VALUATION OF VACANT REDEVELOPMENT LAND SITUATED AT …info.gladstonerc.qld.gov.au/meetings/20140204... · VALUATION OF VACANT REDEVELOPMENT LAND SITUATED AT RAILWAY TERRACE, UBOBO,

Liability limited by a scheme approved under Professional Standards Legislation. Director | Julie Owbridge MVS National Gladstone Pty Ltd – ABN 32 162 715 139 Part of the MVS National Group | Valuations and Property Consulting

T | 07 4972 6944 F | 07 4972 8080 E | [email protected] W| www.mvsvaluers.com.au P | PO Box 5464, Gladstone Q 4680

VALUATION OF VACANT REDEVELOPMENT LAND

SITUATED AT

RAILWAY TERRACE, UBOBO, QUEENSLAND.

PREPARED FOR: Gladstone Regional Council PO Box 29 GLADSTONE QLD 4680. Attention: Heather Riches. DATE OF VALUATION: 30th August 2013. OUR REFERENCE: G131187. YOUR REFERENCE: 116899.

Railway Terrace, Ubobo Q 4680. (Gladstone Regional Council) (G131187)

2 | P a g e MVS National Gladstone Pty Ltd – ABN 32 162 715 139 Part of the MVS National Group | Valuations and Property Consulting

TABLE OF CONTENTS INTRODUCTION Page 3 Instructions 3 Prepared For 3 Purpose of Valuation 3 Date of Inspection 3 Date of Valuation 3 Assumptions 3 PREAMBLE 4 PROPERTY DESCRIPTION 5 ‐ 6 Property Address 5 Real Property Description 5 Title Reference 5 Easements/Encumbrances 5 Registered Proprietors 5 Land Area 5 Local Authority 5 Zoning 5 Zoning Comments 6 Services and Amenities 6 Roads and Access 6 Situation and Locality 6 Land 6 STRUCTURAL IMPROVEMENTS 7 Structural Improvements 7 VALUATION PROCESSES 8 ‐ 21 General Comments 8 Valuation Rationale 12 Valuation Calculations 13 Recommendations 13 Market Data 14 Background Evidence 20 OTHER MATTERS 22 QUALIFICATIONS & LIMITATIONS 23 Contamination Clause 23 Limitation 23 VALUATION 24 ANNEXURES Photographs

Location Map Cadastral Map Satellite Map (Gladstone Regional Council) Ubobo Township Map (Gladstone Regional Council)



INTRODUCTION

INSTRUCTIONS: Written instructions received from Gladstone Regional Council, to carry out an assessment of value of the property described within this report for Sales Purposes (potential disposal).

PREPARED FOR: Gladstone Regional Council PO Box 29, GLADSTONE QLD 4680. Attention: Heather Riches.

PURPOSE OF VALUATION: To assess the current, “Fair Market Value” of the property as described within this report for Sales Purposes (potential disposal). The individual lots proposed are to be separately apportioned. Additionally we are to look at other options for development that are a potential of site. This is to allow council offices to address issues now prior to releasing property to market where alternate uses may be proposed by potential purchasers. This report is also intended to assist council in decisions to purchase the raw land from the Queensland Government and the viability to this proposal.

DATE OF INSPECTION: 19th August 2013

DATE OF VALUATION: 30th August 2013

ASSUMPTIONS: The report is to take into consideration existing zoning development approval and redevelopment potential. Costs to develop are as per initial estimates provided by Council as part of this assessment and information requests by valuer.



PREAMBLE

MARKET VALUE: Market Value as defined by The International Assets Valuation Standards Committee (T.I.A.V.S.C.) is: “the estimated amount for which an asset should exchange on the date of valuation

− between a willing buyer and a willing seller − in an arm’s length transaction − after proper marketing − wherein the parties had each acted knowledgeably, prudently and without compulsion.”

A basic interpretation of Market Value and one often referred to as a reliable precedent by the Courts is the following Court Decision: Spencer v The Commonwealth of Australia High Court of Australia (1907) 5 C.L.R. Griffin C.J., at page 432. “In my judgement the test of value of land is to be determined, not by inquiring what price a man desiring to sell could have actually obtained for it on a given day, that is, whether there was, in fact, on that day a willing buyer, but rather by inquiring: ‘What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’” Issacs J., at page 441. “To arrive at the value of land on that day, we have to suppose it sold then, not by means of forced sale, but by voluntary bargaining between the plaintiff and a purchaser willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to convenience or inconveniences, its surrounding features, the then present demand for land, and the likelihood as then appearing to persons best capable of forming an opinion, of a rise and fall for what reasons so ever in the amount which one would otherwise be willing to fix as to the value of the property.” In another part of the judgement Issacs, J. state that regard must be paid to “the most advantageous purpose for which the land was adopted.” In accordance with the above, our valuation assesses the value of the land in accordance with our perception of the “most advantageous purpose”. This valuation assesses the value of the property for the specific developed use, ie. redevelopment site. This is accepted as “the most advantageous purpose for which the land is to be adopted”.



PROPERTY DESCRIPTON

PROPERTY ADDRESS: Railway Terrace, Ubobo Q 4680.

REAL PROPERTY DESCRIPTION: Freehold land, situated in the County of Clinton, Parish of Milton, described as Lots 206 to 214 on Crown Plan U7251.

TITLE REFERENCE: We have not conducted a current Title Search and our assessment, by necessity, assumes there are no other encumbering endorsements, notations, etc on the Title which may adversely affect the value of the property. Any variation from above assumption should be referred to this Practice for comment.

EASEMENTS/ENCUMBRANCES: None disclosed or evident.

REGISTERED PROPRIETORS: Department of Natural Resources and Mines.

LAND AREA: Lot 206 911 sqm Lot 207 911 sqm Lot 208 911 sqm Lot 209 898 sqm Lot 210 898 sqm Lot 211 911 sqm Lot 212 911 sqm Lot 213 911 sqm Lot 214 911 sqm Total Area: 8,173sqm

LOCAL AUTHORITY: Gladstone Regional Council.

ZONING: The land is zoned “Village” under the Calliope Shire Council Town Plan, gazetted on the 27th April 2007, now under jurisdiction of the Gladstone Regional Council.



Property Description ……………cont’d.

ZONING COMMENTS: Council officers indicate that the site can be separately sold however as a necessary part of this development, normal services for this area must be provided as would be normal for any private developer i.e bitumen roads, overhead electricity etc.

SERVICES AND AMENITIES: Electricity and telephone are available within the township of Ubobo. All other normal Council services including garbage collection are available in this area. Water supply is via on site rainwater tanks in location and toilet facilities area via septic systems in this location.

ROADS AND ACCESS: Railway Terrace is a sealed bitumen road with grass and gravel shoulders to the northern boundary of Lot 206. i.e This lot has bitumen road frontage existing. The remainder of Railway Terrace is a formed gravel road in good condition. Lee Street to the north of Lots 209 and 210 is an unformed gazetted corridor. McDonald Street is a gravel road/track which access two established residences at number 8 and 10 McDonald Street. Nearby Hawke Street is bitumen and a formed culvert at the intersection with McDonald Street exists as well as street signage. The existing McDonald Street corridor is generally cleared and level however the track ceases at the last dwelling situated on Lot 215, being 10 McDonald Street, Ubobo. Access is easy and direct with traffic volumes low.

SITUATION AND LOCALITY: Ubobo is a small rural community, approximately 74km south of Gladstone. The township provides minimal facilities including primary school, general store with post office and fuel sales. The nearby communities of Builyan and Many Peaks, approximately 18 and 23km south, have a police station, primary school and hotel. The closest shopping for most grocery lines is available at the IGA Shopping Centre in Calliope approximately 53km to the north. All other facilities are available within either Gladstone or Monto (e.g. hospital, business and retail). Opposite Lots 210 to 214 is a Recreation Reserve which is predominantly cleared and improved with the Ubobo Discovery Centre (camping and dormitory styled accommodation facility). To the north of Lots 209 and 210 is a Reserve for Police Purposes which is currently undeveloped. Parallel to Railway Terrace is a rail line which is relatively unused in this location. The main Gladstone‐Monto Road accessing the Boyne Valley from Calliope is parallel to the rail line on the opposite side from the subject land. The Ubobo Primary School reserve is opposite the intersection of McDonald and Hawke Streets, however the main school buildings are located adjacent to the southern boundary i.e Cedarvale Road. The community is small with two churches, Ubobo hall, CWA hall, Boyne Valley Historical Society as well as approximately 14 residences within the township itself.

LAND: The subject is an amalgamation of 9 generally regular, rectangular allotments with each lot having dimensions of approximately 20 metres frontage and 45 metres depth. Lots 206 to 209 front Railway Terrace whilst Lots 213 to 210 front a cleared track within the McDonald Street corridor. Lee Street to the north of Lots 209 and 210 is not cleared or formed. The land has a generally near level contour. The majority of the sites are timbered with mostly Gum Top Box and Ironbark. Lot 213 is partially cleared whilst Lot 206 and 214 are predominantly cleared. The land itself is at street level with a generally level contour. For further detail in relation to site layout, shape, etc, refer to annexed copy of relevant section of Cadastral map.



STRUCTURAL IMPROVEMENTS

STRUCTURAL IMPROVEMENTS: Currently the land is in a vacant undeveloped state void of any significant improvements. Some minor fences exist however have no impact on value.



VALUATION PROCESSES

GENERAL COMMENTS: Region in Focus: Gladstone is the region’s principle city and is located on the Central Queensland coast 550 kilometres north of the state’s capital, Brisbane and approximately 103 kilometres south of Rockhampton. Gladstone City is a vibrant and growing regional centre catering to a major industrial heart of the state and nation. Off the coastline is the Great Barrier Reef with some of the best reef areas and islands including Heron Island and is a recognised national and international tourist destination. The city is a recognised hub of industry and is the venue for the largest agglomeration of corporate assets of Rio Tinto, in particular its alumina and aluminium sectors. This corporate citizen of the city has both refining and smelting plants in the location. Gladstone is strategically located as a natural distribution point for the worldwide shipment of the considerable resources in the Central Queensland region – mining, primary industries, and heavy and light manufacturing industries. The region is host to a number of existing heavy industries, which include major minerals processors, services such as power and engineering and a range of trade and commerce. Other major industries centre on chemical manufacture, cement as well as a substantial port related sector with coal, alumina, aluminium, petroleum, wood chip and general cargo producing substantial tonnages through the Port. This sector is likely to increase as major mining development continues to occur west of Gladstone. Major Industry:

• Gladstone Power Station (NRG) • Queensland Alumina Ltd (QAL – Alumina Refinery) • Boyne Smelters Ltd (BSL – Aluminium Smelter) • Queensland Cement Ltd (QCL) • Orica Australia (Chemical Refinery) • Gladstone Ports Corporation (GPC) • Rio Tinto Aluminium Yarwun (RTAY – Alumina Refinery).

There are numerous projects under consideration which are of a varied nature ranging from originally seven proposals for Liquefied Natural Gas (LNG) plants (now 6 after the purchase of arrow project by shell), Nickel plant, Steel Plant, Fitzroy water pipeline, Tenement to Terminal Coal Terminal, Balaclava Island Coal Terminal, gas pipelines and Aldoga power station (gas fired), power link upgrades. Rio Tinto Aluminium Yarwun (RTAY) stage 2 has recently been completed and had 1,000 construction workers on site. Agents advise of recent increases in interest and contracts which has started to affect market supply and prices during late 2010. This is on the back of EIS approvals for 3 LNG Projects in Gladstone. These projects will require large workforces during construction and two projects are well into construction with the third at earthworks stage. The three main groups at the forerunning for the LNG development on Curtis Island within Gladstone Harbour are the BG Group (British Gas), an international company listed on the London Stock Exchange. This US $15 billion project (QCLNG) as noted above has passed EIS approval however is subject to stringent development conditions. The group announced it now has financial approvals and commenced earthworks in late 2010. Santos Group which is an Australian company is the other project proponent (GLNG) that has passed the EIS stage, again with harsh terms and conditions. The announcement of the financial backing was made by Santos in early January 2011 allowing this US $16 billion project to move forward. Project construction has commenced.



Valuation Processes ……………cont’d. The Conoco Philips/Origin project (APLNG) is worth $14 billion (US) and announced in late February 2011 a supply agreement with a Chinese group. Origin is an Australian Energy company and Conoco Philips has headquarters in Houston Texas USA. Shell purchased the Arrow Group LNG project in 2010 which has passed EIS stage. Tenders for front end engineering design of plant closed in February 2011. Project is pending construction commencement. We note that Shell recently purchased a site on Curtis Island for their project in 2010 prior to Arrow buyout. The latter two projects are still under pre‐commencement negotiations. Origin approved its final investment decision for the first of 2 trains. All the plants are now well under construction. Announcements of funding for stages of project have recently been announced and further consolidate this project to continue. The Arrow project has had a recent announcement (March 2013) of EIS approval for the gas pipeline from South West Queensland to Gladstone. The EIS decision for the plant on Curtis Island is due late 2013. There has been media reports that Shell is likely to sell its gas to one of the LNG projects under construction on Curtis Island, rather than construct its own facility. APLNG, the least advanced of the three however approved for more production trains (extra 2 over nearby plants) has been put forward as a likely proponent with Shell given its extra potential capacity currently approved. Wiggins Island Project (WICET) This is another large scale development located to the north of the city being a privately funded joint venture between eight coal companies for Stage One. The project is worth over $2.5 billion and is projected to have throughput of 27 million tonnes per annum, create 800 jobs and provide $35 million to the local region for community amenities, (ie. Auckland East Shores Redevelopment project). The project is to see the first shipments of coal in mid 2014. Western Basin Project We understand that the project is the largest dredge project globally at the current time with approximately 22 million cubic metres of fill. Key features of the project include:

• Deepening and widening of existing channels and swing basins. • Creation of new channels, swing basins and berth pockets, specifically for LNG projects on Curtis Island. • Use of dredged material to reclaim land ie. subject land north of Fisherman’s Landing.

Background to the Proposed Purchase of Subject Land We understand that the Council have been approached by members of the local Ubobo community that have requested Council purchase the subject land (9 lots) from the Department of Natural Resources and Mines. The offer from the Department is $34,721 per lot inclusive of GST or a total of $312,489 (in GST). On a GST exclusive basis the total cost of the raw land is $284,081 or approximately $31,565 per lot (ex GST). Issues from the brief to Council by the Director of Corporate and Community Services indicate that the Department will apply a concessional 50% discount on the proposed purchase price being $16,054 per lot (ex GST), however this is subject to the addressing of native title issues. We are advised that this is likely to encompass the remaining 50% of the original offer price thereby bring the full cost of the land to $284,081 being GST exclusive. The matter of GST is clarified within our feasibility analysis and commentary. The council has indicated that although it is possible to complete this development with formed gravel roads it is not the normal optimal requirement of Council placed upon a developer particularly given that there is an existing bitumen street network within the residential areas of Ubobo. Council should participate in a development to the same standard as that normally required of a private development proposal and normal town planning conditions set within its approval. Relative to the proposed bitumen roads, it is considered unnecessary to complete a road along the Lee Street unformed corridor. It is our opinion that this road gives no substantial benefit to the saleability of the land or any increase in the value of Lots 209 and 210 which front this corridor. We feel that this corridor would be best cleared of existing trees and left as an open reserve which will additionally assist as a firebreak. It may be that these lots become more desirable over the other sites as it increases privacy of these 2 lots and allows owners to “care take” and utilise as an open park or extension of the landscaping (non‐structural) of their land. This may also make a substantial cost saving relative to roadworks which will assist in allowing Council to consider this proposal on the basis of feasibility analysis rather than any future rates revenue increases which are outside the scope of this valuation assessment. We understand that roadworks estimates provided do not include Lee Street.



Valuation Processes ……………cont’d.

HYPOTHETICAL DEVELOPMENT METHOD: This method of valuation is based on a Plan of Subdivision reflecting the full potential of the property. This is accepted as our primary methodology relative to the as is valuation of the 9 lots. The Plan would give account of: ‐ The natural contour of the property. ‐ Site profile. ‐ Current design requirements of the Local Authority. ‐ Market conditions relative to allotment size, shape and frontages. Such land must be suitable for subdivision and present good competition to allotments currently within competing subdivisions. As the land in question is already in title, the “plan” of development is already set. As a method, this approach gives consideration to specific characteristics of the property and is related to the actual market by determination of Gross Realisation, based on the sale prices of individual allotments in other similar areas or townships. The Hypothetical Subdivision method of valuation is based on an assessment of the development costs, sale prices of allotments and the duration of the selling period. As such any hypothetical purchaser would take into consideration selling costs, loss of interest, profit and risk, etc. which are key factors in our calculations. The proposal is for 9 lots within the small township of Ubobo. There are approximately 41 individual lots within the township, some held as multiple titles or occupied by non‐residential uses. Thus the proposed 9 lots if released in one stage encompass approximately 22% of the entire township (titled lots) Refer to attached cadastral map and Ubobo Township Map. Given the criteria of this assessment we have relied upon costs for this development as provided by Council officers. No indication of the cost of electricity connections were provided and we have made an allowance within our calculations. Due to the nature of the development and location, the development would attract a higher developers risk of 30% which has been adopted in our calculation. This rate is less than normally required for a “greenfield site” as some works are already in place i.e plan, approvals, survey, title etc. Native title issues are assumed to be addressed during the purchase process should this proposal be accepted by Council. Other costs including identification survey, engineering, valuation fees, legals on purchase, establishment charges and stamp duty have been based on estimated charges for this development obtained after enquiry with relevant professional consultants and Government authorities. The assessment of the completed lots has been attained from sales comparisons and current market trends for vacant residential land of this nature within the townships of the Boyne Valley including Ubobo, Nagoorin, Builyan and Many Peaks. Investigations have been made into sales of vacant residential lands in the Boyne Valley over the past three (3) years. The volume of sales in the last 2 years is low and those sales are noted within the "Market Data" section of this report. We note that the largest volume of sales was in 2010 and included the last major land release in Nagoorin by Council. Our assessment is based on our interpretation of current market conditions. Additionally we have research recent supporting sales from other small communities in the Gladstone Regional Council area and where relevant have been included as support evidence.



Valuation Processes ……………cont’d.

VALUATION CONSIDERATIONS: Average Selling Price: In view of the current market demand for land of this nature within the Boyne Valley or moreover lack thereof, the estimated sale prices for the allotments upon completion of the subject would be within the range of $45,000 to $50,000 for the residential lots. Our calculations are based on individual assessed values for the separate lots as per the Valuation Calculations. Competition: Currently competition is mainly from the established vacant sites within the nearby townships of Nagoorin (closer to Calliope), Builyan and Many Peaks (further removed from Calliope than Ubobo). No property is listed for sale within Ubobo. List prices for vacant land in this area varies from $45,000 to $80,000 for land from 1,000m2 to under 1 hectare, see background evidence. Given that the market in the region is reducing thereby making land within Calliope and areas closer to Gladstone being “more affordable”, this is likely to have a negative impact on the saleability of the subject land. The market in Boyne Valley is “stagnant” as evident from the limited sales although there is sufficient residential property available in a number of the townships. Nagoorin has similar appeal to the subject township of Ubobo and is approximately 6km closer to Calliope. Both have a primary school and given that there is vacant land available in Nagoorin for $60,000 which has not attracted any interest to date, this creates an issue for the subject land. There is vacant land available in Builyan, approximately 12km south‐west of Ubobo from $45,000 for a 1007m2 parcel which has been available for close to 2 years. List prices for the subject must be sufficiently low enough to attract market activity as it is not in the best interests of the Council to hold a substantial land bank as rates recovery is slower at take‐up. A prudent purchaser would compare prices within the Boyne Valley as well as other townships including Yarwun, Calliope, Mount Larcom, Ambrose, Raglan, Turkey Beach, Bororen and Miriam Vale. The location of the subject is a primary negative factor given the lack of local activity over a number of years. All Sales Volume in Boyne Valley townships (2010 to 2012):

Note: The above sales are for land areas under 4 hectares and within the normal extent of the townships. At the time of producing this table, no sales in these townships had been transacted in 2013. However just prior to completion of this report a sale was confirmed in Nagoorin which is noted in sales evidence of this report. The highest sales achieved includes residences at 67 Payne Road, Nagoorin and 2 Moran Road, Nagoorin in 2011 and 2012 respectively. Of the two (2) transactions in Ubobo over the reporting period one for $56,000 was a family transfer in 2012. The lowest sale in 2012 in Nagoorin was an Ergon Transformer on land outside urban fringe of township. .

Price Range Nagoorin Ubobo Builyan Many Peaks

2010 2011 2012 2010 2011 2012

2010 2011 2012

2010 2011 2012

<$50,000 8 1 2

$51,000 to $100,000 4 2 1 1 1 1 1

$101,000 to $150,000 1 1 1 1 1

$151,000 to $200,000 2 1 2 1 1 1

$201,000 to $300,000 1 2 2 1 1

$301,000 to $400,000 1

Over $400,000 1 1

TOTAL 14 8 8 0 0 2 4 3 3 1 1 1



Valuation Processes ……………cont’d. Vacant Land Sales Volume in Boyne Valley townships (last 3 years):

As can be seen this is a small market sector and has few transactions occurring. When compared with volumes of transactions in Calliope, it is a relatively inactive sector. Profit and Risk: The "Profit and Risk" factor generally sought by developers varies between 25% and 45% depending on the characteristics of each individual development where no developmental works have commenced. The profit and risk factor adopted within our valuation is at lower rates to take into consideration the reduced risks associated as opposed to subdivision of vacant englobo land or a “greenfield” site where works have not commenced. Considerations forming a basis in determination of this profit and risk rate include:

• Direct and easy access will be made available within the development, including the provision for services. • The site is situated within a small but developed residential area, some distance from Gladstone. • The subdivision as existing would be developed in one stage which encompasses approximately 22% of the

entire township size (in lot numbers). i.e potential to “flood market”. • From viewing the topography of the site, the lands are all generally easy to level contour, thus earthworks within

site would be minimal and predominantly consist of clearing of existing trees. • A consideration of the likelihood of successful marketing based on the "take‐up" rates currently available within

other areas within the Boyne Valley presently ie. potential of extended selling period due to inactive local residential market.

• The suitability and nature of the land and its contour. • The style of development, standard single unit dwelling residential lots.

Selling Period: The subject property will produce 9 separate residential allotments within the subject lands under assessment. The release is likely in one (1) stage which has the potential to flood the local market. Multiple lot releases given the small number of lots in development would be impractical. In estimating the length of the selling period for the development, a number of factors must be taken into consideration including:

• Competition from other lands, generally established land within other townships. • Selling rates within the Boyne Valley of vacant land and improved residential property. • Vacant allotments available within townships within the Boyne Valley and surrounding environs where less

than 1 hectare. • Past building activity in the townships.

The writer has determined the selling period for the proposed subdivision from reference to the current market conditions within Boyne Valley, Calliope and the greater Gladstone Region. A selling period of twelve (12) to eighteen (18) months total would be realistic and achievable for the subject within the current slow market conditions and based on the price point of the individual parcels which will be the main impetus to successful realisation of the lots within this estimated period. The writer has therefore adopted a selling period of eighteen (18) months for the development. It is also possible if market conditions improve that the accepted sales rate may prove conservative but only by a few months at best.

Price Range Nagoorin Ubobo Builyan Many Peaks

2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012

<$50,000 8 2

$51,000 to $100,000 3 2 1 1

$101,000 to $150,000 1 1

TOTAL 12 2 1 0 0 0 3 0 0 0 1 0



Valuation Processes ……………cont’d. Loss of Interest: The generally accepted approach for determining the loss of interest to be incorporated within the valuation calculation is to view the current interest rates. The writer has therefore adopted an interest rate of 10% based on this review. Within our calculation we normally adopted a loss of interest over half the estimated period of development and realisation for the subject development however in this instance we have increased this to 12 months. This approach assumes that interest on the capital invested in land and its cost of development will be offset by the income produced from the sales of allotments during the separate stages of the development. At this point the capital and interest charges are being recouped by income from the sales of the allotments and therefore reducing the loss of interest. Our extension of the period is based on the risks of this development, inactive market currently and historically within the Boyne Valley and potential “over supply” of land within the market by the subject developments release of the individual titles. Development Costs: These costs can be divided generally into:

• Construction costs • Municipal fees and charges • Electricity connection • Survey costs • Engineering fees • Other charges (i.e. valuation fees, stamp duty, legals on purchase and establishment charges). • Municipal Costs

Given that the titles exist there are a number of the above costs which do not apply to the subject development including: Municipal fees and charges, headworks charges and contributions, title costs, some survey costs as only an identification survey of each lot is needed. Construction Costs: These costs generally include:

• Roadworks • Earthworks • Stormwater drainage • Electricity connection works

From information obtained from officers of the Council, the general construction costs for the subject for roadworks is $230,000 or approximately $25,500 per lot plus $90,000 for clearing (earthworks) or $10,000 per lot. Costs are normally dependant on the specific development requirements of the development to be subdivided, i.e. road works, earthworks, electricity provision are examples of extent of considerations which have tended to vary construction costs. Given that the provision of electricity is a highly variable segment of the costs and has not been provided our allowance has been undertaken on a generous basis in the first instance. Other costs including survey, engineering, valuation fees, legals on purchase, establishment charges and stamp duty have been based on estimated charges for this development obtained after enquiry with relevant professional consultants and Government authorities.



Valuation Processes…………….cont’d. VALUATION RATIONALE: The primary method of valuation for the subject is by direct comparison of similar zoned residential sites. There is limited sale evidence existing thus we have widened our search to throughout the smaller townships in the Gladstone Regional Council area. The subject property is viewed as a questionable development site. We have undertaken a hypothetical development analysis of the proposition in order to assist council in determining the potential of this project. Values for the individual completed lots have been determined on a basis of comparison with other similar residential land within the locality, giving consideration to contour, size, location, access (gravel or bitumen) etc (see market data). We would caution that there market within the main urban areas of Gladstone has been reducing since the first quarter of 2012. Reductions in the standard residential areas of Gladstone range from 10% to 15% within the under $600,000 price range. We would expect that reductions have correspondingly occurred in the Boyne Valley however this is not evident in the sales but rather in the lack of sales or interest as indicated by the local agents. Included in Background Evidence are the vacant residential land listings within the townships of the Boyne Valley. Where earlier sales exist, they are quoted as well as list prices and length of listing in order to show the reader the difficulties experienced within the marketing of similar product to that proposed in the local area.



Valuation Processes…………….cont’d.

VALUATION CALCULATIONS: VALUE ASSESSED BY FEASIBILITY – TOTAL DEVELOPMENT: Lot 206 $ 45,000 Lot 207 $ 45,000 Lot 208 $ 45,000 Lot 209 $ 47,000 Lot 210 $ 48,000 Lot 211 $ 47,000 Lot 212 $ 47,000 Lot 213 $ 47,000 Lot 214 $ 47,000 TOTAL $418,000 Less: Selling expenses Commission on sales $16,000 Legal Expenses $ 7,500 $ 23,500 $394,500 Less: GST (on Margin Scheme) G.R Entire Development $418,000 Land Margin (Sale) $144,487 Margin $273,513 GST Payable $ 24,865 $ 24,865 $369,635 Less: Margin for Developer @ 30% $ 85,300 $284,335 Less: Development Costs Construction Costs (incl electricity) $440,000 Native Title compensation $140,000 Professional Fees (estimate) $ 15,000 Shows $50,555/lot $595,000 Interest/Contingencies $ 15,000 $610,000 ‐ $325,665

Less: Other charges including Stamp duty, legals, valuation fees, loss of interest etc $ 19,000 ‐ $344,665 NOTE: Given the Council has other criteria to undertaking a development, the Developers margin if not applied would

reduce the loss on the development to approximately $260,000 or $28,888 per lot. It should be noted that as the Native title issues are not inclusive in the price proposed to be paid on the development thus has increased the GST payable under the margin scheme. If the total price was inclusive of native title compensation to the Department this would reduce the GST to approximately $12,200. If the native title was part of the overall sale price to the Department it would reduce GST payable on the margin as noted above and reduce the development costs with the outcome being in the vicinity of ‐ $195,000 or $21,650 per lot. However, we understand this is not likely to eventuate.




RECOMMENDATIONS: Based on the feasibility analysis, the offer price from the Department is considered to be substantially high. The issue of native title as a separate cost from the purchase price should be varied to the benefit of the council i.e. land should be transferred at a cost where no native title fees are paid by Council. i.e. paid by Department and absorbed in purchase price. This will reduce the GST payable on the margin. However, we understand this is not likely to eventuate. There are a number of areas where our cost estimates may prove high. A firm cost for electricity connections is recommended to be obtained prior to any offers to purchase the raw land. External costs for roadworks and clearing etc should be firmed. Unless the overall cost for the individual sites reduces substantially inclusive of native title compensation this is not a feasible development for undertaking by Council. For the development come closer to a “workable” subdivision based on a $0 or small negative value when assessed on a feasibility analysis the following assumptions would need to be made:

• Success at sale of individual lots at a minimum of $65,000 per lot (which is not a potential based on sales evidence and activity).

• Purchase of State land as is exclusive of native at less than $3,000 per lot for the raw land (maximum). • Assume that Native Title compensation is approximately $2,500 to $3,000 per lot (maximum). • Cost of electricity at no more than $8,000 per lot (requires formal Ergon costing). • No allowance for Profit and Risk (outside normal considerations for a developer). • Reduced contingency allowance and loss of interest within calculations.

The costs are more likely to blow out rather than reduce and there is no potential for achieving $65,000 per lot particularly given there is a lot in Nagoorin available for $60,000 and has not attracted any enquiry over the past 2 years it has been listed. The window for sale to maximise price in our opinion is NOT at the current time. Until there is an improvement in the economic circumstances of the region i.e we have another major project announcement, the development sector will remain quiet and demand for residential housing will continue to be soft. Thus this indication of value should be considered as relevant for information purposes as a quiet period in the market should allow council to engage in discussion.



Valuation Processes…………….cont’d. MARKET DATA: The following sales evidence is predominantly from the Boyne Valley which has seen limited activity over the past 12‐18 months. Thus due to the limited evidence we have investigated sales from 2010 to 2013 in an effort to show sales trends to assist the reader in assessing the current and historical demand for standard residential property in the Boyne Valley. Our sales data has been restricted to the townships of Nagoorin, Ubobo (subject town), Builyan and Many Peaks which have similar township attributes however of varying distance from Calliope and Gladstone. Additional evidence has been researched within the small townships to the north of Gladstone including Mount Larcom, Ambrose and Ragland as well as Bororen and Miriam Vale to the south within the Gladstone Regional Council area. IMPROVED ADDRESS: 16 Dawes Street, Nagoorin. CONTRACT: DATE: 3rd July 2013. PRICE: $125,000 COMMENTS: Improved with a 21 m2 shed and two (2) relocatable buildings utilised as a weekender and

improved since 2010, on 1,012m2 allotment. Other improvements include a shower room, tanks, pump, equipped bore, established gardens. Power and telephone are connected to the property. Property was originally listed in February, 2013 for $125,000 and required 6 months to achieve sale:

Earlier sales: $50,000 2/11/2010. $45,000 24/11/2009. ADDRESS: 4415 Gladstone – Monto Road, Nagoorin. CONTRACT: DATE:14th November 2012. PRICE: $148,000 COMMENTS: Regular, rectangular shaped, inside allotment of 4,047m2 area. The land itself is above street

level rising to the rear boundary with a gully/natural watercourse traversing the lot through the mid section. Ancillary improvements include: Wiremesh fencing to boundaries, 68m2 colorbond shed with basic kitchenette/work bench (fitted with 2 roller doors), clothes line, bore with pump, colorbond fencing to a small courtyard off shed, minimal lawns and gardens:

ADDRESS: 4989 Gladstone – Monto Road, Ubobo. CONTRACT: DATE:16th March 2012. PRICE: $150,000 COMMENTS: Lowset chamferboard dwelling, built about 1950’s on 1,917m2 allotment. Layout provides: 3

bedrooms, 1 bathroom, kitchen, dining, lounge, storeroom, sleepout, toilet, hall, entry, rear patio and stair landing. Living areas are approximately Main: 118m2, Outdoor: 5m2. Ancillary improvements include: Fences, concrete paving, tanks and pump, detached 19m2 laundry, detached double carport, septic system, clothes line, letterbox, double car accommodation, lawns and gardens. Dated appointments throughout and average condition:

ADDRESS: 17 Dawes Street, Nagoorin. CONTRACT: DATE: 25th October 2012. PRICE: $250,000 COMMENTS: Highset weatherboard dwelling, built about 1940's on 1,012m2 allotment. Layout provides UP: 3

bedrooms, 1 bathroom, sunroom, sleepout, kitchen, dining, lounge, toilet, hall, stair landing and rear verandah. DOWN: Laundry, double carport and open storage. Ancillary improvements include: Tank and pump, bore and gravel driveway:




Historical Sales and Listing Information for Vacant land – Boyne Valley Address Sale Price Date of Sale List Price Listed from Sales Period

(months) Comments

NAGOORIN Lot 213 Dawes Street

$40,000 27/4/2010 ‐ ‐ ‐ Now improved with dwelling

12 Dawes Street $50,000 4/6/2010 ‐ ‐ ‐ 16 Dawes Street $50,000 2/11/2010 ‐ ‐ ‐ Now improved with

dwelling, see 2013sale 17 Dawes Street $41,000 21/7/2010 ‐ ‐ ‐ GRC (Calliope Shire

sale). Buyer was local agent. Listed early 2012 for $72,000, not sold. Sold 10/2012 inclusive of dwelling.

19 Dawes Street $41,000 21/7/2010 ‐ ‐ ‐ GRC (Calliope Shire land sale). Still vacant.

21 Dawes Street $40,000 19/7/2010 ‐ ‐ ‐ GRC (Calliope Shire land sale).

Resale $67,000 12/10/2011 ‐ ‐ ‐ Related to agent 23 Dawes Street $42,000 21/7/2010 ‐ ‐ ‐ GRC (Calliope Shire

land sale). Buyer was local agent.

Resale $65,000 1/4/2011 $67,000 Early 2011 <3 months Now improved with a shed.

29 Dawes Street $40,000 24/4/2010 ‐ ‐ ‐ Now improved with a dwelling.

4419 Gladstone‐Monto Road

$95,000 12/11/2010 ‐ ‐ ‐ 8,094m2 site.


$85,000 12/11/2010 ‐ ‐ ‐ 8,094m2 site.


$87,500 20/3/2010 ‐ ‐ ‐ 8,094m2 site.

1 Milton Street $80,000 31/12/12/ $80,000 Mid 2012 Over 12 months

Improved with bore. Dwelling under construction.

BUILYAN 6 Pine Street $47,000 10/11/2010 $50,000 July, 2010 5 months Listed at $45,000 since

March 2013, prior at $47,000 from Jan 2013 and $52,000 from Oct, 2011. 3 agents during list period of 22 mths.

21 Pine Street $50,000 6/5/2010 $60,000 March, 2009 14 months Listed at $70,000. Relisted in Dec 2010 at $58,000, reduced to $53,000 in 2/2011 & remains at $53,000.

Lot 22 Zwisler Road, Builyan

$75,000 30/4/2010 Not listed N/A N/A Local buyer from 35 Zwisler St.

MANY PEAKS 36 Morgan Street

$105,000 31/7/2011 $120,000 1/2011 ‐1st 8/2011‐ 2nd

7 months 2 local agents Listed at $130,000 since May, 2013.



Valuation Processes…………….cont’d. BACKGROUND EVIDENCE Discussions with local agents indicate that there is limited enquiry on any property in the Boyne Valley on vacant or improved residential property within the townships. There has been no substantial interest for vacant land reported by most of the major and active local agents. One agent for the land for sale at 4 Degalgil Street and 5 Milton Street, Nagoorin stated that there are interested parties however no formal offers to date. The vendor will not likely negotiate and the sites have been listed for over 12 months.

Address List Price Listed Since Area Comments

32 Dawes Street, Nagoorin $60,000 Oct, 2011 1,012m2 Part of a larger holding of 6 lots all of same size as listed block. Overall property includes a timber cottage being listed at $230,000. Agent advised that there has been no interest in the site as one title nor as individual vacant lots. Agent indicated some drainage issues with site.

4 Degalgil Street, Nagoorin $80,000 Mid 2012 1,012m2 Currently held with 5 Milton Street.

5 Milton Street, Nagoorin $80,000 Mid 2012 1,287m2 Currently held with 5 Degalgil Street.

6 Pine Street, Builyan $45,000 Oct, 2011 1,007m2

Current list price below 2010 sale, see below. Originally listed at $52,000, dropped to $47,000 in Jan 2013 and to current list price since March 2013. 3 agents during list period of 22 mths.

Earlier sale $47,000 Sale date: 10/11/2010

17 Pine Street, Builyan $53,000 Nov, 2011 1,012m2 Currently held with adjoining land improved with dwelling.

21 Pine Street, Builyan $53,000 Dec, 2010 1,007m2 Original list price $58,000, dropped to $53,000 in Feb, 2011.

Earlier Sale $50,000 Sale date: 6/5/2010

22 Laird Road, Builyan $79,000 April, 2013 9,421m2

Part of original parcel noted as Lot 22 Zwisler Rd being 2.24ha, sold on 30/4/2010 for $75,000.

36 Morgan Street, Many Peaks $130,000 May, 2013 3,971m2 Backs onto a creek and encompasses 2 titles.

Earlier sale $105,000 Sale date: 31/7/2011



OTHER MATTERS

OCCUPANCY: Vacant possession basis. REALISATION COSTS: Normal anticipated. GST COMPONENT: This assessment is GST exclusive. COUNCIL COMPLIANCE OF IMPROVEMENTS: Not applicable. POSSIBILITY OF CONTAMINATION: Not to the Valuer’s knowledge. POTENTIAL PEST AFFECTION: Not to the Valuer’s knowledge. HERITAGE LISTED: Not to the Valuer’s knowledge. MAIN ROADS DEPARTMENT SEARCH: We consider a search is not warranted. CONFLICT OF INTEREST: Neither the writer nor the practice, John Logan and

Associates, has a financial or beneficial interest in the property, the subject of this report.

LAND SURVEY: The subject property has been satisfactorily identified by

physical inspection in conjunction with the annexed map. MARKET MOVEMENTS/FLUCTUATIONS: This valuation is current as at the date of valuation only. The

value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of three (3) months from the date of the valuation, or such earlier date if you become aware of any factors that have any effect on the valuation.

PRIVACY: It is agreed between the instructor and the Valuer that all

valuations are provided in confidence and for the Instructor’s purposes only.



QUALIFICATIONS & LIMITATIONS

CONTAMINATION CLAUSE: This valuation is undertaken on the assumption the land is stable and free of all toxic hazardous wastes and building material hazards that could prevent the ongoing current use of the property. The Contaminated Land Act (the Act) was introduced in 1991 to establish a system to identify and manage contaminated lands and to prevent further contamination. Under the Contaminated Land Act polluters, owners/occupiers and Local Authorities are required to notify the Contaminated Land Unit of the Department of Environment and Heritage of Land that is or is likely to be contaminated. This information is then‐ entered upon the Contaminated Sites Register. In this case, no search of the Register has .been undertaken and no comment is provided by the valuation Practice "John Logan and Associates Gladstone" as to whether the property is or is not contaminated. An assessment of contamination can be undertaken by specialist environmental consultants and you may wish to make independent investigations about contamination. This valuation is provided on the basis that the site is not contaminated and no remediation is required. If you become aware that the property is or is likely to be contaminated then a revaluation should be undertaken.

LIMITATION: We state this report has been undertaken for Sales Purposes (asset disposal) only, and is for the use only of the party for whom it is addressed and for no other purpose, and no responsibility is accepted to any Third Party for the whole or part of its contents. This valuation has been undertaken for the express utilisation of our instructing party in accordance with advised purpose of valuation, and for no other party and as such we would advise that should any party other than the nominated party view, rely or act on any details contained herein, no responsibility will be accepted for this valuation, unless such parties have obtained prior commitments and formal written acknowledgments from this practice. Neither the whole, nor any part of this report or any reference thereto, may be included in any document, circular or statement without our written approval of the form and context in which it will appear.



VALUATION

The subject property has been inspected and all known facts and relevant features have been carefully taken into account. THE MARKET VALUE OF THE PROPERTY, AS DESCRIBED WITHIN THIS REPORT, FOR SALES PURPOSES

(POTENTIAL DISPOSAL), AS AT THE DATE OF VALUATION, ON THE ASSUMPTIONS AND BASIS AS OUTLINED HEREIN IS CONSIDERED TO BE.....

AS IS (Recommended purchase from State, see feasibility) $25,000 Total ON COMPLETION $418,000 (9 Lots)

See recommendations for further detailed relative to valuation. I hereby certify that I have inspected the above property on 19th August 2013 and subject to the terms and the API Supporting Memorandum to this valuation report, I assess the Market Value of the property as above. The valuation is for the use only of the party to which it is addressed for Internal Asset Management Purposes and is not to be used for any other purpose. No responsibility is accepted or undertaken to any third parties in relation to this valuation and report. The Valuers inspection and report does not constitute a structural survey and is not intended as such. This valuation pro‐forma is made in accordance with the Australian Property Institute Supporting Memorandum and must be interpreted with that Memorandum. MVS LOGAN ‐ GLADSTONE

VALUER: JULIE OWBRIDGE (Director/Principal) A.A.P.I., Certified Practising Valuer. Registered ‐ Qld, No. 1782. DATED: 30th August 2013



TABLE OF ANNEXURES

PHOTOS

LOCATION MAP

CADASTRAL MAP

SATELLITE MAP (Gladstone Regional Council)

UBOBO TOWNSHIP MAP (Gladstone Regional Council)



PHOTOS: Lot 206 – Front view Lot 207 – Front view

Lot 208 – Front view Lot 209 ‐ Front view

Lots 207‐209 – Along Railway Terrace Lot 210 – Front view



Lot 211 – Front view Lot 212 – Front view

Lot 213 – Front view Lot 206 – Railway Terrace Bitumen Road extent

Aspect from Lot 206 easterly Railway Terrace adjacent to subject Lots 207 ‐ 210



Railway Terrace View South from Lot 206 footpath View Along Railway Terrace and over rail line

McDonald Street & Hawke Street corner McDonald Street adjacent to Lots 210 ‐ 213

View Along McDonald Street to Hawke Street Unformed Lee Street view east from McDonald St



Recreation Reserve opposite Lot 210 ‐213 Nearby Discovery Centre on Recreation Reserve

Ubobo Store nearby



LOCATION MAP:



CADASTRAL MAP:

Liability limited by a scheme approved under Professional Standards Legislation. Director | Julie Owbridge MVS National Gladstone Pty Ltd – ABN 32 162 715 139 Part of the MVS National Group | Valuations and Property Consulting

T | 07 4972 6944 F | 07 4972 8080 E | [email protected] W| www.mvsvaluers.com.au P | PO Box 5464, Gladstone Q 4680

30th August 2013 Gladstone Regional Council PO Box 29 GLADSTONE QLD 4680.

TAX INVOICE INVOICE: G131187

Valuation of: SECURITY ADDRESS: Railway Terrace, Ubobo Qld 4680. CLIENT: Gladstone Regional Council YOUR REFERENCE: 116899 VENDOR NO: 33374 Fee (exclusive of GST) ....................................................................................................... $2,000.00 Plus: GST (for supply) .................................................................................................................... $200.00 ‐‐‐‐‐‐‐‐‐‐‐‐‐‐ TOTAL (inclusive of GST) $2,200.00 ======== JOB NO: G131187 – Development Site (Vacant).

MVS LOGAN ‐ GLADSTONE

JULIE OWBRIDGE

STRICTLY 30 DAY ACCOUNT (FROM DATE OF INVOICE) LATE FEES OF $33.00/MONTH OR PART THEREOF APPLY

DIRECT DEPOSIT TO: BSB 084‐662 (NAB – GLADSTONE) A/C NO: 94507 6530 (PLEASE INCLUDE INVOICE NO. AS REFERENCE)

Documents

VALUATION OF VACANT REDEVELOPMENT LAND SITUATED AT …info.gladstonerc.qld.gov.au/meetings/20140204... · VALUATION OF VACANT REDEVELOPMENT LAND SITUATED AT RAILWAY TERRACE, UBOBO,