Moved on: aged-care residents in stand-off with Lendlease

Keith Tremain, 81, talks with his daughter Sharon Bate in his serviced apartment at Glenaeon Retirement Village run by Lendlease in Belrose. Photo: Kate Geraghty Keith Tremain with his late wife and daughter Sharon Bate in front of the family’s Forestville home in the mid 1980s. Photo: Kate Geraghty
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Keith Tremain always believed that when times got tough, you could count on your mates.

After suffering two strokes, a heart attack, and the loss of his wife, the 81-year-old is now bracing for a battle with construction giant Lendlease, which wants to demolish the entire wing of the Sydney retirement village he lives in, because it isn’t profitable enough.

If it goes ahead, Keith and 50 other retirees face being split up, as they come under pressure to leave their homes.

So Keith decided to call on an old mate – Tony Abbott, the former prime minister.

“Keith is a terrific bloke. Our community owes him a lot and I am only too happy to speak up in his support,” Mr Abbott said.

“He is a tough supporter of his day, he is a very accomplished tradesman – one of those people whose word is his bond.”

Keith and the former prime minister share an obscure but deep connection – they are both honorary patrons of local rugby club the Forestville Ferrets.

The pair worked together to build the club gym – Keith as a bricklayer, and Mr Abbott as the local member lobbying for government funds.

Keith, who can utter only a few simple words due to his stroke, lives in a unit at the Glenaeon Retirement Village in Belrose on Sydney’s Northern Beaches.

More than 280 people live in the village with 34 of the most vulnerable residents living in serviced apartments alongside Keith.

Lendlease, which yesterday reported a full-year profit of $698 million, want Keith and around 50 other residents to leave their homes and build in their place more than 100 more-profitable retirement-living units and an aged-care facility.

Keith moved into his new apartment after the sudden death of his wife and his second stroke in 2014. He paid Lendlease $200,000 for the apartment on a 99-year lease.

To move ahead with its proposal Lendlease needs 75 per cent of residents to support its plans in a vote and agreement from residents on leases.

No date for the vote has been set, but that hasn’t stopped the company from having one-on-one meetings with residents, to encourage them to leave.

The company is even throwing in incentives to sweeten the deal offering to pay $4000 in moving costs, $2000 in legal fees, while waiving “selling fees” and “re-establishment fees” worth around $12,000.

Keith and his neighbours fear Lendlease will whittle down the resident population with these deals until the remaining few feel like they’ve got no choice but to take a deal.

The former prime minister is watching the situation with interest.

“Obviously Lendlease are entitled to propose an upgrade but they do need to treat the residents with respect and negotiate with them in good faith and they need to make sure the residents get a good deal. That means as little as possible disruption and better accommodation than they have now,” he said.

The issue has divided the centre. Many of the residents directly affected say they feel cheated and pressured to leave. Others feel the plans would bring much-needed new facilities and add value to their homes.

Lendlease first told them of its intentions at a meeting in June, indicating serviced-apartment residents would have 12 months to find alternative accommodation.

At more recent meetings it backtracked and reiterated that no one would forcibly evicted.

It has also offered to resettle residents inside the centre. But residents say the plans have created “total terror” inside the serviced apartment block.

Lendlease has also told residents not to go to the expense of contacting lawyers.

About 120 residents met on Monday at the Glenaeon community centre, in the heart of the village, to hear from Lendlease managers Greg Little and Ann Holzer about the plans.

They were told the 30-year-old serviced apartments had become a liability, losing $300,000 in the last year alone.

“We are not a hotel. That’s not our business to run a hotel … we are about providing a retirement environment that has to have a commercial outcome both for Lendlease and the resident,” Ms Holzer told the meeting.

Even if Lendlease does not get the 75 per cent it needs, it says it will close down the serviced apartments eventually anyway, including Keith’s.

Surveyors have already been hired and Lendlease is speaking to aged-care providers to operate the yet-to-be approved centre.

Lendlease has also offered to buy back units at a market price determined by an independent assessor. But some residents are digging in their heels.

Keith’s daughter Sharon Bate has joined the battle and says her father will refuse to leave. She says the plans have had a devastating impact on morale at the centre.

“I can’t believe that they can do that to all of those people. One man is 99 years old. These people are living out the end of their lives. They’ve spoken about suicide as a result of all of this,” she said.

Prices for serviced apartments at Glenaeon vary from between $200,000 to $300,000. Residents also have to pay a monthly service fee of around $2000 as well as an exit fee – typically around 3 per cent for each year of residence – when they sell their unit.

During the sometimes heated meeting on Monday, some residents vowed not to leave.

“You said that no person in serviced apartments will be forced to leave their home. That means I can stay in my home until the day that I die and you can’t do anything about it …That’s fine. I plan to live another eight years,” one resident told the meeting to rousing applause.

The meeting was also shown a concept sketch of the new proposal which included three-storey apartment buildings connected to an aged-care centre, where the serviced apartments now stand.

Former construction manager Stan Fields, 91, has been living in the centre for 14 years. He believes Lendlease is strategically drip feeding information until they reach the 75 per cent support needed to pass their plans.

“They will work away at us and work away at us, until more and more people say ‘well I suppose it is not so bad’,” he said.

“There is this feeling that this is going to happen whether we want it to or not.”

The meeting was told Lendlease operates 17 villages with serviced apartments across the country with many suffering ongoing problems with vacancies.

Michael Eggington, Managing Director of Lendlease’s Retirement Living business said Glenaeon was an ageing village that was not meeting the requirements of village residents who may need higher levels of care.

He said no resident will be forcibly evicted.

“The proposal will only progress if agreement is reached with directly affected residents and a favourable resident vote is achieved,” he said.

“Lendlease understands this is a sensitive time for some residents and their families. Residents who require additional support have access to elected Resident Committee representatives as well as services provided by Lendlease, such as independent legal advice.”

Tony Abbott said he’s concerned about the stress for residents forced to go through the move late in life.

“Particularly for old people, it is always stressful when you are asked to consider something that might involve upheaval in your life. And losing your accommodation, even if it is going to be replaced by something better, is very troubling,” he said.

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REIT reporting season on track to deliver growth

It is the halfway mark for the 2016 full-year reporting season on the real estate investment trust sector and, by all accounts, it is achieving some gold star stamps.
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The office landlords are predicting good times ahead, particularly along the eastern seaboard, while the retail owners are defying the mixed underlying economy with solid inflation-beating sales growth.

For the residential developers, the story is of continued undersupply and high demand.

It’s no surprise the results all come in at market expectations, as the REITs obey continuous disclosure and are in constant contact with investors, but the tone of the analysts’ reports indicate they are liking what they are hearing from the REIT managers.

AVJennings followed larger residential peers Mirvac and Stockland with an upbeat final result for the year to June 30.

The group reported revenue growth of 32.7 per cent to $421.9 million, growth in profit before tax of 22 per cent to $58.8 million and growth in earnings per share of 18.6 per cent to 10.71¢.

A final dividend of 3.5¢ per share was declared and is to be paid on September 23, bringing the annual dividend to 5¢.

AVJennings’ managing director Peter Summers said the results for the year were strong and consistent with previous comments about conditions in traditional housing markets.

“As we entered the 2016 financial year we continued to grow our level of stock under production in anticipation of continuing favourable conditions in the traditional housing markets. We saw issues as being primarily related to certain CBD high-rise apartment markets,” Mr Summers said.

But he took a mild swipe at governments over affordable housing.

“We believe the last 12 months or so has provided a better understanding that we need to supply not just housing but housing in areas where people want to live,” Mr Summers said.

“Unfortunately the understanding and debate around affordability has not been as clear. Governments continue to focus on property from a revenue-raising aspect. They also continue to implement short-term reactionary measures, often creating further longer-term volatility.”

“We hope governments start to focus more on their role in planning and other areas where they can work with developers to increase the supply of suitable, appropriately-located, affordable housing.”

For the office sector, Investa Office Fund unveiled that statutory net profit for the year ended June 30 increased 175.6 per cent to $493.8 million.

After adjusting for fair-value movements and other non-operating items, funds from operations increased 3.4 per cent to $175.6 million, driven by property level income growth and the income from 567 Collins Street, Melbourne, which completed in July 2015.

The dividend was 19.6¢ cents per unit, up 1.8 per cent on the previous corresponding period, and will be paid on August 31.

Having fought off a takeover, the group said it will now focus on its core office portfolio which has solid assets across Sydney, Melbourne and Brisbane and has forecast a 2.1 per cent increase on the past financial year. This includes its development at 151 Clarence Street, Sydney.

The group has 12 months to consider exercising its right to negotiate an acquisition of 50 per cent in the Investa management platform.

Charter Hall Retail REIT also improved its performance, with statutory profit of $180.7 million, an 11.2 per cent increase from the prior corresponding period. Full-year distribution is 28.10¢ per unit, up 2.2 per cent, and payable on August 31.

Scott Dundas, fund manager of the REIT, said that, despite the price war between its tenants Coles and Woolworths, its centres had net operating income growth of 2.2 per cent.

He said the fund had earmarked about $200 million in non-core asset sales in the coming year with a similar amount in purchases to refresh the portfolio.

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CBD retail sees low vacancy levels

The proposed Van Cleef & Arpel store at 112 Castlereagh Street, leased as retail vacancy rates fall. Photo: suppliedFinding a retail site in capital cities is getting that much more difficult as international retailers and banks jostle for space, according to Knight Frank’s directors.
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The latest data shows that street frontages experienced the tightest vacancy level as well as the largest yearly decline, with the vacancy rate contracting to 1.5 per cent as at July this year from 3.5 per cent a year earlier.

And the influx of luxury retailers is showing no sign of slowing in Sydney, with the likes of Chopard setting up a flagship store at the newly redeveloped building at 119 King Street.

Knight Frank’s senior director, retail leasing, NSW Alex Alamsyah​ said, other major luxury flagship deals in Sydney secured by Knight Frank include upmarket jeweller Van Cleef & Arpels, which is anticipated to open at 112 Castlereagh Street, Cartier, and Franck Muller, which opened last year.

“However, while demand from luxury international retailers has been strong, there has been an engagement of banks in the Sydney CBD retail market,” Mr Alamsyah said.

“The trend is evident by NAB and HSBC pre-committing to 333 George Street, which topped out during the week, and at least six more major international banks searching for prime sites in the CBD. This is on the back of the ANZ repositioning at 20 Martin Place.”

The high demand has also led to strong rents for the landlords.

The anticipated redevelopment of the David Jones store at 77 Market Street by the new owners, Scentre​ Group and Cbus, could include space at ground level for a new retailer and it has been suggested many are keen to sign up if it’s available.

With properties being sold across the city, some tenants, such as Tiffany & Co will be looking for a new site. The upmarket jeweller has appointed CBRE to advise on its move.

There is also the planned redevelopment along King Street, opposite the new Chopard store, which could be attractive for well-known brands and new retail entrants.

“In Sydney, for premises outside Pitt Street Mall, being George Street and Castlereagh Street precincts, gross rental rates currently average between $5000 per square metre per annum and $7000 per sq m per annum, an average increase of 9.1 per cent over the past 12 months,” Mr Alamsyah said.

“Gross retail rentals in the super-prime retail core, encompassing Pitt Street Mall, now average prime rents between $10,000 per sq m per annum and $17,000 per sq m per annum, an increase of 8 per cent over the past 12 months,” he said.

“Whilst leasing activity in 2014-15 was dominated by international fast-fashion retailers, 2015-16 has seen luxury and upmarket international retailers and banks driving demand. A number of local players have also upgraded their stores in the CBD.”

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Office landlords ruling the roost

National Australia Bank’s move to be anchor tenant at the $1.7 billion office and retail development at Wynyard Place and car-sharing service Uber’s​ move to GPT Group’s 580 George Street underpin the optimism of office landlords.
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The two tenants, one a traditional bank, the other a new-look technology business, reflect the divergence of the city and its workers.

In the reporting season, office landlords of DEXUS​ Property, GPT Group, Investa Office and Stockland have all identified the Sydney cental business district as the growth engine of the country’s sector.

Investa Office Fund and DEXUS have forecast that the vacancy rate, particularly in the premium office space, will fall to between 3 and 4 per cent in the next three years.

This is boosted by growth in the financial/technology sector and the traditional banks, which are also taking out retail space.

Investa Office assistant fund manager Nicole Quagliata said the group was fielding many inquiries for its 10-20 Bond Street buildings “by the day”.

NAB will move from 255 George Street to nearby Wynyard Place, which is being developed by the Canadian heavyweight Brookfield Property Partners, and will be the anchor tenant.

This will leave 255 George and the adjoining 259 George Street – Suncorp Bank’s offices – up for lease. Suncorp Bank is moving to Barangaroo.

According to Jenine​ Cranston​, senior director, advisory and transaction services at CBRE, Sydney’s first-half leasing inquiry volume has been very strong, comparing favourably to 2015 with an increase of just over 50 per cent in total. Notably, there has been an unprecedented level of inquiry with AMP, CBA and NAB all coming to the market this year.

“To put this into some context – in the three-year period between 2013 and 2015 there were only three inquiries over 30,000 square metre in size. We have had this many alone year to date and a total of 128,000 sq m of demand,” Ms Cranston said.

“At the other end of the size spectrum, there was also a near 80 per cent increase in the number of small tenants in the size range of 100-500 sq m. This size sector has always been the bellwether for the general health of CBD leasing and an informal indicator of small business confidence.”

Ms Cranston said the inquiry from tenants in assets acquired for the Sydney Metro had been concentrated in this size sector.

“Most of these tenants are seeking options close to their existing locations and few have moved to date, with a visible slowdown in the transaction process off the back of state cabinet’s budget questions on the project. We anticipate inquiry will gain momentum in the second half as all CBD tenants are now understood to have received notice to vacate.

“The only loser this year has been the 1001–3000 sq m size category where there was a near 9 per cent drop in the number of inquiries,” Ms Cranston said.

“We anticipate this will normalise again in the coming quarters and some of the drop-off can be attributed to tenants moving early to capture favourable market deals or tenants coming to the market early, provoked by the competitive tenant rep environment.

“Net effective rental growth has been visible in both the prime and secondary markets in the first half. CBRE Research puts this at 12.6 per cent and 12 per cent respectively – impressive for a market that has been languishing for some time.”

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Sydney CBD laneways are in hot demand

The City of Sydney is forging ahead with its plan to make Sydney more appealing for residents and boost its standing as a liveable city through its new rezoning and planning strategies.
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In the most recent Economist survey, Melbourne again outshone Sydney as one of the world’s most liveable cites, which has spurred on the northern capital to lift that profile.

This is happening with the “Manhattanisation” of Sydney through new apartment developments, such as Cbus plans above David Jones and the plethora of new restaurant and food precincts, such as DEXUS​ Property’s projects at Gateway, Circular Quay and ground floor at Grosvenor Place.

The City of Sydney Council has also released its Central Sydney Planning Strategy for development over the next 20 years, to bring Sydney back to life on the weekends as much as during the week.

It is said the proposed development guideline changes will create 100,000 more jobs and as this occurs amenity will be in high demand. According to Vince Kernahan, director Sydney CBD sales at Colliers International, as the demand for more amenity such as cafes, restaurants and bars increases, properties fronting laneways are in demand to provide the space.

The City of Sydney Council has a Laneway policy that identifies all lanes of interest and generally encourages owners of adjoining properties to activate their properties at street/lane level.

Laneways that have been successfully transformed include Bulletin Place, Tankstream Way, Angel Place and Rowe Street, which are home to China Lane restaurant, Baxter Inn and Felix restaurants.

Mr Kernahan and Tom O’Neill​, executive Sydney CBD sales at Colliers International, are selling a heritage-listed property at 362 Kent Street with rear lane access to Council Place.

An eight-level building, it has the potential for a reconfiguration of the ground and first floors to provide more retail space.

Mr O’Neill said small to medium boutique office and retail buildings are becoming rarer in Sydney as more new and larger buildings are being constructed.

“Many office and retail tenants are looking for properties that have character externally and modern internal finishes that offer a point of difference; 362 Kent Street will appeal to investors, developers and owner occupiers,” Mr O’Neill said.

Mr Kernahan added that buildings in the $10 million to $20 million category are the most sought after and the proposed LEP changes and the massive amount of new infrastructure projects as well as major projects such as Darling Harbour Live and Barangaroo are having a positive impact on all western corridor assets.

“We are seeing more opportunities with these style of assets to offer a range of uses to potential buyers,” Mr Kernahan said.

This grab for space comes as vacancy rates in Melbourne and Sydney’s CBD core retail markets have plummeted as international retailers and banks jostle for space.

Knight Frank head of research, Matt Whitby, said Sydney experienced the highest fall from 3.3 per cent last year to a current rate of 1.8 per cent while Melbourne fell from 3.2 per cent to 2.4 per cent over the same period, the lowest it’s been in five years.

Mr Whitby said arcade and laneway shops in Sydney and Melbourne have experienced positive absorption, underpinned by new boutique brands and specialty food services.

“The vacancy rate for arcades and laneways in Sydney has declined from 3.2 per cent in July 2015 to 1.5 per cent in July 2016 … Melbourne’s fell from 1 per cent to 0.7 per cent over the same period,” Mr Whitby said.

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BlackWall boosted by WOTSO space

WOTSO offices at 55 Pyrmont Bridge Road, formerly the Fox Sports building. Photo: suppliedProperty group BlackWall has capped off another strong financial year, boosted by its office share business WOTSO. The company reported a 38 per cent increase in operating revenue and lifting its full-year dividend by 17 per cent to 3.5¢, fully franked. Net profit after tax was $2.9 million.
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BlackWall chief executive Stuart Brown said the company’s operations were split into three complementary segments. WOTSO WorkSpace, the collaborative workspace and serviced office business, was the engine, generating revenue of $3.4 million – up 80 per cent on 2015. Property services and funds management under BlackWall Property Funds lifted revenue 19 per cent to about $5 million, and investment activities helped grow BWF’s net tangible assets by 9 per cent to $18.7 million. Chifley expands.

Non-bank finance group Chifley Securities has posted record levels of lending for the 2015-16 financial year, lending more than $600 million to a range of investors, builders and property developers across Australia. Chifley Securities’ director Joe Morello said the 20-month-old group has $230 million in loans to projects in progress, with loans ranging from $1 million to $50 million in first mortgages, mezzanine, bridging and construction finance. Now with $1.1 billion worth of loan funding available, Chifley Securities is finding strong demand from commercial and residential property developers who do not fulfil the major banks’ new, tighter requirements of pre-sales and added security.

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Shopping malls morph into town centres

Aventus Retail Fund has expanded its Belrose Super Centre in Sydney to offer a range of new retail services. Photo: IICONICVanity, health and medical services are the new black in shopping centre tenancies, and are eclipsing sales contributions from traditional apparel stores for landlords.
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Nowadays, doing the banking, getting the teeth checked and updating mobile phones, followed by a mani/pedi and a well-earned coffee before heading to the movies, are what we do in a mall.

That’s not to say that buying apparel has disappeared as a pastime, but it has diminished and led those tenants to look at ways of enticing customers, mainly through more online connectivity.

The battle between the supermarkets is escalating and leading to price deflation but on the plus side has increased foot traffic and sales volumes in the stores.

Department stores have taken up the challenge of the inflow of international apparel and cosmetics brands – a staple of Myer and David Jones – by revamping their offerings with expanded food products in smaller sites.

Two of the larger shopping centre landlords, Vicinity Centres and Stockland, said malls are now seen as town centres for neighbourhoods and will continue to morph into that role.

Both groups reported their full-year results on Wednesday and said the way malls are used by customers has evolved and will continue to do so.

The use of technology will also play a larger part of mall life, with Vicinity Centres signing a $20 million connectivity project with Optus to build a single high-speed digital network with wi-fi capabilities, connecting all retail assets and corporate offices.

This trend has extended to large format retailers, with Aventus​ Retail Fund saying at its results that its centres are now offering cafes, childcare centres and other general retail services to entice customers to linger. The group reported a maiden funds from operations of $41 million, in line with its IPO forecasts.

In the year to June 30, Vicinity Centres reported a statutory net profit of $960.9 million and underlying earnings of $757.5 million, up 9.5 per cent, which was affected by one-off asset sales and other items.

The underlying earnings per security, of 19.1¢, was up 9 per cent, while the full-year distribution was 17.7¢, up 4.7 per cent on the previous year, which compared with an aggregate of Federation Centres and Novion Property Group for the 2015 year when the merger occurred.

Vicinity chief executive Angus McNaughton said the group had completed $1.2 billion of asset sales, worth about $350 million more to come, as part of its portfolio review.

The retail landlord, which owns the Chadstone shopping centre and Melbourne Emporium in Melbourne and the DFO Centre at Homebush in Sydney, said the development pipeline was $3.7 billion, which would roll out new-look shopping centres. He said the re-leasing spreads, between new and old leases, had moved back to positive territory.

Reflecting the demand of shoppers for a range of services at malls were specialty sales, where total centre sales’ moving annual turnover (MAT) grew at 2.1 per cent to June 30.

This was driven by specialty sales growth of an average 3 per cent. But of that, sales from general retail rose 5.7 per cent over the year. This was due to cosmetics retailers expanding and performing strongly and retail sales for pharmacies showing considerable improvement with continued focus on health and wellness.

The retail services tenants benefitted from the growth in hairdressing and beauty services, which pushed its sales contributions up 9.9 per cent over the year.

Stockland chief executive of commercial property John Schroder said for the year the MAT was up 4.6 per cent, with the technology categtory up 11.3 per cent.

“There are retailers in our portfolio that don’t report sales,” Mr Schroder said. “I characterise these as dental clinics, physiotherapists, doctors, financial sevices and other services that used to be on the high street, and they account for about 16 per cent of our portfolio of specialty shops.

“And they are becoming increasingly important, so as a result many of our centres are morphing into town centres.”

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The Obama years: The best of times to be a sharemarket investor

President Barack Obama hasn’t boasted much about the performance of the stock market during his time in office, but if he were inclined, he could do so with gusto.
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The facts are inescapable: The Obama years have been among the best of times to be a stock investor, going all the way back to the dawn of the 20th century.

Consider that had you been prescient enough to buy shares of a low-cost stock index fund on Obama’s first inauguration day, on January 20, 2009, you would now have tripled your money. Sharemarket performance of this level has rarely been surpassed.

Yet this performance has not been as widely celebrated or appreciated as past bull markets have been, nor is it a major issue in this year’s presidential campaigns. The main reason may simply be that the current bull market is suspect because it came after one of the worst declines in stock market history.

“Politicians almost seem embarrassed to talk about the stock market,” said Paul Hickey, co-founder of the Bespoke Investment Group. “It’s not a popular thing right now. But when you look at it, the record of the market under Obama is kind of incredible.” Investors were fleeing

Buying stock wasn’t the obvious thing to do when Obama took office. The United States was still in the grips of the most severe economic downturn since the Great Depression, and the Dow Jones industrial average had already declined 34 per cent over the previous 12 months – and it was still dropping.

People were fleeing the stock market. Many of them never returned and so never benefited from the last 7 1/2 years of rising asset prices. Federal Reserve data and Gallup poll data both indicate that direct and indirect stock ownership by US households is lower than it was at the beginning of Obama’s first term in office.

Wealthy people own stock, of course, but many people of more modest incomes do not. Unlike the days of the internet bubble in the late 1990s or the boom of the 1920s, when everybody seemed to be exchanging stock tips, the market these days is not terribly fashionable.

Yet the market performance record is first-rate.

I asked Hickey to run the historical numbers, and he found that since 1900, the Obama presidency has so far been the third best for sharemarket investors. Using the Dow Jones industrial average, market performance has been better only during the presidencies of Calvin Coolidge, a Republican, in the Roaring ’20s; and Bill Clinton, a Democrat, from 1993 to early 2001, years that encompassed the tech bubble.

The market under Obama has risen 11.8 per cent, on an annualised basis, without dividends. That compares with 25.5 per cent for Coolidge and 15.9 per cent for Clinton. It exceeds the Dow’s performance for everyone else, including three Republicans who were known for being pro-business and for tenures that coincided with strong stock markets: Ronald Reagan, with 11.3 per cent; Dwight D. Eisenhower, with 10.4 per cent; and George H.W. Bush, with 9.7 per cent. Democratic touch

It’s also noteworthy that since 1900, the market has performed better under Democrats, with a 6.7 per cent annualised gain for the Dow, compared with a 3 per cent gain under Republicans. Is it reasonable to conclude that Democratic presidents are better for stock investing than Republicans are? Probably not, especially with party alignments and policy positions in an extreme state of flux this year; even if this were true in the past, it may not be so in 2016 or in the future.

Furthermore, if the direct impact of presidential policy on the economy is debatable, the effects on the stock market are even less clear. It is certainly difficult to demonstrate a strong cause and effect. But Hickey gave it a try: “Democrats spread the money around more than Republicans do, stimulating consumer spending, which is good for the economy and for the stock market,” he said, but that this connection is hard to quantify conclusively.

That said, there are two obvious reasons for the market’s stellar performance in the Obama years.

One is simply that, from a stock market standpoint, Obama had fortuitous timing. The market and the economy were already in such bad shape by the time he arrived in office that any signs of recovery were likely to result in a market rebound. Stocks did relatively well during much of Franklin Delano Roosevelt’s tenure, for example, partly because they had done so badly during Herbert Hoover’s presidency at the start of the Great Depression. Enter the Fed

The second crucial factor is that the Federal Reserve, which the president does not control directly, embarked on an extraordinarily accommodative monetary policy, starting even before Obama took office. On December 16, 2008, for example, one month after the presidential election, the Fed brought short-term rates sharply lower, close to zero.

Fed interest rate policy may be the single most important factor behind the stock market boom. And even if Obama does not control the Fed, he did reappoint Ben Bernanke as Fed chairman in August 2009. In October 2013, the president appointed Janet Yellen as Bernanke’s successor. Under both, the Fed has held interest rates very low, which is helping to buoy the stock market and may be affecting the presidential election, as Ned Davis Research suggests in a recent note to clients.

The financial market research firm’s survey of presidential elections and the stock market since 1900 concludes that (even though voters tend to tire of two-term presidents and their political parties) the kind of market we’ve seen this year is, if anything, auspicious for the incumbent Democratic Party. “The stock market action so far this year is very much aligning up to support an incumbent party retaining the White House,” said Ed Clissold, chief US strategist for Ned Davis Research and a co-author of the note.

The economy, which isn’t strong, is at least not in recession, he said, and the Fed’s monetary policy is expansionary, while fiscal policy is looser than it was during Obama’s first term, which was bedeviled by the “fiscal cliff” budget impasse. He also cited this year’s stock market pattern, which includes a correction – a decline of a little more than 10 per cent – that ended in February, along with a smart recovery. All of that helps to tilt the odds in favour of an incumbent party victory, he said. A major market decline before the election could shift matters, however.

This kind of tea-leaf reading implies that the stock market is affecting the country’s mood and political alignment, even if it’s not being widely recognised. Investors may not give the president any credit for their portfolio returns. But the numbers are straightforward enough, and for those fortunate enough to hold stock, they are heartening: It’s been a splendid market.

The New York Times

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Mark Zuckerberg sells $125m in Facebook shares for philanthropy

Facebook chief executive Officer Mark Zuckerberg has just made his first big share sale to fund his family’s philanthropic initiative.
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The sale of more than 760,000 shares of Facebook stock, valued at about $US95 million ($125 million), was made by Chan Zuckerberg Initiative Holdings and the Chan Zuckerberg Foundation, according to a regulatory filing Friday.

It will be the first of many sales in Zuckerberg’s plan to fund solutions for problems in health, science and education.

In a widely publicised letter to his newborn daughter, Zuckerberg with his wife, Priscilla Chan, in December said they would give away 99 per cent of their fortune over the course of the rest of their lives. They said they were doing this to “further the mission of advancing human potential” and to promote “equality by means of philanthropic, public advocacy, and other activities for the public good”.

At the time, the December pledge was worth about $US45 billion. Since then, Facebook stock has gained more than 15 per cent.

The step had been widely interpreted as Zuckerberg and Chan pledging their fortune to charity, yet the pair also garnered criticism for not announcing the establishment of a nonprofit group or a charitable foundation.

Their project, called the Chan Zuckerberg Initiative, is structured as a limited liability company. That means that, unlike a traditional charitable or philanthropic foundation, it can make political donations, lobby lawmakers, invest in businesses and recoup any profits from those investments.

Philanthropic foundations such as the one set up by Microsoft co-founder Bill Gates typically support non-profit organisations, and they are required to pay out at least 5 per cent of their assets in grants each year, a restriction the Zuckerbergs will not face.

Bloomberg

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Supermarket meals for toddlers contain daily salt intake in single serve: study

Anita Stone is concerned about monitoring salt levels in her son Zac’s diet. Photo: Edwina Pickles Australian toddlers are consuming their recommended daily salt intake in just one sitting, a study has found.
Nanjing Night Net

Anita Stone encourages her son Zac, 3, to eat healthy snacks. Photo: Edwina Pickles

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Australian toddlers are consuming their recommended daily salt intake in just one meal, a review of supermarket pre-packaged meals has found.

Only Organic, Heinz and Annabel Karmel were among the brands of eight meal products assessed by advocacy group Parents’ Voice and nutritionist Dr Rosemary Stanton.

“The very idea that we have to have these special foods for kids is the main problem,” said Dr Stanton.

“Adding salt to products marketed to children is unwise and unnecessary.”

According to the Nutrient Reference Value for sodium consumption, Australian children aged one to three years are advised to have no more than 200-400 mg of salt per day.

The Parents’ Voice investigation highlighted Only Organic Vegetable Macaroni Cheese (273mg of sodium per serve), Annabel Karmel Cheesy Chicken & Pumpkin Risotto (230 mg), Heinz Little Kids Ravioli Bolognaise (220 mg) and Annabel Karmel Beautiful Bolognese Pasta Bake (202 mg), all of which have more than 200 mg of salt in one serve.

Other products included Only Organic Beef Bolognese Pasta (114 mg), Heinz Little Kids Savoury Rice and Beef (100 mg) and Heinz Little Kids Spaghetti Bolognaise (95 mg).

The product with the lowest sodium intake per serve was Rafferty’s Garden Moroccan Lamb, with 34 mg.

A spokeswoman for Rafferty’s Garden said the brand tried to ensure all added ingredients were low-sodium alternatives. In the case of the Moroccan Lamb meal, a low-sodium speciality baker’s yeast is used.

But Dr Stanton said the best parents could do was “not provide ready-prepared meals, give them what your family eats – there is no reason why you need any special baby food.”

For Anita Stone, mum of three-year-old Zac, pre-packaged supermarket meals presented a convenient option when Zac was aged one and two.

“He was a fussy eater and it was pureed, so it was easy to eat. But I was not aware some of them met close to the daily salt intake,” she said.

“I am concerned, because he has a natural affinity for salt, and we always make sure we don’t add salt to his cooked meals.”

Around 80 per cent of the salt consumed by Australians is already in foods when they are purchased, while the last national nutrition survey found 100 per cent of Australian children already have excess sodium in their diet.

The campaign manager for Parents’ Voice, Alice Pryor, said she was concerned that products such as the Annabel Karmel Beautiful Bolognese Pasta Bake and the Annabel Karmel Cheesy Chicken and Pumpkin Risotto “proudly proclaim ‘low in sodium’ on the front of the pack.”

Food Standards Australia New Zealand states that in order to advertise a product as having “low sodium”, it must have less than 120 mg of salt per 100 gram serve.While both products fall under the limit, at 110 mg and 115 mg, Ms Pryor said she still felt the claim was “misleading,” because the FSANZ guideline was written for an adult diet.

“The front of the boxes state they are for children aged one to four years. So it is clear they are not captured by that code,” Ms Pryor said.

A spokeswoman for Heinz said their products were considered “low in salt” as defined by the FSANZ code, and noted that the sodium profile of both meals was within the Nutrient Reference Values.

As a result of the investigation Parents’ Voice is calling on Only Organic, Heinz, and Annabel Karmel to “reformulate their products and ensure that their marketing claims were more closely matched to the reality”.

An Only Organic spokesman said their meals only contained a “very small amount of organic salt”, however the brand intended adjusting the sodium of both products in the near future.

Annabel Karmel was contacted for comment. Latest consumer news

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