Podcast
SCAN OR CLICK TO LISTEN TO THE INTERVIEW IN FULL
56 MINUTES
HUNTER HIGGINS & NICK WEDGE
With Rob Langton
COLLIERS BRISBANE
On today’s podcast we’ve got with us, Hunter Higgins and Nick Wedge from Colliers in Brisbane. Gentlemen, great to catch up and see you in person. As always, I thought we’d start with market sentiment. Take us through what you’re seeing here on the ground in Brisbane, perhaps starting with yourself, Hunter.
HH: We’re seeing some changes in the market with a lot of good opportunities still coming through. So for ourselves as a business, what we focus on is helping our vendors through this market cycle. NW: With interest rates and building costs going up we are seeing a flight to existing facilities and buildings that can be reworked or refurbish and turned into an investment opportunity. We are also seeing really good quality passive investments, with upside in other market sectors. So a good example, we took a refurbished asset to auction the other day in the sub $5 million range. We had 190 inquiries, 11 registered bidders with 24 bids - sold at $5 million on the dot, with a 4.4% yield. HH: So this indicates that there’s still strong investment appetite for a good quality product. Unfortunately, if doesn’t have a long lease term or it’s vacant is probably the trickiest at the moment. And that’s where we try to support vendors and help guide them on what they can do to add value on their assets. Who are you finding are the most active buy groups for some of those assets?. NW: Well in Brisbane, especially in the price point that we focus in - $5 to $30 million, has traditionally been led by the private market. In the last few years their competition had been the larger funds syndicates and real estate investment trusts, who are now very much on the sidelines, hamstrung by interest rates. So, now the private market have the opportunity to bid far more and are jumping up to that next price point for assets they traditionally wouldn’t be able to buy a couple of years ago. What are some of the asset classes that are most in demand? NW: The market wants safe, secure investment opportunities. We target heavily on private investments, anywhere from
phosphates in McDonnell G Calf Station, Red Rooster outlets right through to medical centres and service stations. Traditionally a lot of that stock has been south of $20 million and sub $10 million. So it’s right where the most active sector of the market is. Investors really have to look for opportunities where there is a value add play or maybe go regional, to get a better return. We were talking about rising interest rates earlier. What impact has that had on the market in Brisbane, do you think? HH: Currently, in inner city Brisbane, we’ve got buildings in the $5 to $30 million range. With interest rates increasing, prices have softened - there’s no way around it. They’re all getting solid inquiry, albeit less than last year, but we’re still getting multiple offers and multiple bidders at auction. There’s some price adjustment but we’re seeing values are holding up. NW: There’s definitely been a price softening, but with that is a real lack of supply to the market. So we’ve got a pent up demand with a lot of wider capital still sitting out there wanting to be placed. A influx of opportunity has really created demand and competition between purchases, which is helping hold prices, all things considered - very good deals being done at the moment, both on and off-market. I want to point out off market because we’re saying vendors read the press and feel that the market has softened significantly. It’s not the case for particular products. And that’s why we’re seeing this huge undercurrent of off-market opportunities because we’re taking these offers to vendors and saying, listen, the market is still very good for this dollar product and they’re generally buying short and essentially getting a deal. A great offer does take time, currently we are seeing an undercurrent of off-market activity. We tell vendors that if they
72 – August / September 2023
Powered by FlippingBook