Chater Hall Group (CHC):
Fund manager Charter Hall has snapped up a portfolio of industrial properties – 10 meat processing plants run by global food giant JBS – from the Lederer Group for almost $180 million. The portfolio deal, worth $179.4 million, was struck on an initial yield of 6.5 per cent. The property deal follows the sale three years ago by Lederer Group of its Primo Meats businesses to JBS, the world’s largest meat processor, which is dual-listed on the New York and Brazilian stock exchanges. The portfolio’s average lease expiry is 10.5 years. The industrial deal comes as Charter Hall boosts its balance sheet firepower, with a $275 million capital raising that it completed on Monday and will direct across its $19 billion property funds management platform. Charter Hall was itself on the sellside of one recent transaction, striking a deal with private equity player Blackstone for a $126 million portfolio of industrial assets last month.
Cimic Group Ltd (CIM):
CIMIC is on the hook for tens of millions of dollars for costs associated with disputes on Inpex’s Ichthys LNG project in Darwin as head contractor JKC Australia plays hardball with subcontractors. CIMIC’s joint venture with the US’s CH2M Hill to build a power plant on the Ichthys site, which it inherited after buying UGL at the end of last year, has spent $20 million this year demobilising after walking away from the $550 million project in January, according to CH2M Hill. The joint venture also expects to incur ‘‘significant legal and other costs’’ until the dispute is resolved, CH2M Hill has revealed in a filing with the US Securities and Exchange Commission, warning JKC could also call on $50 million of performance bonds. The joint venture has claimed JKC – a consortium of US engineering group KBR and Japanese groups JGC and Chiyoda – failed to properly manage the power plant contract. But JKC claims the termination, which will be debated in an International Chamber of Commerce arbitration in Singapore, was not valid.
Lendlease Group (LLC):
Australia Square, the Sydney office tower that set a new standard in central business districts across the country, turns 50 this week and is still one of the city’s best-performing assets, its owners say. The 50-storey development that combined office accommodation in Australia for the first time with a public plaza still has close to 100 per cent occupancy after its May 1967 completion. The gamble at 264 George Street, that made the reputations of architect Harry Seidler and developer Lendlease, is one of the most sought after office locations, despite having a floor plate that is smaller than most modern buildings and a circular shape that some say limits its capacity to configure for tenants. But while the building’s 1020 square metre average floor plate size is smaller than the average, current owners GPT and Dexus say it works well. ‘‘Australia Square has stood the test of time and remains one of GPT’s top performing assets,’’ chief executive Bob Johnston said. ‘[‘The capital invested in Australia Square in recent years, along with the introduction of new services and amenities, has ensured the building has maintained its high quality and relevance. In addition, the building’s premium location and enduring Harry Seidler design still makes it one of the most sought after office locations in Sydney.’’ Dexus chief executive Darren Steinberg, whose own organisation bases itself in Australia Square, said the building stood out.
Macquarie Group Ltd (MQG):
Australia’s sharemarket could jump by as much two-thirds over the next decade, underpinned by a booming superannuation sector and the nation’s status as a ‘‘growth haven’’, according to a new report by Macquarie Research. The report, released before Macquarie’s annual three-day investor conference in Sydney, which starts on Tuesday, says the ASX 200 could climb from just below 6000 points to 10,000 points over the next 10 years, and to 20,000 points by 2040. James McIntyre, head of economic research for Australia at Macquarie, described Australia as a ‘‘growth haven’’, pointing out that economic growth has outstripped other advanced economies by 0.7 per cent over the past 25 years. While warning of a global push towards populism and more nationalistic policies, the Macquarie pair said it was yet to be seen whether Australia’s economy would suffer as a result. The Macquarie report suggests four sectors that should do well over the next few decades: education, tourism, services and agribusiness.
Harvey Norman Holdings Limited (HVN); Myer Holdings Ltd (MYR); JB Hi-Fi Limited (JBH); Metcash Limited (MTS); Westfarmers Ltd (WES); Woolworths Limited (WOW) :
Amazon will wipe 16 per cent off discretionary retailers’ earnings and 12 per cent off grocery retailer profits within years of entering Australia, according to surveys of fund managers and brokers by UBS. Within three to five years, sales of listed discretionary retailers are expected to fall on average by 5.2 per cent and earnings before interest and tax by 16 per cent, with JB Hi-Fi and Myer likely to be the hardest hit. In department stores and fashion, sales are expected to fall on average by 6.4 per cent and margins by 120 basis points, denting Myer’s earnings by 31 per cent and profits at Wesfarmers (which owns Kmart and Target), Premier Investments (which owns Just Jeans, Dotti and Portmans) and Woolworths (BIG W) by 8 per cent. The UBS surveys suggest that fund managers are slightly less negative about Amazon’s expansion than UBS’s own sales team. For example, investors believe food retailer profits could fall 10 per cent whereas UBS’s team estimate profits could fall 17 per cent. Harvey Norman shares have fallen 15 per cent in the last six months, JB Hi-Fi 11.5 per cent, Premier Investments 7 per cent and Myer 4 per cent, while Metcash shares have risen 8.5 per cent. Retailers, however, have generally played down the Amazon effect, saying that with strong store networks, existing relationships with suppliers and customers, competitive pricing and integrated omni-channel systems, which enable shoppers to order online and pick up in store or order instore and have products delivered, they are well-placed to compete with all new entrants.
（Source: AIMS）
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