Four things I found interesting from the past week. Headings are hyperlinks.
Apartments in Southbank, Melbourne CBD, Docklands and West Melbourne experienced rental growth of ~33% YoY
Vacancy rates hit a record low of 1% across Australian capitals
Higher rents are driven by increased demand from the influx of migrants and landlords demanding higher rents in response to the rising cash rate
Pubs are getting snapped up by private buyers at sharper cap rates, despite rising interest rates
Buyers are usually buying both the business and the freehold land in ‘stapled freehold going concern’ transactions
16/8/22: Warren Livingstone buys The Australian Hotel in outer Sydney for ~A$12m
11/8/22: Albert Hakfoort buys the Lord Stanley Hotel in East Brisbane for A$20m, at a sharp yield of 4.6% and at a premium to book value
2/8/22: The Oaks Hotel in Sydney lists for a record-breaking A$175m
25/7/22: Adam MacFarlane buys the Lord Roberts Hotel in Darlinghurst (Sydney) for A$22.5m
Controversial WeWork co-founder and former CEO Adam Neumann’s new startup Flow is now valued at >US$1b at pre-seed
Flow is yet to have a product or revenue, and is pre-launch
Flow is purported to be a residential real estate company that will operate a chain of branded rental properties with a consistent ‘community’ experience (think WeWork but for living? Co-living?)
a16z’s investment note on Flow called Neumann the ‘one person [who] has fundamentally redesigned the office experience and led a paradigm-changing global company in the process’
Privately-held Cooke wins takeover bid for Tassal with a A$1.1b all-cash offer, at A$5.23/share, a 49% premium on its closing price on June 22
Tassal’s FY22 revenue increased ~33% to A$788.67m, FCF increased >3x to A$95.44m and net profit increased ~60% to A$55.35m YoY
Cooke mentioned local distribution and supply as the core catalyst for the acquisition
The 49% premium is higher than the median premium of 38% in successful Australian M&A transactions over the past 15 years
Within a month (June), Cooke brought three bids to Tassal’s board ranging from A$4.67 to A$4.85, which were rejected
Cooke adds Australia into its existing global network of 10 countries
Cooke had steadily increased their stake in Tassal to >10% from 7.6% in July 2022
In 2021, Cooke lost against Brazillian meat-processing company JBS in a takeover fight for Huon, the second largest salmon producer in Tasmania after Tassal – this means that two of Australia’s three largest salmon producers are now foreign-owned
The Tasmanian government paused granting new leases in the state’s waters for salmon farming in September 2021 for 12 months as salmon prices increased 13% YoY
Tassal is also Australia’s largest seaweed farmer
Goldman Sachs (IB) & Herbert Smith Freehills (Law) advised Tassal while Kidder Williams (IB) & Allens (Law) advised Cooke
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