newsletter | june · newsletter | june issue 4 of 2014 land ... have taken up the opportunity to...

SOHO has progressed to level 24

NEWSLETTER | JuneIssue 4 of 2014

View of Darwin at night taken from the North West corner of where SOHO will be built.

precipice ultimately, where prices will tumble and these herd buyers will be left licking their wounds.

These investors seem oblivious to market drivers like infrastructure spending; creating employment opportunities for an ever expanding population base. They are just buying for the sake of it along with the rest of the herd.

The reason I have always been so bullish on Darwin for so long, is that all of the fundamentals are strongly in place and have been now for decades; with Darwin being the strongest consistent capital growth and rental yield of any capital city in Australia since the early 2000’s.

Luckily though, the message is getting through to many like me who have chosen Darwin as one of the strongest long term investment regions to invest in.

I believe in decades to come, people will look back and wonder how Darwin became a global oil and gas hub without many people noticing.

The good news is the vast majority of you reading this have invested and will share in the growth ahead.

See you at my next Darwin talk.

All the best,

Jim Downs

Mobile: 0418 250 879Phone: +61 8 8981 0299Fax: +61 8 8981 0288Email: [email protected]

NEWSLETTER | JuneIssue 4 of 2014

Land ready for shopping centre development.

Hi Everyone,

I’ve been busy for the last month visiting Perth, Brisbane, Sydney, and Melbourne selling the Darwin investment message for Gwelo Developments.

The good news is that many investors have taken up the opportunity to invest in one of Australia’s most exciting growth regions

While in these other capital cities I have noticed particularly in Sydney and Melbourne (where the property markets are peaking), that buyers are driven more by HERD instinct than sound investment fundamentals. Their desire to NOT MISS OUT is driving the prices higher and the market towards an unsustainable

Fairweather and Pavillions construction.

SOHO DEVELOPMENT | JuneIssue 4 of 2014

Views of Frances Bay harbour from 24th floor

Views of the Esplanade from 24th floor

COOLALINGA SUB-DIVISION

Coolalinga aerial site location

shopping village(footings commence 30/05/14)

Service Industry & Showroom Complex

Howard Springs INPEX Accommodation Village

JohnstonZuccoli

(3 minute drive)

DARWIN ECONOMIC NEWS | JuneIssue 4 of 2014

2014-06-21 Financial Review: Hot property: DarwinDarwin’s housing undersupply has driven some of the country’s biggest price growth in recent years. While house price growth has now slowed, the high house prices have encouraged growth in Darwin’s unit market.

2014-06-18 SQM Research: Residential Vacancies: Darwin vacancy rate 1.4%.

2014-06-17 www.mywealth.commbank.com.auDarwin: Good Property Returns at the Top End

You may have heard about Darwin’s thriving property market and wondered if you should get in on the action. The numbers certainly suggest there are good returns for investors right now. For a start, the median asking rent on a unit is about $600 per week, according to RP Data and this produces around 6.5% gross rental yield on average. By contrast, Melbourne’s median asking rent is around $450 with a 5.8% yield… Darwin’s median house value is $665,000, according to Colliers International, which is notably higher than the national median of all capital cities combined…

There are a few reasons for the city’s property price rises but it’s mostly to do with its growing economy. Darwin, and indeed the wider Northern Territory, has been quietly improving its output while keeping unemployment levels below 4%.

It has a young workforce with a heavy concentration of employees in public admin and safety, healthcare and social services, and retail, according to government statistics. In addition, the Territory has also been boosted economically by major resources projects, agribusiness, tourism and the expansion of the defence force there.

In fact, a recent confidence survey conducted by the Australian Property Council and ANZ Bank found the Territory to be one of only two states to see a rise in positive sentiment overall, which has come on the back of its high employment levels, growth in wages and strong gains in household spending.

Construction levels have also been increasing and last year reached a high for the state, highlighted by $619m worth of private residential building during 2013. As Colliers notes, this has helped the property market.

A market that’s in high demand with a growing population typically favours investors because they’re usually not clinging to a particular location and can capitalise on areas with good rental yields. Darwin’s average rental yields have been the best in the country over the last decade at about 5%, according to the Real Estate Institute of the Northern Territory. This has been helped by people wanting to be close to town but also large numbers of temporary workers needing short term housing. Herron Todd White says that the city is well positioned half way through the year due to its healthy economy and expanding workforce…

In Darwin buyers appear to be interested in both capital growth and rental yields. Data from RP Data indicates that over the last 10 years Darwin averaged approximately 8% per year in capital gains. Whilst this accelerated rate of growth may have slightly slowed, Darwin still presents fantastic long term investment opportunity. In terms of rental yields, Darwin continues to have the best returns in Australia, something which makes Darwin highly appealing to astute investors. There is a lot of optimism towards new and affordable development in Darwin.

2014-06-24 LNG Industry: Work to begin on Ichthys LNG gas export pipeline

The 188 m-long Saipem-operated SEMAC-1 vessel is scheduled to start the 164 km shallow water pipelay component of the GEP installation… This work includes laying the first 18 km section of 42 in. dia. pipe through Darwin Harbour from Middle Arm… The SEMAC-1 is scheduled to be in Darwin Harbour for approximately 4 weeks. In total, the 164 km shallow water pipelay installation is scheduled to take around 80 days. Once completed, the SEMAC-1 will transfer work to Saipem’s deep water installation vessel, Castorone, which will lay the remaining 718 km of pipe to the Ichthys Field.


2014-06-02 Australian Financial Review: Inpex clinches LNG sales dealsSAL Heavy Lift Singapore Pte Ltd, has signed a major new contract with Australia’s BAM Clough Joint Venture for shipping and deployment of LNG and LPG product loading platforms for the INPEX-operated Ichthys LNG Project… The two platforms, being built in Batam, Indonesia, will be among the largest structures ever handled by a heavy lift vessel. The LNG platform will weigh in at a hefty 1,080 tonnes with dimensions of 40 x 39 x 8 metres. The LPG platform will be even more substantial at 1,320 tonnes with dimensions of 45 x 40 x 8 metres.

2014-05-28 NT News: Another big win for AhrensAhrens has secured more than $40 million worth of construction, structural, mechanical and piping work for the Australian oil and gas industry… This is Ahrens’ third major project for Inpex, as part of the Ichthys LNG project.

2014-05-26 MarineLink: LNG & LPG Product Loading Platforms

Inpex Corporation has struck two deals for the sale of liquefied natural gas from its share of Shell’s $US12 billion ($12.9 billion) floating LNG project… Tepco will buy about 560,000 tonnes a year of LNG, while Shizuoka Gas agreed to buy about 70,000 tonnes a year, for eight years starting in 2O17.The volumes account for all of Inpex’s share of LNG at Prelude.

2014-06-03 The Australian: Origin goes west in $864m gas playOrigin Energy is set to make an $US800 million ($864m) entry into Western Australia’s offshore Browse Basin, agreeing to buy exploration ground owned by Karoon Gas… American oil major ConocoPhillips is the operator and 40 per cent owner of Poseidon, with Petro¬China holding a 20 per cent stake…


The probable development options for Poseidon, which is expected to contain between 2.5 and 5 trillion cubic feet of gas, are backfill of ConocoPhillips’ Darwin LNG plant when reserves at the Bayu Undan fields in the Timor Sea run low, or floating LNG. Managing Director Grant King thinks backfill for Darwin, between 2017 and 2020, is the most likely option, meaning a 500km pipeline from Poseidon to Bayu Undan will need to be built rather than a new LNG plant.

2014-06-01 Oil & Gas Australia: Unprecedented opportunity in NTNorthern Territory Chief Minister Adam Giles said the Northern Territory was in an ideal position because of its central location be-tween the booming Asian economies and Australia’s well developed and supported south… “The time for investment in the north is now.” A key to that investment is at the Northern Territory’s Charles Darwin University… at the forefront of process and chemical engineering training in Australia.

2014-06-23 The Australian: Santos looks for supply deals to lift lid on Browse

SANTOS has started talks with ConocoPhillips and Inpex over the potential to supply the pair’s Northern Territory liquefied natural gas plants with gas from its low-profile Browse Basin discoveries. Santos is currently drilling its Lasseter-1 well in the Browse Basin, north of Broome in Western Australia, and is confident the well could add to its resource ¬position in the region. Lasseter sits in the same permit as the Crown gasfield, Santos’s largest discovery, with the well set to reach its target next month.

Santos general manager for Western Australia and the Northern Territory, Brett Woods, told The Australian that the group was already in discussions with ConocoPhillips and Inpex over the potential to pipe gas from its Browse Basin permits to their LNG facilities. “Those conversations are in play at the moment,” Mr Woods said.

Crown and Lasseter are sandwiched between the Conoco¬Phillips-led Poseidon gas discovery and the Inpex-led Ichthys gasfield, leaving them well placed to be incorporated into ¬either development. Inpex also holds a 20% interest in the Crown and Lasseter permits.

ConocoPhillips operates the Darwin LNG plant, in which Santos holds an 11.5% stake, and has said it is open to gas supply deals with third parties as it looks to top up supplies into the plant and potentially underpin a doubling of capacity… Santos and ConocoPhillips are also currently drilling at their Barossa discovery northwest of Darwin that has also been earmarked for the Darwin LNG plant.

2014-06-20 Ferret: Mining industry … SA & NT forging ahead

The Northern Territory has hit a new peak with the highest full-time employment ever recorded at 6,500 positions.

2014-06-12 ABC: Tellus ready for consultations

A mining company with plans to open Australian’s first underground salt mine in the Northern Territory has completed its final review… It would be capable of producing 5 billion tonnes of salt for the lucrative Asian market… the next step was to complete feasibility studies and get regulatory approvals.

2014-06-16 NT News: Port can be a world ‘centre of excellence’

In Darwin yesterday, acting Prime Minister Warren Truss said Darwin is “likely to be a strategic asset when it comes to developing the whole North Australia”… Darwin is likely to have a key role thanks to its proximity to Asia.


2014-06-15 Media Statement: Darwin at the centre of northern development

Acting Prime Minister and Minister for Infrastructure and Regional Development Warren Truss says the Northern Territory is well-placed to drive the development of northern Australia… “Darwin is shaping as Australia’s gateway to Asia – one of the fastest growing regions in the world, which will soon be home to half of the world’s middle-class by 2020. In terms of northern Australia’s development, Darwin is the linchpin.

This Green Paper reminds us that the northern Australia is vital to our national economy, with 55% (or $121 billion) of Australia’s exports shipped from our northern ports. The Northern Territory has one of the lowest unemployment rates in the country and investment activity is set to increase by 7% in 2014-15. According to the Bureau of Infrastructure, Transport and Regional Economics, the value of exports through Darwin’s port has increased with an average annual growth rate of more than 12% a year over the five years to 2012-13. And there is potential for increased exports from current and new mines in the Northern Territory, LNG from the Browse Basin and growing live cattle and beef exports. A new abattoir able to process up to 200,000 head annually is under construction south of Darwin.”

2014-06-13 Media Release: Economic opportunities flow from US marine rotations

Chief Minister Adam Giles: “This agreement … is about the United States using our bases on a more regular basis and having an appropriate legal arrangement for this to happen going forward. The ongoing presence of US Marines in the Top End presents significant economic opportunities for Northern Australia. An Economic Assessment of the Marines’ presence in the Top End found that the Territory’s Gross State Product would be boosted by at least $5.6 million this year or just over $5,000 per Marine.

2014-05-20 NT News: Talking up NT’s bright future

Committee chairman Warren Entsch said the NT had a lower population density than any other state or territory but, with its many natural assets and a pro-development attitude, it had “enormous potential to attract new residents and to expand and grow industries with benefits for all beyond the region. The Northern Territory’s trade and strategic potential is based on its significance in the pastoral industry, mining and defence support, in close proximity to Indonesia and South East Asia. The Port of Darwin is the main outlet for Australia’s live cattle export trade into South East Asia. As the service centre for mining, the offshore gas industry, tourism and horticulture, Darwin also has Charles Darwin University with its many centres of expertise, including on tropical health, and its role in the delivery of education and training across the North.”

2014-06-16 NT News: Asia seen as vital for NT growthNational economics director Ian Manning said the Territory was much better off than the rest of the country... “Darwin had full employment, unlike Tasmania, and then the green paper came out. It’s looking good.” Darwin could to grow to a city of one million people. “People in Darwin know about trading opportunities and cultural exchange opportunities. These need to be a major part of the foundation of the development of Darwin.”

2014-06-10 Media Release: Government Moving to develop Northern AustraliaThe Australian Government’s vision… is taking shape with the Green Paper on Developing Northern Australia released by Acting Prime Minister and Minister for Infrastructure and Regional Development Warren Truss in Townsville today… northern Australia is vital to our national economy, with 55% of exports shipped through northern ports and agricultural production in the north worth over $5 billion… The former Chief Minister of the Northern Territory, the Hon Shane Stone AC QC, will chair the Advisory Group.


2014-06-08 sbs.com: Canada, US to help northern AustraliaCanadian and US investors could be the key to opening up development in northern Australia, Trade Minister Andrew Robb says… opening up northern parts of WA, the NT and Queensland would also require rail, airports and ports linked to the major new agricultural projects. The growth in Asia’s middle class - from about 600 million to three billion people over the next 3 decades - would drive demand for specialist crops, horticulture and sugar. “These sorts of ventures across the north, in what is currently just cattle country, are in prospect for the first time ever because of the size and sophistication of the market that is emerging”.

2014-05-27 NT News: Cattle boss tackles new Top End roleOutgoing chief executive of the NT Cattlemen’s Association Luke Bowen has been appointed head of the Territory Government’s new Northern Australia Development Office.

2014-06-12 Media Release: Busy port sets record for Northern AustraliaNew figures for the 2014 calendar year show 155,000 cattle have left Darwin bound for Indonesia… New figures confirm that 1800 buffalo have so far set sail for Vietnam.

2014-05-28 Beef Central: AA Co showcases ‘Darwin product’ to the marketThe start of operations in Darwin will see the return of a slaughter facility on a commercial scale to the region for the first time since the closure of the old facility in Katherine in 2003… Breaking down the numbers, a half-shift, daily, at the Darwin plant would represent around 50,000 cattle a year; a full shift around 110,000, and two shifts around 220,000 a year. “By the time we get to March/April next year, we expect to be at a full-shift rate each day.”

2014-06-12 NT News: A new CBD hotel will open its doors next monthThe $150 million Elan Soho Suites on Woods St will add 301 rooms to the city’s strained hotel market, which struggles to accommodate both tourists and resource industry workers. Gwelo Hotels Group general manager Steve Frichot… “I’m really proud of the fact that we’re in the Territory and the impact we have on tourism in the NT… We expect our business to grow and flourish.” The hotel aims to attract business and conference visitors, with facilities for up to 400 conference delegates.

2014-06-13 NT News: We’re cruising

Northern Territory is set for a windfall as new figures show Australia is No.1 in the world for market growth and penetration in the cruise ship industry… An estimated 51,000 cruise ship passengers are tipped to visit Darwin this year.

2014-06-21 NT News: Garuda is looking to spread its wings

Garuda Airlines looks set to fly to Darwin after the director of National Civil Aviation in Timor-Leste cleared the airline to fly between Bali and Dili.

2014-06-08 NT News: Airlines woo Top Enders with Asian deals

Travellers can fly to Singapore return for under $350 from Darwin, and return flights to Kuala Lumpur are available from $450… the competition on short haul international flights out of Darwin means customers have more choice.


2014-06-05 Tourism Research Australia: International Visitors

Year ending March 2014, international visitors in the NT: total numbers up 2%, spend up 7%.

2014-05-28 NT News: Building towards future

Planning and project managers Flinders and Hyder have expanded to Darwin, opening offices in Woolner. Flinders Group merged with Hyder consulting in April… “We want to be part of the Federal Government’s plan to speed up the development of Northern Australia,” business director Shane McDowall said.

2014-05-20 NT News: Indigenous firm opens Darwin basePwC Indigenous Consulting chose Darwin as the ideal spot to service northern Australia… “This is a vast area that has enormous potential, not least of which is its proximity to Asia,” PIC chief executive Jason Eades said. “Add to that northern Australia’s resource wealth, whether it’s the Territory’s LNG reserves or its rainfall and huge land mass, or the fact Darwin has a deep water port, it’s open for business and we want to be a part of it.”

2014-06-11 Media Release: cost of livingMercer’s last cost of living study in late 2013 compared 350 different cities using a standard basket of goods and services... Mercer updated its cost of living index in March of this year with a more detailed break-down of the data for Darwin. “The report found that Darwin had the lowest cost of living of any Australian capital city”.

2014-06-12 Media Release: Territory unemployment rate lowest in the countryThe trend unemployment rate in the Territory decreased by 0.2 percentage points to 3.3% in May. This was the lowest trend unemployment rate of the jurisdictions. The Territory’s participation rate was 76.2%, the highest of all jurisdictions and well above the national figure of 64.7%. In annual terms, trend employment in the Territory increased by 7.8%. This was the highest annual employment growth of the jurisdictions.

2014-06-10 Treasury Economic Brief: ANZ Job Advertisements May 2014Compared to April 2014, the trend average number of weekly newspaper job advertisements in the Territory increased by 0.7% in May 2014, the 10th consecutive month of growth. In annual terms (May 2013 to May 2014), the average weekly number of newspaper jobs advertised in the Territory increased by 15.7%. The Territory was the only jurisdiction to record an annual growth.

2014-06-05 Treasury Economic Brief: International Trade April 2014In April 2014, the NT recorded a trade surplus of $434M, an increase of 23.6% compared to the previous month.

2014-06-04 Media Release: Tollner says NT on trackTrend retail trade turnover has increased for the 12th consecutive month…

2014-06-04 Treasury Economic Brief: State Final Demand March Quarter 2014In the year to March 2014, Territory SFD increased by 5.6% to $28.1 billion. The Territory recorded the highest growth rate of the jurisdictions.


2014-05-29 Treasury Brief: Private new capital expenditure March Quarter 2014In the year to March 2014, in original terms, private new capital expenditure in the Territory increased by 7.8%.

2014-05-28 Treasury Brief: Construction Work Done March Quarter 2014In the year to March 2014: total construction work done in the Territory increased by 33.6% to $6.6B, and engineering work done in the Territory increased by 41.6% to $4.7B (both the highest totals on record)… The value of residential building work increased by 16.4%.

Disclaimer

The above information has been compiled by Gwelo (the Agent) from third party providers. The Agent has not verified whether the above information is accurate and does not have any belief one way or the other as to its accuracy. The Agent does no more than pass on the information. The Agent does not accept any responsibility to any person for its accuracy. All interested parties should make and rely upon their own enquiries in order to determine whether or not the information is, in fact, accurate.

newsletter | june · newsletter | june issue 4 of 2014 land ... have taken up the opportunity to...

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