Gold Coast commercial property sales up by 43 percent: Colliers

Gold Coast commercial property sales up by 43 percent: Colliers
Gold Coast commercial property sales up by 43 percent: Colliers

Commercial property sales volumes in Gold Coast for assets valued from $2 million to $10 million have increased in comparison to five years ago, with private local investors dominating the purchases, followed by owner occupiers, says Colliers International.

Yields have also compressed during the five-year period, and Colliers expects continued strong demand across the commercial property sectors until December 2018.

The real estate firm said it had recorded $225.85 million worth of sales across office, retail and industrial sectors for 2016/17, a 43 per cent increase from 2011/12.

“The total dollar volume of transactions increased across the retail and industrial sectors whilst the office sector was slightly lower than 2011/12, due to lack of stock on hand rather than slowing demand,” said Helen Swanson, research manager at Colliers International.

“There is currently fierce competition from privates, self-managed super funds and syndicates for all forms of commercial assets that are strategically located and offer a positive cash flow.” 

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 Gold Coast commercial property sales up by 43 percent: Colliers

Click to enlarge

Gold Coast commercial property sales up by 43 percent: Colliers

Industrial was the best performing sector, with the sales volumes increasing by 50 per cent over the five-year period to $82.79 million, according to Darrell Irwin, director in charge at Colliers International on the Gold Coast. 

“Driving this demand of late has been an upswing in the Gold Coast economy, especially the tourism and construction sectors. Other industries which are active in this market are automotive, health and medical, marine, and small to medium enterprises (SME’s),” said Irwin.

“The Gold Coast has the highest number of SME’s per head of capita Australia-wide. It is easy to see how this flows onto the heightened demand for industrial property from all buyer groups, particularly from owner occupiers who are generally willing to pay a premium.”

The retail sector was the second best performing sector with sales volumes increasing by 41.8 per cent to $75.448 million over the five-year period. Equivalently, retail warehouses also increased in sales from $6.5 million to $36.3 million over the same period, Colliers said in its research report.

“Strong tourism industry coupled with above average population growth rate and well performing residential sector over the last year has helped support the retail investment market on the Gold Coast,” added Irwin.

The limited stock in the office sector over the years meant the sales volumes were slightly down but the level of competition remained fierce, he said.

“Because of the pent-up demand and lack of supply, yields for office assets have compressed significantly since 2011/12 to sit at an average of 7.5 per cent. 

“The interest in office investments on the Gold Coast is likely to continue considering the positive net absorption rates, strengthening of the rental market and a slight easing in incentives,” Irwin said.

Tags: 
Gold Coast Commercial Property

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