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Regional Economic Development

Is Australian commercial property being hacked by the digital revolution?

RARELY is the tumult in Australia's commercial property market adequately explained. Digital Business insights CEO John Sheridan's research reveals the commercial property industry in Australia has not understood that the digital revolution has brought about a fundamental shift in the commercial property landscape.

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High commercial property vacancy rates may be the 'new norm' for Brisbane and other Australian cities, attributable to the digital revolution. Image: Ken Keefer, SkyCamera.

 

A raft of recent newspaper articles and commissioned reports by industry experts offers a range of ‘traditional' explanations that point towards some sort of 'light at the end of the tunnel'.

These range from a mining boom investment phase transition, in the cases of Queensland and Western Australia, to residual effects of the international Great Recession in the case of the Sydney and Melbourne markets and various other influences such as rising bond rates and even the transition of the Australian dollar.

But Mr Sheridan's research indicates that the commercial property tunnel is being extended for the foreseeable future, because of the effects of the digital revolution on business in Australia. In a recent blog, Mr Sheridan said he was intrigued by the ongoing commentary in major newspapers about the ‘soft' state of the commercial property market.

"Week after week, office vacancy rates are published for the major cities - Melbourne 10 percent empty, Brisbane 14 percent empty, Sydney 10 percent, Perth 8 percent and so on," Mr Sheridan said. "The general view is that things are unlikely to improve soon.

"Each week I now search in vain for some reference to the impact on commercial property of the digital revolution. There is no mention.

"In article after article, and interview after interview with industry experts not one of them raises the issue at all. Maybe they are frightened of lifting it onto the radar? I would have thought it was obvious."

Mr Sheridan said the digital revolution was having an enormous impact on commercial property and its prospects for recovery. He said even such an obvious factor such as the rapid growth in ‘teleworking' has not rated a mention among industry commentators.

This surprised him as the Federal Government has been promoting teleworking over the past year and is staging another Telework Week this November.

"Businesses and organisations are teleworking already," Mr Sheridan said. "Forget the Telework Week. It is happening right now.

"In all of our recent surveys roughly half of organisations have one or more members of staff that work from home for some part of the week. Some for all of the week."

Digital Business insights research has found teleworking present in "58 percent of professional services, 67 percent of public administration, 72 percent of rental, hiring and real estate, 51 percent of wholesale, 50 percent of Information media businesses", Mr Sheridan said.

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John Sheridan, Digital Business insights CEO.

 

"Which means less demand for office space. And as more and more organisations become comfortable with teleworking, what possible evidence is there that vacancy rates are going to drop some time in the future?

"They won't. Vacancy rates will soar and the situation will get much worse. And businesses will become increasingly selective as a result.

"Every organisation we speak with is reducing their demand for office space and in some cases getting rid of it completely."

DBi's research was showing that the types of commercial spaces that will be in demand in the future are markedly different to those on offer now.

He said indications were that mixed use spaces offering WiFi and fast broadband, combined with comfortable and flexible meeting spaces - "and lots of them" - would increasingly become the order of the day

"And what businesses and other organisations will want from a commercial office in the future is very different to today."

Importantly, Mr Sheridan's research is already suggesting: "It's the same thing with retail space."

www.db-insights.com

* John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

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Australia's new Clean Energy Finance Centre backs two wind farms

THE Australian Government's Clean Energy Finance Corporation (CEFC) started operations on July 1 and last week announced financing for two major wind farms in Victoria and New South Wales.

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Wind power developments sped up by CEFC.

 

The Macarthur Wind Farm has the capacity to generate enough energy to power about 220,000 average Victorian households per year, while reducing carbon emissions by 1.7 million tonnes a year. The Taralga Wind Farm will have the capacity to generate enough energy to power 45,000 homes, cutting annual carbon emissions by 250,000 tonnes.

"Successful refinancing deals help send a strong message to future large-scale renewable energy projects in Australia that it is possible for developers to successfully complete a development-finance-exit cycle," CEFC CEO Oliver Yates said.

In a statement, the CEFC said it was investing $50 million as part of the refinancing of the $1 billion Macarthur Wind Farm, in south-western Victoria.

The 420 megawatt wind farm is the largest in the southern hemisphere and has been fully operational since January 2013.

One of Australasia's largest renewable energy groups, Meridian Energy Ltd, is refinancing its 50 percent stake through a $529 million syndicate of co-lenders including the CEFC.

The wind farm's joint-venture partner is Macarthur Wind Farm Pty Limited, a wholly owned subsidiary of AGL.

Mr Yates said by providing senior secured debt financing to Meridian, the CEFC is playing a valuable commercial role in supporting the other syndicate members, ANZ Bank, National Australia Bank, ING, Shinsei , ICBC and EKF, to provide market liquidity.

The CEFC also announced it is providing $37.5 million in senior debt finance to help build the $280 million Taralga Wind Farm near the southern NSW city of Goulburn.

Mr Yates said the project would use Australian-manufactured towers made by BlueScope steel.

"The integrated Australian supply of inputs enabling this project - from materials through to finished goods, know-how and finance - demonstrates Australia's capability across the whole value chain for the clean energy sector," he said.

Danish company Vestas will supply 51 wind turbines for the Taralga project and Energy Australia has a 10-year power purchase agreement to supply the grid.

Other lenders are theANZ, CBD Energy, EKF, and the primary equity investor, Spain's Banco Santander.

The stated role of Australia's Clean Energy Finance Corporation is to mobilise capital investment in renewable energy, low-emissions technology and energy efficiency. Its investment activities are funded through a special appropriation of $2 billion to a special account every year for five years from July 1, 2013.

www.cleanenergyfinancecorp.com

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Surat Basin Mining and Energy Expo triples in size - attracts Asia, US, European companies

SOUTHERN Queensland's largest event for the resources industry, the Surat Basin Energy and Mining Expo, is back for its third year on June 19 and 20 - and it is almost triple the size of the inaugural event, attracting interest from companies as far afield as Asia, Europe and the US.
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Innovative Toowoomba-based company Easternwell is the platinum sponsor of the Surat Basin Energy & Mining Expo.
Toowoomba Showgrounds is the venue for hundreds of resource services exhibitors and organizers are tipping a record-breaking attendance. Already organizers have had to find additional site space and are tipping transactions to exceed last year's $54 million through the event.

Event organiser Bob Carroll attributed the escalating interest in the expo, both locally and internationally, to the frenetic activity happening in the region as well as high profile infrastructure announcements like the Surat Basin Rail project.

"Companies from as far as the US, Asia and Europe are enquiring about presenting their products and techniques as they're looking to establish themselves in boom areas," Mr Carroll said. "The Surat Basin Rail project will be the key to further development of the Surat Basin."

Oklahoma-based GEFCO Inc, a world leader in the design and manufacture of portable drilling rigs, is Queensland-bound to display its wares at the event.

GEFCO's head of marketing, Heidi Gore said the company wants to continue its expansion into areas where the durability and productivity of their rigs are a necessity. They identified that sites in the Surat Basin would benefit from the use of their drilling rigs.

"We'll be promoting the world's most advanced Energy-Mineral Exploration rigs, including the GEFCO 500K and GEFCO 200K models, at the Surat Basin Energy and Mining Expo," Ms Gore said.

Closer to home, event organisers expect to attract large numbers of industry personnel from across the country looking to relocate and take advantage of the attractive work and lifestyle combination that Toowoomba and the wider Surat Basin region offer.

With $200 billion worth of resource-related investment slated for the Surat Basin, projected to generate 16,000 new jobs, many of the visitrs through the door will be looking for information on employment and career opportunities.

Mr Carroll said the expo also offers an invaluable networking platform for the Surat Basin area and an opportunity for key stakeholders do business face to face. Encompassing all facets of energy and mining in the district, the expo provides an opportunity for both global and local visitors to seek employment within the mining sector, to develop new business relationships and source services and equipment.

He said the 2013 event will exceed last year's record which saw the expo attract the participation of 438 companies occupying 520 exhibitor sites, 7000 visitors over two days, and sales of an estimated $54 million.

"Events such as this expo are pivotal to the Surat Basin reaching its full potential, not only by offering the chance for exhibitors to showcase their wares, but also to stay informed and educated about development in the region," Mr Carroll said.

INDUSTRY FORUM

The expo will be preceded by an industry forum designed to inform companies attending the event about resource and infrastructure projects underway in Toowoomba and the Surat Basin.

The forum will be held on the eve of the expo on Tuesday and will include presenters such as Queensland Minister for Natural Resources and Mines, Andrew Cripps.

The Western Downs Regional Council (WDRC) is sponsoring the Mayoral Welcome Breakfast on the opening day of the Expo. Mr Carroll said this would be an exciting opening to the event with the WDRC expected to present their much-anticipated Business Capability Study.

"Our delegate registrations are up, exhibitors are excited, and this is shaping up to be the leading energy and mining event in the country," Mr Carroll said.

One of the 500-plus exhibitors in 2013 is platinum sponsor for the third consecutive year, Easternwell, one of Australia's leading integrated energy and mining services provider and the organization credited with developing the innovative drilling systems that have opened up Australia's coal seam gas industry.

Easternwell operates continuous contracts with some of Australia's largest exploration companies and provides the convenience of integrated services for the energy and mineral sectors by providing a one stop shop for their clients.

Other key supporters of the Surat Basin Energy and Mining Expo include gold sponsors Hutchinson Builders, Itac Services and Onsite Rental group, and the University of Southern Queensland is a silver sponsor.

The Surat Basin Energy and Mining Expo runs on Wednesday, June 19 from 9am-5pm and the following day from 9am-4pm.

Pre-registration if free, through the website, or entry on the day is $10.

www.suratbasinexpo.com.au

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Mater Private Hospital in $85m development at Springfield, Qld

MATER Health Services is to build a Mater Private Hospital at Health City Springfield Central, Work will start on the site in August on the facility, which will incorporate the latest in digital health service  technologies.

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Springfield's development has come a long way in a short time.

The 80-bed, $85 million hospital will offer a combination of in-patient, day and chemotherapy beds and is partially funded by the Australian Government , which provided $21.4 million for a cancer care centre.

Mater has a master plan for the hospital precinct of Health City which incorporates a number of expansion stages designed to meet the growing demands of the region. Stage one works are due to start in August this year and be complete by the end of 2015.

Mater Health Services CEO, John O'Donnell said, "Mater Private Hospital Springfield will provide a range of medical and surgical services that are relevant to the Springfield community.

"The hospital will be a truly innovative, unique and contemporary model including latest use of digital technologies for providing health care needs to the growing region.

"The framework of services provided by Mater, its partners and other third parties, will be responsive to the community's health need and will provide accountable, holistic care that promotes wellness, prevention of illness in addition to exceptional acute and sub-acute care and treatment."

The seven level, 10 000sqm  facility will include theatre space, inpatient wards, a day surgery unit and a cancer care centre, initially with a linear accelerator and 15 medical oncology treatment bays, to be further developed in a partnership between Mater and Radiation Oncology Queensland.

Dr O'Donnell said Mater would  work closely with Springfield Land Corporation (SLC) in relation to the Master Planning and governance of Health City, Springfield Central.

Springfield Land Corporation chairman Maha Sinnathamby said he was excited the company's five year relationship with Mater Health Services has now resulted in this hospital project and he is looking forward to continuing the partnership with Mater Health Services.

"Mater Private Hospital Springfield will provide the landmark building for Health City Springfield Central and mark the start of a 52 hectare master health and wellness precinct that will be unique to the country providing all forms of co-ordinated health facilities and services such as research and development, education and training, allied health, retirement and aged care with appropriate hotel and visitors accommodation," Mr  Sinnathamby said.

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New Mater Private Hospital at Springfield.

 

"Approximately 8.7 hectares of Health City Springfield Central is earmarked for primary health and acute hospital type development with pre-planning approval obtained for up to 1200 hospital beds.

"Health City Springfield Central is an ideal location for Mater Private Hospital Springfield.  It is the fourth fastest growing urban area in Australia, comprising six suburbs across 2860 hectares," Mr Sinnathamby said.

Ipswich City Mayor Paul Pisasale said he also welcomed the development as another valuable asset and services advantage for the Ipswich region.

http://www.mater.org.au/

http://www.greaterspringfield.com.au/

 

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Cairns builds case for aquarium as a vital regional and international tourism drawcard

THE design phase of The Cairns Aquarium - a much mooted infrastructure piece regarded by the regional tourism industry as an accelerator for certain Asian markets - was launched in Cairns on Friday (May 10).

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The Cairns Aquarium will encapsulate the Great Barrier Reef within the Cairns CBD.

 

Directors of The Cairns Aquarium and Regional Development Australia (RDA) FNQ&TS hosted a media event in Cairns to launch the design stage of the multi-million dollar aquarium project. This will culminate in the submission of a development application (DA) to Cairns Regional Council later this year.

While the Great Barrier Reef is the region's overwhelming tourism asset, weather events and the reticence of some markets for long sea travel means the region could capitalize on a world-leading aquarium, stocked from the reef.

RDA FNQ&TS chairman, Allan Dale said Friday's event was significant for Far North Queensland's regional tourism industry, which stands to prosper in the future with the introduction of another world-class tourism experience. 

"The arrival of this project is timely and deemed to be of great value to the region's emerging Chinese market," Dr Dale said.

"We also feel proud of the fact that The Cairns Aquarium was the first major tourism infrastructure project to receive Commonwealth Government Assistance for its start up phase. This is great for our region and proves Far North Queensland's voice is being heard loud and clear in Canberra."

The Cairns Aquarium director, Daniel Leipnik said the successful architectural firm was to be chosen from 15 tenders to design and develop the project's $35 million flagship building.

Jan McLucas, Minister for Human Services confirmed the Federal Government's current funding and assistance being provided under the Department of Tourism's TMPF and TIRF programs.

"The Department of Tourism's support has been a significant factor enabling us to launch our flagship tourism project that is expected to attract over 500,000 visitors each year - making it one of the busiest land based tourist attractions the region has on offer," Mr Leipnik said.

"When complete, The Cairns Aquarium will be a valuable drawcard for Cairns's CBD precinct - providing an all weather, all ages, affordable, exciting and enjoyable way of seeing reef and rainforest creatures in a comfortable and safe way."

According to Mr Leipnik, The Cairns Aquarium project has attracted support from all levels of government, the business community, and members of the public who see the project as a vital mean of revitalising the CBD and providing a new and innovative approach to showcasing the flora and fauna of the Wet Tropics to a growing tourist market.

"Cairns Aquarium will generate over 250 full time jobs and substantial economic flow on effects to businesses and local suppliers during construction and well into operation," Mr Leipnik said. "It will also focus on creating awareness of the threats to The Great Barrier Reef and surrounding eco-systems and what can be done to protect these environments."

The initial design stage of Cairns Aquarium is anticipated to take four months with the DA scheduled for lodgment with Cairns Regional Council by September 2013.  

The Cairns Aquarium is slated to open in July 2016 following a year of design and development work and a further 18 months of construction.  

The project involves the design, development and commercialisation of an architect inspired, iconic three storey, 10,000sqm landmark attraction featuring animals, plants and habitats found only in Queensland's Wet Tropics.

Feature exhibits will include a multi-million litre Great Barrier Reef tank, a giant freshwater River Monsters exhibit, a Life in the Mangroves lagoon exhibit, a Dangers of the Deep exhibit, a Daintree rainforest boardwalk and up to 70 other key exhibits housing some 5000 plus fish, animals and plants. 

In December 2012, the Cairns Aquarium's company directors, Daniel Leipnik and Andrew Preston, purchased a 4000sqm, CBD land parcel on the corners of Lake, Florence, and Abbott Streets directly opposite and within walking distance of family friendly downtown hotels. 

The project will create over 150 jobs during construction and over 100 staff positions once open. 

It will deliver investment into the region of about $35 million for construction services and materials and generate almost $20 million in revenue per year once open.

When open, it is anticipated The Cairns Aquarium will be one of the top visitor attractions in the region with expectations of over 500,000 visitors each year.

http://www.rdafnqts.org.au/

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The Event acts as Gold Coast sales barometer

There is always a great deal of hype associated with Ray White Surfers Paradise’s annual three-day auction – branded The Event – but this year more than ever it is seen as a litmus test for the immediate recovery prospects for the Gold Coast.

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Surfers Paradise.

More than 130 residential, prestige, industrial and commercial properties as well as land sites and marine vessels are set to go under the hammer on January 27, 30 and 31.

Ray White Surfers Paradise CEO Andrew Bell said The Event remained one of the largest auctions in Australia and provided an insight to buyer sentiment leading into the New Year.

“In two decades The Event has grown to unrivalled heights and is now seen as a litmus test for the regional and national markets for the year ahead,” Mr Bell said.

“It continues to grow each year, with prospective buyers coming from across the country and overseas and sellers keen to take advantage of this. “The Event acts to spur the market into action - as a result we often see substantial sales activity in the weeks following the auctions.”

Mr Bell said enquiries for The Event 2013 started in June 2012 with sellers keen to take advantage of The Event’s international marketing reach.

“The Event is well timed during the Gold Coast’s peak holiday season, which sees a huge number of prospective national and overseas buyers flock to the city,” he said.

Mr Bell said he had also witnessed a convergence of buyers’ and sellers’ expectations as the market continued to gain strength throughout the year, making The Event perfectly timed in the real estate cycle.

“There is general sentiment the market has reached the floor, which makes it an ideal time to sell with buyers seeing good value and competition for well-presented properties increasing,” he said. “A number of interest rate drops throughout the year has also improved buyer sentiment and will continue to do so over coming months as we feel their delayed effects.”

Mr Bell said he expected an increase in international interest at this year’s auction following a bumper year of more than $108 million in sales to overseas buyers through the Ray White Surfers Paradise Group network in 2012.

“This year we’ve seen a huge boost in sales to the international market, particularly Asian buyers, so we expect that will flow through to The Event,” he said.

Mr Bell said The Event’s listings showcased a diverse cross-section of Gold Coast properties ranging from one-bedroom units to prestige homes and small office spaces to large industrial facilities.

In his opinion, 2012 had seen a surge in buyer confidence across the board, driven by growing activity in the prestige sector and the record sale of a $12 million Sanctuary Cove mansion.

“Our office has traditionally been responsible for a number of the city’s highest priced sales and last year we witnessed noticeable growth in the prestige sector,” Mr Bell said. “It gives the rest of us confidence when Australia’s highest wealth citizens back their intuition that now is the time to get into the market, and as a result we’ve seen steady activity across the residential market following the string of high-priced sales.”

More than half a billion dollars worth of property has been sold through The Event to date, with more than $30 million in sales each year since 2008.

The Event 2013 starts on Sunday January 27 with residential and marine auctions and the presentation of Andrew Bell’s annual property report at the Gold Coast Arts Centre, followed by the commercial auction on Wednesday January 30 at Southport Yacht Club, and concluding on January 31 with the prestige auction at Palazzo Versace.

www.rwsp.net.au

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Queensland invites the world to International Gas Symposium

INTERNATIONAL gas industry leaders are heading for Queensland in a summit-style discussion of opportunities and challenges for Australia as it enters what the Queensland Government calls "a golden age of gas development".

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Queensland Treasurer Andrew Fraser invites the world's gas industry leaders to a symposium.

Queensland Deputy Premier and Treasurer Andrew Fraser said major players in the global liquefied natural gas (LNG) and energy markets will address the Queensland International Gas Symposium in Brisbane on December 7-8. 

The Queensland International Gas Symposium will showcase global CSG to LNG opportunities and the key challenges facing the sector as countries around the world prepare for the transition to cleaner energy futures.

Delegates will have access to a selection of high-calibre international and Australian speakers with a vast working knowledge of the global and Australian CSG and LNG markets.

"In June, the International Energy Association's 2011 World Energy Outlook report said Australia is entering a ‘golden age' for gas development and could overtake Qatar as the world's largest LNG supplier by 2020," Mr Fraser said. 

"Queensland already has $45 billion worth of LNG projects under construction and is poised to become a global leader in producing and exporting LNG for the world. 

"Queensland is currently the world's largest coal exporter and our booming CSG-LNG industry presents a once in a generation opportunity for sustained investment, economic benefits and jobs." 

Confirmed international speakers include: 

• Ian Cronshaw, International Energy Agency consultant and former head of the agency's Gas, Coal and Power Markets division;

• Noel Tomnay, head of Global Gas for world-leading energy industry research and consultancy firm, Wood Mackenzie;

• Kyel Hodenfield, vice president, Unconventional Resources for Schlumberger Limited; world leading oil and gas industry services company;

• Al Hirshberg, senior vice president for planning and strategy, United States energy giant ConocoPhillips;

• Dick Mcslhattan, snior vice president and general manager LNG Global Business for Bechtel Oil Gas and Chemicals, the global oil, petrochemical and LNG plant construction giant;

• Ken Mullen, president, Savanna Energy Services Corp, international drilling services company to the oil and gas industry. 

Australian CSG-LNG industry leaders will also address the symposium including: 

• Jim Knudsen, senior vice president, Queensland Gas Company;

• Mark McFarlane, president, Santos/GLNG;

• Page Maxson, CEO, Australia Pacific LNG;

• Andrew Faulkner, CEO, Arrow Energy. 

Speakers will deliver presentations on a range of opportunities and challenges relating to the symposium's key themes: Demand and global market trends; Business and industry innovation; Encouraging investment; Environment and best practice regulation. 

The two-day Queensland International Gas Symposium will be opened by Queensland Premier Anna Bligh on Wednesday, December , 2011.

www.gas.business.qld.gov.au

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