Offshore move gives gloom the boot

Blundstone boots are now made in Asia.WHEN Blundstone shut its 137-year-old Hobart bootmaking factory in 2007 and moved production overseas, it was criticised by unions, politicians and the press.
Nanjing Night Net

Australian icons that head offshore are never popular, and this story was a gift to subeditors looking for puns. ”These boots were made for walking: Blundstone strides off to Asia,” The Age reported. ”Blunnies workers get the boot,” said The Australian.

Five years later, chief executive Steve Gunn says there is ”no way” the company could have survived the subsequent surge in the Australian dollar. ”We were struggling, really struggling hard,” Gunn says. ”We could have survived for a while but it would have been a downhill slide.” Now Blundstone is bucking the gloom engulfing many manufacturers.

Gunn says that while the Hobart plant was efficient, it struggled to meet the wave of overseas demand that comes in the northern winter, when people in those markets want boots. This constrained the company from expanding its exports.

Since then, with most production split between India and Thailand, it has nearly doubled exports. Last year was its most profitable year on record. The 300 factory jobs lost in Hobart are unlikely to return, but it still employs about 115 people in Australia in a gumboot factory and in white-collar jobs.

”We really should be looking at the fact that we’ve saved 100-plus jobs, rather than the fact that we’ve lost 300, and I realise that’s very hard for people to appreciate if they happen to be one of the 300,” Gunn says.

As manufacturers grapple with the high dollar, Blundstone’s experience is telling.

In contrast to previous criticism, the move offshore was this week hailed by former Treasury secretary Ken Henry as an example of an Australian company playing to the country’s strengths.

For companies to thrive during the Asia boom, which has brought the high dollar, Henry argued they needed to make the most of the ”competitive advantages” – such as our educated workforce and advanced technology.

”Instead of making the same products that we were making 140 years ago, that capacity can instead be used to make and do things that only we can do, or that Australia can do better than people in other countries,” he said.

Henry stressed that this was more than simply taking output from existing factories in Asia. It’s also about companies trying to integrate themselves more deeply in the region.

ResMed, medical product manufacturer, has also invested in factories in Singapore and Malaysia, in addition to its research and development work in Australia.

A UBS healthcare analyst, Andrew Goodsall, says this has given them lower costs and provided a handy shield against the high Australian dollar. Similarly to Blundstone, it also benefits from being far closer to markets in the northern hemisphere, with shorter shipment times. ”Because Singapore is so much closer to their market they save a week’s worth of working capital,” Goodsall says.

Vitamin company Blackmores has also pursued Asian operations for the past two decades, with profits doubling in the past three years.

Henry says its success was built on combining ”the Asian appetite for preventive medicine with Australia’s reputation for quality, safety, and strong regulation”.

Far from just defending offshoring as a cost-cutting strategy, Henry says these examples show how Australian companies can exploit the Asian century to their advantage.

But that’s not to say investing overseas is a silver bullet that can resolve the problems facing many manufacturers. Pacific Brands, the owner of Bonds, sparked a furore when it cut 1800 jobs and moved manufacturing to China in 2009, but the strategy has failed to revive the company’s fortunes. CEO Sue Morphet, the architect of the plan, was this week replaced by former Foster’s boss John Pollaers.

The company’s woes highlight that offshoring is far from a sure fix for struggling companies in the manufacturing industry – because they need many other core strengths, such as Blundstone’s iconic brand or Blackmores’ reputation.

The chief Australian economist at Bank of America Merrill Lynch, Saul Eslake, also stresses that while survival strategies built on Asian integration can help individual companies survive, they won’t stop the shrinking of manufacturing in this country.

Ultimately, Eslake says there’s no escaping the harsh arithmetic of the boom. For mining to radically expand its share of the economy, the relative share of other industries has to shrink. If the currency is indeed ”stronger for longer”, Eslake says this may mean more jobs in Australia are lost.

This story Administrator ready to work first appeared on Nanjing Night Net.

Market’s five-week run hits the wall

THE sharemarket closed lower yesterday, ending a run of five weeks of gains amid fears the mining boom might have ended and as hopes for quick monetary stimulus in the US faded.
Nanjing Night Net

The benchmark S&P/ASX 200 Index fell 34.7 points, or 0.8 per cent, to 4349, for a loss of 0.2 per cent over the week.

Among the big sectors, materials lost 1.4 per cent, consumer staples 1.4 per cent, energy 1 per cent and financials 0.6 per cent. The telcos index was the only sub-index to gain, rising 0.4 per cent on the day.

Questions over whether the decade-long bull run in commodities has ended have become louder in recent weeks as data shows China heading for the slowest annual growth in more than a decade, driving down copper, iron ore and other raw materials.

Reserve Bank chief Glenn Stevens said it was too soon to call an end to the mining boom, intensifying debate over the outlook for the resource-rich economy as miners, including BHP, shelve expansion plans and takeover deals.

”Miners are being weighed down by the fact that iron ore prices are dropping,” said Damien Boey, equity strategist at Credit Suisse.

Iron ore prices dropped 5 per cent on Thursday to $US 99.60, below the $US100 mark for the first time since 2009.

Mr Boey said the banking sector was also hit amid concern about the robustness of the Australian economy, given fallen commodity prices and expenditure cutting by mining companies.

”This isn’t a good thing for employment and if it’s not a good thing for employment, it’s not a good thing for potentially bad debts,” Mr Boey said.

”So people are a little bit concerned now that both these sectors are kind of taking related risks from China’s slowdown.”

Yesterday ended the busiest week of the earnings season with Woolworths announcing a net profit of $1.82 billion, down 14.5 per cent. Its shares fell 48¢, 1.7 per cent to $29.

Fairfax shares took another bath, dropping 11 per cent to a record low of 45.5¢ after Gina Rinehart tried unsuccessfully to sell a third of her 15 per cent stake in the media company at 50¢ a share.

Its stock slumped 10 per cent on Thursday when it reported a $2.73 billion full-year net loss.

Coalminer Whitehaven posted improved net profit of $62.5 million for the year but its shares dropped 11.2 per cent to $3.09 after magnate Nathan Tinkler shelved a $5.2 billion takeover bid.

Elsewhere, resource stocks dragged the market lower.

BHP Billiton dropped 32¢ to $33.09 and Rio Tinto lost $2.38, or 4.4 per cent, to $51.80. Fortescue Metals suffered heavy losses following a downgrade by broker Nomura, losing 26¢, or more than 6 per cent, to $3.98.

The big banks were down but not by as much, with Commonwealth Bank falling 24¢ to $54.90, ANZ 23¢ off at $24.77, Westpac losing 12¢ to $24.65 and National Australia Bank falling 17¢ to $25.14.


This story Administrator ready to work first appeared on Nanjing Night Net.

Is the mining boom over?

Is it time to look beyond mineral resources for Australia’s future prosperity?AUSTRALIA’S mining boom was never going to last forever. Tucked away in the budget papers two years ago were estimates from Treasury and Geoscience Australia about how long our minerals would last. Iron ore was set to run out in 70 years at the current rate of extraction, gold in just 30 years. Black coal would last longer – 90 years, meaning many very young Australians will still be alive when the last lumps of black coal are dug from the soil and thrust into furnaces.
Nanjing Night Net

Treasury was careful to say its estimates weren’t definitive. Higher prices could ”encourage greater investment in exploration activities and new discoveries”. But its message was clear: mining would be unable to power Australia’s economy forever. Sooner or later – within one lifetime or maybe two – we would have to face up to the question of what comes next.

It’s the sort of question Australia has faced in the past. Those who grew up in the 1950s were forever being told the nation rode on the sheep’s back. Back then the farm sector accounted for a quarter of Australia’s production. Today it accounts for a little over 2 per cent.

For the most part that transition away from agriculture has been managed smoothly (although for a while woolgrowers tried to stare change in the face by legislating a floor price for wool, with disastrous consequences). The subsequent decline of manufacturing has been more painful, mainly because of the number of people employed. In the 1960s manufacturing provided jobs to one in every four Australian workers. Today it employs just one in 12.

On Thursday, Resources Minister Martin Ferguson seemed to ring in the next change. Speaking to the ABC’s AM program after BHP shelved plans to build what would have been the world’s biggest uranium mine at Olympic Dam in South Australia’s arid north, he declared the boom over.

”It’s about time Tony Abbott stopped talking down Australia both at home and internationally and recognised how well placed we are,” he said.

”But you’ve got to understand, the resources boom is over. We’ve done well – $270 billion in investment, the envy of the world. It has got tougher in the last six to 12 months. Look at Europe, the state of the European and global economies.

”Think about the difficulties in China, with still strong growth. The next round was always going to be difficult and I must say Olympic Dam was always a very, very challenging project – its sheer size.”

Prime Minister Julia Gillard rushed to reassure the public that Ferguson had not meant to say what it sounded as if he had.

”He has indicated that prices have come off a bit – or, if you like, that the commodity price boom has passed its peak,” she told Parliament. ”But there is a huge investment phase which still has some way to run and the export boom in resources still has a very long way to run.”

The simultaneous industrialisation of the world’s two most populated nations – China and India – has decades to run. Another 1.1 billion Asians are expected to move to cities over the next 30 years and they will require housing and supporting infrastructure. The Reserve Bank has estimated a typical Chinese apartment requires about six tonnes of steel, while 10 kilometres of metropolitan subway requires about 75,000 tonnes. Each tonne of steel produced requires about 1.7 tonnes of iron ore and more than half a tonne of coking coal.

But the plummeting mining profits and shelved resource projects have underscored the need for Australia to prepare for a time when it must rely on a different mix of exports, mostly knowledge-based services.

Resources exports have forged deep economic ties between Australia and Asia. But the mining boom may just be the prelude to the main game of Asia’s economic emergence. By the middle of this century, more than half of the world’s economic activity will occur in Asia.

This landmark shift creates economic possibilities unimagined even a decade ago. As the region’s middle class becomes richer, demand for a long and different menu of Australian exports including foodstuffs, tourism, education, financial services, business services, professional services and niche manufacturing will grow steeply. Australia’s proximity to the Asian economic powerhouse means it is well placed to capitalise.

But the shift from selling Asian customers bulk commodities such as coal, iron ore and gas to the far more nuanced task of exporting a wide range of goods and services into diverse Asian markets won’t be easy.

”It is one thing to sell a homogeneous minerals commodity to a minerals-hungry industrialist in China, and another thing entirely to design and market a sophisticated personal service to someone living in that culture,” said former Treasury secretary Ken Henry in a speech to business this week.

Australians have become much more aware of Asia, especially through holiday travel in the region. But experts warn that our knowledge is superficial. Even though many more of us are travelling to Indonesia and other south-east Asian destinations, fewer students are studying Indonesian now than in the 1970s. A recent business survey found that less than half of Australian businesses with dealings in Asia have any senior executives or board members with Asian experience or language ability.

Asia’s middle classes are emerging as the world’s biggest consumer group, but many of them won’t speak English. They will also have business cultures and political systems different from ours.

Henry, who is writing the government’s forthcoming white paper on preparing Australia for the Asian century, says the nation needs to build its ”Asia-relevant capabilities”. It will be crucial that Australian students gain a much deeper understanding of the cultures and languages of Asia.

Businesses will also need to think differently. Many companies that are defined as Australian will have to start looking at themselves as regional and be willing to move components of their business to Asia in order to survive.

THE Prime Minister and the Resources Minister are both right. The resources boom has ended, but only in a limited sense, for now.

It was kicked off last decade by an explosion of urbanisation in China. The first effect was to push up prices. With Australia and suppliers in Brazil and India ill prepared, the only way China could get the iron ore it needed to cater for its rapidly expanding cities was to bid up the price from a long-term average of about $US13 a tonne in 2002 to an extraordinary $US180 a tonne by last year. For Australian miners the undreamt of price was pure profit – they hadn’t needed to spend an extra cent to get it, which is why Kevin Rudd and Wayne Swan wanted to tax some of it away as super profits.

The price boom begat the investment boom as resources companies scrambled to mine more of the stuff. The investment boom is boosting the economy in its own right, drawing in billions in overseas capital and employing more workers constructing mines than will eventually be employed operating them.

But as miners around the world have raised production, prices have eased. A year ago iron ore was fetching about $US180 a tonne but yesterday the price slipped below $US100 for the first time since the global financial crisis.

Investment will turn down soon. Reserve Bank governor Glenn Stevens told Parliament’s economics committee yesterday he expected investment spending to peak ”within the next year or two” although it would remain at an unusually high level for a long time.

Big investments in gas production mean exports are set to quintuple by the end of this decade.

But Peter Coleman, chief executive of Woodside Petroleum, Australia’s biggest gas producer, says that as commodity prices fall miners are becoming more cautious about investments.

”We’re just seeing a natural part of the cycle, to be honest. It’s kind of like that long wave that comes into the beach, it’s starting to break. That’s what commodity cycles do, and then we’ll pick up another one here soon. It just depends on picking the right one.”

But even if the resource price boom is over, and the resource investment boom is coming to an end, our resource income boom still has some way to run. This pay-off from the investment boom – the extra resources Australia is able to ship out of the country – will stay with us for decades.

After China will come India. China has just passed a truly historic milestone: half of its population now live in cities. India’s rate of urbanisation is just a third, so it has a long way to go. In the past 15 years India has shot up from being the world’s 10th-biggest steel producer to its fourth. While India is blessed with vast reserves of high-quality iron ore, it is desperately short of the coking coal used to turn it into steel. Australia will be in the box seat once more, given our stocks of high-quality coal.

Even so, Deloitte Access director Chris Richardson says there could be a ”tricky phase” for the Australian economy as commodity prices fall and we wait for recent investment in mining capacity to come on line.

”In late 2014 going into 2015 we are going to have to change gears from construction as an economic driver to export earnings,” he said. ”There could be a pothole. We don’t know how big it will be.”

Some parts of the economy will benefit as the effects of the mining boom fade a little. The Australian dollar will probably fall, providing a boost to important sectors – such as tourism, education and parts of manufacturing and retail – that have been badly affected by the high exchange rate.

The companies in those sectors that have weathered the effects of the soaring exchange rate are likely to thrive if the dollar pulls back.

Meanwhile, Henry says there is no room for complacency. Australia should waste no time adapting and reforming our policy settings to make the most of opportunities beyond the mining boom.

”It would be a mistake to think that geography and/or geology alone will get us where we want to go and allow Australia somehow to ride the wave of the Asian century around us.”

Matt Wade is a senior writer.

Peter Martin is economics correspondent.

This story Administrator ready to work first appeared on Nanjing Night Net.

Doctors in the house on Wellington Parade

End of an era: Mowbray students protesting at Parliament when their school closed.THE Royal Australian College of General Practitioners has paid about $25 million for a prominent East Melbourne office – for years the headquarters of utilities company Melbourne Water.
Nanjing Night Net

The college, Australia’s largest professional general practice organisation representing some 21,000 members, will own and occupy four levels of the six-level building as its national office.

At 100 Wellington Parade, opposite Yarra Park and the Melbourne Cricket Ground, the former Melbourne Water building will now be known as RACGP College House.

The 6500 square-metre office, with 102 car parks, is much larger than the four-level South Melbourne office at 1-7 Palmerston Crescent that the college occupied for 17 years, but sold last week for $9 million.

The college, which represents urban and rural general practitioners, will lease part of the East Melbourne building.

Jones Lang LaSalle director Richard Norman says just one level of the building is available for rent at $285 per square metre, per annum.

Property enthusiasts with longer memories may remember the East Melbourne asset was once controlled by the Heine Brothers empire, which was considered one of Australia’s largest steel exporters.

More recently the building was leased to Melbourne Water, which in 2010 announced a move to more modern new headquarters in Docklands.

Melbourne Water made headlines in June when, because of an administration error, its clients were overcharged more than $300 million. Melbourne Water has quietly been selling development sites across metropolitan Melbourne for years.

Mowbray’s site deficit

ADMINISTRATORS for defunct western suburb private college Mowbray are likely to recover just half of the school’s $18 million debts from the sale of its three campuses.

In a complicated sale campaign in which value will depend on potential land use, particularly if the sites can be rebuilt as residential projects, the three school campuses are thought to be worth a total of about $9 million.

The largest school, the 17.75 hectare Patterson campus in Melton, is expected to sell for about $6 million. Two smaller campuses in Caroline Springs, including the 1.25 hectare residential 1-zoned town centre campus at 183-191 Caroline Springs Boulevard, and the 1.06 hectare Brookside campus at Federation Way, are likely to each reap about $1.5 million.

The Caroline Springs campuses are the most suitable for medium-density residential redevelopment.

Private schools seeking an avenue into the growing western suburbs market might view the Melton campus as a chance to buy at below cost price.

CBRE and Fitzroys are representing administrator Deloitte Australia in marketing the sites.

Stationer on Collins

WESFARMERS-owned stationery chain Officeworks will pay annual rent of about $450,000 to occupy a 650-square-metre shop with a wide 18-metre street-frontage at 461 Bourke Street.

Officeworks has signed a five-year lease to occupy what were two adjoining CBD retail spaces trading until recently as a restaurant/bar and hairdressing salon. At the ground floor of the 43-year old, 19-level office known for years as Dalgety House, Officeworks has agreed to fixed annual rent increases of 3.5 per cent until 2017, when it has an option to renew for another five years.

Kliger Wood agent Russell Meerkin said Officeworks already operated a number of CBD stationery outlets, but this location would place them very centrally in the insurance, legal and business precinct.

AV outsources sales

REVERSING a decision it made five years ago when the land sale market was more buoyant, developer AVJennings has again outsourced its sale and marketing division.

In 2010, the 80-year old company sold its building arm to leading Japan-based home builder Sekisui, and earlier this month it announced a $29.5 million annual loss for the last financial year.

It has appointed local agency RPM Real Estate to market blocks within all of its Victorian estates.

AVJennings controls a diversified Victorian portfolio, which includes a land subdivision at Portarlington, near Geelong.

It also controls large parcels of land in the major growth areas of Epping, in outer-northern Melbourne, and Officer, about 50 kilometres from the CBD in the outer south-east near Clyde North, which is expected to become an important new township under plans announced late last year by the Baillieu government.

Site fit for royalty

FOUR months after buying a dozen properties from the Melbourne-based Viento Property Trust, Sydney-based Denison Funds Management has listed for sale one of that portfolio’s largest and most versatile properties at 14 Queens Road, in an area identified as Melbourne, but with the postcode 3004.

The 1970s brown brick building, known for years until 2009 as Atari House, sits on a large 2327-square-metre site opposite Albert Park Lake, about two kilometres south of the CBD. Rising 13 levels, and with 8158 square metres to let and 120 car parks, the asset is about 75 per cent leased.

In recent years, residential developers including Evolve Development, part-backed by former Fairfax chairman Ron Walker, have targeted Queens Road sites because of the postcard views apartments can offer of the lake and Port Phillip Bay.

MP Burke Commercial director Pat Burke, who is representing Denison with former colleague Leigh Melbourne from Colliers International, says 14 Queens Road also offers CBD views to the north that can never be built out. The asset sale is expected to boost Denison’s coffers by about $15 million, which it will use to reduce the fund’s debt.

Evolve recently demolished the former single-storey luxury Suntory restaurant at 74 Queens Road, renowned throughout the 1980s for its picturesque gardens and its cuisine, and is rebuilding the block as Monarc, a 13-level predominantly glass apartment tower with 228-apartments.

Living on a cloud

LOCAL developer Piccolo is the buyer of the prominent former Electrical Trades Union building in Carlton.

At 516-520 Swanston Street, on the south-east corner of Queensberry Street, the site is now set to make way for Upper House, a 17-level, 110-unit residential complex designed by Jackson Clements Burrows Architects.

The $50 million Upper House complex will be divided into two parts: the Podium (comprising the lower levels) and the Cloud (upper levels). Between them, and appearing to occupy an entire level, will be a common area fitted with a gymnasium, indoor and outdoor lounge and dining areas and an observatory deck. One-bedroom apartments, being marketed by Colliers International, start at $380,000.

Piccolo is believed to have paid about $5 million for the former ETU building, which is across the road from the former Carlton & United Brewery site that another local developer, Grocon, bought from RMIT University for $39 million in 2006. Grocon, which has recently been seeking equity partners for many of its projects, is proposing to rebuild the Carlton site as a mixed-use village.

Piccolo, whose development focus has centred on corner blocks in Carlton, is also responsible for the $50 million low-rise low-density called the Garden House complex at 85 Rathdowne Street opposite Carlton Gardens.

The ETU recently relocated to another owner-occupied office at 200 Arden Street in North Melbourne.

[email protected]南京夜网

twitter: @marcpallisco

This story Administrator ready to work first appeared on Nanjing Night Net.

After a string of ratings failures, Ten’s programmer makes his exit

THE Ten Network’s chief programmer, David Mott, fell on his sword yesterday, capping a disastrous week for the No.3 network after axing its failed dance show on Monday.
Nanjing Night Net

The company announced his resignation after 16 years with the network, during which time he brought to the screen breakthrough shows such as MasterChef, Big Brother and Australian Idol.

But more recent programs to have been broadcast under his tenure, including The Shire, Being Lara Bingle and Everybody Dance Now, have failed to find audiences, leaving Ten trailing Nine and Seven in audience ratings and revenue.

The pressure now is on the Ten chief, James Warburton, and the chairman, Lachlan Murdoch, to find a successor who can lure younger viewers back to the network with innovative programming. It is a strategy that involves more than an element of risk, a point acknowledged by Mr Mott in his statement.

”I am proud of the bold programming decisions we have made at Ten over that time, because without risk there is less chance of success,” he said. In the last week Ten’s highest rating program, Puberty Blues, was the 27th most watched program with a national capital city audience of 925,000. Ten needs to generate higher ratings in the last quarter of the year if it wants to increase its 25 per cent share of the $2.9 billion TV ad market.

Talks with media buyers for the allocation of budgets in the forthcoming year begin in October. Peter Horgan, the chief executive of the media buying firm OMD, said the next few weeks would be critical for Ten. ”The hope was that they would fire after the Olympics but it hasn’t happened. Had they had some successes then it would have been easier to restore some faith [among media buyers] about what’s coming next year. They need to make 2013 work.”

This story Administrator ready to work first appeared on Nanjing Night Net.

Bank chiefs knew of bribe claims

Denial … Glenn Stevens, Governor of the Reserve Bank of Australia insists that no cover up has taken place. Responsibility … former treasurer Peter Costello wants the banks to report credible evidence to the police.
Nanjing Night Net

One step further … former federal Liberal leader, John Hewson, wants a royal commission.

THE Reserve Bank’s internal lawyer, chief auditor and an assistant governor all knew, in June 2007, of an explosive memo sent that month to the ”deputy governor RBA” detailing alleged overseas bribery by a firm owned by the central bank.

It can also be revealed that for months the Reserve withheld from police critical information it had about bribery. These revelations come after the governor of the bank, Glenn Stevens, yesterday denied any attempt to cover up evidence of bribery and told Federal Parliament’s economics committee he could not recall when he first read the June 2007 memo written by the company secretary of Note Printing Australia, Brian Hood.

Mr Stevens cast doubt on whether his then deputy, Ric Battellino, received the memo, even though it was Mr Battellino who asked Mr Hood to put his bribery concerns in writing – by saying the document might have been sent directly by Mr Hood’s lawyer at law firm Freehills, which was conducting an inquiry on the Reserve’s behalf.

But internal Reserve files seen by the Herald reveal that assistant governor Frank Campbell was aware of Mr Hood’s memo in June 2007. The files show the Reserve’s internal lawyer, Helen Brown, and the then chief audit officer, Paul Apps, were also aware of it and its explicit evidence of NPA’s involvement in bribery.

This week the Herald published Mr Hood’s memo, which detailed admissions by NPA’s agents in Malaysia and Nepal of having paid foreign officials to win banknote printing contracts.

Instead of referring Mr Hood’s bribery concerns to the federal police, the bank called in Freehills to advise whether Australian law had been breached. In a report the bank has so far refused to release, Freehills said it was unable to detect a breach.

The Reserve was forced to contact federal police in May 2009 after Fairfax Media exposed multimillion-dollar payments to shady overseas agents by NPA’s sister firm, Securency. Federal police have since charged NPA, Securency and eight former executives with bribery offences involving deals in Vietnam, Indonesia, Malaysia and Nepal, the two countries to which Mr Hood’s memo explicitly referred.

Under questioning yesterday, Mr Stevens said he could not recall when he first read or was aware of Mr Hood’s memo. ”I did not read it at that time [2007]. It wasn’t given to me, that is my memory,” he said.

The handling of the bribery scandal by the Reserve and the Gillard government has come under scrutiny this week, with the former treasurer Peter Costello saying the bank has a responsibility to report credible evidence of criminality to police. A senior federal police officer Chris McDevitt has confirmed the Reserve had known about bribery at its subsidiaries for years before it alerted police.

The former federal Liberal leader John Hewson and former foreign minister Alexander Downer yesterday challenged the government to hold a royal commission into the scandal, which has also ensnared other Commonwealth agencies such as Austrade.

Writing for the ABC website The Drum, Dr Hewson said it was ”not good enough to have to rely on the stilted testimony” of Mr Stevens.

Mr Stevens told the committee he was seeking legal advice about tabling documents significant to the case.

This story Administrator ready to work first appeared on Nanjing Night Net.

Retail sector defies prophets of doom with profits in sales

Colliers’ research director said the retail investment market had been strongest in Queensland, with 26 sales.INVESTORS are defying the retail sector’s doomsayers, with 83 big sales valued at $4.244 billion in 2011-12, 8 per cent more than the previous financial year.
Nanjing Night Net

The latest Colliers International National Retail Investment Review 2011/12, which covers transactions greater than $10 million in Australia, found that nearly all of the top 10 largest sales in 2011-12 took place in the first half of this calendar year.

Lachlan MacGillivray, Colliers’ national director of retail investment services, said investor demand for quality shopping centres was resilient despite volatility in monthly retail trade data and the structural challenges the sector was facing.

Also, interest in prime regional shopping centres had been strong from institutional investors from Australia and overseas, with demand exceeding supply.

“Increased demand came from domestic wholesale funds, as well as offshore sovereign and pension funds,” he said.

Mr MacGillivray said overseas purchasers were keen to form joint ventures with local retail players. Sales of half-shares in prime assets had surged, with seven of the top 10 sales in 2011-12 being for 50 per cent shares. Overseas interest was particularly strong for prime regional and sub-regional assets.

Neighbourhood centres led activity with 35 sales, but interest in regional centres was historically high, with seven centres comprising 44 per cent of all sales by value.

“The number of sub-regional centres sold tripled to 15, which was the largest jump in sales volume of all sectors,” he said.

Nora Farren, Colliers’ research director, said it was the market’s largest positive spread between bond yields and property yields in more than a decade, and demand for assets should outstrip supply for the rest of the year.

Ms Farren said the retail investment market had been strongest in Queensland, with 26 sales, including three of the top 10 sales recorded.

These were a 50 per cent share in the Myer Centre Brisbane by the Industry Superannuation Property Trust for $366 million, a 50 per cent share in the Cairns Central shopping centre for $261 million by Australian Prime Property Fund Retail, and Noosa Civic at Noosaville for $200 million, to the Queensland Investment Corporation.

This story Administrator ready to work first appeared on Nanjing Night Net.

Mosaic forms pretty picture

Artist’s impression of the Mosaic development in Dandenong.AN $85 million project involving luxury apartments, offices and shopping outlets, coupled with strong demand for new office-warehouses, is a pointer to the continuing buoyancy of the state government’s $290 million Dandenong revitalisation strategy.
Nanjing Night Net

Mosaic, designed by Peddle Thorp Architects, comprising 235 one or two-bedroom apartments, offices and retail spaces, has just hit the market. It is part of the Metro Village estate being built near the Dandenong city centre.

Mosaic is designed around a landscaped courtyard that will provide a central meeting space for residents. According to the developer, Burbank, most apartments achieve a 7-Star energy-efficiency rating through cross-ventilation and double-glazing.

Dandenong is relying on the area’s upgraded transport network to foster residential, office and industrial development.

EastLink and the Monash Freeway provide faster access, while the Dandenong Bypass, coupled with the freeways plus the South Gippsland Highway, create what is effectively a ring road. This is designed to take heavy traffic out of the centre of the city.

The impending opening of the new EastLink connection to Peninsula Link, scheduled for completion early next year, will also create new links between Dandenong, Frankston and the Mornington Peninsula.

Colliers International’s Paul Jones said these factors were encouraging projects in the industrial estate. Developers were increasingly using previously ”dead” space to build speculative 1400 to 2000-square-metre premises.

Mr Jones said most demand was for properties with two-storey offices, with most inquiries coming from businesses looking to lease or buy.

Mr Jones and colleague Colin Tarlamis are marketing several high-quality properties in Arkwright Drive and Rodeo Drive in Dandenong South, and in Pacific Drive, Keysborough. The properties are all close to the major transport routes, including Greens Road.

The agents are also marketing 13,886 sq m of speculative development with Governor Road frontage in Braeside. Buyers have already snapped up 11 of the 14 properties in stage 1 of the project.

Encouraged by this, the developer is about to start work on stage 2, which is scheduled to start next month. This will involve the construction of a further 10 properties.

Mr Tarlamis said the response to this estate was a prime example of the interest he had seen from businesses keen to relocate closer to EastLink.

”We have a lot of people asking us about the Hastings railroad and Port of Hastings, as Keysborough, Dandenong and this section of Braeside will become a central point between the Melbourne CBD and the prospective new port,” he said.

This story Administrator ready to work first appeared on Nanjing Night Net.

Murdoch’s daughter aiming for the top

ELISABETH MURDOCH’S attack on the values of News Corporation is part of a ”strategic” plan by the family to retain power over the $US55 billion media empire and was a ”significant Murdoch moment”, says a keen observer.
Nanjing Night Net

Ms Murdoch, the second-eldest of Rupert Murdoch’s six children, emphasised humanity over profit in a keynote address to the TV industry that is being widely read as her pitch to lead the family business.

In a speech that attacked free market capitalism and the idea that ”money is the only sorting mechanism”, Ms Murdoch, 44, outlined her vision for leadership.

Michael Wolff, the author of an authorised biography of Rupert, said the speech would have been written with the full support of her father and all but one of her siblings – James – who control the majority of voting stock in News Corp.

”Nobody in the Murdoch family does anything unilaterally. Clearly she has swayed the votes and they are supporting her,” said Wolff, journalist and author of The Man Who Owns the News.

In her MacTaggart lecture at the Edinburgh international TV festival on Thursday night, Ms Murdoch also appeared to criticise James, which will serve only to deepen the rift that opened up between them over the phone-hacking affair.

Ms Murdoch said News Corp had to ask ”significant and difficult questions about how some behaviours fell so far short of its values” following the scandal. She said the lesson from the affair was that any organisation needed to ”discuss, affirm and institutionalise a rigorous set of values based on an explicit statement of purpose” – in contrast to News Corp’s traditional mode of governance based on executives second-guessing what Rupert would do.

”Profit without purpose is a recipe for disaster,” she said, in a direct reference to a speech by James at the same industry gathering three years earlier in which he extolled the idea that profit was the only ”guarantor of independence”.

Wolff said that now James has been effectively sidelined in the company, the speech marked Ms Murdoch’s return to power, most likely as the head of the entertainment business once the organisation splits next year. Ms Murdoch rejoined the family business last year after she sold her TV production company Shine to News Corp for $440 million. Wolff also predicted Lachlan Murdoch would head publishing, as much of its operations are based in Australia.

Lachlan’s spokesman told the Herald last week his focus was on building up his own business, through his private investment vehicle Illyria. ”I think you will end up with two Murdochs heading up the two companies. This [speech] was a very significant Murdoch moment,” he said.

with Guardian News & Media

This story Administrator ready to work first appeared on Nanjing Night Net.