Australian bushfires hit businesses

A dog sits among ash from bushfires in Merimbula. The fires have ripped through more than 6 million hectares of land in Australia’s NSW and Victoria. (AFP)
Short Url
Updated 07 January 2020

Australian bushfires hit businesses

  • In Victoria, fires are expected to have killed large numbers of livestock, gutting a A$3.3 billion industry

SYDNEY: As Australia’s deadly bushfires rage, many companies are reporting hits to business with resorts shutting their doors, cheesemakers struggling to secure milk supplies and insurance claims on the rise.

As many as 5,850 fire-related insurance claims have been lodged since early November with insured losses estimated at A$375 million, according to the Insurance Council of Australia (ICA). However, with conditions still too dangerous in many areas, the full cost of the disaster is not expected to be known for several weeks.

The fires have ripped through more than 6 million hectares of land in the two most populous states of New South Wales (NSW) and Victoria, killing 24 people so far, razing thousands of buildings and leaving some towns without electricity and mobile coverage.

Aspen Group, which owns tourist parks in idyllic beach towns like Tomakin on the NSW south coast, said on Monday it has turned away holidaymakers from its rentals as a result of the fires and expects a hit of at least A$500,000 to its revenue.

“Fire activity along the NSW south coast has been catastrophic with significant loss of life, housing and infrastructure,” Aspen said in a statement.

“Tourists and residents have been asked to leave the region. It is not known when trading conditions will return to normal,” it said, although none of its properties have been affected by the fires.

Bega Cheese, which operates two sites the NSW district it is named after, said its employees and dairy suppliers had been affected by the bushfires, sending its shares sinking nearly 9 percent on Monday.

In Victoria, which accounts for one-third of Australia’s milk production, fires are expected to have killed large numbers of livestock, gutting a A$3.3 billion industry.

Vitalharvest Freehold Trust, which leases farms to Australia’s largest listed fruit and vegetables grower Costa Group, said the fires had damaged a packing shed, including equipment and vehicles at one of its berry farms.

The farm comprises about 6 percent of Vitalharvest’s berry plantings, it said, adding a full assessment was yet to be carried out.

Kangaroo Island Plantation Timbers requested a trading halt on the stock exchange until Tuesday, pending an announcement on the “current fire situation.”

Kangaroo Island is a popular holiday spot in South Australia where two people died as dangerous fires burned over the weekend.

Last week, Insurance Australia Group said it expected to pay roughly A$400 million in natural peril claims for the six months to Dec. 31. That is more than half of its A$641 million natural peril allowance for the fiscal year.

Rival Suncorp said it had received more than 1,500 claims since the fires began in November. “However, the full impact will not be known for several weeks until areas are safe to access.”

Dubai rents may be bottoming out as ‘green shoots’ appear

Updated 20 January 2020

Dubai rents may be bottoming out as ‘green shoots’ appear

  • An estimated 45,000 homes were completed in Dubai in 2019 according to Chesterton estimates

LONDON: Confidence may be returning to Dubai property despite a bloated market for off-plan homes, according to a report from Chestertons, the real estate broker.

Although apartment and villa sales prices were down 2 percent and 3 percent respectively in the fourth quarter of 2019 compared to the previous quarter, rental rates are stabilizing.

But supply issues continue to represent the biggest challenge facing the market, with 45,000 new units completed in 2019 and that expected to double this year.

“The Dubai residential market in Q4 2019 is alluding to a more positive outlook for 2020 thanks to the slowdown of sales price declines and the leveling of rental rates,” said Chris Hobden, of Chestertons MENA. “This does, however, have to be tempered by the volume of new units scheduled for delivery in 2020, which makes the short-term recovery of prices in the emirate unlikely.”

In the rental market, no movement was witnessed in the fourth quarter with the market supported by a draft law which would fix rental rates for three years upon the signing of a contract. 

“To ensure high occupancy in 2020, landlords will have to be realistic in the face of tough market conditions. The incentives previously offered to tenants, such as rent-free periods, multiple cheques and short-term leases, will continue, with an increase in tenant demand for monthly direct debit payments also likely” added Hobden.