MJM Property Group

October 2005 Issue
How accurate are economic & property market forecasters?
Is it cost effective to lease an external data technology centre for your business?
What is the future of freight transport in NSW?
New clients… how far does the MJM 'services web' spread?

Market Trends: Have you wondered how "expert" the experts are?

A high-profile economics professor released the results of a confidential survey and analysis program at a recent conference attended by MJM. The survey looked into the degree of accuracy in property forecasting achieved in the last six years by three types of “expert”.

The performance of a total of 30 fund managers, equity brokers and property advisors or research houses were surveyed. The results illustrated that forecasters tend to be conservative in the vast majority of cases. That is; they tend to under-estimate improving market conditions and overstate the potential for market downturns.

The degree of accuracy was broken up amongst the 30 companies with the top quartile (7 or 8) achieving the highest level of accuracy in any given year and the bottom quartile offering the worst level of performance.

Over the six-year period not one company was consistently accurate! In fact, only one firm achieved top quartile status in four out of six years. Furthermore, only three firms achieved this level in three out of six years!

Across the different kinds of "expert", property advisory firms performed better in four out of six years whilst the equity brokers and fund managers “got it right” once each.

THE BOTTOM LINE IS PROPERTY ADVISORS DO IT BETTER!

Data Centres

At the height of dot-com boom in 2000 the NSW Government and Global Switch committed $165m to convert the derelict Government Printing Office building in Harris Street , Ultimo into a state-of-the-art data centre.

Each of the six floors was 4,500m 2 in size and despite a rental rate of $2,500 psm (almost $1M per month) 75% of the building was pre-leased prior to the start of the building program. The plan was to establish a facility to service large and small businesses but the dot-com crash put paid to that idea.

Along came Harbour MSP, a highly regarded managed service provider as a tenant of Global Switch. They quickly established a business which allows small and large subtenants to set up an external data centre on a short term lease basis in a totally secure environment with flexibility, expansion potential and top level technical support.

BCS Blue retained the services of MJM to find them a property to meet their increasing IT needs. The question was asked ,“Why burden part of our office tenancy with expensive & inefficient IT infrastructure which is going to require constant updating anyway ?”

The Answer…

Join Deutsche Bank, Tempo Cleaning Services and many others in leasing “rack space” from Harbour MSP. If you employ more than 40 people and wish to investigate the cost benefits of outsourcing your data centre facility then contact MJM now.

How do freight transport companies plan for change?

Maurice James of Patrick Corporation has talked about the future of the freight transport industry, which will encompass changes in rail transport and intermodal transport networks along with future development plans for Port Botany.

The well-publicised industrial disputes in 1990 saw an amazing improvement in container shipping and associated transport efficiencies. Between 1990 and 2005 the overall cost of stevedoring fell by 40%.

This has resulted in container movements at Port Botany more than doubling since 1997 with 50% less staff!

It is projected that freight movement will double again in the next few years and an infrastructure crisis is imminent. Road transport is substantially cheaper than rail however the best long-term solution is for storage and rail facilities to be built on the docks so that regional and interstate rail transportation can take place.

Without substantial private and public sector infrastructure investment many containers will continue to arrive in Australia full and leave empty resulting in a worsening of our current account deficit.

New clients

MJM has been recently appointed to assist a wide range of clients, which illustrates the diversity of the services we provide.

National Poly Industries is a Queensland based industrial company which specialises in the manufacture of water tanks and boats. The company is looking to establish a new facility on the north coast of NSW and retained MJM to compile a comprehensive market research report aimed at meeting their exact needs.

Brennan Partners is a city based financial services company that was considering moving but after being shown the market in great detail by MJM they decided to appoint MJM to negotiate a short-term lease extension.

Boutique advertising agency Momentum Worldwide, currently located in 140 William Street, East Sydney , was horrified by the rental increase proposed by their landlord. MJM put together a market rental report, which provided a strong case for the two parties to work together rather than against each other to resolve a potential dispute.

Contact Worthy Workplace now

Did you know that there are 26 separate Occupation & Health Safety rules and regulations in NSW that pertain to rail transport?

Do you know what OH & S rules your business needs to comply with?

Our new OH & S consulting business Worthy Workplace can help.

Click on www.worthyworkplace.com.au to contact WW about the services it provides or call Samantha on 0408-969768.