Don’t quite have a house deposit? Where to invest instead

So you’ve amassed a nest egg with growth potential, but don’t have quite enough for a house deposit. If investing in stocks and shares seems soulless, the art market could provide the basis for a beneficial long-term relationship – certainly aesthetically, but perhaps also financially.
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Think of the Vogels, a penny-wise New York couple, who achieved “proletarian art collector” status by acquiring a collection of emerging minimalist artists in the 1960s and ’70s, paying just a few hundred dollars for each work, which proved too priceless to sell (valued in the hundreds of millions of dollars).

But leading n financial advisers, auction house directors and curators suggest they are the exception rather than the rule. ???Intuition, patience and possessing a great eye are not enough.

Although loath to equate art with financial gain, the n representative of Christie’s auction house, Ronan Sulich, defers to a colleague’s line, “If it’s appreciated, it will appreciate”.

“When asked, I always advise people to buy what they actually like, because if it doesn’t make them a 500 per cent return, they can at least enjoy looking at it; something you cannot do with stocks and shares,” he says.

Leonard Joel auction house’s managing director, John Albrecht, also says to avoid anyone using the “investment” word in relation to buying art. His advice, in a nutshell, is: “Don’t rush it; consider a story/theme; market equals auction; art equals gallery.”

Albrecht believes young collectors are more global in their thinking these days, with the proliferation of art fairs, online galleries and art blogs. He recommends immersing oneself in these mediums and reading Jeff Makin’s Critical Moments and Robert Hughes’ Nothing If Not Critical, which will provide context, a crucial element for collection longevity.

“There is no doubt in my mind that if you set about collecting a period, genre or medium (or all three) and develop a honed approach to collecting, then what you get is a collection that tells a story and these collections will always be more prized than those that don’t,” he says. Related: The best places to buy affordable artRelated: Inside home of artist Antonia Perricone MrljakRelated: What do top artists hang on their walls?

Time is the most valuable commodity for any potential collector, advises Cameron Menzies, the managing director of Menzies Fine Art Auctioneers. “Art can seldom be ‘traded’ quickly. In almost all cases, a ‘holding’ period of 10 years should be seen as mandatory. Art purchased in a gallery environment is typically the artist’s ‘current’ work, so it needs time to be assessed and appraised by the market in order to appreciate,” he says.

Building relationships with those in the know is paramount for collectors. “They should subscribe to gallery and auction house mailing lists and engage their staff, who are generally charming, helpful people with a passion for the collecting journey and guiding their clients. The n Art Sales Digest is an invaluable online resource for tracking auction prices for all n artists”, Menzies says.

Tom Lowenstein OAM, the founding director of Lowensteins Arts Management, has advised top artists on financial matters for more than 50 years, representing and befriending the likes of John Olsen and Charles Blackman.

Possessing natural ability and a flair for media attention go hand in hand for raising an artist’s profile. But Lowenstein says unless an artist is in the realm of Boyd, Whiteley, Olsen and their contemporaries, “an artist that you may have collected for $5000, 20 years ago could only be worth $5000 today”. His advice is to enlist the services of a financial adviser, dealer or consultant who is trustworthy and therefore provides peace of mind and higher-yield potential.

Knowledge is power, suggests Rodney James, an independent art valuer/consultant, exhibitions curator and collection manager, who advises art buyers to “clue up”. He says registered consultants, such as members of the Art Consulting Association of , should be the first port of call.

However, the most important element should be how you feel about the work. Art dealer, consultant and valuer Anna Groden advises buying an artwork that “you love or speaks to you on some level”.

“The difference between art and other investments, such as shares, is that art is something you can appreciate, that is tactile and visual, as opposed to numbers on a piece of paper.”

Chinans align their hip pocket with their values

The tides are turning in the world of investment.
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As trust in business drops to its lowest level in years, a positive trend is fast emerging with the record growth of responsible investing.

A decade ago, just $70 billion of ‘s funds under management were managed with some form of responsible investment strategy.

Fast-forward 10 years and in 2016, responsible investments comprised $622 billion, making up nearly half (44 per cent) of ‘s assets under management.

But what’s causing this shift? To what degree is the rise of responsible, ethical and impact investing being driven by the management of risk versus performance or investor demand? The answer is all of the above.

Consumer research launched on Wednesday by the Responsible Investment Association Australasia (RIAA) shows that nine in 10 ns (92 per cent) expect their super or other investments to be invested responsibly and ethically.

And in an important signal to n’s superannuation, banking and wealth management sectors, four in five ns would consider switching their super or other investments to another provider if their current fund engaged in activities inconsistent with their values.

Millennials show the greatest interest in aligning their investments with their values, with 88 per cent prepared to make the switch if their current investments can’t deliver against their needs. Outperformance

Investors moving their money into more responsible investments are benefiting more than just their conscience, with responsible investment funds outperforming their average mainstream counterparts year on year.

RIAA’s 2017 Benchmark Report shows responsible investment n equities funds outperformed against their equivalent ASX300 and mainstream funds over three, five and 10 years.

But what does it mean to be make responsible investments? Divestment

From screening to shareholder engagement to impact investing, there are various approaches for making responsible investments, and investors will typically adopt a number of strategies.

Divestment is perhaps the most well-known strategy. In the past three years, more than 35 n super funds have divested themselves of tobacco and only two weeks ago, BT Financial Group, a division of Westpac, announced it was dumping its investments in tobacco and “controversial weapons”.

Additionally, there’s been an increase in negative screening against fossil fuels, gambling, nuclear power generation and human rights violations.

These trends are reflected in RIAA’s research showing that the top three issues ns want to avoid investing in are animal cruelty (69 per cent), human rights violations (62 per cent) and pornography (56 per cent). Investment

Yet while divestment is an important tool in the responsible and ethical investment toolkit, it is just one tool, and owners of capital are becoming much more focused on where their capital is directed, as opposed to from where it is removed.

The integration of ESG issues and opportunities into investment decision making is the most common responsible investment strategy, accounting for the largest proportion of funds under management in .

Whether a fund manager is considering the impact climate change policies will have on the energy companies in which it is investing, or how well a chemical company is managing OH&S issues to avoid spills and fines, ESG integration has fast become the benchmark of good investment practice. Active ownership

To complement this, a growing number of responsible investors are taking a more active ownership approach locally and globally, heralding a new wave of shareholder activism with the aim of shaping corporate activity to better consider risks that, for far too long, have been considered non-financial.

Whether it is engaging with BHP around its membership of bodies such as the Minerals Council of or Santos around how prepared its business is for a 2 degree low-carbon world, this next wave of shareholder engagement is not about aggressive board takeovers but rather getting our leading companies to better consider the interdependence between their business and broader society.

Put simply, more sustainable companies make better investments. A company wishing to thrive in the long term can no longer afford to ignore how it treats its workforce, the communities within which it operates, the environmental footprint of its activities, or the quality and diversity of its board of directors. Better investments

Assuming these trends continue, ns are only going to step up the demand for their savings to be invested in a way that does no harm and builds a better, fairer, more sustainable world into which they can retire well.

To help consumers navigate this space, RIAA has launched Responsible Returns, a web-tool that helps people search certified responsible investment products that align with their values and interests.

To be relevant into the future and benefit from the flows of finance into responsible investments, the onus now lies with companies and financial institutions to walk the talk and proactively demonstrate not just the negative impacts they are avoiding, but the positive outcomes they are delivering for the economy, communities and our environment.

Simon O’Connor is the chief executive of Responsible Investment Association Australasia.

‘It is very hard’: 7000 cleaners forced to reapply for their jobs

Arou Akot is among 7000 school cleaners who will need to reapply for their jobs for the first time in 24 years.
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The NSW department of Finance Services and Innovation has notified United Voice, the union representing the cleaners, that employment guarantees in place since 1994 “will not be extended in the new contracts from 2018”.

Mr Akot, a South Sudanese migrant and single father of seven children aged five to 19, has worked for eight years as a cleaner at three schools in western Sydney.

He fears he is at risk of becoming homeless if he loses his job.

Mr Akot said he earns about $1500 a fortnight in the hand and pays $1020 a fortnight in rent.

His work day is split across two shifts from 4.30am to 9am and 2pm to 6pm and he said he was often too busy to take a 10-minute break.

“It is very hard,” he said. “We need a job guarantee. If I don’t have a job, I will be homeless.”

United Voice NSW secretary Mel Gatfield said 7000 NSW school cleaners faced an uncertain future under changes to state government cleaning services.

“For the first time in 24 years, every cleaner will have to reapply for their job, with many facing an anxious wait to see if they will have a job come July next year,” she said.

“After years – and in some cases, decades – of service to their school, many cleaners fear that finding another job will be next to impossible, particularly in regional areas.”

The union is concerned about the proposed change from an hours-based to a square-metre-based pricing model under the proposed new contract arrangements.

Ms Gatfield said the quality of cleaning was directly connected to having trained staff and enough cleaning hours to do a good job.

“A reduction in staff or cleaning hours will directly impact the quality of cleaning being delivered,” she said.

In a letter to the union, Finance Services and Innovation secretary Martin Hoffman said the employment conditions and rates of pay of cleaners would be protected under relevant industrial awards.

He said the same government buildings would need to be cleaned to the same standard under the new contract.

“[So] there will be significant employment opportunities for cleaners,” Mr Hoffman said.

“I also understand that under the new contract, all existing cleaners will be offered the chance to attend an interview with the successful tenderers as a way of maximising the employment opportunities for the incumbent workforce.”

Alison Redman, a cleaner of seven years, who works at two schools in western Sydney from 6am to 7.30am and 1.40pm to 6pm, is concerned older cleaners will not be rehired.

“I am one of the youngest cleaners and I am 41,” she said. “People are not going to want to employ older people, they are going to want to employ younger people.

“It will be difficult finding another job when you have been in the cleaning industry for a long time as most cleaners have.

“Our anxiety and stress levels are through the roof,” she said. “Some people are taking mental health days to recompose themselves.”

Ms Redman said it would also be difficult for cleaners to work to current standards if their hours were cut.

“That would put so much more pressure on us to get things done. We are struggling as it is,” she said.

A spokesman for Finance, Services and Property Minister Victor Dominello said the minister recently met with United Voice. The government would continue to work with stakeholder groups including the union to ensure “existing employees are provided with adequate information regarding the new facilities management contract”.

NSW government agencies spend more than $400 million a year on cleaning and maintenance services under the contract, which expires at the end of June next year. The government has said it has a responsibility to ensure the contract delivers the best possible value for money for taxpayers and its agencies.

Zara fashion in talks to close first Aussie store

After its rock star-like opening and fast expansion program, Zara fashion group is in discussions to break its lease at the QIC-owned Robina shopping centre on the Gold Coast, due to the challenging retail sector.
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If the lease is broken, retail leasing agents said it could be a “game changer” in terms of how the international brands are faring.

Earlier this year the fast fashion group Forever21 closed its stores in Sydney’s Pitt Street Mall, Macquarie Centre and Brisbane and there have been suggestions that other international labels are slowing down their store rollouts to ensure they do not cannibalise their sales.

When Zara’s first store opened in Sydney’s Pitt Street Mall in 2011, security staff were needed to control the queues.

These stores remain some of the more profitable tenants in shopping centres but, like their n peers such as Solomon Lew’s Premier Investments, they are feeling the cool winds of slow consumer demand, and are looking at shutting down stores.

Last year Zara also opened an outlet at the nearby Pacific Fair at Broadbeach on the Gold Coast and has a flagship site in Brisbane’s CBD. There are 15 Zara fashion stores across and two separate Zara Home outlets.

It was the first mega international brand to arrive in the country with a much-hyped store rollout, but with competition in that area of retail at fever pitch, it has decided to curate its locations. It remains committed to .

Zara is the largest fast fashion label in the world run by the Spanish Inditex group. Its main rival is the Swedish group H&M.

A spokesperson for Zara said the group was “unable to comment on this”.

QIC declined to comment on the Zara lease negotiations, except to say the group was “constantly evolving” its shopping mall offerings.

The Robina Town Centre general manager, Anita Brown said: “It is not appropriate for the centre to comment on the commercial operations of our retail partners.

“During the past 20 years we have repeatedly evolved our offer, through significant and sustained reinvestment as part of our active management approach, delivering transformations that continue to meet the needs of our community,” Ms Brown said.

“The most recent examples of this commitment in action are demonstrated in the launch of our n-first foodies’ playground The Kitchens, as well as our stunning Central Mall development, which is currently under way.”

According to Colliers International’s latest research and forecast report, the n retail sector has been facing a number of well-documented challenges, but is still tracking outstanding demand with high occupancy levels.

Michael Bate, national director of retail at Colliers International, said the demand for retail space remained high with densely populated areas continuing to perform, particularly for major retail assets such as shopping centres.

“The integration of these sites with the social and physical infrastructure of a community makes them highly sought after for investors and retailers alike,” Mr Bate said.

But with the imminent arrival of online giant Amazon, the need for landlords and retailers to embrace technology and enhance the value proposition to customers has never been more important, according to George Wragge, director of project leasing at Colliers International.

“Collation of consumer spending and data, and understanding of how to interpret such data will be crucial for instore experiences and bricks and mortar retailing,” Mr Wragge said.

Walker Corp breaks ground on $2.4b Parramatta Square

Developer Lang Walker, Parramatta City Council and Property NSW, have broken ground on his $2.4 billion Parramatta Square site, providing four office towers, retail and cafes, that will rival Barangaroo at Sydney’s Darling Harbour.
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It is the fastest-growing CBD in metropolitan Sydney and the office vacancy level for premium sites is zero. The Parramatta Council is also undertaking a $6 billion transformation of the civic square.

Once completed there will be close to 24,000 workers across the precinct, with the main new commercial building at 40 storeys high with views across the Parramatta CBD and back to the Sydney CBD.

On completion, the centrepiece Tower 4 will be tallest commercial building outside Sydney CBD and the largest in the Parramatta Square precinct, pending approval of towers 6 and 8.

Walker Corp joins an array of developers and investors in Parramatta including GPT Group, Dexus, Charter Hall and the new $876 million South Quarter development by the Dyldam group.

Approvals are in place for three of the four towers with the final approval expected early next year. The National Bank has committed to more than 40,000sq m in 3 Parramatta Square.

With the NSW Government pre-committing 62,000sq m within Tower 4, it is the first of the four towers to commence construction. National Builder Built, partnering with the international Obayashi Group, will begin work on site this month, with completion scheduled for late 2019.

The 4 Parramatta Square tower will accommodate government employees from the Department of Planning and Environment, Department of Finance, Services and Innovation and Department of Industry in the largest-ever government agency leasing commitment in Western Sydney.

Minister for Finance, Services and Property, Victor Dominello, said the long-term lease of office space will establish Parramatta as a major public sector jobs hub, providing more opportunities for those who live in the west to work closer to home.

Lang Walker, executive chairman at Walker Corporation, said he was “thrilled to have the NSW Government as anchor tenant for 4 Parramatta Square”.

“This major tenancy is the start of the movement that we are seeing with large corporations making the move from both the Sydney CBD and suburban business parks to Parramatta, as the citywide revitalisation takes shape,” Mr Walker said.

“We have received strong interest from several ASX listed companies looking to Parramatta Square as it evolves into the next generation workplace; a connected campus with industry leading commercial buildings, extensive amenities and facilities – everything employees need will be on campus or within a short walk.”

The Sydney Business Chamber, Western Sydney says the start of construction of Parramatta Square is a “significant milestone in transforming the CBD into a world-class business and leisure destination”.

David Borger, director of the Sydney Business Chamber, Western Sydney, said, the $2.4 billion development includes four major towers, which will house more than 20,000 workers by 2021 and will “completely revolutionise the Parramatta CBD”.

“The precinct will see thousands of public sector and private sector workers descend on Parramatta daily, which will have significant flow-on effects to other businesses within the CBD,” Mr Borger said.