Australia in News

1、Australia in News Perth to become Australias most expensive office market The average prime gross face rent in Perth is expected to jump by over 21 to A$963 per square metre per year by December 2015 as Australia enjoys a once-in-a-lifetime commodities boom, fuelled by rapid industrialization and ur

2、banization in China and India.Rent in Sydney is projected to lead the pack by 2012 but growth is likely to slow down with the average prime gross face rent likely to stand at A$890 per square metre per year in December 2015.“During the 2013 to 2015 period, we expect to see new supply levels in Sydne

3、y (central business district) to increase, while demand in Perth CBD remains consistently strong as a result of the commodities boom,” Luke Nixon, senior manager for CBRE said.“These are likely to be the main contributors to Perth CBD becoming the most expensive office market on average in Australia

4、 by the end of 2015.”Perth was hit by an abundance of new supplies and the global credit crisis over the past two years which pushed office vacancy rates to nearly 10 percent in mid-2010. But CBRE expects the vacancy rate to drop to near 6 percent by 2015, compared with the 10 year historical averag

5、e of 7.3 percent.Rising mortgage arrears in Australia fuel property concernsFitch notes more home borrowers were one or two months behind on payments in the quarter and have since been unable to cure delinquent status through December 31.“Mortgage performance is also expected to worsen in (the first

6、 quarter) driven mainly by the usual impact that the Christmas spend has on first quarter mortgage performance,” said James Zanesi, associate director in Fitchs Structured Finance team, who added a November rate hike by the countrys central bank and the impact of a series of flooding in Queensland m

7、ight also impact delinquencies.Fitchs 30-plus day Dinkum index, a measure of 30-day arrears, rose to 1.37 per cent in the fourth quarter from 1.30 per cent in the third quarter. Moreover, 90-plus day delinquencies rose to 0.54 per cent in the quarter from 0.48 per cent the quarter before.The report

8、comes only a few months after research from the International Monetary Fund pointed to home prices in Australia being 5 per cent to 10 per cent overpriced. In addition, several recent data reports have shown growth in housing prices is either starting to slow or turn negative.Overall, prices in Aust

9、ralia have quadrupled in a little more than 20 years, and the average home in Sydney now costs around US$200,000 more than its counterpart in greater New York and nearly as much as in Honolulu or San Jose, California, according to a calculation from data drawn from the National Association of Realto

10、rs in the US and the Real Estate Institute of Australia.Still, local economists and even the countrys central bank have dismissed claims there is a property bubble, noting the gains dont stem from a “credit-fuelled speculative boom” in Australian prices.Australia Building Activity Outlook Weak: J.P

11、Morgan The prospects for Australias building activity remains bleak as most of the first home buyers withdraw from the market due to a steady rise in borrowing costs and the quashing of subsidy support, Ben Jarman, an economist at J.P Morgan Securities said on March 16. Jarman was commenting on the

12、latest dwelling starts data, which showed a 5.3% quarterly decline on a seasonally adjusted in the fourth quarter. This was, however, better than the 13% contraction witnessed in the third quarter.The economist is of the view that going forward, rental yields may normalize. “That means, the pressure

13、 valve for undersupply of new housing is likely to be higher rents,” the economist added.Further, Jarman noted that building approvals softened markedly throughout 2010 as this was inevitable following a stimulus-boosted 2009.The economist sees this as an indicator of the economy retuning to the pre

14、-2009 malaise, where structural impediments in the planning, approval and taxation framework dominated any cyclical impulse coming from a strengthening economy.Wealthy suburbs put pressure on start-ups to performSmall businesses wishing to operate in Australias growing elite suburbs must be prepared

15、 to compete for space and offer something unique to survive, according to demographer Bernard Salt.Salt, an advisor on cultural and demographic trends at KPMG, says its not enough for businesses in well-to-do areas to be technically proficient in their offering.“Residents in these areas have high le

16、vels of discretionary spending and often travel extensively, so you need to have something that no one else has,” he says.Salts comment come in light of the latest RP Data Property Pulse report, which shows Australias million dollar property market experienced growth of 35% in 2010.The Perth suburb

17、of Peppermint Grove has maintained its status as Australias most expensive suburb with a median house price of $4.6 million, making it almost $1 million more expensive than the Sydney suburb of Vaucluse in second spot.Of the 212 suburbs with a median price of at least $1 million, 56% were in Sydney

18、while 20% were located in Victoria followed by WA, Queensland, the ACT and the Northern Territory.Tasmania is the only state without a suburb where the media house price is in excess of $1 million.RP Data senior research analyst Cameron Kusher says over the past five years, the number of suburbs wit

19、h a median house price of at least $1 million has increased by 172%.Kusher says the results highlight that not only has demand and price growth been strong for premium property, but residents are prepared to pay a high price for securing such a property.According to Salt, a lot of the business oppor

20、tunities in these suburbs relate to the properties themselves, such as gardening and cleaning.“I also see opportunity for retailers such as butchers, bakers and grocers ?C those sorts of businesses that contribute to the operation of the household and the day-to-day functioning of the residents of t

21、hat house,” he says. Salt says while he can also see opportunities for corner stores and cafs, residents in wealthy areas may be less inclined to choose restaurants based on convenience. “The challenge is to try to make your product range appeals to well-heeled clients who will be prepared to pay a

22、premium,” he says.He says businesses must also be prepared to face a competitive property market and high rents, stating retailers and businesses in wealthy areas are often under pressure to justify their space or their operation on commercial grounds.“Whether youre going to be a butcher or a hairdr

23、esser in a wealthy suburb, you need to be the best, which means more than just being technically proficient ?C its about your marketing ability to engage that population,” he says.Rio raises stake in RiversdaleGlobal miner Rio Tinto Plc. announced that it has raised its stake in Australia-based Rive

24、rsdale Mining Limited.The company acquired approximately 19.82 million common shares, representing 8.37% of the total shares and increased the stake to about 26.13%.Last week, Rio Tinto increased its offer price to A$16.50 from the previous price of A$16.00, for acquiring Riversdale Mining shares.Ma

25、nagement stated that the increased price will be applicable if Rio Tinto acquires more than 50% stake by 23 March, 2011. If there are no competing proposals, the company stated that it will not increase its offer price.Rio Tinto has extended the offer period for the third time. The extended time lim

26、it is April 1, 2011.Last year, in December, Rio Tinto announced that it will acquire all of the issued and outstanding shares of Riversdale at an offer price of A$16 per share, bringing the total consideration at A$3.9 billion. Rio Tinto decided to use its cash reserves and credit facilities to acqu

27、ire the above.The offer price of A$16 represented a 46% premium to the one-month volume weighted average price (VWAP) of Riversdale shares on November 3rd and 24% premium to the one-month VWAP of Riversdale shares on December 3rd.The acquisition is expected to enhance Rio Tintos production at a much

28、 reduced cost. Riversdale has coal projects and anthracite colliery in Africa, which will fuel Rio Tintos growth strategy of investing in developing and operating large, long-term, cost-competitive mines and businesses.Headquartered in London, United Kingdom, Rio Tinto engages in exploring, mining a

29、nd processing the earths mineral resources.We are encouraged by Rio Tintos massive investment plan, improved market conditions and the companys cost reduction strategy. However, at the moment the ADR is considered to be quite expensive. Thus, we have a Neutral recommendation on the ADR with Zacks #3

30、 Rank translating into a short-term rating of Hold.Drop in visitors to Australia forecastAUSTRALIA stands to suffer a significant drop in Japanese visitors following the earthquake that has left thousands dead, with concerns Sydney and the embattled Queensland tourism industry will be hardest hit. T

31、ourism and Transport Forum chief executive John Lee said that the disaster in Japan, coupled with the New Zealand earthquakes, could result in a big fall in international visitors here. Last year, the highest number of visitors came from New Zealand, at more than a million. Japanese tourists represented the fifth-largest visitor number at 398,100.Two out of our five top markets for international tourism have had major d