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Cedar Woods plans strata office for western suburbs

Artist impressions of Newton Apartments by Cedar Woods at Williams Landing.Perth-based developer Cedar Woods will launch a 5000 square metre strata office development next year and is planning a 50-room hotel at its Williams Landing estate in Melbourne’s west to cater for growing employment demand.
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Cedar Wood’s Victorian manager Nathan Blackburne said the strata building, to be completed in 2017 subject to planning approvals, followed the successful take-up of a smaller office project at 100 Overton Road.

The new building will be located next to the estate’s shopping centre, which will undergo a $6.5million expansion to include a Future Kids childcare centre and 1200 square metres of retail space.

Research commissioned by Cedar Woods suggests Williams Landing will host 13,000 employees within the next 15 years, a growth in white collar workforce spurred by its location in Wyndham, one of ‘s fastest expanding municipalities.

Few developers are willing to risk building large, speculative suburban office projects.

About three years ago MAB Corporation constructed a 4350-square-metre strata office at its University Hill project in Bundoora, following the earlier success of two similarly-sized buildings.

In Melbourne’s more-active south-eastern office market, a recent pre-commitment from BMW’s financial services arm will allow Frasers Property, formerly known as Australand, to construct a 10,000 square metre, $51 million office in its Mulgrave Office Park.

BMW joins Mazda and healthcare products group BSN Medical as tenants in the three-hectare park.

Also in the south-east, the wealthy Spooner family signed leases in July with American consumer and commercial goods giant Newell Rubbermaid and German high-end appliance maker Miele in its Caribbean Park development in Scoresby.

“The research that we’ve undertaken and the initial development that we’ve completed has shown that there is that demand and that it can be done at a meaningful scale. It’s very much like what MAB did in the north. They pioneered major office development in the outer suburban areas,” Mr Blackburne said.

Williams Landing may be in the running to host a 3500 square metre office for VicRoads employees after Cedar Woods submitted a bid to construct the new building with 10+5+5 year lease terms, despite a stated government preference for the office to be in Sunshine.

The lack of office space in Melbourne’s west was coupled with a lack of accommodation, Mr Blackburne said.

“We’re talking to a number of accommodation providers with the hope of developing a hotel within the next few years,” he said.

When complete, the estate’s commercial hub will have between 40-50 buildings up to five storeys tall, a third will be offices and the remainder a mix of apartments, retail space, bulky goods stores and a childcare centre.

The ASX-listed mid-tier developer has active projects in St Albans, Footscray, Clayton South and in Queensland’s Upper Kedron, where it expects to launch the 228 hectare 1000-lot infill Ellendale estate early next year.

ISPT joins Villawood in Queensland residential venture

Villawood’s Rory Costelloe and Tony Johnson have signed a joint venture with ISPT, Photo: Pat ScalaSuper fund investor ISPT will increase its exposure to an upswing in Queensland’s residential land market after signing a joint venture with Villawood Properties to develop part of its Helensvale project.
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The 600-lot deal for a portion of the south-east Queensland project will have an estimated end value of $400 million and is the second tie-up between privately-owned Villawood and ISPT which is investing funds on behalf of Hostplus Super.

The deal comes as ISPT is said to be the front runner to buy into one of ‘s best performing malls, World Square in the heart of Sydney’s CBD, at a price exceeding $280 million.

ISPT, with $11 billion in funds under management, formed a similar joint venture in 2007 on Villawood’s Alamanda Project in Melbourne’s Point Cook.

Villawood, run by founder Rory Costelloe and joint director Tony Johnson, purchased the 86-hectare Gold Coast Country Club in Helensvale in August last year.

The site has capacity for nearly 2000 dwellings and an overall end value in excess of $1 billion.

ISPT’s development manager David McFadyen said the 50-50 joint venture covered land in southern sector of the Helensvale site which is expected to be released next year.

“We have an ability to step into the central portion as well at a later date,” Mr McFadyen said.

“Strong demand fundamentals in the south east Queensland market and the property’s unique positioning with immediate access to a range of amenities and transport infrastructure made this investment highly desirable,” he said.

Colin Keane, director of the National Land Survey Program, said greenfield developments in south-east Queensland were selling on an average of 913 lots per month at a median price of $258,000.

“That is a near record high,” Mr Keane said.

Between 2008 and 2013, after the global financial crisis, the area’s land sales averaged 500 lots per month.

Growth was being driven by larger projects like Lend Lease’s Springfield Lakes estate near Ipswich and Yarrabilba in Logan and Stockland’s Bells Reach project on the Sunshine Coast that were able to deliver more land at lower price points, he said.

Melbourne’s median land lot price stands at a more affordable $211,000, while Sydney’s is the most expensive at $485,000.

The joint venture’s Helensvale land is an established suburb about 15 kilometres north of Surfers Paradise and 63 kilometres south of the Brisbane. Nearby is a Westfield shopping centre.

Villawood expects to launch up to 10 new projects next year and recently announced it will include childcare facilities upfront in all its new communities.

ISPT has been an active residential investor, pouring funds into six land and apartment projects under mandates from n Super and Hostplus over the last 12 months.

Mr McFadyen said ISPT had “pulled back” from Melbourne CBD apartment developments and would focus on building a residential land bank next year.

Kids exposed to domestic violence more likely to suffer sexual, physical abuse

Children who are exposed to domestic violence suffer similar effects to trauma and can struggle in adulthood. Photo: SuppliedChildren who are exposed to domestic violence are at higher risk of suffering sexual, emotional and physical abuse, according to a new study.
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The n Institute of Family Studies report, which will be released on Wednesday, also shows that children exposed to domestic violence from an early age are more likely to experience difficulties at school and have lifelong problems with social and cognitive development.

The report, Children’s exposure to domestic and family violence, draws on local and international research to examine the effects on children raised in abusive households.

It found young people who grew up around domestic violence were at higher risk of other forms of abuse, and that exposure to family violence was the leading cause of homelessness in young people.

“It affects their development in such a global fashion,” AIFS director Anne Hollonds said. “The problems are extensive and they go right across physical and mental wellbeing, cognitive development, which obviously affects academic achievement and employment.”

The study found child abuse often co-existed with domestic violence and that victims of persistent maltreatment in childhood suffered similar effects to trauma, which can lead to aggression, self-hatred and a lack of awareness of danger.

Ms Hollonds said the experience of children exposed to violence at home was not well understood and that a fragmented response meant the most vulnerable children were falling through the cracks.

“What we have is a fragmented patchwork of some services in some areas often operating in quite a siloed way,” she said.

“For example, domestic violence support for women might not always be focusing on the needs of the children. Similarly, adult services for mental health or drug and alcohol issues might not have a focus on the needs of dependant children.

“Unfortunately in some families the problems are multiple, it’s not just violence towards the other parent but there is also various kinds of abuse that the children directly experience. This multi-victimisation of children requires our urgent attention.”

The n Human Rights Commission released a report on Monday that found up to five children in every classroom had experienced or witnessed family violence.

The National Children’s Commissioner, Megan Mitchell, said children were the “invisible victims” of the domestic violence scourge and that growing up in an abusive household could have a devastating lifelong impact on a person’s mental and physical health.

She said children exposed to family violence might also feel they needed to defend the parent, or be the one to call police or an ambulance.

Crime statistics show Victoria Police were called to 65,400 family incidents in 2013-14 and that children were present in more than one-third of cases.

According to the n Bureau of Statistics, more than half of victims abused by their partner had dependent children in their care at the time, with that figure rising to 61 per cent in cases of abuse at the hands of former partners.

Ms Hollonds said a multidisciplinary approach to domestic violence across health, child protection and family services sectors was needed to help the most disadvantaged families, who are often dealing with complex problems but face the most barriers accessing help.

“We have a late reaction policy culture and find it difficult to co-ordinate across portfolios,” she said. “The key is acting earlier because often we don’t find out about the problems people are having until they’ve escalated to a very serious stage, and by then children will have been affected.”

New Chinan lottery could raise funds for heritage projects

The Opera House Lottery ran from late 1957 until 1986. About 86.7 million tickets were sold over the course of 867 draws, raising more than $105 million. Photo: Michele MossopOpera House Lottery kidnappingGamblers help fund Opera House birthday
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The federal government will consider introducing a national lottery – similar to the Opera House lotteries of the past – to fund the preservation of ‘s most precious places.

It will explore the feasibility of adapting Britain’s Heritage Lottery fund. Since it was launched in 1994, this lottery has raised more than $71 billion and funded more than 39,000 projects, that it says “make a lasting difference for heritage, people and communities.”

An n national heritage lottery is one of a range of funding initiatives that are outlined in the new n Heritage Strategy, a five-year plan that will be released at the Opera House on Wednesday by the Minister for the Environment Greg Hunt. It also includes plans to generate more publicity for nationally listed heritages sites by a more creative use of online storytelling.

Mr Hunt said the strategy would explore the potential for a national lottery that would benefit ‘s “magnificent heritage”.

Heritage management should be a “shared responsibility between national, state and local governments, private owners, businesses and the local community” , he said.

And protection of ‘s 100 world and national heritage-listed places was a pillar of the strategy, he said.

As well as national parks, these sites include: the Opera House; Hyde Park Barracks; and Bondi Beach in NSW; Port Arthur in Tasmania; Uluru in the Northern Territory; the Great Barrier Reef in Queensland; Flemington Racecourse in Victoria; and Canberra’s Old Parliament House.

A study of 15 sites estimated that they generated $15.4 billion in annual turnover, and employed around 79,000 people directly and indirectly.

The strategy paper acknowledges that “budget pressures” on the heritage sector have forced it to move towards more innovative funding measures, including crowd funding, partnerships with the private sector and targeted lotteries.

The Opera House, for example, has seen government funding drop and is investigating ways to raise more funds from the public.

A range of public lotteries in has encouraged gambling for “good causes”. The Opera House Lottery ran from late 1957, starting with tickets of £5 each, until it ended in September,1986. It sold 86.7 million tickets over the course of 867 draws, raising more than $105 million. In 2013, its 40th birthday celebrations were funded by special scratchies.

The Opera House Lottery became an institution in NSW, generating headlines about its power to transform lives – and not always for the better.

When Sydney actor Robert Levis won the Opera House jackpot of $200,000 in 1965, he said it set him up for life. He was “the richest man he knew,” he told the Herald.

In 1960 an eight-year-old Bondi boy Graeme Thorne was the first n to be kidnapped for ransom, and later murdered, when his parents won £100,000 in the 10th Opera House Lottery.

The odds of winning the Opera House Lottery were very long, and copped criticism from the church and others for encouraging gambling. The odds of winning the British jackpot recently got even longer.

Dr Mark Griffiths, the director of the International Gaming Research Unit and Professor of Gambling Studies, Nottingham Trent University, estimates the chances of winning the British lottery fund are one in 45 million after recent changes reduced a punter’s chance of winning.

“Does that make playing it a tribute to public innumeracy and totally irrational? Not necessarily. Lotto still offers a low-cost chance of winning a very large, life-changing amount of money … given the small cost involved; it’s a small price to pay for a big hope,” he wrote in The Conversation.

Frank Howarth, the national president of Museums , welcomed the idea of a lottery. He said the lack of funding at federal, state and local level for cultural and heritage institutions was very concerning.

In particular, organisations that relied on local government funding were really “feeling the pinch”.

The British lottery had been “immensely successful” in building a large number of cultural facilities that would otherwise not have been built, said Mr Howarth who was previously director of the National Museum of .

He warned that it was important that there was a strategy so that organisations that received lottery money for capital works also had funding to cover ongoing operational costs. Several projects funded by lottery money in Britain had closed because they didn’t have funding for operational costs.

When the Opera House Lottery ended, the then manager of the NSW Lotteries Bryne Smith told the Herald that the primary motivation to buy lottery tickets was to win money. “But a secondary reason is often the knowledge that the money spent on the ticket is going to a good cause,” he said.

Yet opposition to government lotteries like Britain’s heritage fund is usually more muted than the usual criticism of gambling.

“There seems to be a moral objection to the notion that people should be able to make bets at extremely long odds unless the proceeds are for a good cause,” said the Fundraising Institute in a submission to government many years ago.

What we can learn from the Packer siblings’ assets split

Kerry Packer is greeted at Sydney Airport by his children James and Gretel in 1977. Photo: Trevor DallenIf the Hancock-Rinehart feud over the family fortune shows how intergenerational wealth transfer can all go horribly wrong, the Packer family provides an example of how to do it well.
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When James Packer and his sister Gretel recently severed financial ties, a decade after the death of their father Kerry, the process was remarkably smooth and amicable.

Gretel Packer is now a billionaire in her own right after reaching a settlement with her brother over the division of assets and cash, essentially finalising their father’s will.

Steven Glanz, the lawyer and partner with Baker & McKenzie who acted for Gretel Packer in the settlement with her brother, says there are lessons in this for the rest of us.

Glanz has represented members of some of wealthiest and most prominent n families besides Gretel Packer, but he says good estate planning is critical for people from all walks of life.

He points out that is poised for the greatest intergenerational transfer of wealth over the next decades as the baby boomers age – the oldest of that cohort are about to turn 70.

At the same time there has never been more at stake. Over the last decade, older households have captured most of the growth in ‘s wealth that will be eventually handed onto their heirs.

A report by the Grattan Institute, released late last year, showed households aged between 65 and 74 are $200,000 wealthier than households of that age eight years ago, mostly due to increases in house prices.

Glanz says more “blended” families and more people with their own businesses mean that working out who gets what after we die is becoming more complex.

Those who do not do their estate planning properly risk splitting the family – setting sibling against sibling.

Glanz says there are three guiding principles that can help ensure a smooth handover of wealth that apply,regardless of the size of the assets.

First, it is very important to have a conversation with family members and make them aware of intentions and the reasons for dividing up the estate in a particular way.

“Many people feel uncomfortable with confronting their own mortality or don’t like having to tell one beneficiary they will not be getting as much as another,” Glanz says.

The consequences of parents not communicating their intentions with heirs is that the beneficiary who receives less is much more likely to direct their anger and disappointment at the sibling who receives more.

In Glanz’s experience, the second principle, is to try and make the heirs financially independent rather than financially interdependent on each other.

“What often happens is that someone builds a business, for example, of which they are very proud and they leave it to their kids,” he says.

“But their kids’ interpersonal relations are often challenging enough without adding the complexity of running a business between them.”

The third principle, which is even more important with the growth in blended families, is to treat all heirs equally.

“Children feel they are equally deserving and it is hard to try and displace that presumption,” Glanz says.

Wills are always contestable in the courts by anyone who feels they have missed out on what they regard as their fair share.

For parents, there is an incentive to get it right, Glanz says.

“You do not want your legacy to be a divided family and one where people dislike each other.”

Twitter: @jcollett_money

David Potts on money: the taxation of voluntary redundancy, and a fond farewell

The last time I was made redundant was a less pleasant affair than this one.
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was in deep doo-doo, made no less painful by the fact that I’d been forecasting it only to leap straight into it. That and I had no say in the decision.

Even though I’m always being mistaken for 63, I’m actually 64. The thing is, my 65th birthday is only a few months away and what with my employer offering me more to go away than stay, it was an offer I couldn’t refuse. Some would take it as a backhanded insult but really it was generously timed because if you take voluntary redundancy before you’re 65 the Tax Office feels sorry for you and taxes the payout more lightly.

My editor suggested I explain the ins and outs of the taxation of voluntary redundancies, which I thought might look a big self-indulgent, but then, as you know, that’s never stopped me. I’ll just say the first $9514 plus $4758 for each year of service is tax-free and the rest, up to $185,000 is taxed at 17 per cent. After 65 the lot is taxed – 17 per cent for the first $185,000 then 47 per cent.

Where was I?

Oh yes, my last hurrah. In this business you’re judged by your last story or column so the pressure’s on. That’s why I’m going to cheat and, in the spirit of John Farnham who never stops retiring, nor should he, return in a few days for Sunday’s final fling.

At least I’m leaving you with the shop in better shape than I did last time.

Although it had seemed such an obvious conclusion to draw considering interest rates had been jacked up to 18 per cent, oddly enough I was virtually on my lonesome warning about it. Incredibly, the economists and bureaucrats of the day – this was before they were so ingeniously dubbed econocrats – were fretting that growth and so inflation were out of control and the Reserve Bank was losing the plot which, in one respect, was right. The recession that followed was our worst in almost 30 years and, as it’s turned out, our only one.

Anyway I had quit my rarefied job as economics editor of The n to get my hands dirty as an editor of a brand new throwaway newspaper backed by real estate agents. This was in the wealthy eastern suburbs of Sydney in the middle of a property boom about to crash due to the recession I’d just warned about. Somehow we hung on for three years and although I was eventually out on my arse I had learned a lot about running a small business.

If I may say, this experience at the coalface allowed me subsequently to become the best in the business at tipping interest rates. I swear sometimes I know before the Reserve Bank what it’s going to do.

So, in what could well be famous last words, my tip is that rates will stay this low for years and possibly go lower.

I’ve also learned that the markets are more about psychology than economics. They have a mind of their own especially when you think you’ve pinned them down.

I love reading daily sharemarket reports purporting to rationalise the irrational. Apparently it was some obscure statistic that sets the market running one way or another. Hmm, unless everybody who bought or sold shares that day was asked, I don’t think so. Beside, over the years I’ve seen whole recessions that were subsequently airbrushed, I mean revised, away.

Trust me, give it long enough and the sharemarket always rises, though unfortunately that’s not to say every stock.

Like everything else, financial concepts move in and out of fashion. Outsourcing and downsizing are all the rage now, hence my own departure. It’s a fad.

Over the years I’ve rubbed shoulders with some of the richest people and one thing I’ve learned is that the rich really are different to you and me. One exception I’ll allow is Gerry Harvey, who is endearingly normal.

The rich put work first, are natural networkers, know how to use other people and hate paying tax. Come to think of it maybe they aren’t that different after all.

It was Andrew Clark who hired me and made me a better writer for a gig which was to go for 22 years before they found out about me. My first time around at Fairfax I owe to the late Paddy McGuiness, one of our great intellects, who rescued me from Treasury and honed my economic insights as Max Walsh taught me how to find a news angle.

This is an excuse to thank them but also remind you that to get on you must find yourself a mentor.

Somebody once confided he doesn’t understand most of what I write but he loves reading every word of it. I hope I’m the exception but in my experience supposed experts in finance who can’t explain simply what they’re on about tend not to know themselves. I mean it’s not rocket science.

But even if I only raised a chuckle now and then, I feel blessed.

I’ve met readers in the most unlikely places – from the Ghan in the middle of nowhere to a checkout chick at Coles – and loved it.

See you around.

Email: [email protected]上海龙凤论坛m,au Twitter: @moneypotts.

Weaker dollar dampens online shopping boom

Amazon fulfilment centre: The boom in digital shopping appears to slowing to a more moderate pace. Photo: Jeff SpicerShoppers will make some $2.8 billion in online purchases over the six weeks before Christmas, according to industry predictions, much of it on smart phones.
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Yet despite the spectacular rise of online retail in recent years, the boom in digital shopping appears to slowing to a more moderate pace.

This is partly because the weaker dollar has made overseas internet shopping dearer. But traditional “bricks and mortar” retailers are also fighting back against their online rivals by competing more aggressively.

As a consumer, it can be worth using this fierce competition between physical and online stores to your advantage, as many retailers are willing to match digital shops on price.

National Bank’s index of online sales shows ns spent $17.9 billion on online retail in the last year, but growth is slowing. Spending rose by 5.7 per cent in the past year, a far cry from around 2011, when it was booming by more than 20 per cent a year.

The exchange rate is one reason for the slowdown – the currency has slumped 13 per cent in the last year to about 73 US cents, pushing up the cost of overseas purchases, and the extras, such as shipping charges.

In fact, the share of our online spending that goes overseas is steadily declining, as this week’s graph shows. Overseas online retail is edging up by just 1.3 per cent a year, whereas the local online businesses are enjoying overall sales growth of 7.3 per cent.

But even though the glory days of cheap online imports are probably in the past, the rise of online shopping is still benefiting consumers in other ways.

For one, it has meant there is more choice, and convenience. As well, digital commerce has brought customers the added bonus of more competition, because it’s forcing the traditional retailers to compete more fiercely with their digital rivals.

NAB’s chief economist Alan Oster says more traditional retailers are fighting back against the online invasion by matching the lower prices, and that is another reason why online growth has slowed over the last few years.

For consumers, that means it can be worth checking out the prices of online stores, and then seeing if physical shops will beat or match it.

Officeworks, for instance, says its policy is to beat the offers of online stores just like other businesses, but it will take into account the cost of delivery. Many other “bricks and mortar” stores have a similar approach.

The weaker dollar may have taken some of the value out of overseas online shopping. But even so, the lasting effect of online retailing is likely to be sharper competition – and that’s a win for consumers.

NSW Government moves to tighten cosmetic surgery industry

Krystle Morgan said she was fearful for other young women who were not aware of the risks associated with cosmetic surgery. Photo: Greg TotmanThe NSW Government has moved to tighten regulation of the cosmetic surgery industry after a number of patients were rushed to hospital following breast enlargement surgery.
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Several patients have been transferred to hospital following procedures at private cosmetic surgery clinics in the last two years and at least three clinics are being investigated by the Health Care Complaints Commission.

The patients include Wollongong woman Krystle Morgan, whose lung was punctured during a breast enlargement at The Cosmetic Institute in Bondi last year and Amy Rickhuss, who went into cardiac arrest at the same company’s Parramatta clinic in January.

Doctors do not need to have specialised in plastic surgery to perform cosmetic surgery in NSW.  Cosmetic surgery practices only need to be licensed by the Private Health Facilities Act if patients are administered sedation that renders a patient unconscious or use certain types of anaesthetic.

A discussion paper that has been posted to the NSW Health website invites the public, stakeholders and industry for their views on whether a new class of regulation should be developed and how it should be defined.

Health Minister Jillian Skinner said her department was considering if further legislation of the cosmetic industry was required.

“Patient safety is paramount,” Mrs Skinner said.

“The discussion paper will assess whether current licensing requirements for facilities are adequate to protect patients.”

The Medical Board of is also reviewing the billion-dollar industry.

The Cosmetic Institute has declined to comment on individual cases, citing patient confidentiality, but has said its record is overwhelmingly one of safety.

Commercial property: Big deals keep on rolling

Melbourne’s Jam Factory on Chapel Street, bought by Newmark for $165 million. Photo: unknownThe commercial property market is poised for another bumper year as increasing business confidence, the falling n dollar and historically low interest rates drive investors.
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Transactions across and all sectors is expected to reach $35 billion in 2015, with local purchasers accounting for half of the investment.

Shopping centres, office towers, development sites and industrial assets have all recorded bumper results during the year.

Colliers International John Marasco said: “It’s been a perfect storm of record low interest rates, the falling dollar and the affordability of Melbourne when you benchmark it against not just Sydney but also Singapore and Shanghai.

“There’s been a real balance of local and offshore groups too.”

Some of the bigger deals have been done just this week. Private equity giant Blackstone is paying  $675 million for half of Southern Cross towers on Bourke and Exhibition streets. Earlier, China Investment Corporation paid $2.45 billion for the Investa Property Trust portfolio on a yield of 4.9 per cent, and Lang Walker is hoping to better that  with the sale of Docklands’ Collins Square project.

In retail, GPT is about to sell the 57,116-square-metre Dandenong Plaza to Armada, and earlier  Challenger sold the Jam Factory to Newmark for $165 million. The Well in Camberwell fetched $72.5million on a 6.06 per cent yield.

JLL head of retail Simon Rooney said competition between domestic and offshore buyers  would continue to be fierce next year.

“The offshore buyers love because it’s very transparent. They’re looking for low-volatile high-quality assets,”  he said. “We’re at a strong point in the cycle. There’s an opportunity for larger owners to sell assets or partial investments to rebalance their portfolios and use the money to refurbish existing assets.”

There’s been plenty of revamps already. QIC increased the size of the Eastland shopping centre in Ringwood by 55 per cent in a $655million expansion that provided space for a host of new retailers, including  Uniqlo.

The Scentre Group’s Knox is having a $450 million 46,000-square-metre revamp that will result in a 188,500-square-metre centre. That  would nudge Chadstone Shopping Centre’s 190,000 square metres if Chadstone was not also  expanding.

A $580 million redevelopment that adds 34,000 square  metres to its floor space will maintains its status as ‘s biggest mall but will add extras such as a hotel and a 10-storey office tower.

The push to  ever-denser retail and residential projects in the suburbs is likely to have an impact on industrial development. Savills national head of research, Tony Crabb, said the growing population would create demand “for more logistics, more storage space and more places for manufacturing”.

Mr Crabb, who is also industrial spokesman for the n Property Institute, said industrial businesses have already been displaced from the inner suburbs and would be pushed out further.

The GIC portfolio, purchased by Ascendas for $1.07 billion during the year, attracted a premium because of the size of its land offering.

“This was a sizeable premium paid for the scale of portfolio – for being able to purchase a rare $1billion-sized land offering.”

Competition from international stores lifts secondary rents in Melbourne CBD

Restaurant Pomodoro Sardo is paying $250,000 a year for 250 square metres at 111 Lonsdale Street, Melbourne. Photo: SuppliedMelbourne CBD landlords are benefiting from a flood of international retailers whose commitment to large stores has pushed up demand and prices for secondary locations.
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Prime retail rents in Melbourne’s CBD jumped by almost 10 per cent over the past 12 months, a rise mirrored by secondary rents which also rose sharply by 9.2 per cent, according to CBRE research.

The impact of international retailers was further heightened by low interest rates (driving consumer demand and turnover) and large-scale redevelopment of older city buildings which has invigorated retail locations, updating or adding new stock.

An impending redevelopment by Leighton Property on a site next to the Wesley Church in Lonsdale Street shows the impact.

The redevelopment has prompted long-established Italian eatery Pomodoro Sardo to relocate.

The Sardinian-themed restaurant took 250 square metres at 111 Lonsdale Street opposite its current location for a near-record $250,000 annual rent with no landlord incentive or works, in a deal negotiated by CBRE’s Zelman Ainsworth and Samantha Hunt.

“This pocket of Lonsdale Street has been activated by residential, retail and tourist growth,” Mr Ainsworth said.

The impact of luxury international retailers on premium spots in Collins Street is well documented, but the latest upmarket retailer to claim a place on the strip is Wittner Shoes.

The footwear retailer will relocate from its long-term home in Collins Place to a 90-square-metre shopfront at 30 Collins Street in a deal negotiated by Colliers International’s Ben Tremellen and Cam Taranto.

Mr Tremellen said there had been more than seven offers for the tightly contested space from a range of retailers.

The shoe retailer snared the shop on a five-year lease for rent about $180,000 a year, a rate of $2000 a square metre.

“We are seeing a significant push from premium fashion retailers in recent months. Retail vacancy levels in prime CBD strip locations are the lowest they have been in the past three years,” he said.

Wittner’s new premises will be directly opposite Giorgio Armani and Ermenegildo Zegna in a Monash University-owned building.