This article is from the Australian Property Journal archive
DEVELOPMENT site sales have propelled total commercial property transactions across the Gold Coast, up $135 million on last year, as the city undergoes a period of transformation amidst hosting the 2018 Commonwealth Games.
Ray White Commercial Gold Coast’s new Between the Lines report for the quarter shows almost 300 transactions generated total sales of $693.756 million in the first nine months of 2017, compared to $558.84 million from 105 deals in the same period last year.
Steven King of Ray White Commercial said the strong swing to development site deals has reshaped the Gold Coast commercial property market in 2017.
Development site account for almost one quarter of all sales this year, compared to just 6.10% last year, when hotel sales represented 34.34%.
Ray White Commercial head of research, Vanessa Rader, says the Gold Coast market has reflected strong demand in 2017 after a quiet start to the year as owners opted to retain assets.
“However, as the year has gone on, more owners have looked to cash in on the rapidly reducing yields resulting in more properties coming to market,” she said.
The September quarter alone saw $417.66 million of deals, with retail sales contributing $167.78 million and the office sector $144.03 million.
The total number for the quarter shows a 53.35% jump on the $272.03 million of Q3 2016, and the $153.21 million of 2015.
Key development site deals in the quarter included the $23.75 million sale of the 7,284 sqm Nobby’s Outlook site at 122-130 Marine Parade in Miami to a Melbourne buyer.
The property sold with the run-down 46-unit resort building that reportedly had a $4 million repair bill dating back to the 1970s.
The $7.8 million of transaction of the 617 sqm 3513 Main Beach Parade site in Main Beach reflected the highest land rate by some distance, at $12,642 per sqm.
The first half of 2017 was dominated by small industrial deals with an average price tag of less than $1 million, which King said highlighted the ongoing local private investor and owner-occupier demand in the market.
“Smaller retail holdings and strata office suites also were prominent in the investment pool at a price point which encouraged competition amongst buyers during this time of low interest rates, putting downward pressure on yields,” he said.
The assets remain in the market but account for a smaller proportion of sales due to the growing number of bigger deals, including large office buildings and retail centres.
King said the most significant transaction during this period has been The Brickworks in Southport, selling for $137.54 million on a reported yield of just 5.09% and showing how hotly contested larger assets are keeping yields low.
Mermaid Plaza in Mermaid Beach, at 2382 Gold Coast Highway, sold for $8.27 million in the period, at a 6.50% yield.
Rader said office property yields have ranged between 6.50% and 9.5%, highlighting the confidence in the location as buyers who may have been priced out of more prime locations move up the risk curve and consider the Gold Coast.
The biggest price tags in the sector over the quarter included $10.5 million for 68 Marine Parade in Southport, and the $5.4 million paid for the home of the Surfers Paradise police station at 89-93/20 The Esplanade.
The industrial sector was headlined by the $22 million sale of the cold storage facility at 84 Lahrs Road in Ormeau, tenanted by Scott’s Refrigerated Freightways, at an 8.10% yield to private syndicator OzProp.
Australian Property Journal
