Local government<br />
area, prices jumped by 8%<br />
according to figures obtained<br />
from REINSW Property Profile.<br />
These figures will have to be<br />
seasonally adjusted, but it is<br />
a marked increase in values,<br />
and more interestingly over a<br />
relatively short period of time,<br />
largely the second half of 2012.<br />
Despite these encouraging<br />
figures, The December 2011<br />
base figures were an aberration<br />
$1,000<br />
$1,000<br />
2,500<br />
2,000<br />
1,500<br />
1,000<br />
500<br />
House Sale Prices<br />
-<br />
Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12<br />
North Sydney 990 1,135 1,130 1,300 1,258 1,201 1,186 1,215 1,200 1,195 1,276 1,400 1,362 1,452 1,475<br />
750<br />
700<br />
650<br />
600<br />
550<br />
500<br />
450<br />
Mosman 1,950 2,050 2,000 2,150 1,988 2,110 2,285 2,350 1,850 2,010 1,780 2,175 2,010 2,030 2,050<br />
Willoughby 1,150 1,164 1,250 1,312 1,345 1,285 1,250 1,301 1,327 1,240 1,250 1,235 1,230 1,250 1,265<br />
Apartment Sale Prices<br />
400<br />
Mar-<br />
Mar-<br />
Mar-<br />
Jun-09 Sep-09 Dec-09 Jun-10 Sep-10 Dec-10 Jun-11 Sep-11 Dec-11 Jun-12 Sep-12 Dec-12<br />
10<br />
11<br />
12<br />
North Sydney 519 550 610 635 645 616 630 620 619 598 590 625 621 627 640<br />
Mosman 529 527 620 695 603 643 645 651 618 610 570 622 623 640 655<br />
Willoughby 499 520 563 570 600 581 582 600 605 600 570 580 580 585 600<br />
in my view because they dipped in December and<br />
then quickly bounced back in March 2012 in the<br />
three lower north shore local government areas<br />
we cover in this report. When the March <strong>2013</strong><br />
figures are released, we’ll have a more informed<br />
look at the previous 12 months movement, then<br />
the figures will probably show a slower rate of<br />
increase; albeit, an definite increase.<br />
One can only explain this increase in values by<br />
the increase of number buyers returning to the<br />
market; and perhaps the lack of properties on the<br />
market to satisfy this new level of demand; but,<br />
what we have found to be of substantial increase<br />
is in the property investor segment; particularly, in<br />
the $500,000 to $1million bracket for apartments,<br />
near the railway stations in good buildings. In the<br />
September quarter 2012, I reported ever so slight<br />
increases in property values and more or less<br />
pronounced the bottom of the market had been<br />
reached earlier that year. This was partly because<br />
investors had begun enquiring, making low offers,<br />
and being prepared to negotiate a reasonable sale;<br />
those early investors have, by now, already saved<br />
their Stamp Duty as there values have increased<br />
enough to cover their purchasing expenses.<br />
Investors drive these types of properties that<br />
attract quality tenants; when they’re not buying,<br />
property values stagnate. As interest rates<br />
tumbled over the term of 2012; rents increased<br />
steadily during that period, and the year before,<br />
despite doldrums in sales. This combination of<br />
rising rents and reduction in interest rates usually<br />
passes unnoticed for about six months to a year;<br />
the cleaver investors can sense it, and pick up a<br />
couple of bargains; and then, the rest will be in<br />
on the action. Until, what we saw in 2003, where<br />
some solicitors and accountants from the suburbs<br />
where colluding with developers to sell to their<br />
clients investment properties will guaranteed<br />
returns, that would never be achieved once the<br />
guarantee period had expired, leaving them well<br />
short of servicing their loans; culminating in forced<br />
sales. Lastly, right at the tip of the cycle: property<br />
spruikers appear, selling sham developments<br />
to mums and dads in high pressured sales<br />
environments.<br />
Six months have definitely passed since investors<br />
started buying again, and as mentioned, the<br />
cleaver ones had started earlier. A full quarter in<br />
<strong>2013</strong> has passed, with a high percentage in auction<br />
clearance; asking prices are being matched on<br />
Private Treaty sales; and the early signs are that<br />
values have continued to creep upwards. We are<br />
well into the year now, there’s still a shortage of<br />
properties at around the popular $1 million mark.<br />
Investors are well and truly stimulating the market.<br />
John Tower<br />
M.D. Tower & London<br />
Licensed Real Estate Agent<br />
Registered Property Valuer<br />
4 5
Refurbishing Properties<br />
Are you the owner of an investment property that has seen<br />
better days? It may be time to think about refurbishing your<br />
property to maximise your potential income.<br />
Refurbishing your investment property has many benefits<br />
beyond the pure cosmetic. A well designed, well maintained<br />
refurbishment can increase the immediate rental value of<br />
the property, impact the quality of tenants you attract, and<br />
influence the value of the property if you decide to sell.<br />
Whilst refurbishing may seem daunting, with large upfront<br />
expenses, it doesn’t have to cost a fortune. Simple changes<br />
such as new light fittings, carpet or a fresh coat of paint, are<br />
affordable and are the best ways to add quick value to your<br />
property. Similarly, giving your kitchen or bathroom a quick<br />
facelift with new doors and handles can drastically change<br />
the look of a room.<br />
In addition to increasing the rental value of your property,<br />
a well presented & well maintained property will not only<br />
increase the your rental value, more importantly it will<br />
impact on the quality of applicants you receive and also can<br />
eliminate lengthy vacancy periods between tenancies.<br />
Regardless of the size of your refurbishment project, any<br />
expenses relating to updating your investment property not<br />
only increase the property’s value, but also increase your<br />
depreciation allowances, meaning that you can claim back<br />
on expenses in the future.<br />
Before<br />
Jessica Brincat<br />
Property Consultant<br />
Tower & London<br />
After<br />
Depreciation<br />
Almost 80% of property investors (www.bmtqs.com.au)<br />
are missing out on thousands of dollars in depreciation<br />
deduction from their rental property. In the current<br />
economic climate, it is important for the investors to obtain<br />
the greatest return from their investment property.<br />
There is a common misconception that only new properties<br />
are eligible for depreciation. This is not the case. Whilst<br />
it is true that new properties attract higher returns<br />
of depreciation, older properties can produce attractive<br />
returns also. In fact, in 99% of cases (www.austtaxonline.<br />
com.au), a deduction of some tangible value is attainable.<br />
As a building gets older and items within it wear out, they<br />
depreciate in value. The ATO allows Property Investors<br />
to claim a deduction related to the building and plant and<br />
equipment items it contains. This deduction essentially<br />
reduces the investment property owner’s taxable income<br />
– they pay less tax!<br />
All ATO specified plant and equipment items as well<br />
as building write-off allowance (where the building qualifies)<br />
can be claimed. Plant and equipment items are basically<br />
items that can be ‘easily’ removed from the property<br />
as opposed to items that are permanently fixed to the<br />
structure of the building. Plant items include mechanically<br />
or electronically operated assets, even though they may<br />
be fixed to the structure of the building. Some examples of plant<br />
and equipment items include: hot water systems, carpets,<br />
blinds, ovens, cooktops, rangehood, garage door motors,<br />
air conditioning, and free standing furniture. The building<br />
write-off allowance is based on historical building costs<br />
of the building and includes the bricks, mortar, walls,<br />
flooring, wiring etc. From the date of construction<br />
completion, the ATO has determined that any building<br />
eligible to claim depreciation has a maximum effective life<br />
of 40 years. Therefore, investors can claim up to 40 years<br />
depreciation on a brand new building, whereas the balance<br />
of the 40 year period from construction completion<br />
is claimable on an older property.<br />
Sophie Wang<br />
Accountant<br />
Tower & London<br />
What can Tower & London do for you?<br />
Executive Leasing<br />
The main thrust of the business is its leasing department. The majority of the residential leases are negotiated<br />
to company executives, general managers and diplomats. The properties leased are middle level to exclusive<br />
apartments, most with prime harbour views. Many major Australian and international companies have entered<br />
into leases with Tower & London.<br />
Property Sales<br />
Apart from considerable private treaty and auction experience Tower & London assist in decorating the property<br />
for sale or auction in order to realise the highest possible sale price. The sale price often exceeds their valuation.<br />
Tower & London have sold every property listed within the exclusive agency period.<br />
Property Management<br />
Our property management team is focused on delivering the highest quality of customer service and in turn<br />
ensuring our clients’ interests are a top priority. At Tower & London we have a full time Trust Account who is<br />
dedicated to ensuring our clients financial matters are given the attention they deserve.<br />
Property Refurbishment<br />
Tower & London manage small refurbishment projects. Often apartments in prime locations require upgrading<br />
in order to maximise returns and increase owner’s equity. Over the years, Tower & London have accumulated an<br />
efficient team of tradespersons to undertake such projects with high quality and care.<br />
Valuations<br />
Property valuations for any purpose are prepared within 48 hours. Expert advice is provided on many technical<br />
issues concerning property values. Comprehensive feasibilty studies and Discounted Cash Flow analysis (DCF)<br />
are conducted on small to medium developments and refurbishment projects.<br />
Commercial Sales and Leasing<br />
Tower & London has a dedicated commercial department specialising in sales, leasing and management of<br />
commercial offices, industrial and retail premises. Our clients love the prompt efficient service they receive as<br />
we treat them like a big fish in a small school. No property is too big or too small, from small office suites to large<br />
industrial facilities. John Wood can tailor a sales or leasing campaign to put the focus on your property.<br />
6 7
Residential Sales<br />
709/2 Dind Street, Milsons Point<br />
For Sale $1,350,000<br />
Residential Sales<br />
Spectacular Harbour Views From The Pinnacle<br />
The Pinnacle is a luxuriously appointed modern building in prime location in<br />
Milsons Point, with first class amenities and 24 hour concierge. Set in midlevels,<br />
this superb 2 bedroom apartment enjoys sweeping harbour views<br />
from every room; the harbour bridge, in full view, is prominent from every<br />
window; like a post card from the living room. Two marble bathrooms, the<br />
master is lavish; and a delightful kitchen with quality fittings and stone<br />
benches. The balcony, accessed from the living room and the main bedroom,<br />
is private, sheltered and capacious with a great view. Not just car space, but<br />
a separate lock-up garage on title.<br />
2 2<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
1<br />
8<br />
9
Residential Sales<br />
2003-<strong>2013</strong>/30 Glen Street, Milsons Point<br />
For Sale $900,000<br />
11/1 Harbourview Crescent, Milsons Point<br />
For Sale $1,700,000<br />
Residential Sales<br />
Dual Apartment With Spectacular Views<br />
SOLD<br />
Mirvac on Lavender Bay<br />
The Colonnades is a famous building located diagonally across the park from<br />
Milsons Point station; and it comes complete with resort style amenities.<br />
This dual key apartment occupies the 20th floor capturing spectacular views<br />
of the harbour and the Opera House from the rounded point of the building;<br />
resembling the fabulous buildings of a bygone era in New York. Internally<br />
this cleaver property has two separate flats, in fact most of them on this side<br />
of the building were designed to this type, but few have such spectacular<br />
views. Currently returning about $1,000 per week; an impressive and solid<br />
income, at a fair and reasonable asking price.<br />
2 2 1<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
Away from the bustle of Milsons Point, opposite Clark Park there is an icon<br />
in the area: Helmspray, is one of the original quality buildings in Lavender<br />
Bay/Milosns Point area developed by Mirvac, arguably, Australia’s best<br />
development company; a relatively small well-built block, substantially<br />
owner occupied, with another access form the side lane to Milsons Point<br />
station. Unit 11 is perfectly positioned to capture pleasant views of Lavender<br />
Bay and the tranquil sounds of ropes ringing the boat masts. Accommodation<br />
comprises three bedrooms with ample hanging storage, two superbly<br />
renovated bathrooms, a quality kitchen with breakfast area, semi enclosed<br />
dining room, lounge and all the bedrooms are wrapped in balconies, laundry<br />
and storage.<br />
3 2 2<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
10<br />
11
Residential Sales<br />
1205/38 Alfred Street, Milsons Point<br />
For Sale $1,350,000<br />
507/2 Dind Street, Milsons Point<br />
For Sale $1,000,000<br />
Residential Sales<br />
North Eastern Aspect In Port Jackson Tower<br />
A Quintessential Milsons Point Apartment<br />
Port Jackson Tower is a tightly held quality building in a perfect a location<br />
in Milsons Point. Apartment 1205 is ideally positioned, high on the north<br />
eastern side of the building; bathed in sunshine in winter; floor to ceiling<br />
glass walls wrapped by balconies with some main harbour views. Three<br />
bedrooms, all with built-in; two bathrooms, breakfast area in the kitchen,<br />
laundry and ample storage, lends this apartment to a very comfortable<br />
home. The building: one of the best managed in the area, has a great indoor<br />
lap pool and gym/sauna facilities. Two side-by-side parking spaces on title<br />
and ample visitor parking. Freshly painted and updated, ready to move in;<br />
this property is an absolute gem.<br />
3 2<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
2<br />
The Pinnacle has been described as “the benchmark in Architectural<br />
Excellence this level of quality certainly ranks it as one of the best buildings<br />
in Milsons Point; ideally positioned at the edge of the high-rise precinct, with<br />
resort like facilities including a lap pool and a great gym. This elegant two<br />
bedroom apartment has a massive living area finished with solid parquetry<br />
timber floors spanning 8.4 meters, on one end is the kitchen on the other a<br />
large window with diagonal views of the western end of the harbour. Two<br />
fully fitted bedrooms with ample storage, the second is larger than most;<br />
two marble bathrooms that only pictures do justice; the kitchen is a delight<br />
with quality appliances, a square useful balcony and a lockup garage.<br />
2 2 1<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
12<br />
13
Residential Sales<br />
611/88 Berry Street, North Sydney<br />
For Sale $540,000<br />
6/187 West Street, Crows Nest<br />
For Sale $420,000<br />
Residential Sales<br />
Stylish One Bedroom in North Sydney<br />
Located on the edge of North Sydney in the “Harbourwatch building, this top<br />
floor one bedroom apartment boasts modern spacious interiors combined<br />
with an ideal location, only moments from the heart of North Sydney’s CBD<br />
and a short drive over the bridge to the city.<br />
The property includes a generous bedroom with built in wardrobes, modern<br />
kitchen with combined living and dining area, well-appointed bathroom and<br />
balcony capturing water views over Neutral Bay.<br />
SOLD<br />
1 1<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
1<br />
Newly Refurbished One Bedroom Apartment<br />
With Lock Up Garage<br />
This bright and well maintained one bedroom apartment is located in a<br />
quiet yet convenient position within a small security building. The building<br />
is ideally located within walking distance to all amenities and offers rapid<br />
access to the CBD. The property has a balcony off the living room and lockup<br />
garage.<br />
SOLD<br />
1 1 1<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
14<br />
15
Residential Sales<br />
401/206 Ben Boyd Road, Neutral Bay<br />
For Sale $485,000<br />
902/12 Glen Street, Milsons Point<br />
Undisclosed<br />
Residential Sales<br />
Spacious & Bright One Bedroom Apartment<br />
With Sunroom<br />
Located in a prominent medium rise building in the heart of Neutral Bay, this<br />
spacious one bedroom apartment with sunroom would make a perfect first<br />
home, or an ideal investment. Featuring a modern kitchen, internal laundry,<br />
open living room with the added space of an adjoining sunroom. The<br />
bedroom is perfectly positioned with sweeping views across Neutral Bay.<br />
Situated in a secure, well located building with beautiful gardens and<br />
outdoor pool, the property includes one secure car space and is minutes<br />
away from Neutral Bays fabulous shopping and dining district.<br />
SOLD<br />
1 1<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
1<br />
Modern Apartment with Great Views<br />
Large and modern one bedroom apartment with great views over Lavender<br />
Bay. The property features a generous bedroom with built in robes, a well<br />
appointment bathroom plus powder room, beautiful timber floors and an<br />
expansive balcony to take in the wonderful views of Lavender Bay.<br />
Secure parking for one car, gym & pool in building<br />
SOLD<br />
1 1 1<br />
Details and Viewing:<br />
John Tower or Jessica Brincat<br />
Phone: 9956 6500<br />
Email: reception@towerlondon.com<br />
www.towerlondon.com<br />
16<br />
17
Residential Lease<br />
LEASED<br />
202/5 Harbourview Crescent, Milsons Point<br />
For Lease $2,000pw<br />
Brand New- Chic harbour front<br />
apartment<br />
LEASED<br />
501/20 Alfred Street, Milsons Point<br />
For Lease $2,500pw<br />
Residential Lease<br />
Spectacular Views From ‘The Point’<br />
Situated on the second floor of Milsons Point’s newest<br />
development, Halcyon, this is a truly impressive apartment<br />
offering style & luxury as well as a level of appointment<br />
suitable for the most discerning executive.<br />
Located on the picturesque Lavender Bay, the property<br />
offers spectacular views & sits only minutes from all that<br />
one of the world’s most desirable cities has to offer.<br />
Open plan living areas lead seamlessly onto the spacious<br />
balcony with unsurpassed views of Sydney Harbour.<br />
Occupying the premium corner position in The Point<br />
development, this is a truly impressive apartment offering<br />
award winning design and luxurious appointment. Floor<br />
to ceiling glass encases the open plan living area providing<br />
jaw-dropping Harbour Bridge & Harbour Foreshore<br />
views. The living area wraps around to the spacious open<br />
Winter Garden with unsurpassed views of the Harbour<br />
and Bradfield Park below, perfect for those lazy weekend<br />
brunches or relaxed entertaining.<br />
3 3 2<br />
3 3 2<br />
LEASED<br />
2301/37 Glen Street, Milsons Point<br />
For Lease $1,250pw<br />
Breathtaking Views Across the<br />
Harbour<br />
LEASED<br />
19 Bayview Street, Mcmahons Point<br />
For Lease $1,500pw<br />
Fabulous Harbour Views<br />
Situated on the 23rd floor of the Peninsula Tower, this<br />
three bedroom apartment encompasses magnificent<br />
views from every window. The property boasts generous<br />
open plan living spaces framed by two balconies opening<br />
up to sweeping views of Sydney Harbour stretching as far<br />
as the Blue Mountains. Featuring three bedrooms each<br />
with their own unique views, the master includes a walk<br />
in robe and ensuite, whilst the remaining bedrooms are<br />
equipped with built-ins.<br />
This prestigious two bedroom town house boasts priceless<br />
harbour views capturing both the iconic Sydney Harbour<br />
Bridge & Opera House. Watch the boats sail past from the<br />
entertaining deck or the beautifully landscaped courtyard.<br />
The split level townhouse offers spectacular views from the<br />
formal lounge & master bedroom. The spacious kitchen<br />
has a beautiful marble bench & European appliances as<br />
well as plenty of storage. The bathrooms are beautifully<br />
appointed, ensuite includes a spa bath. The property also<br />
includes a study, wine cellar, & parking for one car.<br />
3 2 2<br />
2 3 1<br />
18<br />
19
Residential Lease<br />
Residential Lease<br />
1707/30 Glen Street, Milsons Point<br />
This prestigious two bedroom apartment boasts serene harbour views<br />
over Lavender Bay captured by the beautiful floor to ceiling glass that<br />
encases the living room. The apartment offers a modern kitchen with<br />
hardwood floors, gas cooking, stainless steel Bosch appliances & plenty<br />
of storage as well as an internal laundry. The property has recently been<br />
updated with fresh paint and flooring.<br />
2 2 1 $850pw<br />
1204/38 Alfred Street, Milsons Point<br />
Located in the landmark building Port Jackson Tower this apartment<br />
features a large living area with, and floor to ceiling glass capturing<br />
amazing views. Two spacious bedrooms, large kitchen and bathroom,<br />
sunny balcony with Internal laundry & one security parking. This building<br />
offers a gym, sauna, pool and spa.<br />
2 2 1 $850pw<br />
604/8 Glen Street, Milsons Point<br />
This is a truly impressive fully furnished apartment offering style &<br />
luxury as well as a level of appointment suitable for the most discerning<br />
executive. The spacious open plan lounge and dining area has wonderfully<br />
high ceilings and opens to a fabulous entertaining deck with spectacular<br />
Lavender Bay views. Available for lease until NOV <strong>2013</strong><br />
2 2 1 $1,250pw<br />
908/12 Glen Street, Milsons Point<br />
This one-bedroom apartment is perfectly located, close to the harbour<br />
foreshore, cafes, ferry wharf, and Milsons Point train station. The<br />
apartment itself features a large bedroom, combined living & dinning,<br />
modern bathroom, and balcony. Building facilities include a swimming<br />
pool and gym.<br />
1 1 $480pw<br />
LEASED<br />
LEASED<br />
LEASED<br />
60 Upper Pitt Street, Kirribilli<br />
A Light and Airy One Bedroom in Neutral Bay. Enter a house brimming<br />
with classic Victorian charm and tranquility. The property offers formal<br />
lounge and dining areas with high ceilings, large windows capturing plenty<br />
of natural light. The house features a spacious kitchen, which is extended<br />
by a family room overlooking a magical, child-friendly rear garden.<br />
4 2 1 $1,200pw<br />
131/48 Alfred Street, Milsons Point<br />
Peaceful One Bedroom Apartment with views over Lavender Bay.<br />
This one bedroom unit situated in the heart of Milsons Point offers<br />
superb views over Lavender Bay. The property is furnished, and features a<br />
stunning balcony overlooking the harbour. In addition there is one security<br />
car space and the building offers a gym and indoor pool.<br />
1 1 1 $680pw<br />
1305/38 Alfred Street, Milsons Point<br />
Modern high rise building in the most prominent location in Milsons Point.<br />
3 bedrooms, 2 bathroom apartment perched on the 13th floor enjoying<br />
outstanding views of the Harbour & Kirribilli. Security building, balcony,<br />
internal laundry, , parking, pool, gym, spa & sauna facilities.<br />
3 2 1 $950pw<br />
34B/2 Brady Street, Mosman<br />
This immaculately presented spacious 2 bedroom apartment in the exclusive<br />
Bridlewood Gardens complex. Generous size open plan lounge and dining<br />
which flows out onto a fabulous under cover balcony making it ideal for<br />
alfresco dining and entertaining. Gourmet granite eat-in kitchen with gas<br />
appliances and dishwasher. Ducted air-conditiong and 2 security parking.<br />
2 2 1 $775pw<br />
LEASED<br />
LEASED<br />
LEASED<br />
20<br />
21
COMMERCIAL REAL ESTATE<br />
Commercial Sales<br />
What Drives Yields?<br />
Welcome to the commercial section of our<br />
<strong>Autumn</strong> Quarter edition of The Property Review.<br />
In this article we will look at some of the principal<br />
drivers of property yields that influence returns<br />
on commercial, industrial and retail property in<br />
Australia.<br />
The Australian Dollar<br />
In the short term the Australian dollar is supported<br />
by a strong association with Asian markets, the<br />
strongest growth region in the world. There has<br />
been a 400% increase in merchandise exports<br />
from Asia since the late 1980s. This has resulted<br />
in an increasing demand for our commodities<br />
resultant in stronger terms of trade.<br />
In addition to our stronger terms of trade our<br />
much higher interest rates compared to the US<br />
dollar reflect the higher return position of the<br />
Australian economy. Given monetary policy in the<br />
US and Europe and, very recently, the dramatic<br />
devaluation of the Japanese yen, this position is<br />
likely to persist for the medium term.<br />
Overall the above influences indicate a relatively<br />
stable Australian dollar with any downside<br />
counterbalanced by an improvement in the<br />
affordability of our exports.<br />
Borrowing and some technical stuff...<br />
NTA and REITs<br />
Real Estate Investment Trusts , “REITs”, are listed<br />
property investment entities which can be traded<br />
on stock exchanges. Net Tangible Assets “NTAs”<br />
are calculated as the total assets of an entity,<br />
minus any intangible assets such as goodwill,<br />
patents and trademarks, less all liabilities and the<br />
par value of preferred stock. Also known as “net<br />
asset value” or “book value”.<br />
The property sector has seen a reduction in<br />
REIT leveraging to less than 30% during the last<br />
5 years. This has resulted in lower borrowing<br />
costs and an increase in price to NTA ratios.<br />
The lack of confidence in growth in the non<br />
mining sector has held back demand for increases<br />
in leverage notwithstanding a general trend of<br />
borrowing costs falling below property yields<br />
across most sectors.<br />
Re-emergence of property as a preferred<br />
investment<br />
The post GFC period saw a strong demand for<br />
secure deposit and cash linked offerings plus<br />
a higher level of super fund inflow into deposit<br />
accounts. The resulting fall in deposit interest<br />
rates plus stable property returns is likely to<br />
attract investors back to the property sector. This<br />
sentiment is reflected in strong REIT returns.<br />
Super funds looking to fund long term annuity<br />
streams will encourage the creation of<br />
development/financial models to meet this<br />
demand<br />
Supply<br />
The “boom and bust “ cycle which afflicted the<br />
economy in previous cycles has been largely<br />
avoided in the post GFC due to an absence of over<br />
supply of investment property. Non residential<br />
approvals indicate this situation will continue for<br />
at least the next two to three years.<br />
Despite falling borrowing costs, stable rental<br />
growth and moderate market confidence there<br />
is little to indicate an improvement in supply.<br />
Once growth expectations take a more positive<br />
outlook the impact on capital values and yields<br />
will begin to improve. There is also an expectation<br />
of improved activity once the tight financial<br />
conditions ease.<br />
Property yields<br />
Falling bond yields and stable rental returns have<br />
resulted in below average yields in the industrial<br />
and office markets. There are expectations that<br />
the yields will increase in the medium term<br />
however net face rental growth has exceeded<br />
long term averages in the office and industrial<br />
sector indicating a built in slowing of forward<br />
pricing and yield.<br />
The retail sector is heading into largely unknown<br />
territory as the impact of on line shopping<br />
on demand for speciality retail space is fully<br />
understood and addressed. Lower demand for<br />
retail space will inevitably result in longer vacancy<br />
periods which will impact on yield and growth<br />
expectations.<br />
Yields by Sector<br />
Sep 12<br />
20 Year<br />
Average<br />
Retail – Regional Centre 6.1% 7.0%<br />
Prime CBD Office 7.5% 7.5%<br />
Industrial – Grade A 8.5% 8.8%<br />
Source: CBRE<br />
Net Face Rental Growth<br />
Last 12<br />
Months<br />
20 Year<br />
Average<br />
Current Growth<br />
Relative to 20<br />
Year Average<br />
Retail 1.8% 3.6% -1.8%<br />
Office 3.9% 2.6% 1.3%<br />
Industrial 3.1% 1.3% 1.8%<br />
Source: CBRE<br />
In summary falling lower bond yields and falling<br />
interest rates are indicative of softer growth<br />
expectations and stable property yields. Current<br />
conservative market pricing should ensure a<br />
stable market in the foreseeable future resulting<br />
in limited downside to capital values.<br />
I hope this gives you an insight into the business<br />
end of property investment and some of the<br />
more technical aspects of that market. In the<br />
next edition we will see how this affects the<br />
commercial market on the lower north shore,<br />
particularly the most popular and affordable local<br />
strata commercial, industrial and retail sector.<br />
Until then remember “An investment in knowledge<br />
pays the best interest.” - Benjamin Franklin<br />
John Wood<br />
Licensed Real Estate Agent<br />
Commercial, Industrial and Retail<br />
22<br />
23
Commercial Sales<br />
G01/15 Atchison Street, St Leonards<br />
For Sale $560,000 + GST<br />
Lot 12/26 Ridge Street, North Sydney<br />
For Sale $165,000 + GST<br />
Commercial Sales<br />
Ground Floor Professional Suite<br />
-Super Super Investment<br />
Small Office - Big Ideas<br />
•Near New Building...<br />
•74 Sq Metres<br />
•Extensive fit out consisting of reception area,<br />
meeting room, general office area and large private<br />
executive office<br />
•Own Kitchenette<br />
•Maximum Exposure To Atchison Street<br />
•Fully Leased Until 31st March <strong>2013</strong><br />
•Gross Annual Return $36065 Gst Exclusive<br />
•33 Sq metres<br />
•Functional fit out<br />
•Character building<br />
Consider the opportunity to join the corporate world at an<br />
amazing $165000 (+ GST) entry point. This is a character<br />
building with an eclectic mix of owners and occupiers.<br />
Level 6 location enjoys a broad vista of Sydney all the way<br />
to Botany Bay!<br />
Total<br />
Area<br />
74sq<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
56 Beaumont Road, Mount Kuring-Gai<br />
For Sale $36,160 + GST<br />
Total<br />
Area<br />
33sq<br />
Parking<br />
Available<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
9/9-11 Chaplin Drive, Lane Cove<br />
For Sale $625,000 + GST<br />
Total<br />
Area<br />
3460sq<br />
Vacant<br />
Site<br />
Last Large Vacant Block In<br />
Mt Kuring-Gai<br />
•Zoned general industrial<br />
•Ideal contractors yard<br />
•Near level approx 3460 sq metres building area<br />
•Very secure site<br />
•7 Metre wide access to beaumont road<br />
•High side location<br />
The last opportunity to acquire a substantial site in the<br />
mt kuring-gai industrial estate. Mostly vacant land with<br />
existing approx 216 sq metre metal working/welding shed<br />
at rear - council approved<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
24<br />
25<br />
Total<br />
Area<br />
192sq<br />
4<br />
High Tech Industrial Unit- Hugely<br />
Motivated Vendor- Security Estate<br />
Modern high tech industrial unit located in the Lane Cove<br />
Industrial area. It consists of ground floor warehouse<br />
area (104 sqm) and mezzanine level air conditioned office<br />
space (88 sqm). The total strata plan area is 248 sq metres<br />
inclusive of car parking - 4 car spaces in total.<br />
Chaplin Drive is a precinct of modern, recently developed<br />
industrial buildings and has easy access to the Gore Hill,<br />
M2 & M7 freeways. All major Sydney industrial areas are<br />
serviced by this network<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com
Commercial Leasing<br />
302/161 Walker Street, North Sydney<br />
For Lease- Realistic Market Expectations<br />
Shop 4/59-67 Strathallen Avenue, Northbridge<br />
For Lease $48,000 + GST<br />
Commercial Leasing<br />
Sharp Fit Out - Sharp Pricing<br />
Main Road Retail With All Day Parking<br />
Retail Exposure At Office Rental<br />
Total<br />
Area<br />
125sq<br />
1<br />
•125 sq metres approximately<br />
•Internal Kitchen<br />
•Boardroom<br />
•Reception<br />
•General Office Area<br />
•2 Offices/Meeting Rooms<br />
This 125 sq metre office has a lot to offer with a very<br />
versatile layout. Walker House is conveniently located near<br />
Berry Street. Security car space in basement of building.<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
Total<br />
Area<br />
91sq 7<br />
•91 sq metres<br />
•Central location<br />
•10 minutes to the 3 cbds<br />
•Modern refurbished centre<br />
•Look at the rent only $48000 pa + gst<br />
Looking for exposure and client parking??<br />
Look no further!!<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
47/221 Miller Street, North Sydney<br />
For Lease $20,800 + GST<br />
Shop 1/144-150 Liverpool Street, Darlinghurst<br />
For Lease $39,300 + GST<br />
Top Of The Town<br />
Level 13, 221 Miller Street<br />
Prime Street Frontage Retail<br />
•52 Sq Metres<br />
•Quality Furniture Included<br />
•2 Offices Reception Utility Room<br />
•Massive Window Space And Natural Light<br />
•Top Quality Executive Suite<br />
•Busy Precinct<br />
•50 Metres From Oxford Street<br />
•Good Exposure and Signage<br />
•Long Term Lease Available<br />
•Approximately 32 sq metres<br />
1 Security basement car space @ $380 pcm + levy + gst<br />
This is a great opportunity for the switched on retailer to<br />
capitalise on this inner city location. Busy yet friendly with<br />
an eclatic mix of bypasses and neighbours.<br />
Total<br />
Area<br />
52sq 1<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
Total<br />
Area<br />
32sq<br />
Details and Viewing:<br />
John Wood<br />
Phone: 9956 6500<br />
Email: commercial@towerlondon.com<br />
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27
Our Offices<br />
SYDNEY<br />
38 Alfred Street,<br />
Milsons Point, NSW 2061<br />
Sydney, Australia<br />
Phone: (612) 9956 6500<br />
Fax: (612) 9956 6522<br />
HONG KONG<br />
6/F Luk Kwok Centre,<br />
72 Gloucester Rd,<br />
Wan Chai, Hong Kong<br />
Phone: (852) 2918 8788<br />
Fax: (852) 2918 9808<br />
•Executive Leasing<br />
•Property Sales<br />
•Property Management<br />
•Property Refurbishment<br />
•Valuations<br />
www.towerlondon.com<br />
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