New options for Toowoomba local diners while retail market in Gladstone remains steady: HTW
The expansion and redevelopment of Grand Central Shopping Centre in Toowoomba continues with stage one now complete and the balance of the project expected to be completed in early 2017, according to Herron Todd White’s (HTW) latest report.
The property advisory firm says that centre management has been aggressive in leasing the new specialty shops, concentrating mostly on national quality retailers.
The majority of recent leasing activity within the Toowoomba CBD has been to cafés, bars and restaurants.
The majority of these operators are new to Toowoomba, resulting in a strong influx of new options for local diners.
Retail rents in general have remained relatively static although market leading rents are often achieved for new developments.
The historically low interest rates have resulted in strong demand from investors for retail properties, however the lack of supply of quality, fully leased properties has limited the number of investment sales and has resulted in a firming of net yields over the past two years.
Recent retail investment sales in Toowoomba include:
- 3/879 Ruthven Street, Kearneys Spring – Modern retail building with two tenancies leased to an Indian restaurant and a convenience store. Weighted average lease expiry (WALE) of 3.15 years. Sale reflected a passing net yield of 7.28% and analysed net yield of 8.25%. Sale price of $580,000.
- 283 Ruthven Street, Harlaxton - Semi-modern retail centre leased to Red Rooster and a Foodworks supermarket. WALE of 2.83 years. Sale reflected a net yield of 7.8%. Sale price of $1.575 million.
- 330 Stenner Street, Kearneys Spring – Restaurant leased to local Pizza Hut franchisee. WALE of 8.56 years. Sale reflected a net yield of 5.82%. Sale price of $1.85 million.
The retail market in Gladstone has continued at a similar pace to most of 2015 and the beginning of 2016, with increasing vacancies in secondary locations, and reductions in rental levels.
Well anchored centres with good location, access and exposure appear to be maintaining occupancies, however centres in secondary locations or with no significant anchor tenant appear to be bearing the brunt of current market conditions.
"Sales activity has been low, with no known notable retail sales during 2016," HTW noted.
The market is currently dominated by owner-occupiers who are taking advantage of the weaker market conditions and low interest rates.
The development site on the corner of Boles and Breslin Streets generated a fair amount of talk and media when it was purchased by Aldi Foods Pty Ltd in January.
Construction is now well underway and the completion date is speculated to be toward the end of 2016.
The development of a multi-million dollar Coles anchored shopping centre, opposite the existing Woolworths centre on Dixon Drive, continues to remain at the forefront of discussion as Coles continues to challenge the decisions made by Gladstone Regional Council.
"The latest reported update is that the fourth development approval to be submitted (subdividing the site into four lots) has been approved, yet with many conditions that Coles is reportedly set to challenge," it noted.
