Hotel Investment and Development State of Play Survey Australia 2022

Hotel Investment and Development State of Play Survey Australia 2022

Hotel Investment and Development State of Play Survey Australia 2022

Hospitality advisory group Minett Prime Square and law firm Keighran Legal + Advisory have partnered to benchmark the state of play within the hotel investment and development industry.

We are inviting industry to participate in a survey. Anonymised, aggregated results and key insights will be shared with the industry. The survey will help you:

  • Discover the short to medium term market sentiment in the hotel development and investment space in Australia; and
  • Gain an overview of the perceived economic and social indicators which will influence how the market performs.

Property developers, institutional investors, hotel operators and real estate private equity groups are in an ideal position to provide an insight to help shape the industry’s understanding as the market evolves further. Your participation will support the development of valuable industry knowledge.

To participate in the survey, please follow the link below. Survey closes Wednesday 1st June.

We look forward to reviewing the results and sharing them with you.

Take survey here:

https://bit.ly/mpshotelsurvey

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Landlords and Tenants: At what stage do lease documents become binding?

Landlords and Tenants: At what stage do lease documents become binding?

Landlords and Tenants: At what stage do lease documents become binding?

Published: 29 November 2021

Written by: Duane Keighran and Sara Ibrahim

The case of Thorn Australia Pty Ltd v Centuria Property Funds Ltd [2021] NSWSC 1217 considers whether provisions of a signed lease and incentive deed which were signed by the tenant and delivered to the landlord could amount to the tenant (Thorn) being immediately bound by the deeds. Due to Covid-19 lockdown restrictions, the landlord (Centuria) was unable to complete execution of the documents in a timely manner after the tenant had delivered its signed copies. It was during this period of inaction by the landlord that Thorn withdrew from the transaction. Thorn contended that it did not intend to be immediately bound on delivery of the signed deeds.

 

How did this issue arise?

In April 2021, both parties had entered into a heads of agreement which was prepared by Centuria (as landlord). Within the heads of the agreement, the following relevant provisions were set out:

“The information contained in this proposal is not a binding lease between the prospective Lessee and the Lessor and is subject to final Lessor and Lessee board approval.
The Lessee and the Lessor reserve the right to withdraw from and terminate negotiations at any time prior to execution of formal Lease documents by both the Lessee and the Lessor. The Lessor’s rights in respect of the deposit and legal costs remain irrespective of approval.”
In early May the draft transaction documents (comprising an incentive deed and a lease) were sent to Thorn’s lawyers. Following negotiations between the parties, Thorn signed the incentive deed and lease. The next day, Thorn’s lawyers again sent two signed copies of the lease and one signed copy of the incentive deed. Attached with the signed documents was a cover letter which referred to “formalising the arrangements”. Under this agreement, Thorn proposed arrangements which would include Centuria sending Thorn a scanned copy of the documents signed by Centura as landlord, and if the tenant was satisfied at that point, they would authorise Centuria to exchange and date the incentive deed and date the lease.

Centuria did not agree to these conditions. Following subsequent discussion, the parties agreed that Centuria would arrange execution of both counterparts and then would arrange registration of the lease, and upon completion, documents would be sent to Thorn. This meant there would be no exchange of counterparts.

As requested by Centuria, Thorn provided another signed incentive deed, attached with the required bank guarantee provided as security for Thorn’s obligations under the lease and incentive deed. However, Centuria could not promptly proceed with its execution due to COVID-19 lockdown restrictions. Consequently, Thorn decided to withdraw.

Centuria argued against Thorn’s withdrawal, stating they were bound by the terms of the lease and incentive deed as signed and delivered by Thorn.

 

What did the court decide?

The critical question for the Court to decide was to determine was whether the tenant had displayed an intention to be bound immediately on execution and delivery of the deeds.

Presiding Judge, Darke J determined Thorn did not intend to be immediately bound on delivery of the deeds. Darke reached this conclusion for various reasons. Most importantly, he noted:

Under the heads of agreement, both parties had a specific right to leave the negotiations at any time until any formal documents had been signed.
An intention for Thorn to be immediately bound was not evidenced by simply signing the deeds and sending them electronically prior to the submission of the original signed documents.
When Thorn had submitted the original documents with only one signed copy of the incentive deed it was believed that Thorn was intending that the exchange of the incentive deed would be the first act giving rise to legal rights and obligations. Thorn did not intend to become bound by the Lease (even conditionally) before being bound by the Incentive Deed. In addition, the submission of a second incentive deed was merely procedural and did not manifest this intention to be bound.
This case follows a similar judgement to the case of Pittmore Pty Ltd v Chan [2020] NSWCA 344, and also reconsiders principles found in Realm Resources v Aurora Place Investments [2019] NSSWC 379. Where an intention to be bound exists, a party will be bound by the deeds on delivery. This will be the case regardless of whether a deed is delivered unconditionally or delivered to be held in escrow.

 

Key point to note

Ultimately, physical delivery of signed deeds does not alone evidence an intention to be immediately bound. The words, conduct and facts surrounding the execution are required to be examined to ascertain a party’s intention.

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Deal Announcement: The delivery and handover of social and affordable housing rental dwellings

Deal Announcement: The delivery and handover of social and affordable housing rental dwellings

Deal Announcement: The delivery and handover of social and affordable housing rental dwellings

Developed by Traders In Purple, in partnership with Housing Trust, the project delivered much needed social and affordable housing rental units to the community in Corrimal as part of NSW Land and Housing Corporation‘s Communities Plus Scheme. A fullfilling project for the team at Keighran Legal + Advisory to be involved with, led by Duane Keighran and John Momitsas. We applaud the committment of the project partners in tackling the housing crisis in these areas.

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Deal Announcement: AVARI Capital Partners successful purchase of 10 Hobart Place, Canberra.

Deal Announcement: AVARI Capital Partners successful purchase of 10 Hobart Place, Canberra.

Deal Announcement: AVARI Capital Partners successful purchase of 10 Hobart Place, Canberra.

A prominent core CBD building with over 4,500m of NLA, the building provides a significant opportunity for value add, whilst returning an impressive yield in the meantime.

Our Real Estate team led by Duane Keighran and John Momitsas (assisted by Sara Ibrahim) worked collaboratively with other deal advisors to ensure the completion occurred smoothly, during both NSW and ACT lockdowns. Thank you for entrusting Keighran Legal + Advisory with this transaction and congratulations to the vendor, and all other deal advisors.

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Deal Announcement: Brisbane’s first Mövenpick Hotel

Deal Announcement: Brisbane’s first Mövenpick Hotel

Deal Announcement: Brisbane’s first Mövenpick Hotel

Developed by Keylin as part of the prestigious ORIA Spring Hill development, the Hotel is due to open in 2024.

Our Hotels team of Duane Keighran, Georgia Carter and Sara Ibrahim were pleased to assist Keylin in bringing this new brand to Brisbane, working alongside Arnaud Millecamps and Minett Prime Square.

We congratulate Managing Director Louis Cheung, Brett Forer and all involved.

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Building the presence of Aboriginal and Torres Strait Islander lawyers in the corporate world

Building the presence of Aboriginal and Torres Strait Islander lawyers in the corporate world

Building the presence of Aboriginal and Torres Strait Islander lawyers in the corporate world

From National Indigenous Times

Deputy Editor Rachael Knowles of National Indigenous Times sat down (virtually) with our Managing Director Duane Keighran to discuss the collective vision for our firm.

“With an impressive career under his belt, Keighran believes it all comes down to community and ensuring that young Indigenous lawyers know they have a place at the corporate table.”
“We want to do the top tier stuff for government, corporates and Indigenous businesses”. Full article below.

National Indigenous Times

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