Real Estate: 2022 Year in Review
As we come to the end of another busy year that has again presented us all with some unexpected challenges, our National Real Estate team reflects on significant achievements, developments and industry trends and looks forward to what the year ahead may have in store.
“In a tightening market, savvy investors will look to position themselves to take advantage of the inevitable opportunities that will follow once confidence in the market returns, and capital is more readily available. It is imperative, as legal advisors, that we partner with our clients over the next 12 months to continue to provide both industry foresight and consistently high levels of service.”
Mark Askin – Practice Team leader
“The market has seen significant yield compression over the past decade across all locations in Australia and across all property types. High investment returns became an embedded expectation even in the absence of strong rental growth. With compounding inflationary pressures, yields have been rising to reflect the higher cost of funding. Property markets are going through a period of reduced liquidity on the path to price discovery. There are risks to investors operating in a such an unpredictable and price sensitive market emphasising the importance of partnering up with the right legal advisors with specialist industry knowledge to assist with the effective assessment and management of risk.”
Adam Rinaldi – Practice Team Leader
The NSW Department of Planning, Industry and Environment placed their new Design & Place framework on public exhibition in late February. The proposal complemented the introduction of the Minister’s Planning Principles in December 2021 and signalled a changing tide in the NSW planning system. This framework had the makings to empower a progressive shift in the lifestyle of NSW inhabitants and promote positive social and environmental outcomes. This framework was later abandoned after extensive consultation with stakeholder groups.
In July, we saw consequences for unlicensed builders carrying out work in Queensland impact a wider class upon termination of an exemption that sometimes (potentially misleadingly) referred to as the Head Contractor Exemption. This exemption applied to unlicensed superior contractors (including civil contractors, and property developers) provided they engaged appropriately licensed contractors to carry out the relevant building work. With the removal of this exemption, the industry saw significant uncertainty, which also followed through to the commercial and retail development sectors. For those in the real estate industry, it is critical that you review your contracts and ensure the scope of works are aligned to the level of certification required of your builders.
From October, we saw the changes resulting from Stage 1 of the Housing Legislation Amendment Act 2021 take effect in Queensland. In this stage, the primary amendments were landlords having increased repair and maintenance obligations, increased protections for renters ending tenancies and increased ease for tenants to keep pets. We encourage body corporates to ensure the new regulations are complied with in their schemes.
A lack of conviction amongst buyers and vendors caused transaction volumes to drop towards the end of 2022, but some sectors remained resilient. These included social infrastructure assets (childcare, medical and education facilities), pubs and hotels.
We welcomed Marcus Andrews (Partner), Paul Vergotis (Partner) and Alicia Chryssochoides (Special Counsel) in our Sydney office in early 2022 and most recently, John Wu (Partner) in our Melbourne office.
The team also celebrated the promotion of Sarah Legoe (Associate, Adelaide) in July 2022.
Throughout the year, we continued to act for our clients, across various industries in a number of transactions and developments, including:
Acting in the sale by Ace Dairy of various pastoral holdings in Gippsland, Victoria involving the divestments of land, water entitlements, dairy licences, motor vehicles, livestock and other operational assets. Ace Dairy was formerly among the three biggest dairy asset portfolios in Australia, fund managed by Duxton Asset Management.
Bridgestone Australia Limited
Acting for Bridgestone in the sale and leaseback of its national property portfolio situated across Queensland, New South Wales, Victoria and South Australia.
Colonial Leisure Group
Acting for Colonial Leisure Group in the $88M development of ‘Ardo’, a new 7 story resort hotel adjacent to The Ville Hotel Resort Casino in Townsville (also owned by CLG), and redevelopment of the marina at the front of the Casino to facilitate new business operations.
CS Development Group
Acting for CS Development Group in the drafting of scheme documents and off the plan contracts and conveyancing on sale of the 92 residential apartment lot proposed Community Titles Scheme and Management Rights at Stones Corner, Brisbane – Cello Apartments.
Edge Early Learning Group (EEL)
Acting for EEL on its acquisition of 19 childcare centres (18 operational and one development site) across South Australia and Queensland for circa $80 million. The transaction involved disposals of freehold interests held by EEL to a listed REIT.
Port of Brisbane Pty Ltd
Acting for Port of Brisbane Pty Ltd (PBPL), the effective landlord of premises to be constructed by PBPL for a long-term lease of industrial premises to Wallace International Pty Ltd. This project further increases the pack and unpack capacity of logistics businesses located at the Port to effectively process and distribute freight crossing the wharves at the Port.
Rockhampton Regional Council
Acting for the Council in the development and construction by Alliance Airlines of an Airport Maintenance Facility, to expand operations a the Rockhampton Airport.
Warakirri Asset Management Pty Ltd
Acting for the leading agricultural investment manager in its acquisition of the Josef Chromy Estate near Launceston. Joining with ASX-listed hospitality and liquor giant Endeavour Group, Warakirri acquired the 110-hectare Josef Chromy Winery, cellar door, restaurant and vineyard at Relbia in the Tamar Valley for its Diversified Agricultural Fund and lease them to Endeavour under a long-term agreement. This deal was one of the biggest single brand wineries deals in Australian history.
262 Lorimer Street Pty Ltd
Advising on the shed sale of 262 Lorimer Street, Port Melbourne, in respect of its industrial facility for $81.6m. The property was sold to Blackstone a leading global investment business investing capital on behalf of pension funds, large institutions and individuals.
This year, we have achieved outstanding recognition – both for the team and our individuals – across our national real estate practice team. We are grateful for our clients and colleagues and are looking forward to another successful year in 2023.
The Legal 500 Asia Pacific
In the 2022 edition of The Legal 500 Asia Pacific, Piper Alderman was recognised across 12 areas of law including Real Estate. Our practice team leaders Mark Askin and Adam Rinaldi were highlighted as recommended lawyers for real estate.
The Best Lawyers in Australia
In the 2023 edition of The Best Lawyers in Australia, 52 of Piper Alderman’s lawyers are recognised across 42 legal areas including the following in our Real Estate team:
- Richard Abbott – Leasing Law, Real Property Law
- Mark Askin – Leasing Law
- Tony Britten-Jones – Leasing Law Real Property Law
- Warren Denny – Leasing Law, Real Property Law
- Adam Rinaldi – Leasing Law, Real Property Law
- Ashley Watson – Commercial Law, Mining Law, Native Title Law, Oil and Gas Law, Planning and Environmental Law
- Jonathan Dodd – Hospitality & Tourism Law
- Lauren Abbott – Real Property Law – Ones to Watch
- Janet Wong – Real Property Law – Ones to Watch
We were also delighted to receive some very kind feedback from clients and contacts during the research process for the legal directories, including:
‘Piper Alderman are experts in their field and are prompt and efficient when dealing with Leases and Tenants.’ (Legal 500 Asia-Pacific, 2022)
‘Diversity is strong with a good mix of people from different backgrounds. Collaboration is very good. High level of interaction.’ (Legal 500 Asia-Pacific, 2022)
‘Very knowledgeable and great team to work with; tasks are always completed in a cost-effective and timely manner.’ (Legal 500 Asia-Pacific, 2022)
‘Mark Askin is an outstanding individual, he has great knowledge and is a relationship builder. Mark has really added value to our organisation.’ (Legal 500 Asia-Pacific, 2022)