[COM] City Central 8 | 72m | 20lvls | office

[Professor]

There was a short article in the paper (not sure what day - read it on the internet last Thursday) that a 17 level office building in Franklin st was going ahead despite the recession. Is there any news re construction?

[AtD]

http://www.sensational-adelaide.com/for ... 120#p62568

We think it might be that one.

[Ben]

It appears the Aspen group that owns the city central development contract may be in a bit of financial trouble.

From a research house.

Aspen
Aspen, which is on our approved list as a stand alone direct property investment, needs to raise equity successfully or it will be forced to become a distressed seller.

Aspen has invited unitholders to subscribe for additional units. The facts regarding this offer as we see them are:

1) The fund is illiquid and withdrawals are not currently possible. You are therefore faced with two choices:

a) do nothing and suffer the consequences; or
b) subscribe for units to ensure the fund's survival and hopefully a return that matches expectations.

2) If the offer fails, the fund will fail and investors can expect nothing in return (worst case scenario).

3) You are worse off as an investor if you do not participate in the offer (and the offer proves to be successful).

4) If the priority and external offer (if needed) do no achieve the minimum needed, investors subscription monies will be returned with interest.

Based on these facts, we see no other option but to accept the offer, as it looks like it is the only option that can possibly benefit the client given the circumstances.

[UrbanSG]

I hate speculating over developments but that is about all we can do at the moment without any confirmation of details regarding this project. I am not sure if this is the same fund dealing with City Central but I think Origin might have been close to signing for Tower 8 when these troubles started. Now 42 Franklin Street further to the west may be looking more likely.

The article below is further to Ben's last post.

WA Business News
Aspen Group offer falls short
11-August-09 by Jonathan Barrett

Perth-based property fund manager Aspen Group will seek capital from external investors after failing to attract sufficient support from unit holders of one of its ailing property funds.

After having already extended the entitlement offer deadline by two weeks to give unit-holders extra time to take part, the Aspen Diversified Fund will now attempt to raise capital externally to avoid a fire-sale of assets. Aspen is seeking between $15 million and $25 million.

The fund is one of several around the country to have run into trouble, with Melbourne-based Orchard Funds Management recently calling in KPMG to help restructure its troubled property portfolios.

Aspen Group managing director Angelo Del Borrello did not return calls, but a spokesman said details of how much the fund had raised from existing unit-holders would not be released until the external offer had closed.

Mr Del Borrello has previously said 70 per cent of the fund's assets would have to be sold if the $15 million wasn't raised.

Researcher Lonsec has recommended against external investors participating in the offer but said existing investors should take up their entitlements.

The fund launched its entitlement offer in June after getting caught with a highly geared portfolio as the credit crunch took hold, which led to the fund breaking its loan covenants with NAB.

Unit-holders who did not participate in the offer face having their investment severely diluted.

A group of disgruntled stakeholders has asked the Australian Securities and Investments Commission to withdraw the entitlement offer, arguing Aspen has other means of reducing debt in the fund.

Unit-holders have invested more than $60 million in the product, which owns six office buildings, two retail sites, and four industrial complexes across Australia.

Aspen's other unlisted retail offering, Aspen Parks Property Fund, has recorded annualised double-digit returns during the past four years.

[nimeton]

Environment and Conservation Minister Jay Weatherill has announced more than $700,000 in grants to help cut greenhouse gas emissions from South Australia’s commercial office buildings.
Mr Weatherill said five building projects would be funded in the first round of the State Government’s $2 million Building Innovation Fund.
Among them is a “living green wall” of vegetation on the former telephone exchange building in Franklin Street in the city as well as feasibility studies that also will be able to be used for other building works in the future.
“Almost a quarter of Australia’s carbon emissions can be attributed to energy consumed in buildings,” Mr Weatherill said.
“These grants are about encouraging owners of commercial office buildings to experiment with and use innovative technologies to reduce energy use and cut greenhouse gas emissions.
“South Australia is already home to a high percentage of green buildings, and by upgrading buildings we can further reduce the impact of our built environment.”


$134,000 to Aspen Group for capital works to install green roof systems to the Darling Building at 30 Franklin St in the city.
$214,000 to Aspen Group for capital works to develop and install a “living wall” on the former telephone exchange at 2-8 Franklin St in the city.
$27,000 to Aspen Group for a feasibility study on a “living wall” system for the City Central Tower 8 on Franklin St.

[Wayno]

$27,000 to Aspen Group for a feasibility study on a “living wall” system for the City Central Tower 8 on Franklin St.

Is this similar in concept to the vertical garden on the Quai Branley Museum in Paris?
http://www.frenchgardening.com/visitez. ... 2820340395

[UrbanSG]

Even though it appears to be a different fund than that used to fund the City Central development I would have thought this would have impacted the whole company's ability to gain financing. Hopefully this investment will get the company back on track so we can see Tower 8 go ahead.

From WA Business News:

Aspen secures investor to back fund
25-August-09 by Jonathan Barrett

Perth-based property fund manager Aspen Group has secured an investor to underwrite at least $5 million needed to meet loan requirements for its troubled Diversified Property Fund.

Aspen said in a statement on the ASX that the unnamed investor would ensure the fund met all its finance facility obligations.

Aspen raised roughly $10 million from an entitlement offer, leaving the fund about $5 million short of meeting lending requirements negotiated with its financier NAB. It also raised $18 million through the sale of two properties to help pay down its debt.

The fund's finance facility obligation falls due on October 1.

The fund launched its entitlement offer in June - hoping to raise a minimum $15 million - after getting caught with a highly-geared portfolio as the credit crunch took hold, which led to the fund falling foul of its loan covenants with NAB.

The fund is one of several around the country to have run into trouble, with Melbourne-based Orchard Funds Management recently calling in KPMG to help restructure its troubled property portfolios.

The raising of $33 million through the entitlement offer, underwriting investor and sale of two properties means the fund will not have to sell properties into a subdued market.

Full announcement below:

Aspen Funds Management Limited ("AFM") as responsible entity for the Aspen Diversified Property Fund (the "Fund") is pleased to announce that it has now successfully completed the minimum equity raising and asset sale requirements to ensure it will meet all finance facility obligations of the Fund.

Further to the ASX announcement of 17 August 2009, the minimum $33 million in required funds has now been secured:
- Approximately $10 million of the $15 million minimum equity component has been raised through existing unitholders under an Entitlement Offer ("Offer") with applications from existing and new unitholders continuing to be received. AFM has secured an investor to underwrite any shortfall to the Offer, thereby ensuring the
minimum of $15 million will be reached.

- The required gross asset sales of $18 million have been achieved with the sale and now settlement of both Riseley Corporate Centre and Champion Drive Shopping
Centre.

As a requirement of the underwriting agreement, Aspen Group Limited ("AGL") has committed to acquire any of the underwritten units not divested by the underwriter at the end of a two year period, or earlier at AGL's discretion.

Under the terms of the Offer, the Fund is able to raise a maximum of $25 million and wil remain open to new and existing investors until further notice. The Fund expects the initial allotment of units to occur by 15 September 2009.

[Xaragmata]

$27,000 to Aspen Group for a feasibility study on a “living wall” system for the City Central Tower 8 on Franklin St.

Is this similar in concept to the vertical garden on the Quai Branley Museum in Paris?
http://www.frenchgardening.com/visitez. ... 2820340395

Some more examples of living walls on Wired News:
http://www.wired.com/culture/art/magazi ... rentPage=1

[UrbanSG]

The Commercial section of today's Advertiser confirms that Origin Energy has officially withdrawn its leasing requirment as they have signed on in their existing building on the corner of King William Street and North Terrace until at least 2014.

The article confirmed that Tower 8 and the former telephone exchange site further west along Franklin Street were the two buildings in the running for the Origin deal. It has been confirmed that this decision by Origin will delay both projects for at least the next couple of years. Thanks Origin!

There is talk of another new major tenant looking for 17,000 square metres of space to enter the market but this is only in the early stages and at least 2 years from signing any contracts.

So it looks like no significant office building development in Adelaide for a while yet. I don't believe the campus style low-rise police building to be built rates as significant. We really did just miss the boat while all the other major cities still have a number of significant office projects under construction. Sure their vacancy rates will rise but when the next upturn comes along they will fill quickly and their skylines will have progressed while ours barely changes. Looking forward to the 'boom' we are meant to get one day, whenever that may finally be.

The article also confirms Hills is still looking for 3,000 square metres of space but will not do another design and construct (don't blame them after their recent attempt)

[Ben]

ATO backs new $200m Adelaide office building

Russell Emmerson From: The Advertiser March 17, 2010

ADELAIDE will gain a new $200 office building with the support of the Australian Taxation Office.

Aspen Group announced this morning the Tax Office would bring 3000 people to its Tower 8 project on Franklin St, taking up 30,000 sq m in a 15-year lease.

The project is part of Aspen's massive City Central project bordered by Waymouth, King William, Flinders and Bentham St and represents the largest property deal done across Australia this year.

Aspen's shares rose 1.5c to 51c in early trade.

[Ben]

Media Release from the ASX : APZ

Construction due to start in September 2010.

Interesting to note at 36,215 Sqm this is the largest Office building ever to be built in Adelaide.

http://www.asx.com.au/asx/statistics/di ... d=01047769

[Howie]

Brilliant, thanks for that Ben.

[Will]

I would assume that the old 20 level proposal is back? That proposal was 31 000sqm2.

However, according to the info, Ben has posted, the building is now 36,215 sqm2.

CCT8 has never been this big. This may mean, that a new, taller design will come out?

[AtD]

Will, I read it as a lease of 30,000sqm of office space equating as 36,215sqm of gross floor space, probably including car parks, etc. Then it goes on to say the total pre-commitment is 35,420 sqm or 98% of the building - I don't know what that means.

I would guess the remaining 2% is the retail section.

[Ben]

Excerpts of the press release say:

The agreement with the ATO (30,000sqm) represents 83% pre-commitment for ADF1's planned new office tower (Tower 8 ) in the Adelaide CBD. this brings the total pre-commitment to 35,420 sqm or 98% of the building.

Tower 8 forms the next stage of ADF1's Adelaide City Central Precint, an impressive city block project. Situated on Franklin Street, the tower will comprise 36,215 sqm of Office Space over 17 levels, as well as 3 levels of secure car parking. the tower, which will be the largest office development in Adelaide, has been designed to achieve a 5 star Green star and NABERS ratings.

Aspen group will project manage the development, which is expected to commence in September this year with a forecast completion date of October 2012.