Gold Coast’s commercial property market has had significant uplift in sales volumes in the past five years, with private local investors dominating the purchases, followed by owner occupiers.
According to Colliers International’s latest research, yields have also compressed during the five-year period, with strong demand expected to continue across the commercial property sectors until December 2018.
Colliers International Research Manager Helen Swanson said $225.85 million worth of sales were recorded 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,” she said.
“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.”
Colliers International Director in Charge Darrell Irwin said the best performing sector was industrial, with the sales volumes increasing by 50 per cent over the five-year period to $82.79 million.
“Driving this demand of late has been an upswing in the Gold Coast economy, especially the tourism and construction sectors,” he said.
“Other industries which are active in this market are automotive, health and medical, marine, and small to medium enterprises (SME’s).
“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.
“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,” he said.
Irwin believed strong tourism industry coupled with above average population growth rate and well performing residential sector over the last year helped support the Gold Coast’s retail investment market.
“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,” he said.
“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.”
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