Sunshine Coast's retail market has strong appetite for sub-$2 million properties: HTW

Sunshine Coast's retail market has strong appetite for sub-$2 million properties: HTW
Sunshine Coast's retail market has strong appetite for sub-$2 million properties: HTW

The 2017 retail market on the Sunshine Coast will likely continue in the same vein as the past six months, according to Herron Todd White’s recent report.

The property valuation firm says that the following things will most likely occur:

  • Demand for sub $2 million well leased retail properties is likely to remain strong.
  • Supply of these properties should remain tight with owners having few reasons to sell.
  • Demand for properties over this level are highly dependant upon tenant strength, however we are seeing transactions occur for older premises with either redevelopment potential or the potential to refurbish and re-let.
  • Vacancy levels in the prime locations of Hastings Street, Mooloolaba Esplanade, Cotton Tree and David Low Way, Coolum Beach are expected to remain tight. Rental rates in these areas may experience upward pressure.
  • Within the bulky goods market, vacancy levels are decreasing after significant supply added during 2015 and 2016.

Recent transactions in the market include:

  1. Tewantin Woolworths for $17.3 million at a yield of 5.76% in November 2016.
  2. Subway Maroochydore for $1.46 million at a yield of 5.63% in November 2016.
  3. Retail Strata, Mooloolaba Esplanade at $1.55 million, yield of 7.41%, transacted December 2016.
  4. Bulky Goods Strata, Noosaville for $4.2 million, yields 7.32%, deal struck November 2016.

The Point, Buddina is a 2,500 square metre retail development comprising 15 tenancies ranging in size from 12 square metres to 680 square metres.

Asking rentals range from $450 to $1,800 per square metre net per annum. Construction has commenced with some pre-leasing commitments achieved.

"The only caution in the market remains that as yields compress, whether there is a big enough yield differentiation between primary and secondary assets," the report said.

The retail sector in Gladstone for 2017 is forecast to continue at a similar pace to 2016, with rationalisation of rentals to more affordable and maintainable levels for local retailers and continued high vacancy levels in secondary locations.

“We do not consider this is likely to change pace until there is commencement of substantial new local projects,” the report stated.

Whilst there is still no announced start date for the Stockland redevelopment (approved in 2014), some positive news to the retail sector is the opening of the new Aldi store on the corner of Boles Street and Breslin Street.

The store is set to open in early March. Property sales activity is likely to remain slow.

Tags: 
Sunshine Coast Htw

Comments

Be the first one to comment on this article
What would you like to say about this project?