Craft beer makers realise that to keep with the times they need a brewery of their own

Chris Lohring surveyed America’s beer scene in 2010 and decided to play the contrarian. Rather than mimic the popular and potent stouts and India pale ales, he would specialise in low-alcohol, high-taste “session beers,” as he called them.

To lenders, though, the business plan held as much appeal as flat beer. So Lohring kept costs low by using established breweries in Maine, Massachusetts and Connecticut to produce and package crisp pilsners and rustic farmhouse ales under his Notch Brewing label.

Contract brewing, as it is known, was perfect for a startup like his, requiring no expensive infrastructure. “There’s nothing riskier than building a plant before the brand and the beers have been proven,” said Lohring, who in 1993 helped found Tremont Brewery in Boston.

Craft brewing’s decade long global surge has been partly fuelled by contract, or “gypsy,” brewers, rootless beer makers whose recipes are realised on other breweries’ equipment. Early trendsetters like Evil Twin Brewing and Mikkeller of Copenhagen, Denmark, and Stillwater Artisanal of Baltimore built themselves into international brands through sales in bars, supermarkets and beer stores.

Chris Lohring, owner of Notch Brewing, at the brewery in Salem. The company opened the physical location after six years of “contract brewing” at other breweries. Photo: Gretchen Ertl/The New York TimesChris Lohring, owner of Notch Brewing, at the brewery in Salem. The company opened the physical location after six years of “contract brewing” at other breweries. Photo: Gretchen Ertl/The New York Times

But now, consumers are increasingly seeking beer at the source: Since 2010, sales at breweries and brew pubs have risen more than 500 per cent, according to the US Alcohol and Tobacco Tax and Trade Bureau. Beer lovers routinely troop to breweries for releases of cans and bottles, and a sense of belonging to a particular place has become as important as the beer itself.

That places contract brewers in a pickle. “If you don’t have a brewery, you’re kind of homeless,” said Mikkel Borg Bjergso, Mikkeller’s founder and chief executive. “You don’t have anything to show people.”

As a result, many itinerant beer makers are dropping anchor, opening breweries with tasting rooms for thirsty patrons.

Evil Twin, in Queens, and Grimm Artisanal Ales, in Brooklyn, are building breweries and taprooms. Stillwater aims to start its own beer production plant next spring in Brooklyn. In June, Almanac Beer Co. revealed plans to construct a brewery and taproom in Alameda, California, near Oakland.

And this month, Bjergso announced that he would create a brewery at Citi Field, home of the New York Mets. Scheduled to open this year, Mikkeller Brewing NYC will brew and can beers like its Say Hey Sally pilsner, served alongside food from Fuku and Pat LaFrieda. “Next year at Citi Field, people will be drinking beer made at the ballpark,” said Jim Raras Jr., Mikkeller NYC’s executive vice president.

Notch Brewing’s session beers eventually found their niche, and last summer, Lohring converted a riverside warehouse in Salem, Massachusetts, into a brewery, taproom and beer garden. In the afternoons, customers clink glass steins of corn-laced lagers and smoked beers that are produced on the premises.

Customers at Notch Brewing serve as contact focus groups, where the brewer can test new brews and get immediate feedback in the taproom and beer garden. Photo: Gretchen Ertl/The New York TimesCustomers at Notch Brewing serve as focus groups, where the brewer can test new brews and get immediate feedback in the taproom and beer garden. Photo: Gretchen Ertl/The New York Times

“Say you’re sitting there as a contract brewer, and you’ve got a million bucks,” Lohring said. “Do you spend the old-fashioned way with advertising and marketing, or do you spend a million bucks on a facility where you serve beer to consumers? It’s a pretty easy decision.”

Taprooms also serve as consumer focus groups. Lohring uses his to test richly flavored Old World lagers and pale ales featuring new hop varieties. “We get immediate feedback from customers and sales,” he said, “and that informs us on our next steps.”

Even more traditional brewers are planting roots. In February, the 127-year-old Narragansett Brewing Co., which once produced New England’s top-selling beer (and one of its catchiest slogans: “Hi, neighbour! Have a ‘Gansett”), resumed brewing in Rhode Island for the first time in decades.

The beer was discontinued in 1983, but Mark Hellendrung, a former president of Nantucket Nectars, bought the brand rights in 2005 and soon began contract-brewing its landmark lager in Rochester, New York. Last year, he moved the company into the cooperative Isle Brewers Guild in Pawtucket, Rhode Island, and, in February, started making smaller batch beers like It’s About Time IPA.

Beer cans at Notch Brewi­ng in Salem­. Photo: Gretchen Ertl/The New York TimesBeer cans at Notch Brewi­ng in Salem­. Photo: Gretchen Ertl/The New York Times

Previously, fans passing through Rhode Island could visit only the brand’s headquarters, then in Providence. Now Hellendrung can meet fans at the brewery, as he did recently with a North Carolina couple who stopped by while driving to Maine. “We were able to sit down and have a beer,” he said. “It was just awesome to have a great conversation.”

All the same, many of these beer companies still outsource much of their brewing.

Narragansett makes most of its beer, including its lager, in Rochester, at North American Breweries, which also produces Genesee beer. That brewery’s mix of lager-making expertise, speed and economies of scale is hard to beat, Hellendrung said, noting that the Rochester brewery can make 1200 to 1400 cans a minute, compared with 240 in Pawtucket.

Bjergso’s Mikkeller beers are mostly contract-made in Europe, where he operates the Warpigs Brewpub in Copenhagen in tandem with 3 Floyds Brewing Co. of Munster, Indiana.

But that can exact a cost, in dollars and freshness, when you factor in tariffs, shipping costs and delivery times. So last year, Bjergso took over an existing brewery and taproom in California to create Mikkeller Brewing San Diego.

“It’s great to produce an IPA and serve it to customers within a week or two weeks instead of two months,” Bjergso said. He can better adapt to fickle consumer tastes by making and selling popular IPAs directly from the brewery. “You’re able to give the customers a better experience if you’re behind everything, instead of going to a supermarket or some random bar,” Bjergso said.



More small investors using SMSFs to buy commercial property

Small investors are becoming increasingly aware of the benefits of using their self-managed super funds (SMSF) and trusts to buy commercial property, encouraged by the higher income yields and lower level of risk than some other asset classes.

Commercial property can offer a net investment yield, after fees, of between 6 and 6.5 per cent – as against less than 2 per cent for residential property – in most CBD markets, says leading Australian property group Charter Hall.

“Our investment philosophy is to invest in high-quality, institutional-grade commercial property in strategic locations, leased to high-quality tenant covenants on long-term leases,” said Steven Bennett, head of direct at Charter Hall. “This approach to investment allows us to manage our portfolio through the cycles providing investors lower volatility than other investment classes.

“Commercial property is now firmly on the radar of investors who want to use their SMSFs and trusts for investment. A lot of retirees and people transitioning to retirement are chasing secure income yields and, with term deposits and bank rates so low, commercial property is very appealing.”

Australian Tax Office figures show that SMSF investment in commercial property has grown nearly 47 per cent in just under five years to March 2017, from $53.2 billion in 2012 to $78.2 billion. As a percentage of total SMSF assets, however, it’s slipped from 12.9 per cent in June 2012 to 11.6 per cent at March 2017.

The SMSF Association has been watching these trends closely. “Direct investment in commercial property by SMSF trustees has been a significant feature of the SMSF sector,” said head of policy Jordan George.

“It’s especially been a core investment for SMSF trustees who have a small or professional business where they own the business premises through their SMSF.”

Often the premises are the most significant asset in a business and owning it via an SMSF meant it could be held in a concessional tax environment and used to fund retirement later in life.

“But SMSF trustees looking at this strategy should always seek specialist advice to ensure that the commercial property investment meets the required definition of being ‘business real property’ and other technical aspects of the superannuation law,” said Mr George.

The issue of how commercial property can be an important investment for SMSFs and trust funds will be one of the themes at the upcoming Symposium17 hosted by Commercial Real Estate on August 30, at which Mr Bennett and Peter Hogan, from the SMSF Association, will be speaking.

The keynote speaker at the symposium will be former prime minister The Honourable John Howard, OM, AC, who among other things will be talking about foreign investment, Asian markets and the impact on the commercial property industry.

Mr George said that commercial property could offer a stable income for SMSFs, with lower capital risk than other asset classes, and also promise attractive capital gains at about 3 to 4 per cent. That could take annual total returns above 10 per cent which, in the pension phase, could come tax-free.

“However, like any asset class, individual commercial property investments should be evaluated on their merits and not assumed to perform the same as the asset class in general,” he said.

In addition, he said SMSF trustees were increasingly investing in unlisted commercial property syndicates and unitised office property funds.

“It’s part of an overall trend that is seeing them diversify their portfolios away from blue-chip, fully franked Australian shares and cash and term deposits, and one we would expect them continue pursuing,” he said. “We always encourage trustees to seek specialist advice when re-evaluating their portfolio mix.”

Mr Bennett recommended investors should also look at how returns were delivered to them. “For example, we focus on long-term leases, anywhere between five to 15 years and in some cases up to 20 years. This provides a certainty of income throughout the fund’s life and allows us to manage re-leasing risk.

“However, a tenant on a three-year, shorter-term lease will give you a different income curve to a tenant on a 10-year lease, but we think it is higher risk because it exposes the asset to market pressures and potentially not producing income every three years.”

The Charter Hall Group, with a total managed property portfolio of more than $19 billion, owns and manages 314 commercial properties around Australia, including office buildings, supermarket-anchored retail centres, and industrial assets.

“We have high-quality tenants on long-term leases who are leaders in their sector,” Mr Bennett said. “Across our entire group portfolio, 70 per cent of our tenants are ASX 200 companies and 20 per cent are government tenants. The weighted average lease expiry (WALE) is around 10 years so we know we have high-quality tenants on long-term leases which provides secure long-term incomes to our investors.”

Accordingly, one of the most important things for SMSF investors to check was who would actually be managing their investments. Mr Bennett said it was important to make sure they were in the hands of a credible manager with a good track record.

Mr Jordan said that happily trustees were increasingly seeking specialist advice on commercial property investment, appreciating they needed to be aware of issues such as the management’s track record, as well as the quality of asset, whether CBD or suburban, the WALE, and the expected yield.

He said that the commercial property sector had also been largely unaffected by the introduction of the $1.6 million assets cap on SMSFs in the pension phase that took effect on July 1.

“This new rule means funds in the pension phase must transfer back assets exceeding $1.6 million to an accumulation fund and pay a 15 per cent tax on all earnings,” he said. “However, funds are not required to sell assets as they can be apportioned between the taxable and tax-free part of the SMSF.

“Also, funds affected by the $1.6 million transfer balance cap can access transitional CGT [capital gains tax] relief which allows them to reset the property or unit’s cost base to its market value on 30 June 2017, washing out any accumulated capital gains. For trustees in a listed or unlisted property vehicle it’s just a case of transferring units from a pension to accumulation fund.”


Box Hill, a mini CBD in the suburbs

With an enviable blend of outer suburb comforts, plenty of educational facilities, easy access to Melbourne’s centre and an abundance of restaurants and shops, Box Hill is fast becoming Melbourne’s second CBD.

Travel along the popular 109-tram route or Belgrave and Lilydale train line and, unbeknown to many, lives a gold mine of eastern suburbs. In recent years, these areas have flourished to become desirable places for families, young couples and singles to take up residence. One such area that has proven opportunistic to suburbans, city-dwellers and developers is Box Hill.

With housing supply in the CBD and inner-city suburbs becoming increasingly scarce, a large population increase in some of Melbourne’s outer suburbs such as Deepdene, Hawthorn and Kew has occurred. This trend will inevitably lead to an increase in jobs and local amenities which means exciting growth for many outer suburbs.

Box Hill truly is the gem of the eastern suburbs and its steady population growth and opportunities have not gone unnoticed. Astute developers are fast creating livable communities to greet the suburb’s growing demands. Box Hill’s centre is identified as a metropolitan activity zone in the Victorian Government’s Plan Melbourne strategy and substantial growth is forecasted for the suburb’s employment, housing, business, services and public investment. Its population is predicted to grow by 26% in the next five years following a growth of 35% in the last 13 years.

To accommodate and service the influx of residents, recent major investments in Box Hill include the $447.5 million redevelopment of Box Hill Hospital, the construction of the $120 million Australian Tax Office building and the $30 million-plus redevelopment of Aqualink to create one of Australia’s most modern and innovative aquatic and leisure centres.

One developer lending particular focus to Box Hill’s considerable growth potential and wealth of residential benefits is Golden Age Group. They have two major projects underway already in the heart of Box Hill – Sky One at the peak of Box Hill’s central hilltop at 545 Station Street and Sky One’s sister project which is two minutes’ walk away on the corner of Station Street and Cambridge Road. The 36-storey, 438 apartment project is ideally positioned with Box Hill Central shopping centre on its doorstep and the hugely popular Asian fresh food market just next door.

Box Hill is an outstanding example of growth outside of the CBD and inner city. It is the most significant activity centre in Melbourne’s eastern region and already provides residents with CBD-like facilities including shopping, dining, transport, education, hospitals, entertainment and recreation, all within a short walk.

This mini-CBD is already a major destination that attracts thousands of shoppers and diners with a diversity of cuisines and restaurants that rival Melbourne’s Chinatown. A flourishing Chinese community has called Box Hill home since the 1980s and many families who travel to Box Hill from around Melbourne to eat and shop have now relocated to its centre or aspire to. Its central activity area is now home to around 4,000 residents with a high level of cultural diversity.

Box Hill is also home to approximately 16,000 jobs across a wide range of sectors including retail, hospitality, professional, public service, medical and education. Box Hill Hospital treats approximately 48,000 patients a year and employs 4,500 staff, along with the Australian Tax Office having approximately 1250 employees.

There are around 60,000 students in Box Hill with 40,000 of them at the Box Hill Institute and the remaining attend various primary and secondary schools including Our Lady of Sion College, Box Hill Senior Secondary College, St Francis Xavier Primary School and Box Hill High School which ranked in the top 10 of Victoria’s best state schools.

Box Hill residents benefit from exceptional access to amenities throughout Melbourne via the train, bus and tram networks and the Eastern Freeway and Eastlink. Belgrave and Lilydale train lines stop at Box Hill railway station and commuters have a quick 20-minute trip to Melbourne Central.

At 517 Station Street, Sky One’s sister project will incorporate luxury apartments, premium retail, a boutique hotel, entertainment, a 104-place childcare facility and large, open public spaces including a rooftop terrace garden. The Box Hill community will also benefit from a new health and well-being centre and the possibility of a cinema complex.

Golden Age Group managing director Jeff Xu says the Sky One project and Sky One’s sister project provide a rare and valuable opportunity to contribute to and participate in the growth of one of Melbourne’s most dynamic areas. He commented, “With Sky One and its sister project, we will provide a significant amount of open public space, retail and entertainment for the community and we are also building a large childcare centre which will accommodate three times the number of children in the existing facility on site.”

Construction of Sky One started earlier this year and is on schedule for completion in mid-2019. Following Sky One’s resounding success, Golden Age Group have revealed plans for another ground-breaking site in Box Hill.



Stockland snaps up Hope Island site from administrators

Australia’s largest residential developer, Stockland, is planning an $80 million medium-density development on Gold Coast’s Hope Island after snapping up a key waterfront site there from administrators of the failed company Fish Developments for $13.5 million.

The 3.3-hectare site at 2-44 Marina Quays Boulevard is Stockland’s first standalone medium-density acquisition in Queensland and will add to its growing pipeline of more than 2500 ”townhomes” within its residential communities across Australia.

Stockland’s general manager of medium density, Ben Cantwell, said the company was in the early stages of planning for up to 100 new homes that would be pitched to investors as well as the first-homeowner market.

“This acquisition aligns with our strategy to diversify and broaden the reach of our residential business through medium-density development,” Mr Cantwell said.

“We have noticed the price points of what people are able and can afford to buy and that gives us confidence,” Mr Cantwell said. “The supply in the broader region is also being absorbed.”

The number of loans to owner occupiers constructing or buying new homes increased in several states over the year to May 2017. Queensland showed the strongest growth – up 10.8 per cent – according to the Australian Bureau of Statistics.

Stockland plans to develop a diverse range of townhomes that will appeal to those looking to upgrade or downsize, as well as first-home buyers. About half the townhomes in the new community will have water frontage and all residents will have access to a shared pool and cabana.

Over the past 12 months, Stockland has begun construction on more than 600 townhomes in Brisbane, Sydney, Melbourne and Perth.

It said it had identified a future pipeline of standalone sites such as the one at Hope Island.


Singapore-Based TrustCapital Advisors List Five Australian Office Assets Worth $700m

Singapore-based TrustCapital Advisors (TCA) commenced an official marketing plan to sell five office assets along Australia’s eastern seaboard in a move expected to raise $700 million.

The assets – 150 Charlotte Street in Brisbane; 50 Pitt Street in Sydney; and 469 La Trobe Street, 850 Collins Street (pictured above) and 575 Bourke Street in Melbourne – are being sold in accordance with the funds’ strategy and intended timeline.

“The assets will be available individually, as an entire portfolio or as a split combination of assets. This is the best quality east coast portfolio that’s come to the market in relation to quality, geographic spread and scale,” CBRE Victoria’s Senior Managing Director Mark Coster said.

“For portfolio buyers, the campaign provides an opportunity to gain obtain immediate scale with prime assets across Australia’s three major cities. Strong interest is also expected in the individual assets, which are each well positioned to capitalise on market conditions in their particular locations.”

JLL Head of Office Investments Rob Sewell said over 85% of this collection of prime office assets is weighted to Sydney and Melbourne, which are rated by JLL as the world’s top 2 best performing office destinations.

“Brisbane, meanwhile, is positioned for an upswing in tenant demand as a result of the many public and private infrastructure projects that are now underway, with 150 Charlotte Street set to benefit given the building’s proximity to these projects.”


In the case of the Melbourne assets, the 19,864 square metre 469 La Trobe tower provides a strong income growth story and the need for minimal capital expenditure. The recently upgraded tower is situated in one of one of Melbourne’s best performing precincts, which is being enhanced by the westward shift of the CBD towards Docklands.

“The building benefits from a diverse tenant mix, full occupancy, a strong history of tenant retention and strong potential for near term rent reversion,” Coster said.

With 850 Collins Street, Coster said buyers had an opportunity to secure a new, 17,337 square metre A-grade building in Melbourne’s Docklands precinct, providing a high-quality income underpinned by global tenant Aurecon.

The campus style building offers large, flexible floor plates, expansive end of trip facilities and has been designed to achieve a 4.5 star NABERS rating when fully let.

There is also potential to add further value to the property, with the ability to reconfigure the retail to include food and beverage offering.

Rounding out the Melbourne assets is 575 Bourke Street – a multi-let, refurbished office asset positioned at the heart of the Melbourne CBD’s western core. The 16,152 square metre building has capital works underway which will deliver a double height entrance foyer, new end of trip facilities, significant sustainability initiatives and a 4.5 star NABERS rating.

“These measures will future proof the asset, improving tenant attraction in the future while driving rental growth,” Coster said.


In Brisbane, the 11,011 square metre 150 Charlotte Street tower offers a quality cash flow and long Weighted Average Lease Expiry (WALE), in addition to the opportunity to secure a relatively high yielding investment opportunity.

Located in Brisbane’s sought after Golden Triangle, the building is home to several major tenants, including Rio Tinto. It is the first A grade institutional quality asset of its size to be offered to the market since Central Plaza Three in 2013.

“In the current cycle, the building is well positioned to capitalise on the recovering Brisbane leasing market, given the major lease expiries are in 2024. It provides an opportunity to buy a long WALE, core CBD product at an initial yield unattainable in other major east coast markets,” Sewell said.


Completing the line-up is 50 Pitt Street, Sydney, a 19-level building which occupies a super prime corner, with value-add options, growth potential and the need for minimal capital expenditure. The building has achieved a 4.5-star NABERS Energy rating.


Chinese mall installs ‘husband storage’ pods to ease the boredom while wives shop

A Chinese shopping mall has come up with a novel solution to entertain bored husbands.

Glass ‘husband storage’ pods have been installed at the Global Harbour Mall in Shanghai, according to Chinese state-run news site The Paper.

Each of the four pods is a miniature video games centre, for husbands that don’t want to be dragged around while their wives shop, and are often mostly there because of their wallets.

The pods feature a chair, monitor, computer and game controllers so men can sit and play retro games such as Tekken 3.

A few men that tried out the pods told The Paper that they preferred the pods to other shopping centre distractions like the cinema or food courts. Photo: The Paper/twitter

The service is currently free, but staff have said they are looking at monetising it in the future, potentially with users scanning a QR code on their phone to transfer payment.

Billboards in the shopping centre have been advertising the pods over the past month.

A few men that tried out the pods told The Paper that they thought they were a novel idea and that they preferred the pods to other shopping centre distractions.

One shopper, Mr Wu, said he thought the ‘husband rest cabin’ was a fantastic idea. “I do not like to accompany my girlfriend shopping, so whenever we go out shopping I will look for a movie to see or find a place to eat and sit,” he said, according to the Telegraph.

But others lamented the fact that the pods have no air conditioning or airflow and that they became ‘very sweaty’ after playing the game.

As online shopping grows in popularity retailers are having to try harder to entertain all shoppers, not just bored husbands.

In Australia interactive windows, in-store displays and ‘experience’ opportunities are becoming much more commonplace now, according to retail experts.


Student accommodation provider OziHouse has leased North Melbourne property

Student accommodation provider OziHouse has added another property to its portfolio after leasing the 22-apartment student accommodation at 38-40 Howard Street in North Melbourne for seven years.

The 720-square-metre property offers kitchen and laundry facilities, a communal lounge and roof top BBQ area. It is close to the University of Melbourne and is fully occupied.

OziHouse has agreed to a net annual rent of $255,000 with a private landlord through ICR Property Group’s Raff De Luise & Julian Materia.

Large format reign supreme

Pets Domain has opened another store in Mildura, Victoria, following the eight-year lease of a 1152-square-metre showroom at the Mildura Homemaker Centre, with landlord MPG Funds Management.

Rents are confidential but indicative gross annual rents in the area are about $80 to $140 a square metre.

Other tenants in the centre include Fantastic Furniture, Amart Sports and Chemist Warehouse.

CBRE’s Tom Perkins and Chris Parry brokered the deal.

Same in Adelaide

Wood heating expert Horizon Leisure is the newest retailer to join the line up at Mount Barker Homemaker Centre in Adelaide after taking out a five-year lease on a new 503-square-metre showroom.

This is an expansion for the company.

The property at 6 Dutton Road also houses Harvey Norman, Spotlight and Autobarn.

Rents are confidential but indicative net annual rents in the centre are about $170 to $270 a square metre.

CBRE’s Dallas Sears marketed the property.

VIMG leases

Property group VIMG has leased a 142-square-metre retail space at 137 Bourke Street, Melbourne, to real estate agency Jinding Real Estate for seven years with options.

Jinding will use the shop as a CBD branch and to display their residential projects, paying a gross annual rent of $222,000.

CBRE’s Zelman Ainsworth, Samantha Hunt and Tan Thach handled discussions.

Filled at last

Norfolk Pacific Pty Ltd has filled the ground floor office of the National Press Club Building at 16 National Circuit in Barton, Canberra – vacant for three years – with tenants Licensed Clubs Association of the ACT and one other private tenant.

ACT Clubs wanted a change and has taken up 96 square metres. The private tenant has leased the 78 square metres space to gain a foothold in the parliamentary triangle. Lease terms for the tenants are three and five years respectively.

Rents are confidential but gross annual rents in the building are about $380 a square metre.

Colliers International’s Aaron Bruce inked the deal

Woolloongabba wheels

Four-wheel-drive accessories business All American Wheeling has found new premises for its business at Woolloongabba in Brisbane after signing a four-year lease with options for a 400-square-metre office/warehouse at 25 Burke Street.

The property has three-phase power and a container-height roller door.

Ray White’s Jack Gwyn and Jared Doyle struck the deal at a net annual rent of $48,000.

Rug race

A hand-made rug retailer has relocated to a 150-square-metre retail/showroom space at 1032 Main Street in Melbourne’s Eltham at a net annual rent of $50,000. The private landlord used Fitzroys’ Dean Alexander.

Restaurant special

Melbourne restaurateur Joerge Meelky has agreed terms on a new 10-year lease for his High Society Café at 1102 High Street, Armadale, in Melbourne.

The two-level property has a three-bedroom dwelling on the first floor and a 90-square-metre ground floor retail space. It includes rear access and on-site car spaces.

Teska Carson’s Barry Novy closed the deal on a gross annual rent of $750 a square metre for a Melbourne-based private investor.

Sydney office bonanza

Time2 Travel Agency Pty Limited has committed to a five-year lease for a 182-square-metre, two-level commercial terrace office at 326 Victoria Street, Darlinghurst, in Sydney after moving from serviced offices.

The company will pay a gross annual rent of $75,000 for the property with rear parking to landlord Froozo Pty Ltd.

In Eveleigh, Centuria ATP Fund has leased out a 30-square-metre, ground-floor suite at the International Business Centre building at 2 Cornwallis Street to Heyday5 Pty Ltd.

The gross annual rent is $21,000 for 20 months.

In the CBD, WAIV International Pty Ltd will move to a 98-square-metre whole-floor office at level 2, 205 Clarence Street, signing a two-year lease with options on a gross annual rent of $61,000.

WAIV relocated from a shared space and needed a creative office.

Kalamata Holdings Pty Ltd is the landlord.

Ray White’s John Skufris brokered all three deals.

Bonanza continues

Software specialist Hotschedules will relocate its Sydney headquarters to the CBD after signing a new five-year lease on a fitted-out 270-square-metre office at 1 Castlereagh Street.

Rents are confidential but gross annual rents in the area are about $1050 to $1100 a square metre.


Has The Banking System Become Less Competitive?


Treasurer Scott Morrison has expressed confidence that the banking system will become more competitive in the future, even if a regulatory crackdown on riskier lending has undermined the ability of smaller and regional lenders to challenge the dominance of the Big Four.

Morrison’s office fended off claims of a decline in competitiveness, — triggered by S&P Global Ratings’ recent downgrade of smaller lenders — saying the focus was on curbing interest-only loans to investors.

Morrison also argued that the introduction of the $6.2bn bank levy on Australia’s Big Five banks during the May budget would improve competition in the sector, as smaller lenders had escaped the levy.

However, in step with the major lenders, smaller and regional lenders have quietly raised their home loan rates for investors in recent weeks, bolstering shareholder profits in the process.

A spokesperson for the federal treasurer said regional banks had been repricing products deemed higher risk, such as interest-only loans for investors, in line with recent regulatory curbs introduced by the Australian Prudential Regulation Authority (APRA) to reduce overall risk in the banking sector.

“The government supports increased capital requirements to lower overall systemic risk,” Morrison’s spokesperson said. “Long term, the government expects more competition in the financial services sector from the major bank levy and other 2017 budget financial services package measures.”

However, Shadow Treasurer Chris Bowen seized on the regional banks’ latest moves to renew criticism of Morrison’s handling of the bank tax.

“Scott Morrison mismanaged the bank levy on almost every score and we see more evidence – as if it was required – that the Treasurer’s argument that the bank levy was somehow about promoting competition is complete rubbish,” he said.

William Inglis & Son to build $140 million complex at Warwick Farm

CAROLYN CUMMINS | Commercial Property Editor | The Sydney Morning Herald | July 16, 2017


Inglis relocated its business to Warwick Farm from the five-hectare Newmarket property in Randwick earlier this year, after selling the long-held stables to Cbus Property in August 2015 for $250 million.

The hotel, MGallery by Sofitel, is under construction as part of the $140 million precinct developed by Inglis to be known as Riverside Stables. The new facility is adjacent to the Warwick Farm racecourse, in south-western Sydney, and will feature more than 800 horse stables re-using the hardwood from the Inglis Newmarket stables in Randwick.

The hotel, designed by architects Timothy Court & Co and interiors by CHADA ,is expected to open by next March and will have 144 rooms, including 22 suites and numerous family rooms across eight floors.

According to the developers, in a nod to the Inglis racing and thoroughbred history each hotel room will have a personalised name and theme, based on one of the many champion racehorses sold through its sales rings.

There will be a range of hospitality facilities at the hotel, including a paddock to plate-style restaurant and gardens named The Newmarket, a ringside bar, a lobby cafe, a mezzanine lounge bar, a micro-brewery and entertainment precinct.
Guests will be able to relax at the rooftop bar and pool deck, which will overlook the racecourse and stable precinct. There will also be conferencing facilities.

“We’re thrilled to be partnering with the Inglis family on this prestigious hotel development for south-western Sydney,” Mr McGrath said.

“Not only will it provide much-needed high-end boutique accommodation to service the racing industry and clients of Inglis, but we also believe it will be a major driver and drawcard for regional tourism across both the corporate and leisure sectors.”

Inglis managing director Mark Webster said the Riverside Stables complex and hotel were a “massive investment by Inglis, and has been created to service the thoroughbred racing and breeding industry for the next 100 years”.

“We are delighted to be working with the Asia-Pacific’s leading hotel operator AccorHotels to manage this special property under its luxurious boutique MGallery by Sofitel brand,” Mr Webster said.

In honour of the existing historic Newmarket stables in Randwick, a large barn is being constructed overlooking the racecourse for use during major horse sales and will double as a venue for weddings and other special events.

It comes as the national hotel sector is on a fast expansion path. As part of the growth, Savills has advised on what is considered the largest hotel merger and acquisition of the year with Prince Hotels Inc., a subsidiary of Japanese Investment giant Seibu Holdings Inc., acquiring 100 per cent of Australian-based Staywell Hospitality Group.

The transaction value is about $50 million and sees Prince Hotels Inc. add 30 hotels, including 12 in Australia, under the Park Regis brand, to its portfolio with significant further international growth to come.

Michael Simpson and Vasso Zographou from Savills Hotels led the transaction team, supported by Sheriden Bacon and Tom Shadbolt, with Tokyo-based Prince Hotels, which owns and operates 49 hotels – 42 of them in Japan under The Prince, Grand Prince Hotel and Prince Hotel brands.

The Staywell Hospitality Group operates hotels in Sydney, Melbourne, Brisbane, Townsville, the Hunter Valley and other Australian locations under the Park Regis and Leisure Inn brands. It also operates a number of properties internationally in Singapore, Indonesia, India, Dubai and Birmingham and will continue with its asset-light approach to hotel management as part of the new agreement with Prince and Seibu.

Mr Simpson, managing director of hotels for Savills Australia, said the acquisition of the platform enables Prince Hotels Inc. to fast track its global growth through immediate presence in a range of international markets.