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Australian Market Summary
Australian Market Summary Augusta held their Australian annual general meetings in early November 2018. At the lunch time break, our previous Chief Operating Officer, Guy French-Wright who moved to Australia some months ago gave an Australian real estate market address to investors. Many investors have requested a copy of this presentation but for those that already have or are considering Australia to further diversify their portfolio, the following were the key highlights of the presentation:
• Retail landscape changing but nowhere near dead • Land values increased to new levels in most major markets • Heat out of the Sydney and Melbourne housing markets • Royal Commission underway into banking practices • Funding for smaller investors becoming harder to attain • Alternative non-bank lenders now a real feature of market MONITOR CLOSELY • Retail sales for consumer confidence
• Yields at historical lows • Broad demand for assets remains
• Lack of quality investment stock key theme in major markets • Industrial the market darling at present
• Acknowledging all of the above, continue to source well leased assets with strong rental growth capabilities • Accepting that yields have moved in recent years and the time in the property cycle, remain highly discerning in our asset selection • Continue with Brisbane focus where relative value continues to exist over Sydney and Melbourne • Unemployment steady at 6%
• Lending restrictions and continued impacts
• Foreign investment and interest at near record levels
FOCUS FOR AUGUSTA
• QLD GDP growth of 3.7% ahead of national average of 2.6%
• Foreign investment • US Bond Yields • Tenant demand versus supply to ensure remain balanced
• Infrastructure and major projects creating positive sentiment as is evidenced by the significant pipeline of projects below:
Major Projects, Brisbane CBD - Private Sector BRISBANE QUARTER
HOWARD SMITH WHARVES
QUEENS WHARF
BRISBANE LIVE
DEXUS WATERFRONT PRECINCT
$1BN 5,000 JOBS
$110M 2,000 JOBS
$3BN 10,000 JOBS
$2BN 10,000 JOBS
$1.4BN 740 JOBS
2019
2020
2022
2025
2026
Major Projects - Public Sector GATEWAY NORTH UPGRADE
KINGSFORD SMITH DRIVE
BRISBANE METRO
BRUCE HIGHWAY UPGRADE
CROSS RIVER RAIL
$1.143BN 1,000 JOBS
$650M 3,000 JOBS
$940M 7,000 JOBS
$8.5BN 2,000 JOBS
$5.4BN 7,500 JOBS
2018
2019
2022
2023
2024