This article is from the Australian Property Journal archive
Commercial property prices have continued to grow in the first quarter of 2006, according to the Colliers International Townsville Commercial Property Q1 2006 report.
According to the report, the median price paid for commercial property in the first quarter 2006 for the twin cities was $660,000, an annual increase of 73.1%.
Meanwhile, the median price paid for commercial property in the twin cities increased by 27.6% over the last quarter.
“If we combine this with average net rental returns of 7%, annual median commercial property gains are 80.1%,” Colliers International director of research Colin Dwyer said.
According to the report, averaged 16 sales per month in Q1 2006, compared to 12 for the previous quarter
Dwyer said the quarter has been fuelled by the construction industry, in particular contractors and suppliers securing warehouse and yard facilities to store materials, demand from external investors and sea changers interested in tourism facilities.
“Underpinning this confidence in the Townsville market is the broad economic base and therefore reduced associated risks and continued population growth.
“This extraordinary result shows the willingness of the market to pay higher prices, especially for top quality properties,” he added.
According to filtered QueenslandDepartment of Natural Resources & Mine’s data, Q1 2006 Townsville market had 47 Industrial &Commercial property sales, 31 were from localpurchasers and 16 were from outside the region.
Localpurchasers invested $20.3 million and external purchasersinvested $30 million into Townsville industrial and commercialproperty.
In the Top 18 sales, there were five sales above $2 million, for Tourism and Accommodation facilities and Professional Offices, two sales in the $1.5 million to $2 million bracket for a Motel and a Warehouse and 11 sales occurred in the $1 million to $1.5 million bracket, shared by Land, Tourism Facilities, Shops Warehouses and Professional Offices.
Dwyer said industrial and commercial land supply continues to remain an issue in the local market.
“Looking further ahead we expect shortages in supply of quality commercial premises especially in light industrial, warehouses, transport terminals and industrial Land.
“The next quarter should see continued strong demand for industrial properties including land and warehouses,” he added.
The Townsville commercial property market is forecast to achieve around 49 sales in total for the months of April, May and June 2006 and produce around $52 million in sales.
He added that economic factors such as population growth, employment conditions and skills shortages and interest rates remain the keys for the Townsville market.
“Longer term we need to consider our output of valuable university trained graduates and seek a balance between skills training and graduates.
“While they continue to be favourable and Townsville’s ability to attract developments continues, our market will be buoyant,” Dwyer said.
According to ABS, population growth is strong in Townsville, increasing from 1.9% in 2004-05 to 3% in 2005-06.
“The May 06 interest rate increase of .25 of 1% could discourage some investors from the market, but there remains good demand from the private sector for quality industrial and commercial premises,” he concluded.
By Nelson Yap
