Canberra's secondary locations provide good entry level into retail: HTW
Buyers wanting to a toehold in Canberra's retail market have the choice of the primary locations of Canberra City, Braddon and Kingston Foreshore, as well as the secondary locations of Woden, Belconnen and Gungahlin, according to valuation firm Herron Todd White.
Entry to the lower end of the primary locations ranges from $5,500 to $7,500 per sqm for ground floor bare space in a modern building. Waterfront locations are fetching prime rates of up to $10,000 per sqm due to the preference for water views over standard street frontage. Yields for good quality accommodation in primary locations range from 5.5% to 7.25%, said HTW.
"The typical property would be a unit (strata title) in a complex comprising 50 to 150 square metres within a mixed use commercial and residential development. It would include good exposure to passing traffic and a mix of tenancy occupants such as restaurants, individual clothing retailers and boutique outlets, accompanied by an office and residential component on the upper levels," HTW said in its June update on the retail market.
Secondary locations such as Woden and Belconnen are more accessible at the lower end of the market, it said.
A number of new mixed-use developments are providing modern space at ground floor level which is more affordable than primary location equivalents. These include developments such as Mystere at Macquarie and Altitude, Northpoint Place, Belconnen. Market entry prices range from $2,000 per square metre to $7,500 per square metre for a 92 sqm unit with a 10-year lease in an established centre.
Property Observer found a few properties for lease in Belconnen and Macquarie.
An office space is available for lease at 10 Lathlain Street, Belconnen for $63,700 p. a. excluding GST.
A retail centre at 3-9 Bowman Street, Macquarie is available for rent at $102,000 p.a. excluding GST. It is a two-level office/retail building with floor area of 255 sqm.
Yields achieved for secondary commercial properties range from 6% to 10% and reflect the strength of the lease covenant nature, age of the improvements and the type of purchaser investor or owner-occupier. The lower price sector is stable at present with demand coming from self managed superannuation funds and owner-occupiers. The market appears to be securing long term potential over the initial yield.
The population growth in the northern suburbs of Canberra and densification of the inner city is seeing demand for this property type grow as people enjoy the convenience of accessible local goods and services. Both primary and secondary locations are offering this type of property and continue to evolve.
"We are seeing the emergence of Melbourne-style laneway occupants providing interesting and point of difference uses that were previously unavailable to retail uses. An example is No Name Lane in the city opposite Hobart Place which provides a vehicle-free pedestrian zone, allowing a pleasant alternative to the typical corner shop or shopping centre space situated between two buildings."
The secondary locations are providing opportunities for purchasers to acquire property in the lower price sector at an entry level that is similar to that in prime locations, yet more affordable.