March 2014 Vol 5 / No
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WORLD CITY REVIEW RECOVERY OF PHYSICAL RETAIL MEETING HOTEL DEMAND The real value of international property And the new offshore challenge Converting office buildings AUSTRALIA AND NEW ZEALAND PROPERTY JOURNAL March 2014 Vol 5 / No. 1 $12.95 (incl GST) CHINA’S GHOST CITIES FORWARD THINKING, OR FAILURE? Print Post Approved PP246764/00006 A.R.B.N. 007 505 866 ABN 49007 505 866 ISSN 1836-6635 PINZ ISN 100 1330 THE OFFICIAL JOURNAL OF THE AUSTRALIAN PROPERTY INSTITUTE AND THE PROPERTY INSTITUTE OF NEW ZEALAND OFC.indd 1 3/12/2014 9:58:57 AM Untitled-1 2 6/5/2013 10:05:18 AM Untitled-1 3 6/5/2013 10:04:36 AM CONTENTS MARCH 2014 083 CHINA’S GHOST CITIES – ‘PHANTOM MENACE’ Forward thinking, or failure? REGULARS LIFESTYLE 008 API NATIONAL 046 FUTURE PROPERTY 086 GADGET REVIEWS DIRECTOR’S REPORT PROFESSIONALS Testimonials 088 NEW ROLLS-ROYCE 011 LEADERS IN THOUGHT Paul Bloxham: “Know your economy” 054 QUARTERLY HOUSING MARKET DATA 090 CLOUD COMPUTING FOR COMMERCIAL REAL ESTATE 014 API LIFE FELLOW James Pledge 072 LEGAL NOTEBOOK Recent cases, headline issues and new legislation 016 OPINION Rita Avdiev: Your future employee 002 ANZPJ MARCH 2014 002-004_TableOfContents.indd 002 3/11/2014 1:41:38 PM FEATURES WORLD CITY REVIEW 039 The real value of international property ‘OF DROUGHTS HOTELS FRACTIONAL 033 AND FLOODING 029 FROM OFFICE 064 INVESTMENT PLAINS’ CONVERSIONS A new kind The case for climate Meeting growing of part-ownership change adaptation investor demand OPINION & RECOVERY OF COST BENEFIT 017 ANALYSIS 049 PHYSICAL RETAIL 068 ANALYSIS Tim Lawless: The 2014 And the new Its role in property outlook offshore challenge development appraisal GDP AND CITY COMMERCIAL RIGHT OF WAY 021 POPULATION 056 PROPERTY 078 How high does this go? Measuring development INVESTMENT performance of Styles, performance and city structures funding (Part 2) RECENT EVENTS 094 Market news from NSW, Queensland and Victoria 004 ANZPJ MARCH 2014 002-004_TableOfContents.indd 004 3/12/2014 10:00:40 AM Discover a unique way to manage your real estate life-cycle to help drive value from your portfolios YARDI Voyager 7STM Smarter Commercial Management Real Estate Investment, Asset and Property Management Software Use a smarter approach to managing your entire property lifecycle. Yardi’s solutions allow employees to focus on delivering first class service to investors, clients and tenants by working more efficiently with mobile access to information that is critical to maintaining the successful operation of your retail, office and industrial portfolios. For more information call +61 (2) 8227 2200 www.yardi.com.au PUBLISHER PANEL NATIONAL OFFICE Australian Property Institute National Director Clyde Eastaugh Financial Accountant Venus Barredo 6 Campion St, Deakin, ACT 2600 CFO Andrew Tregenza Senior Journalist Kelli Wells Property Institute of New Zealand CIO Joel Leslie Systems Administrator Zoe Wolfendale Level 5, 181 Willis Street, Wellington, New Zealand Executive Assistant!Jill Lewis Professional Standards Manager Tony McNamara Editor: Bonnie Gardiner Technology Manager Iain Smith Professional Indemnity & Compliance Manager Production Manager: Education Standards Manager Tracy Kriesel Rohan Pearce Betty Lehman Financial Accountant Zainab Mwamtenda Sub Editor: Rebecca Merrett National Compliance & Audit Offi cer Creative: Fletcher Guinness Carlos de Vos Senior Designer: Kate Dougan API PINZ Account Director: Kerry Frances API National President Tony Gorman PINZ National President Phil Hinton President and Publisher: Barbara Simon API Senior Vice-President Robert Hecek PINZ Immediate Past President Ian Campbell API Vice-President Milton Cations PINZ National Board I Campbell, G Barton, G Munroe, API Immediate Past President EDITORIAL COMMITTEE B Hancock, P Hinton, I Mitchell, M Dow, Phil Western Managing Editor: Kelli Wells P Merfi eld (Independent) API National Council General Manager Chief Executive Offi cer David Clark Joel Leslie C Harris (QLD), A Cubbins (TAS), • Michelle Glastris M Kay (SA), R Smyth (ACT), R Dupont (NSW), C Shaw (Legal Advisor) • Professor Chris Eves • Sean Ventris PRODUCED BY • Ian Flynn IDG Communications for the Editorial Australian Property Institute. [email protected] • Amy Guy Advertising • Tracy Kriesel [email protected] Ph: + 61 2 9902 2706 MARKETING AND Level 10, 15 Blue Street, Subscriptions COMMUNICATIONS North Sydney, NSW 2060 [email protected] Joel Leslie, API National Offi ce Ph: +61 2 9902 2700 Ph: +61 2 6282 2411 The Australia and New Zealand Property Journal is published by the trademark infringement, breaches of copyright, licences and royalty, slander, Australian Property Institute (API) and the Property Institute of New unfair competition, trade practices and any violation of the rights of privacy. CONTRIBUTORS Zealand (PINZ) for the members. Authors, contributors and advertisers warrant that the material The Publishers invite authors to submit articles of interest supplied complies with all laws and regulations and that publication of that further professional practice in the property industry. Articles the supplied material will not give right to claims of liability or are being Rita Avdiev, Yolande Barnes, Adam of 500 to 5000 words will be considered. Guidelines for authors are capable of being misleading or deceptive or in breach of respective laws Bender, Paul Bloxham, Jessica available from the publishers. in all States and Territories of Australia and New Zealand. The Publishers reserve the right to alter or omit any article or At times, the Australia and New Zealand Property Journal Darnbrough, Clyde Eastaugh, Bonnie advertisement submitted. Authors and advertisers indemnify the publishes technical material to assist professional practice as supplied Gardiner, Michelle Glastris, Adrian Publishers and publishers’ agents against damages and liabilities that by authors and 3rd party sources. The Editor accepts no responsibility may arise from the published material. for the expressions, opinions, outcomes or effectiveness of formulas Hack, David Higgins, Lindsay Advertisers, advertiser agents and representatives lodging material or calculations contained in those articles. Readers should seek Joyce, Benjamin Lai, Tim Lawless, with the Publishers indemnify the Publishers, its servants, staff and agents independent, specialist advice on matters concerning business against all claims of liability or proceedings in relation to defamation, practice, fi nancial outcomes and legal implications. Tim Lohman, Gus Moors, James Morse, Elias Plastiras, Rohan Pearce, IDG Communications Pty Ltd (IDG) is the publisher of this magazine on behalf of the Australian Property Institute. Chris Shaw, Oren Rosen, Kelli Wells If you choose to accept offers, enter competitions or complete surveys contained within the Journal you may be required to provide information about yourself to the Australian Property Institute who will use this information to provide you with products or services you have requested, and may supply your information to contractors that help IDG and the Australian Property Institute to do this. Unless you tell us not to, IDG and the Australian Property Institute may also use your information to inform you of other products, services and events, or give your information to organisations that are providing special prizes or offers and that are clearly associated with the offer. For information on how the Australian Property Institute respects and protects your personal information, and how to change your privacy preferences please visit http://www.api.org.au/ folder/footer-links/privacy-policy or please contact the API Privacy Offi cer by emailing [email protected] 006_Publishers_Information.indd 6 3/12/2014 9:04:08 AM EDITORIAL COMMITTEE THE AUSTRALIA & NEW ZEALAND PROPERTY JOURNAL EDITORIAL COMMITTEE Submissions for the Australia & New Zealand Property Journal are reviewed and approved by the Editorial Committee. The Committee is made up of experienced professionals, academics, educators and journalists who regularly contribute their expertise in the various facets of the property industry to ensure content is valuable to members of the Australian Property Institute, the Property Institute of New Zealand (PINZ) and the broader property profession. COMMITTEE MEMBERS SEAN VENTRIS CHRIS EVES Sean Ventris is a corporate lawyer with CSR Professor Chris Eves is the Academic Program Limited and heads up the in-house legal Director for Urban Development and a Professor team in Sydney. He has specialist expertise in mergers and in Property Economics at the Queensland University of acquisitions, commercial property, corporate and commercial Technology. During his academic career, he has worked as negotiation, dispute resolution, corporate strategy, and a Senior Lecturer at the University of Western Sydney for 12 major projects. Mr Ventris was previously a senior lawyer years, followed by a position as Professor of Property Studies at Corrs Chambers Westgarth Lawyers where he worked in at Lincoln University from 2006-2009. In the past, Professor the property, environment and major projects fi elds. He has Eves has also been employed with the State Bank of NSW contributed articles to the Property Journal on a variety of for 13 years as a valuer, and a further three years in rural topical issues. lending and credit administration. MICHELLE GLASTRIS TRACY KRIESEL Michelle Glastris recently completed her PhD Tracy Kriesel commenced her work with the API at the University of Technology, Sydney. She in 2011 as the Online