National property group CFMG Capital will launch a new residential community in the Brisbane to Gold Coast growth corridor after beating fierce competition for a land parcel in Ormeau Hills.
The 5.4-hectare piece of land will be home to ‘Elevate’, CFMG Capital’s latest lifestyle endeavor which will provide 100 residential allotments for home buyers and investors seeking entry into the highly-contested region.
The site was acquired for $7.6 million from an undisclosed vendor via a campaign run by Colliers International.
CFMG Capital General Manager Andrew Thomson said there was intense competition for quality sites in Brisbane’s southern growth corridor.
Strategically positioned approximately 25 kilometres north of the Gold Coast CBD and 45 kilometres south of the Brisbane CBD, he said the project site ticked all the boxes CFMG Capital used to assess project opportunities.
“As the future community ‘Elevate’, this new acquisition at Ormeau Hills will be developed among an abundance of already established lifestyle amenity, health and education facilities, outdoor living, public transport and major road networks.
“The project site currently has the benefits of an existing approval for a 96 lot residential community and is situated within a kilometre of the Ormeau Town Centre and the ‘future’ North Ormeau town centre, which includes Woolworths, Coles and IGA supermarkets, petrol stations, cafes and specialty shops,” he said.
CFMG Capital have already seen the proof of the corridor’s residential market strength through the recent completion of their existing Ormeau-based project called ‘The Brook’, which launched 251 residential lots and grew to a gross realisation of $52.2 million.
Market data from realesate.com.au revealed that demand for the area had led to a 24.4% increase in median house sales prices, equating to a compound annual growth rate of 4.5% compared to the same period five years ago.
“Land remains relatively tight in this corridor with several large scale subdivisions recently completed or nearing completion within this area,” Mr Thomson said.
Prospective investors will be offered the opportunity to invest into the project through the CFMG Land and Opportunity Fund, which offers the potential to invest at a fixed rate of return of 12 per cent per annum for a fixed investment term.
What RGCMM achieved for CFMG Capital
CFMG’s story also appeared in the ‘Daily Telegraph’, ‘The Courier Mail’ and the ‘Australian Property Journal’.
Travellers paid more for their domestic tickets in 2017, while corporate international fares remained flat and leisure travellers paid on average 4.3% less for their long-haul tickets.
According to the latest 4D FOCUS – AUSTRALIA Aviation and Airfare Analysis, compiled by Flight Centre Travel Group’s 4th Dimension Business Travel Consulting division – (purchased) domestic economy corporate and leisure ticket prices rose, on average 3.5% and 8.9% in 2017 respectively.
The report includes a benchmarking study that compares tickets purchased from FCTG’s corporate and retail businesses in 2017 compared to 2016 and 2015 airfares.
Felicity Burke, General Manager of 4D, said the ticket increases the business had witnessed during the year in the domestic space had been driven by strong consumer demand, steady tourism growth and gradual increases in carrier published fares.
“Both Qantas Airways and Virgin Australia increased their published airfares during the year, with the largest percentage increases on the economy class restricted airfares,” Felicity said. “The carrier-driven increases have pushed the cheaper ‘leisure traveller’ airfares upwards to the range of 2.5% to 8%. Also noted are business class fare increases of between 2% to 8% and economy class flexible fares 2% to 7% during 2017.”
Felicity said the positive news was that international economy fares for corporates had remained flat in 2017 and leisure travellers had another year of excellent value, low-priced long-haul fares.
With approximately 62 airlines now servicing the international landscape, Felicity said Australian travellers continued to be ‘spoilt for choice with carriers, flight frequencies and in-flight product’.
FCTG Managing Director, Graham Turner, said the golden era of travel continued to shine brightly for travellers.
“Competitive international airfares, new direct flights such as the Perth to London, more frequent services, continually improved in-flight amenities plus unprecedented discounting on some routes are but a few of the positive takeaways from 2017,” Mr Turner said.
“If the price of oil continues to rise this could potentially mean ticket prices may increase in the near term. But we’re still going to see some excellent value across the international and domestic landscape as airlines compete for both the corporate and leisure dollar.”
Qantas’ recent start of non-stop services between Perth and London is the first of new city pairs to be offered by the airline as it welcomes new long-range aircraft to its fleet. Qantas is also targeting ultra-long haul flights from the east coast of Australia to London and New York by 2022.
John Simeone, Qantas’ Head of Business and Government Sales, said in the report, ‘We’re seeing growth across all markets including the resources sector and the arrival of new aircraft allows us the chance to open new routes, just like Perth-London’.
The report indicated that Virgin Australia continued to focus on its guests’ travel experience rolling out wi-fi across the majority of its fleet, introducing Melbourne to Hong Kong flights in 2017 and commencing Sydney to Hong Kong services in July this year.
Some of the key findings in 4D’s report are below.
Domestic Travel – CORPORATE Economy Class airfare benchmarking
(based on 2017 fare benchmarking against 2016 fares)
Domestic economy class price changes for tickets purchased through FCTG’s corporate brands ranged from a 1% to 9% increase on key routes
Corporates flying the CBR – SYD route incurred the lowest increase with fares rising by 1%
Those corporates travelling on the ADL – SYD and HBA – MEL routes incurred the largest economy increases of 6% and 9% respectively.
Domestic Travel – LEISURE Economy Class airfare benchmarking
(based on 2017 fare benchmarking against 2016 fares)
From 2016 to 2017 the average price of domestic economy class leisure fares purchased through FCTG’s leisure division increased by 9%
The biggest increase for leisure tickets was for the ADL – SYD and MEL – SYD routes where prices increased by an average 14% over 2016
Leisure economy travellers flying BNE – PER saw the smallest increase of 4%.
BENCHMARK SUMMARY – Economy Class
Felicity said the increase in in-bound visitors and domestic tourism, had also impacted the availability of domestic seats with load factors reaching nearly 80% in 2017.
“The demand for domestic seats in the leisure space was very strong last year, which has also affected ticket prices,” she said.
The 4D report indicated a 2.5% and a 4.6% increase for corporate and leisure domestic fares during the next 18 months provided the carrier mix remained the same along with a positive outlook for the domestic economy.
Additionally four key industry themes have been highlighted for the year ahead:
Shifting airfares due to continued airline transformation, strong tourism numbers, solid load factors, a rise in oil prices and positive economic outlook
Connected technology such as biometric systems are producing a frictionless international passenger experience, speeding up processing times and reducing airport congestion;
Air New Zealand and Virgin Australia ending their trans-Tasman alliance, and Air New Zealand, Qantas and Virgin Australia making tactical moves to increase market share across the Tasman; and
International airlines continuing to adjust their networks from and to Australia, and deploy new aircraft for an improved flight experience.
MEL- SYD is the busiest domestic route (10.8 million seats – up 1.2% on 2016; 54,500 flights) and 2nd busiest route in the world in 2017 (up from 4th in 2016)
Brisbane – Sydney is the next busiest domestic route with 4.7 million seats flown during 2017
8 million inbound visitors into Australia during 2017 (+6.5% on 2016)
62 international airlines operated to/from Australia during 2017
Shopping centre owner and manager SCA Property Group (ASX: SCP) has backed continued investor demand for neighbourhood shopping centre investments, launching the third iteration in its highly successful SCA unlisted retail fund strategy, SURF.
The third SCA Unlisted Retail Fund, SURF 3, seeks to raise $35 million to help acquire a $57.9 million portfolio of neighbourhood shopping centres in Moama and Swansea in New South Wales, Woodford in Queensland and Warrnambool in Victoria. The opportunity to invest is open to both retail and wholesale investors.
The Moama Marketplace, Swansea Woolworths and Woodford Village properties are anchored by a Woolworths supermarket and Warrnambool by Target. Moama is also anchored by a Woolworths petrol outlet.
The fund income is primarily from the anchor tenants with 71% of income from Woolworths Limited and Target Australia. The specialty tenants are primarily non-discretionary focused including medical centres, pharmacies and food-based tenancies.
The fund has a weighted average lease expiry over 10 years and is forecasting an attractive initial distribution yield of 7.1 per cent. The fund term is 6.5 years and approximately 30 per cent of distributions are expected to be tax deferred. It is an unlisted closed end property unit trust registered as a managed investment scheme with a minimum investment of $25,000.
SURF Fund Manager Melissa Kingham said, “Already we have over 50% registered interest from SMSF trustees who are looking for long average lease expiries and stable distributions.”
SCA engaged Australia’s leading economic location advisory firm Location IQ to undertake a demographic review of each of the assets. The research found the main trade area for all locations was growing and primarily comprised couples with dependants. The populations are typically strongly associated with the local convenience shopping facilities.
Location IQ also found the Warrnambool Target had a trade area population of more than 95,000, nearly double the typical trade area population for a discount department store-anchored shopping centre of 50,000 people.
SURF 3 Fund Manager Melissa Kingham said the research gave SCA confidence that each of the assets was well positioned to deliver on the targeted distribution rate.
“All four assets are surrounded by populations that, demographically speaking, are pre-disposed to visit their local shops for groceries and other essentials,” she said.
SURF 3 Portfolio Overview*
Moama Marketplace, NSW
Swansea Woolworths, NSW
Warrnambool Target, Vic
Woodford Woolworths, QLD
*As at valuation date of 31 March 2018
SCA Property Group Chief Executive Officer Anthony Mellowes said the SURF series had proven extremely popular with retail investors seeking exposure to convenience-based shopping centre assets, underpinned by the security of long leases to anchor tenants.
“Both the SURF 1 and SURF 2 offerings are now closed and investors are happy with their quarterly distributions,” he said. “Each of the assets has a strong lease profile, quality tenant base and together provide broad geographic diversity.
“SCA will manage the assets on behalf of the fund and will co-invest a minimum of 20% of the amount to be raised.”
The SURF 1 and SURF 2 unlisted property funds have delivered unitholders annual returns more than 8% and 7% respectively since being launched in October 2015 and June 2017.
SURF 3 was independently reviewed by Core Property Fund Research and Ratings and ‘recommended’ for investment.
Managing Director of Core Property Dinesh Pillutla commented that the interest for direct property investment was due to predictable income distributions with potential for capital growth. SMSF investors are also looking for regular distributions with tax deferral benefits.
The properties are currently owned by SCA Property Group and will be acquired on an arm’s length basis following an independent valuation carried out by JLL of $57.9 million with a weighted average capitalisation rate of 6.92%.
SCA utilises the SURF structure to provide existing unitholders and other investors with an opportunity to invest in assets that are non-core to the Group’s future strategy. The SURF 3 portfolio takes to 11 the total number of properties that have been syndicated in this way.
The SURF 3 portfolio has a total Gross Lettable Area of 18,842 square metres and Total Site Area including car parking of 44,822 square metres.
SCA Property Group owned and/or managed over $2.5 billion of retail properties in Australia as at end December 2017. SCA announced Funds From Operations (FFO) of $56.1 million for the six months to 31 December, 2017, up 4.9% on the same period last year.