GPT Group and Blackwall are the latest ASX-listed companies to expand their footprints in the co-working office space, a sector identified as an integral part of an organisation’s workplace strategy.
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GPT launched Space&Co in May 2014, while Dexus Property offered a separate site under the Dexus Place banner in May 2015, and is also on the expansion path.

Peter Black, head of workplace solutions at Colliers International, says the biggest shift he sees in coming years is that flexible workspace will become a key component of many companies’ workplace and real estate strategies, for occupiers and building owners.

“Flexible workspace is not just for millennial freelancers or tech start-ups any more. Large, multinational companies are increasingly taking on space at flexible workspace operators or integrating shared working spaces into their own environments,” Mr Black said.

“In 2016, there were about 11,000 co-working locations around the world. But this figure is expected to more than double to 26,000 by 2020. By comparison, there are approximately 24,000 Starbucks locations worldwide.”

Knight Frank analyst Kimberley Paterson says Melbourne, Sydney and Brisbane have 239 co-working spaces in total, occupying 116,955 sq m, and Melbourne accounts for 56 per cent of that total.

GPT’s latest deal is for its Space&Co which opened another level at its Melbourne Central office in July. The flexible workspace group has taken level 12 in the building and targeted it towards teams of four or more staff.

The new space had already achieved occupancy around 70 per cent, GPT’s national director of flexible working Daniel Stiffe said. About half of the usage was from existing tenants in the building, he said.

Space&Co also has space in another GPT-owned building at 530 Collins Street. There are plans to open in two other locations in Melbourne, Mr Stiffe said.

GPT also confirmed plans to expand its venue at 580 George Street, Sydney, in response to strong demand. The Space&Co will be boosted from 300 sq m to 700 sq m, with the new space created by one of the world’s leading designers of co-working spaces, architectural firm BVN.

The expanded venue will accommodate an extra 50-plus members and include dedicated project and team rooms and collaborative working areas.

GPT’s head of office & logistics Matthew Faddy said the venue had benefited from being in Sydney CBD’s expanding mid-town area, which has emerged as a hub for international technology and creative firms: “580 George Street includes the best amenities and is arguably the most convenient location for any co-working space in Sydney..

“Aside from the appeal of its close proximity to Town Hall Station, Space&Co had seen strong demand from independent professionals and small business operators but also existing GPT tenants looking for temporary flexible workspace.”

Listed Blackwall, which reported an after-tax profit of $3.6 million for 2017, up 22 per cent, on the previous year, and whose result also featured a significant increase in gross revenue, up $6.6 million to $17.4 million, has increased its WOTSO space at its office at 55 Pyrmont Bridge Road, Pyrmont, after the departure of Fox Sports.

With 102 new desks, plus studio rooms and office suites, the area sees the total WOTSO tenancy at Pyrmont grow to more than 1600 sq m.

Blackwall director of property Jess Glew said the decision to move and expand the co-working space at Pyrmont was because demand was outstripping supply in its original configuration.

WeWork is also on the march, with three Sydney sites and now about 6000 sq m in Collins Street, Melbourne. Another big co-working company in Melbourne is Hub Australia.

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Ingenia Communities will benefit from the rise in grey nomads selling the family home and setting off around the county, before settling into low maintenance and affordable accommodation.

Having built up its development pipeline with caravan parks and community villages, Ingenia now has 12 projects under way and can create a further 2473 new homes. It has further increased its settlements target to 260-280 in 2018 and 350-plus in 2019.

The group warned of likely increased regulatory requirement for retirement villages, but expected this to have limited impact on lifestyle communities.

For the year, the group reported an underlying profit of $23.5 million, an increase of 16.3 per cent on the previous financial year.

The statutory profit of $26.4 million was up 8.6 per cent on the year before, but that was affected by the $7.6 million loss recorded on the sale of most of the group’s deferred management fund (DMF) retirement assets in October 2016. The interim dividend of 5.1?? will be paid on September 13.

Ingenia operates in the holiday and seniors living sector and says housing affordability and ageing population will drive long-term core demand. A key risk would be a slowdown in residential housing but not apartments. It previously was the ING Real Estate Community Living Group.

Ingenia chief executive Simon Owen said the group was positioned to benefit from demand from “travelling seniors and families for quality holiday accommodation with our portfolio now offering over 790,000 ‘room nights’ per annum along Australia’s east coast”.

He said tourism and mixed-use communities continued to be an important part of Ingenia’s portfolio, with more than $200 million committed to expanding the portfolio over the past year.

“As the competition for lifestyle communities intensifies, buoyed by interest from offshore players, and capitalisation rates compress, we see a competitive advantage in having a business model that spans both holiday and lifestyle communities, with significant embedded growth through our development pipeline.”

Brokers were mixed on the result, with Petra Securities’ Jonathan Kriska saying the positive was the Garden Villages division, which continues to be a solid performer, but the Settlers DMF division profit fell on the disposal of assets.

“Overall, the 3 per cent earnings per security growth and minimal net tangible asset growth is just not good enough for a company which has had the tailwinds of cheap debt, attractive acquisition spreads, growing development profits, and an in-favour sector,” Mr Kriska said.

Over the next 14 months, Mr Owen said, the group was set to launch eight new or expansion development projects, which supports its aspiration to become the clear lifestyle community market leader.

The expected increase in sales and addition of new assets and rental contracts will underpin earnings before interest and tax guidance, being in the range of $42-46 million for the 2018 year,” Mr Owen said.

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Costco, the original international bulk goods discounter to enter Australia, has opened its ninth national store and will look to increase its online presence to match its physical space as it joins other retailers in waiting for the arrival of Amazon.
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Commanding a large area, Costco has been a sought after tenant. For its third store in Sydney it has opted for a site within the large-format retail precinct at Sydney Business Park, Marsden Park. The store will be the largest tenant with 13,575 square metres, within the 256-hectare precinct in the north-west.

Costco Wholesale Australia managing director Patrick Noone has been with Costco for 26 years and said the company was “very pleased to have found such an ideal site for its latest store at Sydney Business Park”.

It is expected the arrival of Amazon will see his group and others boost their online operations to complement the bricks and mortar outlets.

Cushman & Wakefield national director John Sears said bigger retailers have generally had an advantage over smaller ones, using their size to reduce costs and increase product range.

“While global retailers such as Zara and H&M have had an impact on the Australian retail landscape, an even larger merchant, Amazon, is likely to cause further disruption. When measured by market capitalisation, Amazon is the largest retailer in the US, at a market capitalisation of $US475 billion, around twice the size of the next biggest, WalMart with Costco worth $US79.20 billion.

“The arrival of Amazon will further shake up the Australia retail sector and should support the expansion of small online traders,” Mr Sears said.

Having held his current role since the retailer launched in Australia around 10 years ago, Mr Noone said Costco’s Marsden Park store opening marks another “significant milestone” for the company, signalling its continued growth in the Australian market.

Sydney Business Park project manager Owen Walsh said Costco joins a growing business and retail community in Marsden Park. He said Sydney Business Park has secured about $600 million in investment to date, on track as part of the broader $3 billion project.

“Costco Wholesale Australia is a welcome addition to Sydney Business Park, which is fast becoming a major shopping and warehouse distribution/ logistics destination for the region,” Mr Walsh said.

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BHP chief executive Andrew Mackenzie has pledged that the revitalised miner’s plans would deliver “shareholder returns for decades to come”, acknowledging that poor investment decisions had come at a cost.
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Mr Mackenzie made the comments as BHP delivered a $US6.73 billion ($8.5 billion) full year underlying profit, revealed it would pay $US4.4 billion in dividends for the year – well above its minimum payout commitment – and confirmed it planned to sell its controversial onshore US shale assets.

BHP’s underlying profit, which was propelled by higher returns from its key commodity divisions, was about 5?? times greater than last year’s $US1.2 billion result.

Coal and iron ore were stand-out performers, with earnings before interest, tax, depreciation and amortisation (EBITDA) from coal up a massive 496 per cent to $US3.8 billion, and iron ore EBITDA up 62 per cent to $US9.1 billion.

Mr Mackenzie conceded BHP’s entry into the onshore US shale industry was “poorly timed, we paid too much” for the assets.

“We would like to get on with the exit from shale,” he said, adding that BHP would “be patient to make sure we restore value for shareholders”.

The preferred method to dispose of the “non-core” US shale investment was via a small number of trade sales, although other options would be considered.

“We’ll look at everything in order to decide what is the right way through this,” he said.

BHP’s shale announcement was welcomed by analysts and investors.

“We’ve always been of the view that it’s not a core BHP business and it’s not a tier-one asset. [And] it’s a declining return business,” Citi analyst Clarke Wilkins said.

“It was poorly timed, they paid too much and then they went too hard when they acquired it.”

Matthew Haupt, portfolio manager at Wilson Asset Management, a BHP shareholder, welcomed the shale announcement.

“I think that’s a big relief for all shareholders,” he said.

“It’s been a terrible investment and I think the market is relieved that they can just focus on their tier-one assets now.”

Mr Mackenzie said in 2018 financial year BHP would generate strong free cash flow, while in the medium to longer term it would strengthen its balance sheet and make significant productivity gains.

“We’ll grow value and returns, which remain at the heart of what we do every day. Our plan is a plan that delivers shareholder returns for decades to come,” he said.

BHP declared a final dividend of 43 US cents per share, payable on September 26, for a full-year payout of 83 US cents per share. The final dividend is more than triple last year’s final dividend. BHP has about 600,000 retail shareholders.

It had been a “rough time for shareholders, they’ve been very patient with us. And I think it’s very appropriate that when we’re able to do so, we reward them,” Mr Mackenzie said.

“We actually have biased our free cash flow towards the pay down of debt, but we thought we should keep a little bit back to put a little bit more juice into the dividend this time, and frankly to maintain a reasonable yield on the stock.”

The market reacted positively to BHP’s news, with the stock climbing 28?? to $25.98.

The decision to exit US shale comes after a comprehensive review of BHP’s portfolio, and amid loud calls from activist investor Elliott Management for an overhaul of the miner, including a full exit from onshore US shale.

BHP also reiterated its position on its Canadian potash project, Jansen, revealing it would not move beyond preliminary works unless it passed strict capital allocation tests.

“We are very happy that we have multiple value-creating options, which span both commodities and time frames. The Jansen project is one of those options … we have a large resource, which has the potential to provide a low-cost, long-life, expandable mine,” BHP chief financial officer Peter Beaven said.

“While timing is uncertain, we have no doubt that the world will need new potash supply. And, when it does, we believe Jansen is best placed. But, Jansen will not proceed unless it passes our strict capital allocation tests.”

BHP reportedly paid about $US20.6 billion for two major US onshore acquisitions about six years ago, and has spent billions more on its US shale assets in the years since. But in its fiscal 2016 results, it included an impairment charge of $US4.9 billion against the value of its onshore US shale assets.

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FFA – PICTURED Football Federation Australia CEO David Gallop and FFA chairman Steven Lowy media conference about the recent bans against troubling fans at games. Thursday 3rd December 2015. Photograph by James Brickwood. SMH SPORT 151203More than 120 Australian leaders of big business, sporting organisations, universities and government agencies have made a personal commitment to addressing the gender pay gap with a new focus on jobs for which the pay scales tip in favour of men.
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The 122 business leaders that form the Male Champions of Change coalition have signed a new agreement to ensure equal pay for equal work in like-for-like roles within their organisations and not just across sectors.

The signatories include Qantas chief Alan Joyce, Telstra chief Andrew Penn, Lendlease chief Steve McCann, Goldman Sachs chief Simon Rothery???, Unilever Australia/New Zealand chairman and CEO Clive Stiff, CBA managing director Ian Narev, Deloitte Australia CEO Cindy Hook, Football Australia CEO David Gallop, ANZ CEO Shayne Elliott, Australian Stock Exchange CEO Dominic Stevens, Australian Federal Police Commissioner Andrew Colvin, Army chief Angus Campbell, Ten Network CEO Paul Anderson, Fujitsu CEO Mike Foster, Johnson and Johnson managing director Gavin Fox-Smith and CSIRO chief Larry Marshall.

Vice-chancellors from La Trobe University, the University of Sydney and Australian National University are also among signatories.

The Workplace Gender Equality Agency’s measure of the average gender pay gap is at 15.3 per cent, reflecting the overall position of women in the workforce.

However, it does not measure differences between men and women in like-for-like roles, which the Champions of Change coalition have now agreed to do. This means companies are not required to measure differences in pay between like-for-like roles. They are only required to compare male and female pay rates within an organisation as a whole.

“They are not looking at two engineers sitting side by side, one’s a boy and one’s a girl and they are paid differently,” Ernst and Young partner Rohan Connors said.

“We are giving our organisations a free pass to excuse gender inequality and so we wanted to come up with a better way of doing it.”

Mr Connors, who compiled the Champions of Change strategy, said organisation leaders have now committed to measuring differences in pay between men and women doing the same jobs.

The report recommends strategies for reducing like-for-like pay gaps, addressing the timing and frequency of gender pay gap reviews and performance reviews and other processes.

Libby Lyons, director of the Workplace Gender Equality Agency, said addressing the national gender pay gap “requires the effort of our whole community”.

“Employers must step up and play their part,” she said.

“All leaders have the power to analyse their data and take action on pay gaps within their organisations.”

The signatories to the Closing the Gender Pay Gap report have invited other Australian leaders to join them.

Lendlease managing director Steve McCann, a signatory to the report, said there was no excuse for men to be paid more than women for work that has “the same accountability, breadth and difficulty, and for which they have comparable performance, competence and experience”.

“We’ve learned that gender-based pay gaps can be both common and insidious – particularly in historically male-dominated sectors,” he said.

“Having regular, scrutinised and actioned reporting is a game-changer – real-time access to relevant data becomes hard to ignore and demands action.”

Elizabeth Broderick, the founder and chair of Male Champions of Change, said employment leaders could help accelerate greater gender equality.

“This is a joint and concerted effort to help make unjustifiable pay differences in like-for-like roles for men and women a matter of history in Australia,” she said.

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