Hospital, schools dominate commercial property deals

Property deals

HOMES in Mosman Park attract prices of $5,000 to $7,000 per square metre, depending on their proximity to the water.

So it is not out of the ordinary that a rare ‘absolute’ waterfront house in the suburb – with no road impeding access to the river – should garner $7,600 per metre.

And when that riverside mansion sits on 7,567 metres, records tumble. Iron ore heiress Angela Bennett sold the Perth mansion for an Australian residential record price of $57.5 million to fellow mining magnate, Mineral Resources founder Chris Ellison, late last year.

As the original asking price was $70 million, Mr Ellison could claim he secured a great deal, but Ms Bennett didn’t do too badly either. All would agree selling agent Willie Porteous benefitted from the deal.

The mansion is made up of three self-contained buildings and has its own cinema, tennis court, gym, pool, boathouse and private jetty.

Interestingly, Mr Ellison cashed in $54 million worth of MinRes shares days before the sale of the property was announced, as part of a company strategy for a partial sell-down of management interests in the company.

The sale eclipsed a national record set in 2008 for a $45 million waterfront property in Sydney’s exclusive eastern suburb of Vaucluse, which was sold by the fallen former head of Allco Financial Group, David Coe, to banker Ivan Ritossa.

The previous Perth record was for a property sold in 2007 for $23 million in Claremont, although it is the ‘palace’ being built in Peppermint Grove by Burrup Fertiliser’s Pankaj Oswal and his wife Radhika that is expected to earn the tag of ‘Australia’s most expensive home’, once completed.

The Oswals paid $22.7 million for a series of prized riverfront blocks in 2007, which was a transaction overseen by Mr Porteous.

Mack Hall, the founder of property consultancy Mack Hall & Associates, said there was some life in the top end of the market, although he didn’t expect a return to boom times this year.

“There are steady inquiries at the top end but we are not being overwhelmed,” he said.

While mining magnates helped the high-end residential property along in 2009, it was government that provided the important contracts for the big construction companies.

Construction heavyweight Brookfield Multiplex won what was arguably the most lucrative local building contract in 2009 – the $220 million contract for design and construction of stage one of the $1.76 billion Fiona Stanley Hospital at Murdoch.

The 643-bed hospital is the largest infrastructure project ever undertaken by the state government.

Under the contract, Brookfield Multiplex will progress the hospital design to the point where major subcontracts for the construction works would be tendered, with completion expected by late 2013.

Brookfield Multiplex in turn awarded Redcliffe-based Global Construction Services a $75 million formwork and concrete contract for work at the hospital.

Major construction company John Holland won the ‘consolation’ government contract of 2009, after securing $140 million worth of work arising from the federal government-funded school building programs.

Belmont-based Pindan Constructions was awarded $37.6 million in tenders, while Claremont-based Arccon Design and Construction won $27.2 million worth of work.

There was some controversy attached to the tender, which was actually run by the state government, as the contracts weren’t spread around as much as smaller applicants had anticipated.

The government also conducted a second round of tendering, which is a practice frowned upon in the sector where tenders are normally awarded to the best applicant in the first instance.

Industry heavyweight BGC pulled out of the tender in protest.

Further public works tenders in 2010 are likely to include the government’s recently unveiled waterfront plans.

Premier Colin Barnett said there was significant work to be done at the waterfront on road realignment, drainage and dredging, but preliminary works would begin as soon as possible, with major construction commencing in 2012.

Work is also expected to begin on the Northbridge Link this year, with contracts to sink the rail line on offer.

Commercial property sales in the state have been well down, with almost a halving of volumes in the past couple of years, according to Landgate data.

The biggest commercial property deals of 2009 included: the $95 million sale of the Australian Tax Office building in Northbridge by the Macquarie Office Trust; Charter Hall’s sale of its 50 per cent stake in Alluvion office tower for $95 million; and the sale of the Holiday Inn City Centre for $44 million.