Linton Apartments - Kangaroo Point

Transcription

1 Linton Apartments - Kangaroo Point INVESTMENT OPPORTUNITY ANALYSIS DATE: JUNE 2015 The information outlined within this document represents a subjective interpretation of the development based on plans, pricing and other information provided to us by the developer and/or their representatives. This information should not be relied upon for investment decisions. Interested parties should undertake independent inquiries and investigations to satisfy themselves that any details herein are true and correct. No forecasts are being made by Resolution Research & Marketing Pty Ltd about potential capital gains. Past information contained within this document about capital gains or price growth does not imply that such gains or growth will be made in the future. Resolution Research & Marketing Pty Ltd accepts no responsibility for reliance on this information. This information is current for twelve months from June 2015.

2 BRISBANE OVERVIEW & POPULATION

3 BRISBANE OVERVIEW Located on the eastern seaboard of Australia, Brisbane enjoys the closest proximity to Asia than any other Australia capital city. Consequently trade, investment, cultural and tourism links between Asia and Brisbane are the strongest in Australia. Brisbane offers its residents an enviable life with a climate which affords its population a unique, year round alfresco lifestyle. underpin demand for new dwellings throughout the city. Brisbane has an extensive public transport network of buses, trains, CityCats and ferries that connect all corners of the city and key community spots. Quality rail infrastructure provides commuters with access to a network of 10 lines, more than 130 stations, and direct links to key destinations including the city heart, the Brisbane Convention & Exhibition Centre and South Bank. With 400 bus routes, more than 12,600 stops, a modern fleet of buses and several dedicated busways, Brisbane s bus network forms an essential component of the city s public transport infrastructure mix. ONE OF AUSTRALIA S FASTEST GROWING REGIONS The city is one of the fastest-growing regions in Australian and the third most populous city in Australia. Brisbane is the largest of Australia s six capital cities by geographic area and the third largest in the world. The region is set to continue to be one of Australia s fastest-growing with the Queensland Government forecasting Brisbane s population to grow from 2.1 million to nearly 3 million by Brisbane City Council has delivered several important infrastructure projects in recent years, including the Clem Jones Tunnel, Go Between Bridge and Airport Link. The Legacy Way Tunnel will open in June 2015 and will be the next major infrastructure project to be completed. Collectively, these projects represent one of the largest infrastructure initiatives ever undertaken in Australia. This significant investment has ensured that the area s rapidly growing population base have sufficient infrastructure in place to support access to the city s major employment, education and retail nodes. POPULATION TO GROW FROM 2.1 MILLION TO 3 MILLION BRISBANE OFFERS ITS RESIDENTS AN ENVIABLE LIFE WITH A CLIMATE WHICH AFFORDS ITS POPULATION A UNIQUE, YEAR ROUND ALFRESCO LIFESTYLE. Much of Brisbane s population growth is driven by overseas and interstate migration which are both key factors which have, and will continue to, 3 INVESTMENT OPPORTUNITY ANALYSIS

4 BRISBANE APARTMENT MARKET OVERVIEW

5 BRISBANE APARTMENT MARKET AFFORDABILITY The latest data provided by the Real Estate Institute of Australia shows that as at the March Quarter 2015, Brisbane ranked as the second most affordable apartment market in Australia with a median price of $385, demand for apartments within Brisbane. With a continuation of escalating demand, growth in median values will follow suit with the Brisbane median expected to climb to the $400,000 mark by December quarter According to this data, Brisbane s median apartment price is $98,300 lower than the national median. When compared with Sydney s median apartment values, Brisbane apartments are $162,100 cheaper and $114,000 lower than Melbourne s median. The affordable position of Brisbane apartments is a key driver underpinning increasing levels of interstate migration which is resulting in uplifts in #2 MOST AFFORDABLE MARKET IN AUSTRALIA AUSTRALIAN CAPITAL CITIES MEDIAN UNIT PRICES MARCH QUARTER 2015 $600,000 $500,000 $483,300 $499,000 $525,000 $547,100 $424,000 $445,000 $445,000 $400,000 $385,000 $300,000 $277,000 $200,000 $100,000 $- HOBART BRISBANE CANBERRA ADELAIDE PERTH AUSTRALIA MELBOURNE DARWIN SYDNEY Source: Resolution Research Real Estate Institute of Australia June Real Estate Institute of Australia June INVESTMENT OPPORTUNITY ANALYSIS

6 BRISBANE INNER CITY APARTMENT MARKET

7 BRISBANE INNER CITY APARTMENT MARKET Brisbane s inner city apartment market is comprised of 21 suburbs which sit within a 5-kilometre ring of the CBD. Across the past two years we have seen a large volume of new development completions throughout the inner city which are servicing the long term underlying demand for new dwellings in inner urban locations. Our analysis of the current future supply landscape across Brisbane s inner city indicates that, based on the long term demand performance of the market, the market remains in a state of undersupply. Brisbane s inner city apartment market currently occupies an opportune position on the property clock, sitting at 7 o clock. The market has entered its next growth phase with underlying fundamentals in place for a continuation of improving levels of demand in the face of what remains an undersupplied market. Opportunities to capitalise on the market s upswing are apparent across both underlying values and rental returns. Inner City Residential Apartment Market Property Clock Sydney vs. Melbourne vs. Brisbane Over the ten years to March 2015, the median apartment price across the inner city has grown by an average of 2.9% per annum to reach a median value of $477,000. Over the medium term (5 years) growth in median values across Brisbane s inner city have performed largely in line with the long term averaging at 2.6% per annum. OUR ANALYSIS OF THE CURRENT FUTURE SUPPLY LANDSCAPE ACROSS BRISBANE S INNER CITY INDICATES THAT, BASED ON THE LONG TERM DEMAND PERFORMANCE OF THE MARKET, THE MARKET REMAINS IN A STATE OF UNDERSUPPLY. INNER CITY RESIDENTIAL APARTMENT MARKET PROPERTY CLOCK SYDNEY VS. MELBOURNE VS. BRISBANE 7 INVESTMENT OPPORTUNITY ANALYSIS

8 INVESTMENT OPPORTUNITY ANALYSIS 8 Both long term (10 year) and short term (5 year) demand has remained relatively stable at 3,800 and 3,400 apartments respectively. During the market s peaks in 2007 sales volumes rose to sit at 5,100 in line with introductions of new apartment developments into the inner city clearly demonstrating the market s capacity and willingness to absorb new apartment supply as it enters the market. VALUES UP 2.9% P.A Substantial rises in median price corresponded with this lift in demand with an annual growth rate of 11.8% recorded between 2006 and This solid growth is demonstrative of a market, which has a strong acceptance of values attributable to new product as it is injected into the market place. More recently, over the 12 months to March 2015 the median apartment price across Brisbane s inner city recorded an increase that was higher than both the long and median term averages at 3.6%. VALUES UP 3.6% IN THE PAST YEAR BRISBANE INNER CITY APARTMENT MARKET PERFORMANCE MAR 2006 TO MAR 2015 $600,000 6,000 $500,000 5,000 $400,000 4,000 $300,000 3,000 $200,000 2,000 $100,000 1,000 $ Sales Volumes Median price Source: Resolution Research, State of Queensland June 2015

9 BRISBANE INNER CITY DEMOGRAPHICS

10 INVESTMENT OPPORTUNITY ANALYSIS 10 BRISBANE INNER CITY 2 DEMOGRAPHICS Around one third of all residents of Brisbane s inner city are aged between 20 and 35 years of age, which is significantly higher than that recorded across Queensland. This demographic trend is consistent with all inner urban markets whose populations are predominantly comprised of Gen Y and Gen X residents who have a strong lure towards the lifestyle and convenience on offer in high-density, mixed use locations within close proximity to major employment nodes. POPULAR GEN Y ADDRESS It follows suit then, that the dwelling landscape throughout Brisbane s inner city is dominated by apartments, which account for almost half of all dwelling types located throughout the inner city, which is more than four times the proportion of apartments recorded throughout Queensland. Given the popularity of Brisbane s inner city with younger residents, the proportion of households occupied by couples with children is lower than the Queensland trend at the expense of higher instances of dwellings occupied by lone persons and share households. Consistent with this is a preeminence of smaller dwelling types comprised of one and two bedrooms. These dwelling types account for 46.5% of all dwellings throughout the inner city which is more than double that recorded throughout the State. Support for this type of built form and accommodation is strong across all tenure types, particularly the rental market which account for almost half of all occupied households in the area. the inner city s working population were employed in a professional or managerial capacity, which is significantly higher than that recorded throughout Queensland of 31%. Following on from this occupational profile is a typically affluent population earning higher median weekly incomes on personal, household and family levels when compared with Queensland. At the time of the 2011 Census, the median weekly family income of Brisbane s inner city residential population was $270 per week higher; the median weekly personal income was $890 per week higher; and the median weekly household income was recorded as $530 per week higher. Reflective of an area populated by those working in high income occupations is a population paying more for housing costs. Median weekly rents, at the time of the 2011 Census were $175 per week higher than the Queensland and median monthly mortgage repayments were $1,300 per month higher. YOUNG AFFLUENT POPULATION BRISBANE S INNER CITY IS DOMINATED BY APARTMENTS, WHICH ACCOUNT FOR ALMOST HALF OF ALL DWELLING TYPES LOCATED THROUGHOUT THE INNER CITY. At the time of the 2011 Census, more than half of 2 Brisbane Inner City SA4

11 KANGAROO POINT LOCATIONAL ANALYSIS

12 INVESTMENT OPPORTUNITY ANALYSIS 12 B=Kangaroo Point is located less than 2 kilometres from the Brisbane CBD and occupies a prime position on a peninsula around which the Brisbane River flows. The geographic attributes of the suburb offer a range of river and city views unmatched in Brisbane. It is traversed by the iconic Story Bridge and home to one of Brisbane s most revered natural assets the Kangaroo Point Cliffs. RECREATIONAL & LIFESTYLE AMENITY The high level and nature of recreational amenity on offer within Kangaroo Point and its immediate surrounds offers the resident population a unique, high quality of life. The popular Captain Burke, Raymond and Count White Parks are all located within the suburb providing popular bbq and picnic spots for social and family gatherings. Kangaroo Point Park is considered one of Brisbane s best parks home to a sculpture park and lengthy riverfront boardwalk. Upper River Terrace is also a popular bbq spot, sitting atop the Kangaroo Point cliffs with panoramic views across Brisbane s river to the CBD. Kangaroo Point is one of Brisbane s premier tourist destinations. The Story Bridge Adventure Climb ranks as one of the top tourist experiences in Brisbane and draws local, interstate and international tourists. Additionally, the Kangaroo Point Cliffs are widely acknowledged as Brisbane s most picturesque location for abseiling and rock climbing. PRIME A-GRADE LOCATION The multi-award winning Riverlife Brisbane is located in the suburb within the heritage-listed Kangaroo Point Naval Stores along the banks of the Brisbane River. Riverlife offers a diverse range of experiences, adventures, events and function spaces which has seen the venue voted as one of Brisbane s top 4 attractions. Amongst Riverlife s most popular adventures are abseiling and rock climbing the Kangaroo Point Cliffs, kayaking and stand up paddle boarding along the Brisbane River and cycling. South Bank Parklands, within walking distance of Kangaroo Point, is Brisbane s premier public space, tourist destination and recreational, entertainment and business precinct. The 42 hectare site is visited by more than 10 million people each year. The Parklands is separated into three main precincts including the 17 hectare open Parklands including Streets Beach and the Wheel of Brisbane; the revered retail and dining street Little Stanley and the Grey Street cultural boulevard including the Queensland Performing Arts Centre, the Queensland Art Gallery, the Gallery of Modern Art and the State Library of Queensland. Running along the banks of the Brisbane River is the Kangaroo Point Bikeway which joins with the Goodwill Bridge at the southern end of Southbank providing a direct link with the Queensland University of Technology s Garden Point Campus and the CBD. The Bikeway joins up with the South East Bikeway running to Macgregor in the south and the Bicentennial Bikeway running to Toowong in the west. THE HIGH LEVEL AND NATURE OF RECREATIONAL AMENITY ON OFFER WITHIN KANGAROO POINT AND ITS IMMEDIATE SURROUNDS OFFERS THE RESIDENT POPULATION A UNIQUE, HIGH QUALITY OF LIFE.

13 RETAIL AND DINING Kangaroo Point is home to two of Brisbane s most famous pubs The Story Bridge Hotel and the Pineapple Hotel. Both Hotels have long-held reputations as being amongst the finest steak restaurants in Brisbane. A number of other venues are located within the suburb including The Cliffs Café, the Dockside Comedy Club and the Brisbane Jazz Club. Naturally, being adjacent to South Bank Parklands the residential population of Kangaroo Point has immediate access to Brisbane s most revered restaurants including River Quay, Stokehouse, Dell Ugo and Era Bistro. running from the University of Queensland to Northshore Hamilton stopping at 18 locations along the way including South Bank Parklands, QUT Gardens Point and New Farm Park. HIGHLY ACCESSIBLE The everyday shopping needs of Kangaroo Point s population are well serviced by a selection of convenience stores and supermarkets including the IGA X-press Kangaroo Point, Foodworks, Coles Woolloongabba and Woolworths Spring Hill. Just over five minutes by car is the Coorparoo Shopping Precinct home to a full line Coles Supermarket and a variety of supporting convenience retailers. Just over 4 kilometres from Kangaroo Point is the landmark Gasworks Precinct at Newstead. Gasworks is home to an array of cafes and restaurants together with a Woolworths Supermarket and the Standard Market Company gourmet food and delicacy store. TRANSPORT Residents of Kangaroo Point are considered some of the most fortunate in Brisbane with unmatched access to Brisbane s ferry and CityCat services. There are three ferry terminals located at Thornton Street, Holman Street and Dockside. In fact, more residents use the ferry as their principal mode of transport to work than any other suburb in Brisbane. The population is also afforded access to the CBD via TransLink s bus network which takes around 15 minutes. TransLink bus services also link the suburb with the Woolloongabba Bus Station which is a major station on the South Eastern Busway. From the Woolloongabba Station, high frequency bus services operate between Mater Hill, South Bank Parklands, the Cultural Centre and the CBD. The South Eastern Busway connects with each of Brisbane s major busways in the CBD providing access to the capital s major employment, education, retail and lifestyle nodes. RESIDENTS OF KANGAROO POINT ARE CONSIDERED SOME OF THE MOST FORTUNATE IN BRISBANE WITH UNMATCHED ACCESS TO BRISBANE S FERRY AND CITYCAT SERVICES. Both the Cross River Ferry and the CityHopper services operate from the Holman Street, Thornton Street and Dockside terminals to Eagle Street Pier in the CBD s golden triangle in a journey taking approximately 5 minutes. At Eagle Street Pier the services link with the broader CityCat network 13 INVESTMENT OPPORTUNITY ANALYSIS

14 KANGAROO POINT POPULATION & DEMOGRAPHICS

15 POPULATION AND DEMOGRAPHICS According to the latest data provided by the State Government, Kangaroo Point was home to 7,527 persons in Moving forward, the population is projected to grow by more than 3,850 persons by Our research reveals that this is likely to translate into demand for more than 2,000 new dwellings. 3,850 NEW RESIDENTS 60% RENTERS The area is particularly popular with Gen-Y s who accounted for just over 40% of the area s population, which was double that recorded across Brisbane at the time of the Census. More than half of Kangaroo Point s resident population were employed in professional and managerial occupations, with more than 30% attending tertiary institutions. Congruent with these trends is a demographic earning significantly higher median weekly incomes when compared to the Brisbane, Queensland and national medians. The residential landscape of Kangaroo Point is similar to all major inner urban suburbs. At the time of the 2011 Census the suburb was overwhelmingly dominated by medium and high density developments which accounted for almost 80% of all dwellings within the suburb. This is in stark contrast to greater Brisbane wherein apartments accounted for around 11% of all dwellings. Demand for rental properties within Kangaroo Point is particularly high with 60% of all dwellings occupied by tenants at the time of the Census. This is significantly higher than when compared with 33% recorded throughout Brisbane. DEMAND FOR 2,000+ NEW DWELLINGS Further mirroring the trend observed throughout inner urban areas, couples with no children and lone person households are the dominant household types. Consistent with this dwelling and household composition is a pronounced demand for smaller dwelling types with 63% of all homes comprised of two or fewer bedrooms. This dwelling profile of smaller dwelling types is more than three times that recorded throughout Brisbane at the time of the 2011 Census. The resident population of Kangaroo Point is typified by young, affluent working professionals. 15 INVESTMENT OPPORTUNITY ANALYSIS

16 KANGAROO POINT EMPLOYMENT & EDUCATION

17 EMPLOYMENT Given Kangaroo Point s immediate proximity to the CBD it is not surprising that an extraordinary level of demand for residential dwellings stems from the CBD s workforce, currently estimated to sit at almost 157,000 persons. By 2031, an additional 65,000 new jobs are forecast to be created in the CBD resulting in a total workforce in excess of 222,000 persons. EDUCATION 73,000 TERTIARY STUDENTS 7KLM RADIUS Additional dwelling demand is underpinned by the significant volume of professional medical and supporting health workers at the state s largest medical precinct (Mater Hill) in neighbouring Woolloongabba. The precinct is home to the Mater Medical Centre, the Mater Private Hospital, the recently opened Lady Cilento Children s Hospital, the Mater Mother s Hospital and the Mater Private Clinic. 107,200+ NEW JOBS TO BE CREATED Around 19,500 new jobs are anticipated to be created over the coming years within Woolloongabba. This major expansion of the suburb s workforce will inevitably underpin demand for dwellings within the riverside precinct of Kangaroo Point. South Brisbane has established itself as a major city fringe employment hub only 4 kilometres from Kangaroo Point. The suburb was estimated to employ more than 22,700 people in 2011, forecast to more than double to reach just under 46,500 people by There are around 73,000 tertiary students all studying at institutions located within a 7 kilometre radius of the Kangaroo Point/South Brisbane and Woolloongabba precinct who are a key contributor to demand for rental dwellings throughout the precinct. These institutions include: The Southbank Institute of Technology which is the largest Vocational Education and Training educator in Queensland with more than 30,000 students enrolled across more than 110 courses. The Griffith University South Bank with more than 3,360 students enrolled contains the Queensland College of Art, Griffith Film School and the Queensland Conservatorium. The Queensland University of Technology Gardens Point & Kelvin Grove campuses which collectively have 39,000 students enrolled and more than 3,500 professional and academic staff employed. The University of Queensland s St Lucia Campus is easily accessible by a number of bus routes running through the area and the CityCat ferry service. The University is the largest university in Queensland and ranked in the top 100 universities worldwide. The St Lucia Campus currently has student enrollments totaling 35,150 and the University s Herston Campus has more than 1,500 students enrolled. The International Language School of Shafston International College is also located within Kangaroo Point and is a contributor to demand for residential accommodation within Kangaroo Point. 17 INVESTMENT OPPORTUNITY ANALYSIS

18 KANGAROO POINT RESIDENTIAL APARTMENT MARKET FUNDAMENTALS

19 INVESTMENT OPPORTUNITY ANALYSIS 19 APARTMENT MARKET FUNDAMENTALS Kangaroo Point s apartment market supply has been relatively constrained principally due to a lack of available land for redevelopment within the area saw the release of a handful of new developments that recorded rapid rates of absorption. At the time of undertaking this research, there was less than seven months of supply within the market. of product situated throughout the area. Over the past three years, consistent with broader residential apartment market trends throughout the inner South, the average annual rate of growth has lifted to a healthy 3.4% per annum suggesting the market has entered its next growth phase. An analysis of long term (10 year) median price performance reveals an average annual lift in values of 2.7%. This rate of growth has been heavily influenced by the older, secondary nature VALUES UP 3.4% P.A KANGAROO POINT IN THE CONTEXT OF BRISBANE S INNER CITY YEAR ENDED MARCH 2015 Newstead $747,000 New Farm Bulimba West End Hamilton Herston Highgate Hill Milton Brisbane CBD Brisbane Inner City Kangaroo Point South Brisbane Fortitude Valley Kelvin Grove Auchenflower East Brisbane Toowong Spring Hill Albion Bowen Hils Dutton Park Wolloongabba $586,000 $560,000 $555,000 $542,000 $516,000 $515,000 $510,000 $495,000 $495,000 $490,000 $480,000 $475,000 $459,000 $458,000 $442,000 $435,000 $430,000 $420,000 $420,000 $405,000 $401,00 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 Source: Resolution Research - Queensland Government June INVESTMENT OPPORTUNITY ANALYSIS

20 INVESTMENT OPPORTUNITY ANALYSIS 20 OVER THE PAST THREE YEARS, CONSISTENT WITH BROADER RESIDENTIAL APARTMENT MARKET TRENDS THROUGHOUT THE INNER SOUTH, THE AVERAGE ANNUAL RATE OF GROWTH HAS LIFTED TO A HEALTHY 3.4% PER ANNUM SUGGESTING THE MARKET HAS ENTERED ITS NEXT GROWTH PHASE. KANGAROO POINT IN THE CONTEXT OF BRISBANE S INNER CITY Despite recording a strong lift in median values over recent years, Kangaroo Point remains an affordable apartment market in the context of the 21 suburbs which make up Brisbane s inner city. The suburb s median price of $490,000 is largely in line with the inner city median of $495,000 and is one of the most affordable riverfront suburbs within inner Brisbane. RENTAL MARKET CONDITIONS - APARTMENTS As detailed earlier in this report, Kangaroo Point is a particularly popular address for Gen Y renters who are fundamentally seeking to occupy one and two bedroom apartment types within the suburb. HIGH GROSS RENTAL YIELD 6.5% Given the suburb s relative affordability, a number of attractive purchasing propositions remain in place within the local market across both new (off-the-plan) and established markets. The area s popularity as a rental address is underpinned by its immediate proximity to the CBD and major employment nodes at neighbouring Woolloongabba and South Brisbane, together with its close proximity to some of the state s largest tertiary institutions. THE SUBURB IS ONE OF THE MOST AFFORDABLE RIVERFRONT SUBURBS WITHIN INNER BRISBANE. Over recent years, median weekly rental growth throughout the suburb has been particularly strong. The median weekly rent of a one bedroom apartment has grown by an average of 4.1% per annum over the past 3 years (or $10 per week) and a two bedroom apartment by 3.6% per annum over the same time period. Accordingly, given this strong rate of growth, the suburb s apartment market is currently achieving a particularly healthy gross rental yield of 6.5% making it the highest yielding suburb within inner Brisbane. YIELDING INNER CITY SUBURB

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