Melbourne investors eye off regional Queensland commercial property
Better Loan Solutions in Mornington Peninsula • Learning Centre • Insights
Better Loan Solutions in Mornington Peninsula • Learning Centre • Insights
The commercial property market in regional Queensland is experiencing a surge of interest from Melbourne investors, as the state's booming
population continues to grow.
According to Raine & Horne, Queensland property is becoming more attractive due to factors such as demographic shifts, economic
dynamics, an upsurge in tourism and market forces.
The Gold Coast in particular has experienced a large transformation, with the return of tourism to the region sparking new interest in the
local retail sector. With long-standing vacant shops now finding tenants, retail vacancies have dropped below 5% and yields are ranging
between 5% and 6%.
Raine & Horne also said the industrial market on the Gold Coast remains robust, especially in smaller strata-owned developments which
are witnessing high demand for both sales and leasing. They said that older industrial showrooms are undergoing facelifts to align with
current trends, leading to higher annual rents. Notably, despite interest rate hikes, sales yields have remained unaffected.
In contrast, the Townsville retail sector has experienced some challenges, with many retailers downsizing or closing due to tightening
household budgets and interest rate increases.
Furthermore, the ongoing effects of the COVID-19 pandemic have contributed to population growth on the Sunshine Coast, with around 47,000
individuals migrating to the region.
This population influx has led to some big jumps in sales prices for commercial assets, highlighted by the increase in industrial unit
prices, where recent units were sold for $4,000 to $6,000 per square metre, up from $3,100 per square metre in previous transactions.
Notably, Melbourne investors are looking beyond their own city to the flourishing regional markets of Queensland. Raine & Horne said
that changes in retail leasing legislation in Victoria have encouraged investors to explore commercial property opportunities in the region.
One instance is Hervey Bay, with the market witnessing an influx of interest. Retail yields are ranging between 7.5% and 8%, vacancies at
approximately 5%, and rents falling within the $250 to $300 per square metre range.
Mackay is also experiencing a rise in the value of second-hand buildings, primarily due to the escalating costs of construction. Soaring
construction expenses have made new developments less feasible and as a result, the gap between new and second-hand commercial properties
has narrowed, with the latter gaining value due to easier refurbishment and immediate usability.
Industrial rents in Mackay currently range between $165 and $185 per square metre, with yields between 7.5% and 8%.
Ultimately, whether to invest in commercial or residential isn’t mutually exclusive.
A balanced property portfolio of both residential and commercial will depend on
your investment journey and goals. We can help with your lending needs.
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