News

EG Funds buys CBD leasehold

The Australian Financial Review - Ben Wilmot
PUBLISHED: 16 Aug 2011

Boutique property group EG Funds Management has snapped up a building in Sydney's Harrington Street for $7.12 million.

The group picked up No 117, a five-storey, older-style property on the fringe of The Rocks, on an initial yield of 10.8 per cent.

The purchase of the leasehold interest from Dawnay Day, which is under the control of receivers, showed a rate per square metre of $5032.

EG's acquisition was at a 21 per cent discount to the previous sale price of $9 million in 2007.

The property, which was extensively refurbished in 2007, comprises 1084 sq m of boutique office space, 139 sq m of retail space and a penthouse.

The freehold is owned by the Sydney Harbour Foreshore Authority. There are 94 years remaining on the leasehold.

The building is fully leased to tenants including Dimension Data and Spirit Pharmaceuticals.

EG launched a new syndicate backed by wealthy investors to acquire the asset.

EG's Matt Davison said the syndicate had been oversubscribed and the group was already hunting for similar opportunities.

The group was attracted to the Harrington Street property because of limited downside risk. The building had a weighted average lease term of more than two years and could benefit from the improving Sydney lease market.

Market analysts are expecting the Sydney CBD office market to have passed peak vacancy levels in the current cycle by the end 2011, with many expecting effective rental growth from 2012 onwards.

The Harrington Street sale was brokered by Andrew Hunter of Chesterton International.

Icon sale shows sanguine outlook

Newcastle Herald - Kate Tarala
PUBLISHED: 12 Mar 2011

THE Newcastle Herald building has sold for $9.5 million to Sydney-based EG Funds Management, according to Colliers International.

The property, at 28-30 Bolton Street and 44-46 King Street, Newcastle, will remain the home of the Herald, which has five years left on the lease with two, 10-year options.

The sale was negotiated by Peter Dodds and Tony Marshall of Colliers International on behalf of Coverbase Pty Ltd.

EG Funds Management divisional director Trevor Byles said Newcastle CBD was experiencing a periodic downturn but the company believed the city was in an excellent position to benefit from the strength of the resource economy.

"Newcastle has enviable existing infrastructure, including the largest coal-loading facility in the world, and with the further development of the coal seam gas industry and the continued port expansion, Newcastle will be an extremely productive and prosperous business location in the next 10 to 20 years," he said.

Mr Byles said the group was attracted to the property because of the CBD location as well as the lease term with Fairfax Media-owned Newcastle Newspapers.

"We will be working closely with Fairfax to retain them as our tenant well into the future," Mr Byles said.

Mr Dodds said the sale was a significant transaction for a regional market such as Newcastle, given the current status of the commercial investment market.

"EG Funds were obviously attracted by the high net return with such a blue-chip tenant in occupation," Mr Dodds said.

"It is good to see some investment faith being shown in our CBD in spite of the perceived sentiment around the GPT project and the lack of government expenditure in our city."

The building has a lettable area of 3646 square metres over four levels and on-site car parking for 57 vehicles.

The 3016-square-metre site formed part of the original Herald offices and printing buildings.

It was owned by developer Jeff McCloy who subdivided the land and completed an extension and redevelopment of the property.

It was redeveloped 10 years ago before being sold to Coverbase Pty Ltd, a company owned by Mr McCloy's brother Phil.

Mr Jeff McCloy sold the balance of the land to another local developer, Keith Stronach, who developed City Extra Apartments.

Location key for business park

THE Anambah Business Park in Rutherford has attracted interest from engineering and mining companies, with almost 19 hectares of the 25-hectare estate sold.

According to marketing agent Tony Cant Real Estate, the park is a joint venture of the landowner, the Royal Newcastle Aero Club, and the industrial developers, Hunter Land.

It includes level, cleared industrial sites with Hunter Land offering the opportunity to construct buildings for either the owner-occupier or tenant.

Twenty-five hectares have been developed in the estate so far, with 19 hectares sold to mainly owner-occupiers or as leased premises.

Tony Cant Real Estate's Peter Sarroff said the business park had attracted interest from major companies throughout Australia.

He said the majority of inquiries were from engineering- or mining-related industries, but there had also been strong inquiries from Newcastle and Hunter Valley service industries keen to capitalise on the above-average rate of population growth in the Maitland area.

Sale prices for individual lots had ranged upwards from $200,000, with more than $17 million in sales over the past two years.

Mr Sarroff said a few unsold lots remained in the first stage of the estate, with land sizes ranging from 1900 square metres to more than a hectare.

A second stage is due to be developed this year.

Mechanic and paint tenants

AN Edgeworth property leased to a paint store and motor mechanic is set to go under the hammer next month.

686 Main Road is on the market with Paul Hoare of Ray White Commercial Newcastle.
Mr Hoare said the 735-square-metre site had dual street access and was zoned 3(1) urban centre (core).

The total net income is about $63,500 a year, with bids expected to start in the early $500,000s.
Mr Hoare said tenant Merv Barlow Radiators had one year to run on the lease, with a two-year option.

He said the other tenant, Paint Right, had 18 months to run on the lease, with two three-year options.

The property will go to auction April 6 at the Madison Motor Inn, Charlestown.

Mixed prospects

The Australian - Marian Edmunds
February 12, 2011

EG Funds Management chairman Michael Easson says that despite the recession in commercial property values, the Gold Coast still has good fundamentals.

EG Funds Management chairman Michael Easson says the Queensland Gold Coast commercial property market won't be returning to good times for several years, but he remains optimistic beyond the present distress.

"We need to take a five to seven-year perspective, not to be in a hurry," says Easson, the former political heavyweight whose group snapped up the Circle on Cavill and the Forum retail properties at Surfers Paradise last year.

The 9000sqm Circle on Cavill was bought for $40 million from the receivers for failed property developer Octaviar, formerly MFS. It last sold in 2007 for $103m.
Earlier this year EG purchased the Forum in Orchard Avenue from the Cromwell Group for $42m.

"We see strong potential for that site to one day come back and to be a development site when the boom returns to the Gold Coast," says Easson, who was previously the vice-president of the ACTU and a senior vice-president of the NSW branch of the Australian Labor Party.

"It's a very cyclical market, but again, we're earning a very good yield on that property and we think it's a very sound investment.

"We're aiming to get a 15 per cent increase in income this year from that site, which is earning less than the Circle on Cavill."

The property's yield was 7.2 per cent on acquisition and is at 7.7 per cent now, he says.

Easson is also an independent director of ING Real Estate (Australia) and ANZ (2000 Olympic) Stadium, as well as EG's chairman, and is acutely aware that ambitious developers have been severely affected by recession on the Gold Coast.

The challenge will be to improve vacancy rates at his two Gold Coast retail centres.

Eleven per cent of the space at Circle on Cavill is empty and the Forum has 15 per cent of vacant space.

"When you hear people from the major banks saying, 'We're not lending, period, to developers on the Gold Coast, there's no more money', it's indicative that people have felt a lot of pain," he says.

"Obviously, there are significant recessions in property values, but we think the Gold Coast has a lot of good fundamentals. But I'm cautious about the Gold Coast returning to the good times for several years."

EG is focused on risks, he says. According to Easson, for this reason the group missed out on a lot of properties during the boom period.

Others were prepared to pay more and, in his view, did not recognise the potential risk of those investments.

EG will be talking to the market this year to gauge interest for the launch of new funds. The group is close to spending all of the investors' funding currently available to it.

One of EG's most recent acquisitions is the Fairfax Building in Newcastle. Bought for $9.5m in a distress sale with settlement due next month, it has a net passing yield (the rate of return that the current rent yields as a percentage of the purchase price) of 13 per cent.

It has also bought a commercial property in Burwood, Sydney.

EG Property is looking keenly at Sydney development sites, Easson says.

The fund manager has contracted the Built group to complete 60 dwellings in Canterbury, Melbourne.

In West Kensington, Melbourne, it is working on developing the old wool stores, "a build where we're protecting the heritage", Easson says. A design by Fender Katsalidis, one of Melbourne's leading architectural firms, is before the Melbourne City Council.

Easson sees Melbourne's office and residential markets as "very, very hot", while in Perth he sees long-term opportunities.

"It's been a little bit of a flat market, but the long-term value of Perth is the mining industry and I think, with some bumps along the road, there's 20 years of excellent opportunities in Perth," he says.

How to win the inner west

The Australian Financial Review - Ainslie Chandler
PUBLISHED: 10 Feb 2011 PRINT EDITION: 10 Feb 2011

Sydney’s inner west enters a decade of accelerated residential growth as two major apartment developments on neighbouring industrial sites will add as many as 700 dwellings to Summer Hill and Lewisham.

Demian Constructions has plans for a $150 million mixed-use development on its site at 78-90 Old Canterbury Road, Lewisham. A leading developer, Harry Triguboff’s Meriton Group, is buying the site, subject to rezoning. Meriton declined to comment when contacted by The Australian Financial Review.

The plans for the Lewisham project, which raised the ire of the local community during the public consultation period because of its height, its density and the potential impact on local traffic, include 400 apartments in nine buildings along with a supermarket and other retail space.

The Marrickville Council also expressed concerns, given that the development was not in keeping with its master plan for the area. The developer is now required to respond to public submissions before the Department of Planning makes its decision.

Planning for EG Funds Management’s redevelopment of the neighbouring Allied Mills site, which sits across the railway line at Summer Hill, is also accelerating. The $164.9 million venture was declared a major project and the fund manager is working on detailed plans for the site.

The Summer Hill project includes the redevelopment of six existing structures and the addition of two-storey and 11-storey buildings. Neighbouring the proposed Summer Hill light-rail station, it will have 280-300 dwellings, 2500-2800 sq m of retail space and 3500-4000 sq m of commercial space, along with open space, parking and infrastructure. The mill building will be used for retail and office space, and the silos will be converted into apartments.

EG Funds Management’s director of planning and design, Mark Syke, said the development was probably still three years from starting, considering the approvals that were needed.

About 7 km from the Sydney CBD, the infill projects are two of several urban renewal projects for Sydney’s inner city, with Frasers Property Australia undertaking a $2 billion mixed-use redevelopment of a former Carlton & United Breweries site on Broadway and Mirvac set to redevelop the Harold Park trotting track.

The NSW government has singled out several nodes around the city for additional density development to meet major population growth. Its Metropolitan Plan Sydney 2036 suggests the city will add 1.7 million people between 2006 and 2036, taking the population to 6 million.

The government aims to have 70 per cent of new housing developed in existing urban areas. However, Opposition Leader Barry O’Farrell has suggested the balance should be 50-50 between infill and greenfields development.

Early sales set a solid footing

Sydney Morning Herald - Commercial Property Editor Carolyn Cummins
PUBLISHED: 29 Jan 2011

THE 2011 calendar year has kicked off on a better note than in the past few years, with sales of close to $70 million so far.

Agents say that while conditions for financing remain tough, the underlying sentiment of buyers, high and small, appears to have turned from the negative to be more cautiously optimistic.

More sales are expected in the coming months than at the same time last year.

Economists predict unchanged interest rates for at least the next few months.

One of the most recent sales was by EG Funds Management, which bought Room 4 at 285A Crown Street, Surry Hills, for a price believed to be about $36.65 million.

The property was originally part of the Crown Street Reservoir and was occupied from the early 1900s by the water board.

Selling agent and the managing director of Chestertons, Andrew Hunter, said the property had been keenly sought as it was well designed for its target market. "The site was well received by the leasing market, as it's catered for the area with a wine bar and retail as well as office space," Mr Hunter said.

"It will provide EG Funds Management with a great opportunity for rental growth in the future."
The other selling agent was Colliers International.

The property was sold in 2008 by Sydney Water and underwent an extensive refurbishment to create a mixed-use development known now as Room 4.

Matt Davison of EG Funds Management said he was pleased with the acquisition.

"The acquisition price equates to a yield of about 8.75 per cent fully leased or 7.7 per cent on net passing and we believe this is attractive and reflective of the point in the cycle," Mr Davison said.

He added that the acquisition of Room 4 finished off a busy year for him and associate Trevor Byles. Last year they invested more than $150 million of EG's funds in five separate transactions.

Diversified property group FKP was also active, with the sale of its 48 per cent stake in Sydney building 17-19 Bridge Street for $24 million to the other private owner, Bridge Lane Corporation.

FKP secured its stake in the building in July 2007 and its share covers a net lettable area of 2728 square metres, 11 car-park spaces and existing tenants including CommVault. The site had been FKP's head office until the group moved into 99 Macquarie Street in June last year.

The executive general manager of commercial and industrial at FKP, Andrew Hall, said a great deal of work had gone into the refurbishment of the property. Mr Hall said it was pleasing to see the FKP stake bought for a price that reflected the quality of that work.

"FKP specialises in adding value to buildings through well-thought-out refurbishments and the securing of high quality tenants," he said.

Caydon tops up in Brunswick

The Australian Financial Review - Michael Hobbs
PUBLISHED: 08 Dec 2010 PRINT EDITION: 8 Dec 2010

Melbourne-based Caydon Property has added to its holdings in inner-urban East Brunswick with the purchase of a development site for almost $15 million.

Caydon bought the 10,000 square metre property off-market from Sydney-based EG Funds Management, which obtained the site from Charles Parsons Group for $8.7 million in October 2008.

EG specialises in buying undervalued properties and turning them around through development and rezoning approvals.

This site at 21-27 Brunswick Road was spot rezoned from industrial to Business 2 by the City of Moreland.

EG associate director Raja Jamal said the strategy had been to gain rezoning approval and then sell the site.

The property includes a 8000-square-metre single-storey property that is leased to the Brotherhood of St Laurence until 2013. The Victorian Electoral Commission also has space in the building. Its lease expires in January. The deal reflects a sale rate of about $1500 a square metre.

Vinci Carbone Property directors Joseph Carbone and Frank Vinci negotiated the sale.

Caydon is a Melbourne-focused property development and construction group. It has lodged an application to redevelop the property into 3000 square metres of offices and 250 flats. The application is expected to be approved by the middle of next year.

This follows the group’s recent purchase of the Vision Australia property in High Street, Prahran, for $21 million and a 5000-square-metre site in Burwood Road, Hawthorn, for $12 million. The company is developing a project at 1 Brunswick Road, Brunswick.

Caydon principal Joe Russo said inner Melbourne suburbs were still providing great development opportunities.

“There’s a lack of supply. There’s still strong demand for boutique sites of inner Melbourne like Brunswick and Prahran, whereas Melbourne’s CBD has a huge supply concern,” he said.

“I wouldn’t like to be in that space at the moment. I think a lot of those developments will have problems getting funding.”

Mr Carbone said major developers had been flocking to Brunswick.

“Brunswick has an enormous amount of potential, being so close to the city and public transport,” he said.

He cited Little Projects’ purchase of the former Tip Top Bakery site on Weston Street for about $12 million and Banco Group buying the former Tontine Pillow site in Nicholson Street for $15 million.

“The sale price of 21-27 Brunswick Road reflects where the market is today. Compared with the sales that occurred recently it’s on par,” Mr Carbone said.

EG bought former MFS Group’s Circle on Cavill at Surfers Paradise for $40 million this week.

EG planning some Circle work on the Gold Coast

The Australian Financial Review - Matthew Cranston
PUBLISHED: 02 Dec 2010 PRINT EDITION: 2 Dec 2010

Sydney-based EG Funds Management is seeking to buy the Circle on Cavill commercial and retail precinct at the Gold Coast from the receivers for failed property developer Octaviar, formerly MFS.

EG is one among a long list of potential buyers who have looked at the property, including the listed Abacus Property Group, the Sydney-based fund manager GDI Property Group and a private offshore family with shopping centre interests in Australia.

EG, whose executive chairman Michael Easson is the former vice-president of the ACTU, confirmed its interest in the property but would not comment further, given the asset’s sale process is moving towards final stages.

The group’s funds management division currently manages four unlisted property funds in Sydney and Perth, with total committed funding in excess of $750 million.

The group has been active in the Gold Coast area having snapped up the Surfers Paradise Forum shopping precinct from Brisbane-based Cromwell Property Fund for about $40 million in July.

The Circle on Cavill is part of a mixed-use development completed by Sunland Group in 2007.
The property, which could fetch more than $40 million, includes 10,000 sq m of retail anchored by an IGA supermarket and incorporating 50 shops, cafes and restaurants, and 2500 sq m of A-grade office space.

Sunland sold the property to the then MFS-backed Sunleisure Properties for $103.2 million in 2007.

Its present rental income is about $3 million a year but, if fully leased, it would bring in $5 million.

The property is being marketed by Sam McVay and Dan McVay from McVay Real Estate as well as Mark Witheriff and Lachlan Harris from CB Richard Ellis.

The agents and receiver, Ernst & Young’s Justin Walsh, declined to comment on the progress of the sale.

The property was officially placed on the market in September and the level of interest indicates a growing demand for bargain Gold Coast assets.

Last month Lang Walker snapped up a retail development site at Hope Island on the Gold Coast which included the Marina Quays Tavern. He purchased it from the weakened property developer John Fish and beat rival bidder Woolworths.

Since July, Singapore-listed Hotel Grand Central has snapped up the Courtyard by Marriott, at Surfers Paradise for $47 million and the Melbourne-based Zagame family purchased the Paradise Resort for about $40 million.

There remains a string of high profile asset up for sale including listed hotelier Thakral Holdings five-star Sofitel Hotel and The Oasis shopping centre at Broadbeach which could attract bids of more than $200 million.

EG snares fashionable Surfers site

The Australian Financial Review - Matthew Cranston
PUBLISHED: 15 Jul 2010 PRINT EDITION: 15 July 2010

Sydney’s EG Funds Management has acquired fashionable retail precinct the Forum at Surfers Paradise from the Brisbane-based Cromwell Property Fund for $42 million.

The sale comes at a tumultuous time for property activity in the Gold Coast.

More than $100 million worth of deals have been finalised in just over a month, but other assets such as the Marina Mirage shopping centre have fallen into the hands of receivers after sale campaigns fail to attract the right price.

EG Funds Management, chaired by Michael Easson, is banking on the Gold Coast’s potential but warned that investors will need to be patient.

“I think the Gold Coast is at a cyclical low, but to capitalise on the upswing you have to have the ability to be patient. And I think it helps to have a strong income stream,” EG divisional director Trevor Byles said.

The Forum, which has more than 8000 square metres of retail and commercial space, sold on a passing yield of 6.9 per cent.

McVay Real Estate’s Dan and Sam McVay negotiated the deal in conjunction with CB Richard Ellis managing director Mark Witheriff.

Sam McVay said investors were now spending money on Gold Coast assets to improve their quality and compete for tenants.

“Surfers Paradise always gets overbought and oversold.

“But I can safely say that on the back of recent deals the market has turned the corner.”

Parts of the Forum has been made vacant due to plans of failed Raptis Group to develop the property and buy it from the Cromwell fund. Cromwell took the property to market last year after the deal with Raptis Group fell through.

Cromwell Group chief executive Paul Weightman said the sale could see the Cromwell managed fund start paying distributions again. Cromwell announced a $120 million capital raising this week

“This sale will reduce the fund’s debt and hopefully get it into a position to pay distributions,” Mr Weightman said.
EG Funds Management was one interested party. EG’s Yield Plus Infrastructure Property Trust will own the asset and EG may look at developing it. “Ideally we are looking to land bank assets near new infrastructure,” Mr Byles said.

“This asset has strong underlying income from retail tenants and is likely to benefit from infrastructure such as the proposed light rail.”

EG Funds Management has been cautious about buying property. But last week bought an office tower in Sydney for $25.35 million.

“We hadn’t bought anything for 21 months and we had the capital for four years,” Mr Byles said.

“We have bid on a number of assets at prices we believed to represent excellent value for risk. However, our disciplined approach meant we missed out on all of those opportunities in the last 21 months.”

“However, Forum and [the Sydney property] have been in line with our investment strategy to protect down-side risk whilst offering a credible upside.

EG Funds moves on Sydney office tower

The Australian Financial Review - Nick Lenaghan
PUBLISHED: 06 Jul 2010 PRINT EDITION: 6 July 2010

Sydney-based EG Funds Management has acquired a seven-storey Burwood office tower for $25.35 million.

The deal was negotiated by Chesterton International agents Bevan Kenny and Michael Stokes on behalf of Commonwealth Bank of Australia.

The price represents an initial investment yield of 9.1 per cent.

The property has recently been refurbished and fully leased to the state government’s RailCorp on a 10-year term.

EG Funds Management is one of the two arms of EG Property Group, which was formed by former unionist turned-businessman Michael Easson and Adam Geha, who was previously an executive at Macquarie Bank.

The property firm has $750 million committed to a number of unlisted funds it has set up for Sydney and Perth.

It specialises in acquiring properties and achieving planning permission to rezone them.

“We were attracted to the long-term redevelopment potential of this property combined with the attractive yield and strength of the lease covenant.” EG’s Matthew Davison said.

“EG Funds Management is cautious about the short-term outlook for commercial property and managing risk remains our primary concern.

“Despite having significant capital available for investment, we struggled to find attractive opportunities over the last few years.

“We needed to be very patient and disciplined in our approach and we believe this approach will provide long-term rewards.”

The last acquisitions EG completed were two years ago when it bought a site in Drummoyne in Sydney for $19 million and one in East Brunswick in Melbourne for almost $9 million.

Earlier this year, the low-profile EG said more than 60 per cent of its money was still unspent.

But Mr Davison said the fund manager was now firmly on the hunt for acquisitions and hoped to capitalise on the opportunities emerging as the market softened.

Chesterton International’s Bevan Kenny said there was strong appetite for assets in the $20 million to $50 million range in the metropolitan Sydney market.

Desirable properties were those that offered “a strong headline yield, future rental reversion and development potential”, he said.

Residential developers on the lookout

The Australian Financial Review - Ben Hurley
PUBLISHED: 13 Mar 2010 PRINT EDITION: 13 Mar 2010

Residential developers with spare equity are on the hunt for prime development sites, as banks give creditstrapped holders an ultimatum to build or sell. With many rivals sidelined by a shortage of finance, cashed-up developers are taking advantage of the opportunities ahead of a looming shortage of housing.

The chairman of Sydney-based EG Funds Management, Michael Easson, says the year will see good buying opportunities as banks pressure long-term holders of development sites to sell if they can’t get the credit to start work.

“We couldn’t find value in the boom times,” Easson tells the Weekend AFR .

“Everyone was overpaying and we didn’t want to do that. We’re looking very carefully for opportunities now. We’ve got more than 60 per cent of our money unspent.”

EG is a specialist property funds managment and advisory operation that focuses on real estate opportunities arising from new community and transport infrastructure.

During 2006, the group raised $240 million in equity but spent less than 40 per cent. Now it is pushing forward with development plans for existing sites, including a mixed-use residential precinct on the former Summer Hill flour mill site in Sydney’s inner west.

The shift started in Melbourne, where apartment approvals jumped last year, and is moving on to Sydney and Perth.

Finance remains a critical issue for developers. Banks require much more equity and much higher certainty than before the financial crisis.

Nevertheless, despite weak approval numbers in January, Reserve Bank governor Glenn Stevens recently pointed to a “turning point in approvals for multi-unit construction’’.

Sydney-based Frasers Property Australia is in the market for more sites.

“Now is the time if you have the spare capital, you should be out there buying the sites that are being thrown out on the marketplace,” Frasers chief executive Stanley Quek says.

Perth-based developer Satterley iProperty Group is working on four land acquisitions compared with two last year, and managing director Nigel Satterley hopes they will be tied up in the next four months. He says he can be more “cautious and selective” as developers move sites off their balance sheets and recapitalise.

“There’s a lot of spin with agents trying to create hype that there’s lots selling, which of course is not correct,” he says.

Another Perth developer, Cedar Woods Properties, picked up a 2.5 hectare infill site in Melbourne’s inner ring suburb of Camberwell just before Christmas, and plans to build 80 homes.

In Sydney, IPM has four projects in the wings, which is a big spike after purchasing about one a year for the past five years.

IPM managing director Peter Plaskitt says tight credit restrictions by the banks have purged the cowboys from the market.

“It wasn’t possible for us to buy sites in the last five years,” Plaskitt says.
“They were able to get a lot of cheap debt and pay more for sites than we were. Now those players are out.”

Commercial real estate agency Knight Frank has sold $83 million of Sydney residential development sites in the past four months, including the $25.5 million Willoughby Market Gardens site in North Sydney to developer PPK.

Knight Frank director Guillaume Volz says he picked up six listings in the new year.

Property owners are more confident that their sites will sell for good prices, he says.

“The market is crying out for an increase in supply, yet approval numbers remain at historical lows,” he says.

“Developers are keen to capitalise on opportunities that do become available so they can position themselves in preparation for an anticipated uplift in residential values.”

Landmark White residential director Bill Fatouros says the profit window is open for those with cash, with strong demand for well-located apartments under $600,000 and it is “just a matter of time” before investors start buying large numbers of properties off the plan.

“Vendors have held out for a significant period of time and I’m sure a lot of banks are tapping those vendors on the shoulder and saying if you’re not going to be able to refinance you are going to have to sell the site,” Fatouros says.

“This is providing the opportunity for developers to come in, especially cashed up developers that can afford to drive things forward.”

The exception is Queensland, which is littered with development sites, often in the hands of administrators.

Across the state, 140 major residential projects were abandoned last year and while some major players such as Gold Coast-based Sunland are in acquisition mode, most large site transactions in the past year have been made by overseas investors.

Matusik Property Insights director Michael Matusik says there is a lack of “economic sites” on the market that developers can make work. This is particularly the case with the high taxes and charges that are in broad terms about double the cost of those in other states.