market-sounding public tender recommendationsinfo.gladstonerc.qld.gov.au/meetings/20150120... ·...

Market-SOUNDING PUBLIC TENDER

recommendations

PART A – PHILIP STREET PRECINCT

PART B – TANNUM SANDS CIVIC PRECINCT

OFFER NO: QUOTE 43/15 – MARKETING FREEHOLD LAND

Prepared for: Mr Mark Larney Manager Contracts & Facilities Gladstone Regional Council

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Sales and Marketing Recommendations – Offer No.: Quote 43/15

Contents

Executive Summary .......................................................................................................................................................................................................................................................................................... 2

Introduction ........................................................................................................................................................................................................................................................................................................ 3

Why Appoint Knight Frank? .......................................................................................................................................................................................................................................................................... 8

Marketing Strategy......................................................................................................................................................................................................................................................................................... 12

Agency Basis .................................................................................................................................................................................................................................................................................................... 16

Company Profile ............................................................................................................................................................................................................................................................................................. 17

Conclusion ........................................................................................................................................................................................................................................................................................................ 19

Annexure A – Track Record ........................................................................................................................................................................................................................................................ 20

Annexure B – Team Profiles ....................................................................................................................................................................................................................................................... 28

Annexure C – Marketing Schedule ........................................................................................................................................................................................................................................... 32

Annexure D – Client Testimonials ............................................................................................................................................................................................................................................. 33

Annexure E – Boyne & Tannum Sands Draft Structure Plan, 18 June 2014 .............................................................................................................................................................. 338

Annexure F – Philip Street Community Precinct Development ....................................................................................................................................................................................... 39

Annexure G – Professional Indemnity Insurance………………………………………………………………………………………………………………………………………………………………………………….. 41

Annexure H – Public Liability Insurance……………………………………………..………………………………………………………………………………………………………………………………………………… 41

Annexure I – Work Cover Queensland………………………………………………………………………………………………………………………………………………………………………………………………… 42

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Executive Summary The Offering – Part A

27.96 hectare site, Urban Expansion Zone Gladstone, Close proximity to all major services

including Stockland Shopping Centre Gladstone, Gladstone Airport, Gladstone Hospital,

Preliminary Approval for Change in Density for Residential Site will appeal to Residential Unit and Townhouse developers and potentially to Residential Aged Care Facility providers/developers.

The Offering – Part B Lot 900 on SP152499 comprising 9.925 ha

and lot 500 on SP215266 comprising 6.459 ha

Council has at different times earmarked the site as ideal for (see page 30 Draft structure Plan in Appendix):

Retail and commercial which may include new or expanded medical centre

Residential subdivision and Retirement Village (may include Aged Care Facility)

Public Swimming Pool/Aquatic attraction

Key Personnel Transaction Team

Knight Frank Gladstone

Peter White, Principal

Knight Frank Brisbane

Health Aged Care & Retirement

Russell Allison, National Director Chris O’Driscoll, Executive

Commercial/Residential

Richard Morrison, Director

Consultancy Team

Gordon Price, Director Valuations

Method of Sale and Timing A national Registration of Interest/Public Tender campaign closing 1st April 2015 at 5pm AEST

Marketing Budget $36,632.84 including GST

Proposed Agency & Fee Exclusive Agency

Fee: Lump sum of $60,000 plus GST to market both sites simultaneously or $30,000 plus GST per site.

Primary Target Markets For Profit and Not For Profit Retirement Living

and Residential Aged Care Providers/Developers Residential land developers and residential unit

and townhouse developers Retail/Commercial developers

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Introduction We are pleased to provide Mr Mark Larney, Manager Contracts & Facilities, Gladstone Regional Council our sales and marketing recommendations for the conducting of a Market-Sounding Public Tender for the disposal of land parcels at Philip Street, West Gladstone and Coronation Drive and Tannum Sands Road, Tannum Sands (subject lands).

Council wishes to engage a suitably qualified and experienced property agent/broker to market the subject lands for sale by public tender.

It is envisaged that part of the process will be a market-sounding exercise to determine if there is sufficient market interest to acquire the subject lands on terms that will enable commercial development, but also ensure that community outcomes are achieved.

In this regard we recommend a two stage process:

Stage 1 – Registrations of Interest enabling discussion with interested parties and their proposals for the subject land and identification of prospective buyers suitable to include in a Public Tender.

Stage 2: Public Tender

Knight Frank has a comparative advantage in that it has a specialist Health Aged Care and Retirement (HAC&R) division. Knight Frank is the only agency with such a stand-alone division in Queensland and few agencies in Australia have a specialist HAC&R division.

This department will work closely with Knight Frank’s specialist Residential/Commercial/Retail division based in Brisbane providing a well-balanced and strong marketing team covering all sectors of the market place.

In addition to this Knight Frank has the advantage of an office in Gladstone. Knight Frank Gladstone commenced trading in 2010 headed up by Peter White and controls a majority of the commercial transactions taking place in Gladstone.

Multiple buyer groups will be interested in the subject lands and our marketing team is able to thoroughly target the following:

Retirement Village operators/developers

Manufactured Home Park operators/developers

Residential Aged Care providers/developers

Residential subdivision developers

Mixed medical users including private hospitals

Mixed use Retail/Child Care/Residential developers

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Introduction (cont) Our proposal addresses the relevant issues important to the sale of this property as well as emphasising the key reasons why Knight Frank will provide the best opportunity of achieving an optimal sale price and terms of sale.

Our core team includes Russell Allison (National Director Health Aged Care & Retirement) and Chris O’Driscoll (Executive) specialising in Health, Aged Care and Retirement with an extensive track record including the sale of retirement villages, aged care facilities and greenfield sites for retirement villages, manufactured home estates and residential aged care facilities. Also included is Richard Morrison, Director of Commercial property which includes the sale of residential development sites and commercial property generally.

In Gladstone Knight Frank has Peter White who will provide invaluable services including on the ground assistance with inspections. Our extensive track record of residential site sales is included in the Appendix.

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The offering PART A: PHILIP STREET PRECINCT A well located 27 ha site on a busy arterial road close to a major shopping centre. The site is treed with terrain varying from gently sloping to steeper areas.

The site has been planned to satisfy a number of social infrastructure needs for Gladstone presents a pleasant parkland setting, with more than 50 per cent of the site planned to be retained in its natural form.

It is understood the current design seeks to co-locate and aggregate a number of human social services functions, including the relocation of Council’s own Community Advisory Service; the construction of a replacement Neighbourhood Centre currently located at 105 Tooloola Street; the establishment of a child and family centre and a youth enterprise centre.

The proposal includes an outdoor amphitheatre and playground; a retirement village of some 200 units; and a 60 allotment residential estate including some higher-density housing to replace existing Government stock managed by Council.

See Philip Street Communities Precinct Development in the Appendix.

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The offering (cont)

PART B: TANNUM SANDS CIVIC PRECINCT Council acquired parcels of land in Tannum Sands in 1998 (Lot 900 on SP152499 comprising 9.925 ha - $388,000) and 2001 (Lot 500 on SP215266 comprising 6.459 ha - $245,000) to secure a site for mixed use public purposes and a new Council administration centre. Two parts of the site have since been developed (14 lots in 2002 and 16 lots in 2008) to recover the initial cost of the site.

TRACT Consultants undertook conceptual planning for the site in 2001 and were asked to revise these plans 2011 following a number of private developments, particularly the Tannum Centre Shopping Centre across the road. Some of the identified uses led to the site being included as Key Site 4 in the Planning Scheme for Boyne/Tannum.

In March 2011, Council resolved (following keen debate) to submit a development application to itself for a mixed-density residential development on the Tannum Sands Civic Precinct site, however, Council has not proceeded with this project.

Council has at different times earmarked the site as ideal for:

Retail and commercial which may include new or expanded medical centre

Residential subdivision and Retirement Village (may include Aged Care Facility)

Public Swimming Pool/Aquatic attraction

See page 30 of the Boyne Island & Tannum Sands Structure Plan Report in the Appendix.

The offering of the Tannum Sands Civic Precinct to the market may provide the catalyst needed to see private investment in these facilities.

At June 2012, Council valued the Tannum Sands Civic Precinct at $2.57 million. Officers estimated at the time that some $11.5 million could be yielded as surplus from a residential subdivision costing $8.7 million.

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The offering (cont) GLADSTONE DEMOGRAPHICS The 2011 census shows Gladstone’s population at 87,905 (medium series). The bar chart below displays current and forecast data for age cohorts over 60s, 70s, 80s and 85s for Gladstone, Brisbane & Queensland (Sourced from the Australian Bureau of Statistics) showing Gladstone has fewer people in these cohorts than Brisbane and Queensland as a whole.

Although the Gladstone Region over 60s, 70s, 80s and 85s cohorts have lower population percentages than Brisbane and Queensland they are still relatively high and support retirement and aged care development. The total population over 60 years of age in the Gladstone Region in 2016 is estimated to reach 15,045 (based on medium series data).

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Why appoint Knight Frank? THE BEST NATIONAL TEAM – MAXIMUM COVERAGE

Peter White

Principal

Knight Frank Gladstone

Russell Allison

National Director

Health, Aged Care & Retirement

Chris O’Driscoll

Executive

Health, Aged Care & Retirement

Richard Morrison

Director

Commercial/Residential

Knight Frank Gladstone is a multi-functional agency providing all forms of services including consulting and property management services together with local knowledge and experience with local buyers. Assisting our Gladstone office will be our Brisbane based Commercial/Residential sales team and our Health, Aged Care and Retirement team providing the greatest reach and access to buyers and the most in depth knowledge of the market today.

In addition support will be forthcoming from our other team members around Australia.

Individual CV’s for Peter White, Russell Allison, Chris O'Driscoll and Richard Morrison are provided in Annexure One of this report.

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Why appoint Knight Frank? (cont) THE BEST NATIONAL TEAM – MAXIMUM COVERAGE

Understanding health aged care and retirement as well the residential and residential townhouse and unit markets is pivotal to the success of the proposed marketing campaign.

There will be significant interest from a range of sectors and having proven transaction records and marketing experience with a broad cross section of potential buyers is key to this appointment.

Russell Allison has previously worked on the disposal of the Philip Street, West Gladstone site and two Not For Profits, Sundale and Carinity/Queensland Baptist Care, submitted strong expressions of interest in the site. This sales process specifically targeted Not For Profit organisations however interestingly there was interest from the private sector as well.

Knight Frank is uniquely placed to be able to offer fully experienced personnel with strong track records in residential development, retirement living and residential aged care.

Our Retirement and Aged Care transaction team has been busy with recent sales of 16 retirement villages, aged care facilities, hospitals and related development sites totalling in totalling well in excess of $200 million with several additional well advanced negotiations. Details of these transactions are included in our Capability Statement in the appendix.

We have recently handled the marketing and sale of two sites on behalf of RSL Care Queensland - both parcels zoned residential and with approvals in place for retirement and aged care. On the Caboolture site, offers were received from a cross section of competing Residential, Retirement/Aged Care and Manufactured Home Park developers with the successful buyer exceeding our client’s expectations by $500,000. The second site at Cooroy, Sunshine Coast, also received competitive offers and the price also exceeded our client’s expectations.

Our track record of sales of residential, retirement and aged care sites as well as retirement villages and aged care facilities is contained in our Capability Statement in the Appendix.

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Why appoint Knight Frank? (cont) Appointing Knight Frank will provide the following:

- We will actively contact possible purchasers directly; - The benefits of our extensive databases of national and international

buyers and sellers; - A strong Asia Pacific presence; - As national RVA and LASA members we are aware of the latest GST

taxation rulings and developments and issues to do with the Aged Care Act and each state Retirement Village Act;

- We do not set a ceiling on the price we may achieve; - We aim to exceed expectations.

We regularly represent owners of retirement villages, residential development sites, aged care facilities and associated development sites in transactional and consultancy circumstances and have consistently produced successful outcomes. We have the track record and current experience to match your exact requirement. We are, above all else, enthusiastic about the opportunity to work with Gladstone Regional Council and trust we have impressed with our desire, knowledge and qualifications.

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Why appoint Knight Frank? (cont) TARGET MARKET – WE KNOW THE BUYERSAs well as Residential Developers the target markets will include the For Profit and Not For Profit sectors for Residential Aged Care and Retirement. The Not for Profit sectors include Churches and Charities which are often holding substantial assets and are not as reliant on banks to purchase.

Included in the target list will be residential developers and existing aged care and retirement operators and potential new entrants. We are aware of a range of existing aged care providers and retirement operators looking to expand.

The following lists provide a sample of targets:

Aged Care Providers and Retirement Village Operators/Developers:

- Lend Lease - Ingenia Communities - Sundale - Oak Tree Group - Retire Australia - Palmlake/Walter Elliott - Halcyon - Living Gems - Alcyon

- Carinity/Qld Baptist Care - Fairways - Seasons - Sunrise Supported Living - Eureka - Ansell Strategic - Regis Group - Adventist Care - Presbyterian Church - Anglicare - Masonic Homes - Salvation Army - Catholic Care - Catholic Homes - Lutheran Community Care - Wesley Mission - Illawarra Retirement Trust - Southern Cross Care - Arcare - Mackenzie Care - Regis - Allity - Innovative Care - Bupa - Johnson Village Services

- Tricare Residential Developers

- Jamieson Projects - Silverstone Developments - Unison Projects - Seymore Group - Philip Usher Constructions - Carbone Developments - Partners in Property - Consolidated Properties Group - NJ Properties - JLF Group - Ultra Property Developments - Reculver Property Group - Trask Pty Ltd - Fairmont Group - Stockland Residential

Commercial/Retail Developers

- Extensive Queensland, National and Offshore Data bases

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Marketing Strategy RECOMMENDED METHOD OF SALE Our aim will be firstly to identify buyers who will satisfy Gladstone Regional Council’s (GRC) aspirations for the sites and in the process to generate competition, maximise price and optimise the terms of sale.

We recommend a Registration of Interest approach which will lead into a Public Tender.

Registrations of Interest will allow the marketing agents to discuss the plans prospective buyers have for the site and in conjunction with Council a shortlist of suitable parties will be invited to participate in the Public Tender. This approach will enable the marketing team to identify the most suitable buyer prospects and to then generate competition through the Public Tender process to help achieve the best result.

We feel this is the best approach where there is uncertainty as to what price will be realised and who the ultimate buyer will be and will maximise buyer participation.

The following points reinforce our view the proposed process is the most appropriate marketing method:

1 No listing price is nominated promoting competition and requiring buyers to make offers.

2 The closing date requires buyers to carry out their analysis and investigations within the nominated period under competitive conditions ensuring the seller maintains control.

3 The process is as transparent as possible as all buyers are provided with the same information in the same time frame and are provided with the same Contract of Sale.

4 We believe the Registration of Interest/Public Tender approach will allow tenderers adequate flexibility in relation to proposed development of the sites and will generate competition which will put upward pressure on price.

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Marketing strategy (cont) KEY MARKETING ELEMENTS Preparing the property for sale

We have no specific recommendations at this stage.

Maintain buyer momentum

Buyers are at their most optimistic at the commencement of the campaign and full information should be available to flow quickly - every element within our strategy ensures buyers have the information to make decisions.

Data Room

Knight Frank has a data room facility known as The Vault and this will be utilised in the process at no extra cost to GRC. The Vault allows us to monitor individual buyers use of the site letting us know who the more obvious buyer prospects are.

Directly present to known buyers

We are aware of specialist residential developers and retirement and aged care operators/developers and we will directly target these prospects. Direct presentations provide greater impact allowing the marketing agents to gauge buyer attitudes toward the opportunity.

Reactive Media

Although we will be aware of the most likely buyers, media advertising will locate those parties we are not currently dealing with and will be important in identifying any new retirement operators, residential aged care, and residential developers emerging.

Media advertising is also an effective means of reinforcing the seller’s intentions and maintaining a level of competitive pressure on prospective buyers.

We recommend utilising the Australian Financial Review which provides a national coverage, the Brisbane Courier Mail and the local newspaper package shown in the marketing schedule in the Appendix.

We also recommend two industry specific email newsletters which reach a broad range of retirement living and aged care players: Aged Care Housing Weekly and The Weekly Source. They are cost effective and provide good results.

Knight Frank Database

Knight Frank has comprehensive databases of qualified buyers in these specialised markets including local, interstate and offshore groups. With increasing interest from off shore buyers in Australia’s retirement and aged care housing market, Knight Frank has developed an impressive contact base of buyers from Southeast Asia and China.

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Marketing strategy (cont) KEY MARKETING ELEMENTS All parties identified as likely to have an interest in these opportunities will be actively canvassed by Knight Frank personnel based within Australia as well as south-east Asia.

Information Memorandum

A comprehensive Information Memorandum will be prepared and distributed to interested parties.

Internet Listings

We recommend prominent listings on commercial property websites:

- www.realcommercial.com.au

- www.commercialrealestate.com.au

The internet is an important part of any marketing campaign. It is heavily utilised not only by local buyers but offshore buyers especially in South East Asia and China. The property will also be featured on the Knight Frank website.

Marketing Costs

The cost of the recommended campaign is $36,632.84 including GST. Please note this is a recommendation only. We would be pleased to discuss any particular requirements you may have. A detailed marketing schedule is included within the Annexures.

E-Brochure

An e-brochure will be sent to Knight Frank data base categories including Residential Developers and Retirement and Aged Care Providers and Developers and industry related categories.

Professional Photography

Professional aerial images will highlight and effectively convey the strong locational attributes of the sites such as proximity to hospitals, medical facilities and shopping centres.

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Marketing strategy (cont) TIMING OF THE CAMPAIGN The timing of the marketing program for an offering of this nature must be scheduled to meet three key objectives:

- Provide a realistic period for preparation of marketing material and property information

- Provide sufficient time for potential buyers to significantly complete their investigations so that they can confidently put forward a Registration of Interest with a view to being included in the Public Tender process.

- Provide adequate time to conduct the initial Registration of Interest process and the Public Tender which will follow while maintaining the momentum and complete nature of the marketing exercise.

The following is an approximately timetable, for the sale of both properties:

Task Feb 2015

Mar 2015

Apr 2015

May 2015

June 2015

Agency Appointment by 2nd

Pre Marketing/Due Diligence Preparation 16th

Marketing Commences 18th

Registrations of Interest (ROI) Close 1st

Review ROI – Select Public Tenderers 15th

Close Public Tender 29th

Select successful Public Tenderer 13th

Execute Contract of Sale 20th

Possible Due Diligence Period 17th

*Settlement 24th

* Settlement date will be determined by the conditions of the contract and availability of title/s.

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Agency basis

As indicated, the nominated personnel have strong track records in the marketing of Residential as well as Health Aged Care and Retirement properties.

In particular, the areas of Health, Aged Care and Retirement are highly specialised and Knight Frank has the only specialised team in Queensland which also covers NSW. There are few other qualified teams in Australia.

In consideration of our selling fee, we are mindful of:

- The marketing process for the property,

- The experience of the personnel responsible for marketing,

- The complexity of the offering and the ability to understand the issues involved with aged care/retirement and residential,

- The time and input required to maximise price and optimise terms of sale.

Knight Frank proposes an exclusive agency appointment which would continue for 150 days after the close of the Public Tender programme and a lump sum price for the simultaneous marketing of the two subject properties of $60,000 plus GST or $30,000 plus GST per site.

Payment to be by 4 monthly payments of $15,000 commencing at the start of the marketing programme or $7,500 plus GST per month per site.

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Company Profile Knight Frank is the world’s largest privately owned agency of professional property consultants.

Founded in London over 100 years ago, the Knight Frank name is synonymous with top quality property, exceptional market knowledge and excellent service.

We have a strong global presence with 370 offices, in 48 countries on six continents and we provide the complete range of real estate services (consultancy, brokerage, and management) across multiple markets.

We currently employ over 800 people in over 20 offices across Australia.

Through our network, we are able to provide our clients with a local, national and international range of expertise. Our services include:

> Commercial Sales > Project Marketing > Industrial Sales and Leasing

> Residential Site Sales > Project Management > Research and Consultancy

> Health, Aged Care and Retirement > Pubs and Hotels > Retail Sales and Leasing

> Office Leasing > Asset Management Services > Valuations

Our Values Our values are integral to Knight Frank’s corporate culture and the way we work. They are brought to life by our employees and are underpinned by our brand essence of passionately professional alongside our Client Service Principles.

> Trust and integrity at every level

> Teamwork at the heart of everything we do

> Driven to go the extra mile to exceed our clients’ expectation

> Professionalism that is unrivalled

Client Service Principles To make sure we live up to our claim of being passionately professional, we have a set of principles that act as service guidelines. These are the service principles we adhere to in our day-to-day work with our clients in order to reinforce our reputation and forge strong productive relationships.

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Company Profile (cont) We take it personally; Our clients should enjoy working with us as individuals, feeling as if they’re our only client. Their objectives are our objectives and we’ll stop at nothing to achieve them. We go the extra mile because we want to, not because we feel we have to.

Our greatest property, trust ; We display transparency, honesty and clarity in everything we do. In this way we earn our clients’ trust, turning transactions into valuable long-term relationships.

Join up the dots;

As individuals we have amazing knowledge and experience. As a global organisation the breadth of our expertise is unrivalled. We make sure our clients benefit from it by understanding their goals and bringing in the right people at the right time.

Reputation is everything;

The way we meet our clients’ needs today earns us their trust in the future. By making sure day-to-day transactions are brilliantly executed, relationships flourish. And when clients become genuine business partners, they recommend us to their friends and colleagues.

Global Corporate Responsibility Framework

Knight Frank is founded on strong values. We must ensure that our actions match our values to retain credibility with our people, clients, the property industry and the wider community. Our global corporate responsibility programme, Building Foundations, provides a framework for all of our offices to work by. For Knight Frank, Corporate Responsibility has always included Workplace, Environment and Charity & Community. We have now extended this to include Governance & Ethics and Marketplace. All our efforts as an employer in, and contributor to, global real estate should be guided by these five areas.

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Conclusion We trust we have addressed the relevant criteria for Knight Frank to be the preferred marketing agent and we would like to thank Mr Mark Larney for the opportunity to submit our recommendations.

Should clarification be required on any aspects of this report, please contact:

Russell Allison

National Director

Direct: 07 3246 8873

Mobile: 0418 858 898

Email: [email protected]

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Annexure a – track record

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Annexure B – Team profiles

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Annexure c – Marketing schedule

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Annexure d – client testimonials

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Annexure e – boyne & tannum sands draft structure plan, 18 june 2014

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Annexure F – Philip street Communities Precinct Development

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Annexure g – KFA Professional Indemnity Insurance

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Annexure h – KFA Public liability insurance

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Annexure I – Work cover QueenslanD

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