YIKES! Keep an eye on CAIRNS!!

Discussion in 'Where to Buy' started by JenJen, 22nd Aug, 2013.

  1. JenJen

    JenJen NQ Buyer's Agent

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  2. JenJen

    JenJen NQ Buyer's Agent

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    News on the proposed Aquis development in Cairns

    This was posted on the Aquis facebook site today:

    "THE developers of the proposed $4.2 billion Aquis mega-resort have dumped plans to establish a standalone casino licence at Yorkeys Knob and now say they hope to build community facilities in Cairns city.

    Facilities such as a sports stadium could now be built in the inner-city rather than being included in the Aquis site. A revamp of Barlow Park is also possible. Billionaire developer Tony Fung wants to focus on using the one gaming licence from his recently acquired Reef Casino to develop a casino at Aquis.

    Mr Fung also revealed plans to establish a special fund to tailor top-level infrastructure to locals. "We want to work together with the community," he said. Mr Fung and son Justin announced that Aquis had withdrawn a bid for one of two regional integrated resort development licences and would focus on ensuring the Reef Hotel Casino licence was split to cover the 342ha Aquis property.

    Mr Fung, who has spent more than $15 million on the development, will meet with investors and banks in Hong Kong this week to raise the billions of dollars needed to fund the project. "I see the construction date to be after the wet season next year ... for completion to be before Christmas 2019," he said.

    Mr Fung said Premier Campbell Newman had suggested splitting the licence and that was the way Aquis would proceed. He met Attorney-General Jarrod Bleijie last Thursday for talks. Mr Bleijie has established a special advisory team within the department to work with Aquis advisors, lawyers and consultants to push through splitting the licence to cover the CBD and Yorkeys Knob sites.

    Mr Fung said he had emphasised "a very tight schedule" because of emerging casino markets in Asia and would meet with investors and banks in Hong Kong this week to raise the money to fund the project. "Japan is coming on soon (legislation of gambling) and I predict Japan will be as big as Macau which will be seven times bigger than Las Vegas by the year end," he said. He said he hoped that the terms of the licence would be agreed upon by the end of June subject to legislation being passed by Parliament.

    He said there had been "many ups and downs" since the project was announced last year. "I am very pleased we are at this point but I will be even more pleased when I have the licence in our hands," Mr Fung said. He said he would stop the integrated resort process.
    "I think there will only be one route and we are choosing the route presented to us by the Premier (splitting the licence) and putting a stop to the other route," he said.

    He said raising the billions of dollars for the project relied on the casino licence. "Aquis relies on a gaming licence to get started," Mr Fung said. "You give me the licence and I say 99 per cent (Aquis goes ahead)." Mr Fung said he had spent $15 million to date on the project but did not have "a bottomless pit." He said he also needed community support. "I will not do anything if I do not have the overwhelming support of the community," Mr Fung said.

    He said some members of the community did not want to travel to Yorkeys Knob and "walk through a casino to take a six-year-old girl to ballet lessons". He said after talks with Mayor Bob Manning, Aquis was considering a community benefit fund to build sites such as a sports stadium, near the CBD, not at Yorkeys Knob.
    Aquis chief executive Justin Fung said it might mean that a proposed 25,000-seat stadium at Yorkeys Knob could be a new facility elsewhere."

    Cheers

    Jen
     
  3. ndonnelly

    ndonnelly Member

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    I have read the article twice now and struggling with a few of the concepts. Fung is now using the recently acquired reef license instead of applying for a new license. This makes sense as he avoids the whole application process but what happens to the land that was approved for purchase last week at YK? Will that still be developed because it indicates the 'integrated resort' has been abandoned. Does this mean Fung will just redevelop the current reef casino in its existing location and add other community projects in and around the cairns CBD area i.e. Barlow Park?
     
  4. JenJen

    JenJen NQ Buyer's Agent

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    No. I think they are pretty committed to the resort development.

    It just means that they have assessed their competition and risk of not getting the additional licence, and are taking on the Premier's advice instead to split the existing licence. Pretty sure they want to keep him on-side. The whole licence application for an integrated resort is the QLD government's idea, not that of Aquis. That licence application process was likely to delay them by a year, and distracted them from the main game.

    They are being strategic. By buying the existing casino and associated licence, they have saved themselves a lot of time and reduced the cost and potential risk of the Aquis project not going ahead. My understanding is that the point of the casino licence was to ensure financial viability and sustainability of the other aspects of the development. It is like an insurance policy for them. Once they get the licence, they are confident they have the Premier's backing to split it across two sites, and know they can raise the revenue needed to progress the Aquis resort development and make it marketable and sustainable. Plus, they are looking at ways of shortening the time-frame, and therefore the financial loss. Also, by investing in Cairns more broadly, they are shoring up the support of the community, as well as providing a strategic marketing platform to start promoting the destination and resort to China.

    Overall, very smart moves on their part to reduce all obstacles, keep the local community on side, and start marketing to the broader Chinese market. They have been very transparent that this is what they want to do, so the moves they are making are no surprise.

    Cheers

    Jen
     
  5. JenJen

    JenJen NQ Buyer's Agent

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  6. ndonnelly

    ndonnelly Member

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    Given that Reef license was there for the taking from the outset I wonder why Fung went through the application to this point? I suppose the new license was a backup if Reef did not come through.
    Who am I to question a billionaire anyway !!
    Lets hope the EIS is all good. I have been following aquis on FB & twitter and 99% of the local's feedback is positive so it seems the community is on board which is helpful. Although I am a little suspicious of aquis never posting anything negative and attempting to placate the poster.
    Do you know when decision time is?
     
  7. impala67

    impala67 Member

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    Is 'big Cairns' going to be bigger than Hobart?

    Population predicted to swell to 205,000 over next decade
    - Liam Parsons - The Cairns Post - 15/03/14

    "...CAIRNS' population will swell to 205,000 over the next decade according to new projections which show the city's growth rate is on track to outpace the rest of the state....another 55,000 people are expected to descend on Cairns over the next 10 years, surpassing the current populations of Geelong and Hobart..."

    www.cairnspost.com.au/business/is-big-cairns-going-to-be-bigger-than-hobart-population-predicted-to-swell-to-205000-over-next-decade/story-fnjpusdv-1226855268021

    Looks like long term Cairns may have some returns no matter the projects.
     
  8. JenJen

    JenJen NQ Buyer's Agent

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    I wish I did! I don't think anyone knows when decision time is. It's dependent on Government processes. And speaking from experience, that's saying enough!
     
  9. bob shovel

    bob shovel Muppet

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    Is cairns going to move over the next 5 years? It is an interesting area and heavily reliant on tourism, but over the past 10 prices have sat fairly flat by the looks. Is it time to go up or are prices just sitting where they should be? Will the hype drive prices up again, then follow with prices falling again.
    Some of the prices for units seen low with good returns, id like to get in for the returns but worries what will happen over the next few years.
    Also is there stable work for locals in general, we'd like to move back up there again! Great spot to live
     
  10. impala67

    impala67 Member

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    There's a lot of positivity from the media, Linda Tuck and other locals about Cairns, which I have been following only for 6-8 months. Additionally good info from the state govt's future long term planning reports etc., and ABS info.

    However, if you are set on FNQ for a few purchases, do you hedge your bets across Townsville, Cairns, Port Douglas, or do you diversify in different markets across Cairns only? In hindsight, and/or with a time machine it will be an easy decision. I'd be interested to know what people think, and especially BA's from the area.
     
  11. Kinnon Bell

    Kinnon Bell Member

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  12. impala67

    impala67 Member

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  13. Kinnon Bell

    Kinnon Bell Member

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    I'm not too sure what to think of it yet - very sci-fi and futuristic. Hopefully the buildings wont be too high otherwise they'll be able to see into my backyard and me skinny dipping in my pool :eek: Kidding!

    It's not far from the airport and being in the flight path not sure if there's a density or height restriction that will be placed on it. Might have to read up on it.
     
  14. Benvolio

    Benvolio Member

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    what about the Whitsundays and places like Proserpine and airlie beach?
     
  15. JenJen

    JenJen NQ Buyer's Agent

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    There are integrated resort proposals in those areas as well. These integrated resort proposals involve applications for a limited number of casino licences. One in Bris, and 2 available in regional Queensland.

    The contenders for Regional Queensland licences are:

    1. Aquis at the Great Barrier Reef Pty Ltd - Yorkeys Knob, north of Cairns

    2. China-Australia Entrepreneurs Consortium Pty Ltd - Airlie Beach

    3. Fullshare International (Australia) Pty Ltd - 26 kilometres south of Proserpine

    4. GKI Resort Pty Ltd - Great Keppel Island

    5. Eastern Success Group Pty Ltd ? Nerang, Gold Coast

    6. ASF Consortium Pty Ltd - Broadwater, Gold Coast

    http://statements.qld.gov.au/Statement/2014/4/1/strong-interest-in-creating-worldclass-resorts

    Keep in mind that Aquis have also put in a takeover bid for the existing Cairns Casino, which they could split across 2 sites. So while AQUIS has applied for a licence through the integrated resort process as well, it is not dependent on the process. i.e. it has a back up plan.

    It will be interesting to see the outcome of the above proposals. Aquis put theirs in at the last minute - possibly at the request of the Premier...

    Cheers

    Jen
     
  16. Kinnon Bell

    Kinnon Bell Member

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    Interesting. Last I had heard Fung had retracted his application for a licence as he was going to split the Reef's licence. Like you say Jen must have gotten the nudge from someone.
     
  17. impala67

    impala67 Member

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    Since Feb onwards I've noticed the price range has moved up noticeably for units Jen?! ...or, is it just more quality stock available? Harder to find deals !
     
  18. JenJen

    JenJen NQ Buyer's Agent

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    Hi impala67

    I invest and work across the Cairns and Townsville regions. The following are my personal observations, and not to be taken as specific investment advice.

    Personally I wouldn't invest in Port Douglas due to its dependency on tourism, but that's not to say that won't change with baby boomers shifting into the area. But keep in mind that the nearest airport is Cairns. As far as Cairns and Townsville are concerned, though, I believe they both have solid prospects for long-term investors. Their relative position in the current property cycle means they are now some of the more appealing investor markets in Australia.

    The Cairns market is currently further ahead in the cycle than the Townsville market. I believe this is due to Cairns bouncing back after having been suppressed for so long after the GFC floored its tourism industry. Cairns has and is injecting a lot of energy into diversifying its economy, and is also buoyed by the recovery of the tourism industry, and the 'Aquis effect', which is effectively drying up supply. In the meantime, rents have been rising for some time, stock on the market depleting, and people moving into the area for lifestyle are buying because it makes more sense than paying high rents. High rents and rock bottom prices also mean great yields for investors who know how to avoid exorbitant insurances.

    By comparison, Townsville has one of the most diverse regional economies in Australia, and was not hit as hard by the GFC. Townsville has been going gangbusters to keep up with anticipated housing demand from people migrating into the area for work, and to re-invigorate the CBD. I believe that it is a result of this, coupled with the slow-down in the mining industry, that it is currently experiencing a higher vacancy rate than Cairns, whilst excess stock is absorbed, meaning there is more room to negotiate on prices. A lot is being invested in Townsville (Port, CBD, Government offices, Defence force, University, Hospital). The Townsville Bunnings that I visit is one of the busiest in Australia, and long-term prospects for the region are very good.

    Both regions have been impacted by escalating insurances and the associated exorbitant body corporate fees. Many insurers left the Strata Title unit market after cyclone Yasi, leading to near market failure. A lot has been done in relation to the insurance industry to address the issue, but the relief experienced to date can only really be felt in the housing insurance market. There has been a big gap between the housing and unit markets, with investors and owner-occupiers avoiding the issue by steering clear of units altogether. However, in Cairns in particular, unit prices have hit such a low and rents are at a high, that investment and lifestyle benefits are there in spite of insurances.

    The development of the Federal Government?s Northern Australia Policy has put a spotlight on the whole region, and the impact is already tangible: new flights are being introduced; links and partnerships with PNG and Asia are being promoted and strengthened, among other things.

    Overall, the Cairns and Townsville markets do tend to move in line with the Brisbane market, although Cairns is currently further ahead than Townsville. If you are thinking of investing in both, to spread your risk, you probably want to do it in that order. Also have a good think about houses vs units. I believe that the market dynamics will see unit prices eventually re-bounding strongly to catch up with the increase in house prices. So those investors waiting for unit insurances to come down first would no doubt be competing with everyone else.

    Cheers

    Jen
     
  19. JenJen

    JenJen NQ Buyer's Agent

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    AQUIS article in The Australian

    Interesting article on the front page of The Australian newspaper (MICHAEL MCKENNA THE AUSTRALIAN APRIL 05, 2014 12:00AM), as posted on the Aquis Casino Facebook site today: https://www.facebook.com/AquisCasin...0.1396667595./696744357035204/?type=3&theater


    Aquis Casino
    8 hours ago
    TODAY'S AUSTRALIAN NEWSPAPER

    NOT since the early days of the white-shoe brigade in Queensland ? when developers waltzed in and out of the top offices of the Bjelke-Petersen government ? has the talk been so big, the stakes so high.

    An $8 billion Macau-style resort ? with two casinos, eight hotel towers and a golf course ? luring a million guests a year, from the gambling-obsessed Chinese middle class and big-betting ?whales?? from around the world.

    The proposed Aquis Great Barrier Reef Resort in Yorkeys Knob, just north of Cairns, is promising to usher in a new era of prosperity single-handedly for a tourist town struggling with the high dollar.

    Easily the most expensive non-resources project in Australia, the 340ha complex is proposed to be built on cane fields in the sleepy seaside suburb where a timber shack with a garage underneath is considered to be high-rise. It seems Tony Fung ? a Hong Kong businessman who last year burst out of nowhere with his plans for the mega-*casino resort ? has got almost everyone on side. Politicians are talking it up, businesses are making plans to expand and families are designing extensions to their homes to rent to the 9000 construction workers and 10,000 permanent staff if the casino gets the go-ahead. It has sparked a frenzy of support in Cairns, where a multitude of ills ? severe acute respiratory syndrome, the global financial crisis, cyclones and lack of new investment ? has depressed the local economy to the extent that it has the highest youth jobless rate (21.6 per cent) in Australia.

    But lost in the excitement of a resort, and its projected annual take of $11bn, is growing division among the 3500 residents of Yorkey?s Knob, one of the only residential beach suburbs in Cairns.

    ?We moved here to raise our families in a peaceful seaside community, and now we are going to be living beside the new Las Vegas,?? Yorkeys Knob Residents Association president Pamela Bigelow said.

    Ms Bigelow, who was appointed briefly on a ?reference group?? set up by Mr Fung, said she also doubted some of the promised benefits of the development.

    ?Publicly they have said that 10,000 staff will work in the casino, but when I asked them how many would be locals, I was told it would be limited,?? she said.

    ?I was told that the front-of-house will be Chinese, and I guess the locals get to do the lawns and clean the toilets.??

    Mr Fung?s son Justin, who is normally based in Cairns as Aquis chief executive, said in an interview from Hong Kong he could not give a breakdown on the proportion of local and flown-in staff.

    ?Obviously we will have a management team and we need Mandarin and Cantonese speakers ? but we remain dedicated to improving the employment rate in Cairns,?? Justin Fung said.

    Bigelow?s group is pitted against the recently re-formed and rebadged local business group ? now known as Yorkeys Knob Community Progress Association ? which admits to receiving ?some funding? from the Fung family. While the groups fight it out, there is a real prospect that the proposal to build the resort on existing cane fields ? which sits on a flood plain crisscrossed by crocodile-infested creeks ? will not win environmental approval.

    James Cook University professor Jon Nott, of the Centre for Tropical Environmental and Sustainability Sciences, said the project would likely breach local planning rules.

    ?There is a reason nothing has been built in that area before,?? Professor Nott said.

    ?The proposed development is located on the Barron River delta, which floods regularly and is also prone to storm surges from the ocean during tropical cyclones. They are proposing to raise the levels of the project, but it is based on outdated methodology.??

    With the resort set back from the beachfront, and sealed off from the neighbouring waterways, Tony Fung had hoped to avoid a drawn-out approval *process.

    Labelled ?the bad boy of the stockmarket?? by the HK Economic Times, he has had a simple message for the Newman government since announcing his plans last year: approve the resort quickly, or he will go somewhere else.

    One senior official, involved in the assessment of the project, said that pressure to approve the resort quickly was intense, especially as the state government approaches an election, due early next year.

    ?It is a frenzy up here ? people are desperate to get this thing happening, ?? he said.

    ?And it is not just Fung either; the locals are pushing hard, and anyone who raises questions or concerns is shouted down or lined-up.??

    Mr Fung has repeatedly warned that he will go to Japan, The Philippines or South Korea ? where casino licences are soon to go onto the open market ? if he is made to wait too long.

    ?The window of opportunity that is available to us is limited ? there are a lot of people going after a piece of the action and the competition for me is not Mr (James) Packer or Echo (Entertainment) but from other countries,?? he said last year.

    The son of one of Hong Kong?s most successful traders, Mr Fung ? who had initially hoped to begin the four-year build in July ? has been *disappointed by the Newman government.

    Last year, prompted both by his plan and a push by Mr Packer?s wish to build a casino resort in Brisbane, the Newman government called for bids for three *?integrated casino resort devel*op*ment?? licences in Queensland.

    Deputy Premier Jeff Seeney said yesterday: ?The integrated resorts are the emerging product in the tourism market worldwide, and the casino licence is just one part of that.

    ?They have enormous potential to inject life into any number of centres, like they have in Singapore and Dubai, and Cairns is just one spot.

    ?The resorts attract tourists and we have the comparative advantage of also having the drawcard of the reef, the rainforests and the beaches throughout Queensland.??

    The host of natural attractions was the decider in wanting to build a casino for the booming Chinese middle class in Queensland, where Mr Fung began investing, in cattle stations and property, two decades ago.

    ?We are going after the *people that are shy who, if they were asked where they are going for Chinese New Year, would say Macau and be called a gambler, but instead they can say Aquis Great Barrier Reef and be *labelled a ?family man?,?? he said.

    During the week, the government announced there were 12 bidders, who had put up the $100,000 application fee, with plans for resorts in Brisbane, the Gold Coast, Whitsunday region, Great Keppel Island and Fung?s proposal outside Cairns.

    The decision last year to call for a competitive process is understood to have enraged Mr Fung, not least of all that it delayed the project?s earliest date that it can begin building by at least a year, to next May.

    He sacked his local lobbyists ? including former conservative premier Rob Borbidge ? before rehiring him in the new year.

    But he is unlikely to make good with his threat and pull up the surveyor?s pegs on the project anytime soon.

    Mr Fung has a lot of skin in the game. He has now bought the Reef Casino Trust, which operates the existing Cairns casino, as well as the casino in Canberra for $269 million.

    Justin Fung told The Weekend Australian that the family couldn?t comment on whether he hoped the existing casino licence would help in the push for approval for the bigger *project.

    ?We look forward to operating both properties in Cairns,?? Justin Fung said.

    As to the growing concerns from residents about living next door to one of the biggest casinos in the world, he said there was enough space between the resort and people?s homes.

    ?We are doing our best to mitigate the issues,?? he said.

    ?But there is a buffer zone, it is not as if someone in Yorkeys is going to hear the jackpot of a slot machine.??
     
    Last edited: 5th Apr, 2014
  20. impala67

    impala67 Member

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    Thanks Jen, I'll be putting T-ville in the mix now too.