November Issue:
Secrets of the office market
Residential Conversion for Pennant Hills Hotel
Industrial Land in Demand

Featured Case Study: Complex move made easy for Integ

Secrets of the office market
Tenant representatives could save you money. JP Morgan slashed its rent bill in Sydeny's Grosvenor Place tower by $750,000 a year when it used a tenant representative. In a smaller 500 square metre, whole-floor deal in North Sydney, then rent fell from $350 a square metre to $300. Even the outgoings – the bills such as energy – were slashed and then capped to $90 a square metre. Again a tenant rep was involved. According to the growing band of specialists in the fields, if you're a tenant looking for office space or trying to renegotiate your lease, it's the only way to go. Thing of it this was: what do you know about the office market? Come to think of it what does your lawyer know? You might own a house but you probably pay attention to the commercial rental market once every five or 10 years, when your lease comes up. And unless your lawyer is a specialist property lawyer, they're likely to be excellent on the legal side but fairly woeful on the commercial reality check. (Australian Financial Review)

Residential Conversion for Pennant Hills Hotel
The Grand Hotel Group (GHG) has sold the Chifley on City View hotel at Pennant Hills for $15.5 million. The property was purchased by developers Marsim and McDonald Industries, and will be converted to residential apartments. The hotel is located approx 30km from the Sydney CBD and currently comprises 117 rooms. The sale price, equating to $132,479 per room, reflects the alternate use value of the property. Plans for the residential development have not yet been released. According to the Real Estate Institute of New South Wales, as at March 2003, the Hornsby Local Government Area recorded a medial unit price of$357,000 and the median price for a house was $587,000, having shown annual growth of 4% and 24% respectively.

The Grand Hotel Group is the second largest accommodation owener in Australia, with a portfolio of 22 hotels comprising the Hyatt Country Comfort and Chifley brands. The sale of the Chifley on City View at Pennant Hills is part of GHG's plan to divest non-core and under-performing hotel assets, and follows the disposal two properties in March this year. The County Comfort in Blakehurst was sold by auction for $4.5 million, and the Country Comfort at Bateman's Bay was sold by public tender for $6.7 million.

Going against the trend of converting hotels to residential apartments in the inner city area, Darlinghurst will be the home of a new Motel Formule 1 in 2004. Construction has begun at 191-195 William Street, with the completed development to comprise 115 rooms over eight storeys. Motel Formule 1 currently operates five budget motels in Sydney, with another set to open at Sydney Airport.
(LandMark White Market Review)

Industrial Land in Demand
Land prices have doubled over the past one to two years in developing outer western Sydney areas such as Smeaton Grange and Glendenning. This has been driven by a lack of supply, and partially by interest generated by the proposed Westlink No. 7 (previously known as Western Sydney Orbital Road), now that construction has commenced on the 40km road to link the M5 and M2 Motorways.

Recent evidence of this includes the safe at Glendenning of six lots sized between 1,936m² to 7,025m², which sold at auction for prices between $251/m² and $298/m². In a separate transaction, a 1ha block on Glendenning Road was sold at a rate of $270/m². At Smeaton Grange in Sydney's south-west, 21 new allotments sold at action for prices ranging between $480,000 for a 2,000m² block and $2.15 million for a 11,890m² lot.
(LandMark White Market Review)

Datacom has leased 4,300sq.m of office space at 15 Talavera Road, North Ryde (in Sydney). The space has been leased for a flexible term at a net rent of $200/sq.m. (Sydney Morning Herald)

The HJ&B Group has leased 2,000sq.m of space at 12-20 Bridge Street, Sydney CBD. The space has been leased for a 10 year term at a gross face rent of approximately $550/sq.m. (Australian Financial Review)