A group of Danish pension funds has bought a biomass-fired power plant project in the north of England for DKK1.6bn (€215m) via investment fund Copenhagen Infrastructure II.The fund, run by Copenhagen Infrastructure Partners (CIP), has labour-market pension funds PensionDanmark, Lægernes Pensionskasse, PBU, JØP and DIP as investors, as well as commercial pension providers Nordea, PFA, AP Pension and SEB.Danish financial group Nykredit is also an investor in the fund.Christian Skakkebæk, senior partner at CIP, said: “The Brite project is an attractive investment opportunity for CIP in a country with a well-established and stable regulatory regime.” He said the deal fit in very well with the firm’s strategy of developing projects that benefit from long-term contracts with strong industrial partners in order to give investors stable returns.PensionDanmark has committed DKK3.5bn to the fund out of a total of more than DKK8bn in commitments the fund has received so far from the 10 institutional investors.The fund is still open for commitments until the end of the first quarter of this year.The Brite power plant is located in Rotherham near Sheffield and will be fuelled with waste wood from the local area, sourced from a long-term contract with Stobart Biomass Group.It is expected to be completed in the spring of 2017, and will have a capacity of 39.3 MW.The plant will be built by a consortium consisting of Babcock & Wilcox Vølund, which is based in the Danish town of Esbjerg, and UK firm Interserve. On completion, Babcock & Wilcox Vølund will be responsible for operating and maintaining the installation on a 15 to 20-year contract.For PensionDanmark, the Brite power plant will be the third biomass facility in England the pension fund has invested in.It was involved in establishing the Brigg and Snetterton biomass-fired plants via a joint venture between the Copenhagen Infrastructure I fund – in which PensionDanmark is sole investor – and Burmeister & Wain Scandinavian Contractor (BWSC).Torben Möger Pedersen, PensionDanmark’s managing director, said he saw great potential in the type of partnership that was behind the three investments.“Investments in the three British power plants with competent industrial partners like BWSC and now Babcock & Wilcox Vølund ensure members a good return over many years and at the same time contribute to strengthening Danish energy technology exports,” he said.
SPH, the pension fund for general practitioners in the Netherlands, has moved to simplify its investment portfolio to reduce risk and cut costs.According to its annual report for 2014, the scheme re-invested nearly half of its €9.5bn portfolio, largely switching to passive management.It also cancelled performance fees for credit and fund-of-hedge-fund managers.Johan Reesink, chairman at the scheme, said nearly 90% of all performance fees could be cancelled as and when management contracts were renewed. He added that the pension fund’s aim was to eliminate all performance fees.As a consequence of the portfolio reshuffle, asset management costs – apart from transaction costs and remaining performance fees – fell from 0.26% to 0.15% of assets under management.The pension fund increased its fixed income allocation from 36.4% to 50.8%, investing in liquid Dutch, German and French government bonds.This came largely at the expense of equity holdings, which the scheme cut by one-quarter to 29%.SPH divested its 3% stake in US and UK inflation-linked bonds, as well as its positions in Canadian and Australian government paper.“The risks of keeping these bonds outweighed the advantages for diversification,” Reesink said.He said the pension fund re-focused its equity holdings on the longer term, while shifting its global equity, emerging market and small-cap holdings into single and passive mandates.It had previously bundled its developed-market equities into one mandate.As part of the reshuffle, the pension fund also reduced its hedge fund allocation by 0.6 percentage points to 4.7%, and cut its commodities exposure by 1.1 percentage points to 3.9%, while switching to passive management.It raised it infrastructure allocation by 0.1 percentage points to 1.8%, inching towards its strategic target of 5%.Last year, the GP scheme expanded its real estate portfolio from 3% to 3.3% while lowering the risk profile of its non-listed holdings by adding “stable property” in core segments of developed countries.SPH reported a 14.7% return over 2014, attributing 3.2 percentage points of performance to a 50% interest-risk hedge.Almost all asset classes contributed positively, with commodities, losing more than 18%, the only exception.The scheme’s fixed income portfolio returned 14.9%, but long-duration German and Dutch government bonds returned up to 27%.Listed property returned 22.1%, while remaining positions in private equity returned 21.6%.SPH’s coverage ratio stands at just under 140%.
Segregated mandates for institutional investors included in a review by the UK’s Financial Conduct Authority (FCA) do not raise concerns about whether they deliver on expectations, a finding also applicable to the funds reviewed despite there being some shortcomings, according to the regulator.The findings are from a thematic review the FCA carried out “to assess whether UK-authorised funds and segregated mandates are operated in line with investors’ expectations as set by marketing and disclosure material, and investment mandates”.The thematic review appears to be separate from the asset management market study the FCA is conducting to assess whether the industry is delivering “value for money” for investors, but this is unclear.The FCA did not respond to a question about this. The thematic review covered 19 UK fund management firms responsible for 23 UK-authorised funds, all available to retail investors and using active investment strategies, and four segregated mandates.The regulator said it did not assess more segregated mandates because the risks associated with communication and delivering on expectations are less prominent than in funds, where oversight is carried out by the authorised fund manager rather than directly by the investors.“The mandates we reviewed were closely overseen by the client through regular reporting and meetings with the asset manager,” said the FCA.“Clients were also sufficiently knowledgeable, or were provided with advice, to understand the risks inherent in the mandates and address potential concerns.”As concerns the funds in the sample, most are investing in line with their stated strategy, said the FCA, although there are some examples of unclear product descriptions and inadequate governance or oversight.Megan Butler, FCA director of supervision for investment, wholesale and specialists, said: “The industry needs to consider how it communicates when funds are linked to financial benchmarks.“It is also vital funds keep investment practices under review so they match their stated aims and strategy, irrespective of whether the fund is still actively marketed because investors base their decisions on this information.”The FCA said all fund management firms should consider the findings in its report and review their arrangements accordingly.
The risk that defined contribution pensions will result in a low pension for savers is “very small”, according to the Danish industry association for the pensions and insurance sector, Forsikring & Pension (F&P).F&P was responding to a regulatory investigation by the Danish Financial Supervisory Authority (FSA or Finanstilsynet).It presented a discussion paper at the beginning of March on the risks for consumers in “market-rate” pensions, whose returns are directly linked to underlying investments. Providers are increasingly offering savers these products instead of the traditional “average-rate” pensions with or without yield guarantees.In its response document – entitled “Good pensions with controlled risk” – F&P said: “It is important to make clear that even though the investment risk is greater in non-guaranteed products, the risk that the individual client will end up getting a low pension is only very small.” The association cited three reasons for this: First, it said pension providers limited investment risks by investing in many different asset types and individual assets. Second, pensions were a very long-term form of savings and downturns on financial markets were typically soon followed by upturns. Thirdly, it said pension providers usually reduced investment risk for customers the closer they came to pensionable age.Finanstilsynet said last month that the Danish pension system had undergone an huge change in the last few years with the transition from the traditional guaranteed products to market-rate products.It said the development was driven by the desire to give customers higher expected pensions, but also meant that the savers themselves shouldered the risk of whether there would be enough money for their years as a pensioner.Per Bremer Rasmussen, chief executive of F&P, said the association welcomed a businesslike debate on the subject raised by regulator.“It is important that the pensions industry, regulatory authorities, and Danish politicians continuously take positions on whether the Danish pensions system has the best conditions for providing Danes with the best possible pensions,” he said.But F&P said information currently available to customers with non-guaranteed pension products was not adequate, and this was why the industry was in the process of new initiatives on information.The association presented a four-point plan last month to promote consumer protection regarding pensions.“There is a lot of literature showing that the typical consumer finds it very difficult partly to understand risk, and partly to act in regard to managing that risk,” the association said in its response to the regulator’s specific questions. “So it is important to take as a starting point the consumer’s limited understanding and interest, when communicating on risk.”It was also important to give the individual pensions firm enough freedom to target and test the information for its specific customer segment, F&P said.
AXA IM Rosenberg Equities – Kathryn McDonald has been appointed to the newly created position of head of sustainable investing as part of the manager’s commitment to integrating environmental, social and governance (ESG) considerations into all of AXA IM Rosenberg Equities’ portfolios by the end of 2017. The equity manager will systematically include quantitative and qualitative ESG insights in portfolio construction and treat the ESG information as complementary to traditional financial information.McDonald joined AXA IM in 1999 from MSCI Barra Inc. and has held several positions at AXA IM Rosenberg Equities including as senior strategist for emerging markets and Asia ex-Japan, and head of investments for Australia/New Zealand. She had been director of investment strategy for the investment team since 2014.AP Pension – Jesper Bjerre has been hired by Denmark’s AP Pension as its new chief operating officer and member of the executive board. He is replacing Bo Normann Rasmussen, who was promoted to the role of chief executive in March. Bjerre comes to AP Pension from Danica where he held the position of private director, in charge of the Danske Bank subsidiary’s commercial activities aimed at private customers in both Danica and Danske Bank. Before working at Danica, he was marketing director of PFA Pension for several years.International Corporate Governance Network (ICGN) – Michael McCauley is succeeding Erik Breen as chair of the investor-led network. Breen is head of SRI at Triodos Investment BV, Netherlands and had been chair of the ICGN since 2014. McCauley is senior officer, investment programs and governance at the State Board of Administration of Florida. He is a former chair of the Council of Institutional Investors. Three new ICGN board members were appointed at the network’s recent annual general meeting in Kuala Lumpur, Malaysia. They are: Dana Hollinger, member of the board of the California Public Employees’ Retirement System, the largest US asset owner, Paul Schneider, head of corporate governance at Ontario Teachers’ Pension Plan, and Ian Burger, head of corporate governance at Newton Investment Management. PensionsEurope – The trade body for European pension funds has appointed Simone Miotto as senior policy adviser. Miotto previously worked for the European Association of Paritarian Institutions. Matthies Verstegen has also joined the association, as policy adviser with a focus on financial market regulation. He was previously at the Confederation of British Industry.Schroders – The investment manager has hired Tom Binks as fiduciary manager, taking its overall investment solutions team to 13 people. Binks has eight years of experience as an investment consultant, having joined Willis Towers Watson in 2009. Most recently he was assistant portfolio manager for fully delegated defined benefit pension fund portfolios. Binks will report to Hannah Simons, head of fiduciary management. In a statement she said fiduciary management is a growing area for Schroders. She told IPE Bink’s hire was “a statement of intent” and ””recognition that we expect our fiduciary assets to grow”. Schroders is a new entrant to the fiduciary management market and is still building its track record, she added. Lombard Odier – The asset manager has poached Charles St-Arnaud from Nomura, appointing him to the newly created role of senior investment strategist. He will report to Salman Ahmed, chief investment strategist. At Nomura, St-Arnaud was a G10 foreign exchange strategist and economist. Before that he was a senior economist with the Department of Finance Canada and held roles at Morgan Stanley and the Bank of Canada.AMP Capital – Niamh McBreen has been hired as an investment director in the infrastructure equity asset management team, based in London. Stasha Prnjatovic has been appointed to the newly-created role of investment director, energy within the infrastructure equity team in Sydney. McBreen joined on 1 July from UK Government Investments, an associated body of HM Treasury, where she was executive director working on several portfolio assets including Network Rail, Highways England, NATS and Companies House. Prnjatovic is joining the firm on 17 July, leaving her role of commercial director at New South Wales Treasury, where she oversaw the privatisation of TransGrid, Ausgrid and Endeavour Energy.Ossiam – The smart beta specialist fund manager and affiliate of Natixis Global Asset Management has hired Mirko Jungmann as product specialist for Austria, Switzerland and Germany. He was previously a senior consultant at Capco Germany, and a senior investment consultant at Mercer Investments in Germany. Jungmann is based in Frankfurt.Scope – The ratings agency has appointed Said Yakhloufi as head of the mutual funds team. He will be responsible for expanding rating activities for UCITS investment funds. Yakhloufi was previously at Allianz Global Investors, where he had been head of market research and head of global product strategy since 2011.Just – Graham Jarvis has been appointed director of distribution development for HUB Financial Solutions, the recently merged business that brings together Just Retirement Solutions and The Open Market Annuity Service. Before joining HUB, Jarvis was director of workplace propositions at Staff Care, an employee benefits platform that he developed and eventually sold to SimplyBiz.Berenberg – The German private bank has further expanded its wealth and asset management team with the appointment of Bernd Meyer as chief strategist and head of multi asset. Meyer joins from Commerzbank, where he was head of cross asset strategy. Before that he was at Deutsche Bank in London as head of the European equity strategy.Transparency Task Force – The campaign group has launched a new group for progressive asset managers, designed to bring together asset managers that fully back high levels of transparency on costs and charges and demonstrate at least one other progressive characteristic. IG Group, Sparrows Capital and Lansons are founder members.
“The government’s stance in the green paper [published in February 2017] was that DB funding was broadly functioning well, with some exceptions,” the ACA said. “Therefore, any measures should be focused on these exceptions, without destabilising a system which is by-and-large working well.” The UK pension fund industry has hit back at government plans to reform funding requirements for defined benefit (DB) schemes, warning that a more prescriptive approach might do “more harm than good”.The Work and Pensions Select Committee – a cross-party group of MPs from the UK’s lower house of parliament – is conducting an inquiry into the proposals detailed in the government’s white paper on DB reform, published in March.Among the government’s ideas was “clearer” funding requirements to be set out by the Pensions Regulator (TPR). In a series of submissions to the committee, consultants, actuaries and unions took aim at this central plank of government thinking, suggesting instead that the current system worked well.The Association of Consulting Actuaries (ACA) said it recognised that the attempt to reduce the complexity of DB valuations to a single metric was a “noble aim”. However, “the unintended consequences will do more harm than good”, the trade body warned. The keenly anticipated government report was published in MarchIn its submission, Lincoln Pensions said that funding crises in some cases had not been the fault of “an inadequate funding framework”.The covenant risk specialist said: “The solution lies not in creating a ‘minimum funding requirement v2’… but in requiring all pension scheme trustees to fully understand the strength of their employer covenant and to take it into account when determining their investment and funding strategies.“This could be codified in new legislation… rather than simply in regulatory guidance.”Consultancy giant Mercer asked why the government wanted to revisit what was “prudent” and “appropriate”, two key measures that would be taken into account when deciding whether the regulator should step in.“The white paper itself concludes that the scheme funding framework works well on the whole and provides a balance between affordability and employer growth on the one side and funding needs on the other,” Mercer said.“We agree with this conclusion and do not believe that it would be in the interests of schemes in general, or their members, to review the scheme funding regime in order to deal with shortcomings that only affect a minority.”Several unions also criticised the proposals to introduce a statutory regime. The Trades Union Congress (TUC), which serves as the UK’s umbrella union organisation, said any statutory funding code risked strengthening “the funding orthodoxy that has led to so many DB schemes closing to new members or even accrual”.“We would like to see an approach to funding that allows greater investment in return-seeking assets,” the TUC said.Unite, the UK’s largest union with more than 1.4m members, also expressed reservations.“A statutory funding code risks enshrining in legislation what is currently just TPR preference – requiring schemes and sponsors to de-risk and plan for buyout (or perhaps consolidation), which will increase the costs for sponsors and will unnecessarily shorten the life of sustainable DB schemes for members,” the union said.The moves by industry and the unions to nix any potential statutory funding requirement exposed a growing gap in thinking with government and the regulator.In its submission, TPR said that the current funding regime allowed trustees and sponsoring employers to serve the needs of both the scheme and employer.However, the regulator added: “[The] lack of clarity in legislation as to what constitutes a ‘prudent’ assessment of liabilities and an ‘appropriate’ recovery plan makes it difficult for TPR to set clear expectations in this complex area, and to take regulatory action where we consider that the flexibility in the funding regime is being abused.“The onus should be on schemes and sponsoring employers to demonstrate to us how their approach is prudent and appropriate.”The UK’s biggest pension fund, the £60bn Universities Superannuation Scheme, has been at the centre of a valuation row for nearly a year, after its latest actuarial assessment revealed a significant funding gap. This led to proposals to close the DB section of the scheme, triggering strike action from university staff across the UK.Other valuation calculations produced such a range of outcomes that the scheme’s employers and union formed a joint committee of independent experts to debate the results.
Several Danish pension funds are taking measures to reduce the climate impact of their investments, setting new targets and excluding more companies from their portfolios.The DKK113bn (€15.1bn) pension fund PenSam, which provides pensions for public sector employees, is to invest 10% of its portfolio assets linked to the energy transition by 2025, including such as renewable energy and green listed shares and bonds.The allocation will equate to DKK8bn of assets in 2025, the fund estimated.PenSam said it had already acted on its pledge by investing more than DKK500m via two deals in conjunction with an infrastructure partnership it has entered into with Danish pension provider PKA. Credit: Robson MachadoLaerernes Pension has excluded a number of firms involved in oil drilling in the ArcticPaul Brüniche-Olsen, chief executive of Lærernes Pension, said: “When we decided on the tolerance limits, we agreed that we should revisit them because all thought some of the tolerance limits were quite high. At the board meeting today, we have just done so and decided to lower most of the tolerance limits.”Elsewhere, the Danish Pension Fund for Engineers (DIP) and the Lawyers’ and Economists’ Pension Fund (JØP) have also excluded several large oil firms from their portfolios: ExxonMobil, Glencore, Chevron, NovaTek, Sasol, Tatneft, AGL Energy and PetroChina.The funds, which are on the verge of a possible merger and together manage DKK120bn, said the companies did not satisfactorily handle their negative impact on climate change. The divestment decisions were the result of a major analysis started by the funds last autumn.DIP and JØP said they were both also working in accordance with TCFD recommendations, and began the analysis of their portfolio companies as part of this cooperation.The funds said they were also in the process of assessing just under 70 firms in their portfolios, all of which were among the 100 largest contributors to future carbon emissions.The criteria for these assessments will include factors such as whether companies publish information on CO2 emissions, whether they have targets for reducing these, and information about the any possible lobbying activities, said DIP and JØP. Credit: SchropferovalPenSam bought 23% of PKA’s stake in two Californian solar parksClaus Jørgensen, CIO of PenSam, said: “The two investments are the starting point for more green and sustainable investments in PenSam. At the same time, we have turned down investments in fossil fuels as part of our strategy in recent years.”The provider blacklisted tar sands companies in December 2018 and has excluded a large number of firms engaged in coal energy production since 2016.PenSam said that it was working in accordance with the recommendations made by the Task Force on Climate-Related Financial Disclosures (TCFD).“By signing up to the TCFD’s recommendations, we are putting more focus on integrating climate change and the accompanying risks into the investment decisions and the organisation,” said Jørgensen.Meanwhile, Lærernes Pension, the Danish pension fund for teachers, said it had excluded a number of companies engaged in coal production for energy, arctic drilling for oil and extraction of oil from tar sands.The divestments come as the fund has moved to lower its tolerance thresholds on how much climate-harming activity an investment may involve.The pension fund said it would only invest in a company if no more than 5%, rather than 20-25%, of its turnover came from coal production, arctic drilling, tar sands or weapons, among other criteria. Both deals – buying to a wind farm in northern Sweden and investing in two solar parks in California – involved PenSam buying 23% of PKA’s existing stakes in the projects.
At the beginning of June, just two months after the first GPF investment was made, Houg told IPE that if sellers continued to stay away due to widened corporate bond spreads, it would take more time for his organisation to build up the portfolio.However in the interim report released this week, the management firm said credit spreads in Norway had narrowed, with liquidity in the bond market having been “relatively good”.“The start of the fund with the first purchase on 27 March coincided with a preliminary bottom in the bond market, so the fund’s purchases in both the primary and secondary markets have yielded good returns,” Folketrygdfondet said in the report.So far, the parts of the GPF that are invested have returned 3.6% in the first half, the firm reported.GPFN uses crisis movementsFor the GPFN, Folketrygdfondet reported an investment loss of 4.4% in the first half of this year, with equities ending the period down 11.1% and bonds having generated a 6.1% gain.But Houg said his organisation had used market movements to increase the risk in the portfolio through the crisis.“In connection with the market decline in the wake of the COVID-19 outbreak, the GPFN made stock market purchases equating to NOK7.6bn,” he said, adding that this amounted to 3.2% of the fund’s capital. “We also took advantage of major movements in the credit market to increase the risk in the GPFN’s fixed income portfolio. We got a good payoff for that in the second quarter,” he said.In the second quarter alone, the GPFN made a positive 8.3% return. Folketrygdfondet, whose main task is to manage the domestically-invested portion of Norway’s sovereign wealth fund, had ploughed NOK3.7bn (€351m) of its new NOK50bn crisis bond fund into the debt of Norwegian companies by the end of June, it has revealed.The Oslo-based manager of the NOK257bn Government Pension Fund Norway (GPFN) was tasked in March with reprising the Government Bond Fund (GBF), which it had run in the years following the global financial crisis, to this time support the country’s economy during the coronavirus pandemic.In its first half report, Folketrygdfondet said that so far, it had bought 44 loans from a total of 30 issuers.Kjetil Houg, Folketrygdfondet’s chief executive officer, said: “We have contributed to a well-functioning market in line with the assignment we received.”
4832 The Parkway, Sanctuary Cove sold for more than $5 million.A LUNCH date with friends proved to be expensive for an interstate couple after they dropped more than $5 million on a Gold Coast house.It was by chance that the mystery buyers came across the Sanctuary Cove property on The Parkway but the opportunity to buy was too good to pass up. 4832 The Parkway, Sanctuary Cove. 4832 The Parkway, Sanctuary Cove. Live like a Gold Coast Titan 4832 The Parkway, Sanctuary Cove. Secret sale smashes suburb record Ray White Prestige agent Matt Gates, who marketed the property with colleague Trish Edwards, said the buyers drove past a sign advertising the house after lunch and then called to arrange an inspection.“They were actually just having lunch with some friends who already lived in Sanctuary Cove, looked at the house and fell in love with it,” he said.Mr Gates would not reveal the buyers’ identities or the price they paid for the house, but said it sold for between $5 million and $5.5 million. He said the spontaneous sale marked the second highest price ever paid for a property fronting a golf course in Australia.The record stands at $6.5 million for the house at 2230 Arnold Palmer Drive, which Mr Gates sold earlier this year.“The prices are just going gangbusters for golf course properties,” he said.He said The Parkway property had generated a lot of interest from local, interstate and international house hunters since it hit the market in July. 4832 The Parkway, Sanctuary Cove.More from news02:37International architect Desmond Brooks selling luxury beach villa15 hours ago02:37Gold Coast property: Sovereign Islands mega mansion hits market with $16m price tag2 days ago 4832 The Parkway, Sanctuary Cove.“I think we had 10-15 inspections on the home in the first 30 days, which is a lot given the price of the property,” he said.“We also had some Russian buyers ~looking at it.”Its position overlooking the lakes and fairways of The Palms Golf Course was one of its most appealing features.“It’s a very pretty aspect and one that you don’t have to maintain,” Mr Gates said.It is the latest of several multimillion-dollar sales in the past few weeks.A Reedy Creek property sold for $2.5 million last weekend while the Palm Beach home of former V8 Supercar driver Paul Weel sold for $5.5 million last week. A jaw-dropping mansion on the Isle of Capri, which was home to ex-world champion rower Cy Pearson, also sold recently in a $5 million secret sale.Mr Gates said the “flurry of activity” was a sign of a good spring selling season. 4832 The Parkway, Sanctuary Cove.Video Player is loading.Play VideoPlayNext playlist itemMuteCurrent Time 0:00/Duration 1:58Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -1:58 Playback Rate1xChaptersChaptersDescriptionsdescriptions off, selectedCaptionscaptions settings, opens captions settings dialogcaptions off, selectedQuality Levels720p720pHD576p576p360p360p216p216pAutoA, selectedAudio Tracken (Main), selectedFullscreenThis is a modal window.Beginning of dialog window. Escape will cancel and close the window.TextColorWhiteBlackRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentBackgroundColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyOpaqueSemi-TransparentTransparentWindowColorBlackWhiteRedGreenBlueYellowMagentaCyanTransparencyTransparentSemi-TransparentOpaqueFont Size50%75%100%125%150%175%200%300%400%Text Edge StyleNoneRaisedDepressedUniformDropshadowFont FamilyProportional Sans-SerifMonospace Sans-SerifProportional SerifMonospace SerifCasualScriptSmall CapsReset restore all settings to the default valuesDoneClose Modal DialogEnd of dialog window.This is a modal window. This modal can be closed by pressing the Escape key or activating the close button.Close Modal DialogThis is a modal window. This modal can be closed by pressing the Escape key or activating the close button.PlayMuteCurrent Time 0:00/Duration 0:00Loaded: 0%Stream Type LIVESeek to live, currently playing liveLIVERemaining Time -0:00 Playback Rate1xFullscreenWhy location is everything in real estate01:59
File photo.TOWNSVILLE’S renovation market is thriving in the city’s established suburbs according to the latest Herron Todd White report.The October Month in Review states that there is gentrification activity within Townsville’s residential property markets for timber framed homes within the established suburbs of Aitkenvale through to Hermit Park and Railway Estate.“Renovations include additions of decks or patio areas through to new kitchens and bathrooms and full renovations,” the report states.More from news01:21Buyer demand explodes in Townsville’s 2019 flood-affected suburbs12 Sep 202001:21‘Giant surge’ in new home sales lifts Townsville property market10 Sep 2020“House flippers are also active in the market with good buying available through mortgagee in possession sales, deceased estates and a general soft median house price.“The market for renovating is likely to continue to remain active with interest rates at low levels, while house flippers are also likely to remain active due to the good buying opportunities available.”Despite renovators remaining active in established suburbs there were very few new homes being built in those areas.“There is limited new home construction occurring within these established suburbs as the price point of buying an existing home, demolishing and rebuilding a new home is not feasible in the current market environment,” the report stated.“We are however seeing some interest in larger corner lot properties that offer small lot subdivision potential as a way of making the construction of a new home in these established areas more feasible.”