Real Estate: 2023 Year in Review

As we come to the end of another busy year, our national Real Estate team reflects on significant achievements, developments, and industry trends, and looks forward to what 2024 may have in store.

“In 2023, the industry was resilient to significant market and regulatory challenges. We experienced retail uncertainty, created more efficient ways to use offices, navigated supply chain issues, and absorbed higher inflation, stricter funding conditions and increased compliance and operational costs. Proactive investors saw opportunities to unlock greater value and higher yields in traditionally underperforming and more passively managed assets. In 2024, functional office spaces will become increasingly popular as people return to work, retail centres focussing on experiential offerings will draw more customers, and industrial and logistics facilities will continue to outperform thanks to ongoing e-commerce growth and the demand for more warehouses. We also expect syndications and REIT mergers to regain popularity as larger funds seek to consolidate and the cost of debt remains high. This year, adaptability and efficiency will be rewarded. As legal advisors, we appreciate the need to effectively balance risk with opportunity to ensure our clients make the most of these opportunities in this changing market.”

Mark Askin – Practice Team leader

“Reflecting on the past year, we have observed considerable adjustments in real estate prices. Despite significant capital remaining uninvested and a drop in transaction volumes, we’re proud to have participated in some of South Australia’s major capital market deals, including the notable acquisition of Brickworks Marketplace. In a year marked by uncertainty in the office sector, our practice has also played a key role in landmark office leasing transactions across South Australia and Western Australia, involving major commitments from the State Government and several mid-cap to large-cap ASX-listed companies. As we head into 2024 at the forefront of SA’s property industry, we anticipate a strong year, fuelled by our active client base and involvement in numerous large-scale projects including the development of various shopping centres, large format retail spaces, and industrial properties.”

Adam Rinaldi – Practice Team Leader

Industry insights

Australia’s real estate sector has experienced a challenging year, with several economic changes and reforms affecting the industry.

One of the most substantial reforms was the passing of the new Property Law Act 2023 (the Act) on 25 October 2023. The Act is designed to revitalise Queensland’s property law framework by replacing the Property Law Act 1974 (Qld). It introduces a range of changes, both minor and significant, to align with modern commercial practices, eliminate obsolete provisions, and enhance clarity and certainty in property dealings. The Act’s enactment is scheduled through proclamation, with a potential delay of up to 12 months to facilitate comprehensive consultation and educational initiatives.

Key changes include:

• the creation of a statutory seller disclosure scheme that will apply to all freehold sales of land (with some exemptions);
• clarifying that registered easement covenants relating to the use, ownership or maintenance of the land (regardless of whether the covenants are positive or negative) are binding on future landowners unless the covenants are expressed to be contractual; and
• reducing the limitation period for bringing a claim in respect of a deed from 12 years to 6 years.

Other legislative and regulatory developments include:

• removing unfair contract terms (UCT) from contracts – this regime applies to standard form contracts issued or subsequently renewed after 9 November 2023, as well as standard contract terms modified after this date. With ACCC and ASIC prioritising the administration of UCT regulations, it is predicted UCT will maintain their attention into 2024, and they will seek penalties where applicable;
• the introduction of the Automated External Defibrillator (Public Access) Bill 2022 which passed both houses of the South Australian Parliament in May and will require owners (as opposed to occupants) to install and maintain automated external defibrillators inside buildings or facilities in certain instances;
• a proposed amendment to the Victorian Sale of Land Act 1960 which would make it an offence for vendors to require adjustment of liabilities for land tax and existing windfall gains tax under contracts for the sale of land from 1 January 2024;
• an amendment to the Queensland Body Corporate and Community Management Act which introduces a new process for termination of a community titles scheme for economic reasons and allows a termination resolution to pass by approval of 75% of lot owners.

Team movements

We welcomed Peter Nugent (Partner) and his team of Jeanette Hew (Associate) and Melissa Griffiths (Paralegal) in our Brisbane office, Michael de Palma (Lawyer) in our Adelaide office; Merna Isaac (Lawyer) and Annabelle Burgess (Lawyer) in our Sydney office, and Mandy Hsieh (Lawyer) in our Melbourne office.

Significant Matters

Throughout the year, we continued to act for our clients, across various industries in a number of transactions and developments, including:

Alceon
Acted for Alceon in the preparation of a put and call option agreement and contract for the sale of 385 MacArthur Avenue subject to commercial leases, and the preparation of a development agreement and contract for the construction, leasing and sale of 391 MacArthur Avenue.

BSA Limited
Advised BSA Limited (BSA) on the successful divestment of its APS Maintain business to CBRE (GCS) Pty Limited, a subsidiary of CBRE Group, Inc.

Morris Group
Acted for Morris Group in their ongoing development and restructuring of the Breakwater Island Master Plan and delivery of the new $110 million, 132 room Ardo Hotel. Ardo is Townsville’s first luxury hotel that will redefine North Queensland’s resort lifestyle by offering high-end accommodation adjacent to The Ville Resort and Casino (another Morris Group owned asset, which Piper Alderman assisted in acquiring), world-class dining, a luxurious day spa, and a stunning rooftop pool deck with panoramic views across the Coral Sea out to Magnetic Island.

Sunkin Group
Acted for Sunkin Group in its $600 million+ staged mixed-use development known as “Highett Common”, a master planned precinct spanning approximately 9.34 hectares which will be home to over 1,000 residences and is set to become Victoria’s first medium-density net zero community.

FRP Capital
Acted for FRP Capital in its approximately $80 million acquisition of Brickworks Marketplace in South Australia, which includes retailers such as Big W, Woolworths, Dan Murphy’s, Tony & Mark’s fresh produce as well as alfresco dining options, fashion shopping and a full range of speciality services, plus over 680 car parks.

Warakirri
Acted for the Warakirri Farmland Fund in its acquisition under a new partnership with global wine company Australian Vintage Limited of two large scale vineyards known as “Coldridge” in South Australia and “Grande Junction” in New South Wales totalling more than 1,300 hectares of land, for a combined value of $62.5 million.

Recognition

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 2024.

The Legal 500 Asia Pacific

In the 2023 edition of The Legal 500 Asia Pacific, Piper Alderman was recognised across 12 areas of law including Real Estate with Mark Askin, Adam Rinaldi and Lauren Abbott named as recommended lawyers.

The Best Lawyers in Australia

In the 2024 edition of The Best Lawyers in Australia, 54 of our lawyers have been named a ‘Best Lawyer’ and 18 of our senior lawyers have been named in the ‘Ones to Watch’ list, including the following in our real estate team:

• Richard Abbott– Leasing Law, Real Property Law
• Marcus Andrews – Real Property Law
• Mark Askin– Leasing Law
• Tony Britten-Jones– Leasing Law, Real Property Law
• Warren Denny– Leasing Law, Real Property Law
• Jonathan Dodd– Hospitality & Tourism Law
• Adam Rinaldi– Leasing Law, Real Property Law
• Ashley Watson– Commercial Law, Mining Law, Native Title Law ‘Lawyer of the Year’, Oil and Gas Law ‘Lawyer of the Year’, Planning and Environmental Law
• Lauren Abbott – Ones to Watch: Real Property Law
• Janet Wong– Ones to Watch: Real Property Law

We were also delighted to receive some very kind feedback from clients and contacts during the research process for the legal directories, including the following testimonials from The Legal 500 Asia Pacific: Australia, 2023 edition:

‘Hands-on approach from partners. seeking the best commercial outcomes.’

‘They are always willing to assist and provide independent advice. Their real estate partners are knowledgeable and provide frank advice.’

‘The team at Piper Alderman are genuinely invested in the quality of the outcomes for their clients and collaborators. They are passionate and committed. They are responsive – to the extent that it ensures a reliability not evident in their competitors.’