☕️ Office crunch

Some worrying signs for the commercial property sector

July 17, 2023

Good morning.

One of Australia’s biggest property REITs, Charter Hall, quietly limited redemptions from one of its largest unlisted office funds last week. That is not a good sign for the local commercial property sector which so far has avoided the pain that has affected the industry in the US.

The major office landlords are being squeezed at both ends. The WFH revolution has led to significant vacancies in offices and prompted some tenants to downsize. At the same time higher interest rates have not only increased funding costs but also hit commercial property values. In other words now would not be the best time to sell office assets, unless you really have to…

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MARKET MOVERS

*Stock data as of the market close. Commodities and crypto data in USD.

Market News: Neuren Pharmaceuticals shares rocketed after the company revealed it had signed an expanded agreement with its US distributor, Nasdaq-listed Acadia Pharmaceuticals, to sell its trofinetide product globally. The company is getting a US$100 million cheque upfront, as well as the potential for milestone payments of up to US$427 million, as well as royalties.

THE QUICK SYNC

  • Michelle Bullock: What you need to know about the RBA’s new governor. (Guardian)

    • The three most revealing speeches of the new RBA governor Michele Bullock. (The Australian)

    • Michele Bullock will be the most scrutinised RBA governor ever. (AFR)

  • Charter Hall limits withdrawals from unlisted office fund. (Reuters)

  • Britain signed a deal to join the £12 trillion ($15.7 trillion) Indo-Pacific trade bloc. (CNBC)

  • Markets are convinced the Fed can pull off a ‘soft landing’. (WSJ)

TRADING FLOOR

M&A:

  • 777 Partners seeks assistance with inbound interest in Bonza. (AFR)

  • Bolster has joined Common State to form one company. (BNA)

  • Lansdowne Hotel, one of Sydney’s most-loved live music venues, is being put up for sale. (SMH)

  • Sandfire Resources and South32 are among the parties interested in buying the copper mine Khoemacau in Botswana. (The Australian)

  • Wittner sets itself up for sale as tough retail conditions bite. (The Australian)

  • Bupa’s dental care operations could soon be up for grabs as well. (The Australian)

Capital Markets:

  • Star Entertainment’s refinancing gets plenty of interest from major credit funds. (AFR)

VC:

  • RecycleSmart, the Sydney startup behind the Power Pickup initiative, has raised more than $1 million through crowdfunding. (BNA)

  • Secure Code Warrior, a safe coding education scale-up, has successfully closed a $72.6m Series C round led by Paladin Capital Group. (BNA | StartupDaily)

  • Reactory has a bonus incentive for investors who chip in $100,000 as it seeks to raise $4m. (StartupDaily)

Others:

  • Two new members have been added to the equity research team at MA Moelis Australia. (AFR)

    • MA Moelis Australia has hired former Goldman Sachs and RBC resources analyst Paul Hissey. (The Australian)

  • Greg Chubb surfaced in the contest for the chief executive role at GPT Group. (The Australian)

  • Nomura Australia has promoted Andrew Macgonigal to president and chief executive. (AFR)

  • PAC Capital hires ex-Antipodes portfolio manager and founding partner Sunny Bangia. (AFR)

  • Slater and Gordon settles with Colonial First State for $100m in case about excessive super fees. (BNA)

  • Institutional Shareholder Services (ISS) is urging its clients to vote against replacing the current board of Bubs Australia. (AFR)

  • Australia's Hollywood-led productions are put on hold due to the Screen Actors’ Guild strike. (BNA)

  • ithium Power keeps mum about its Chilean licenses. (AFR)

  • Queensland Tourism Industry Council (QTIC) has called Bonza’s recent axing of certain flight routes a case of “trial and error”. (BNA)

THE WATERCOOLER