Market Overview - QLD
QLD Market Overview from Team Grbcic Kollosche, Broadbeach QLD
Q. What are the key market trends occurring throughout 2021 in your region? A. There are several current trends in the commercial sector on the Gold Coast. Two key trends are: a. Development Site Appetite There is a huge demand from seasoned developers, new developers and interstate developers seeking to secure sites in beachside locations on the Gold Coast. With such a short supply of greenfield sites, the demand has shifted towards medium to high rise precincts that incorporate Broadbeach through to Coolangatta. This demand is driven by the shortage of unit supply and the increased uptake of new product. b. Investment Demand With such a strong performing residential market, we are finding that there is an increased demand for quality investment properties with multiple tenancies. Investors who are either sitting on cash reserves from the sale of their properties or those who have a high level of equity are turning away from the residential market and looking for quality commercial investment opportunities. Q. What have been the fundamental drivers of demand amongst buyers? 1. Investors sitting on cash reserves from the sale of residential properties or having access to equity which has broken the barrier to entry for commercial real estate. 2. Interstate investors are seeing value in the Gold Coast for three reasons: - Value in yields as other capital cities have had their yields compressed significantly lower than what can be achieved on the Gold Coast. - Gold Coast (and Queensland) has not been impacted as much as other capital cities and states in relation to lockdowns and restricted trading. Therefore, in terms of tenant viability and strength, Gold Coast offers a higher level of security for investors. - Frustration in the residential market pushes investors to look at commercial as a more sensible option. Q. Reflecting on recent transactions, what has been the profile of buyers and has this shifted from previous years? A. Greater demand from interstate investors and these investors are far more aggressive in their purchase than previously. B. Buyer expectations have shifted, the expectation for yields has shifted by 1 - 1.5 percent. Q. What types of assets are most in-demand given the current environment? A. Development Sites on the eastern side of the Gold Coast Highway, between Broadbeach and Coolangatta. B. Freehold investment properties with either one or multiple tenancies.
C. Childcare is becoming more and more sought after, however with such limited supply there are not many transactions.
Q. Howwould evaluate the impact of the past eighteen months in your local market? A. There was a short term slow down at the start of covid, however since then confidence is probably at the highest point experienced in this property cycle. Retail still has some hesitancies in particular suburbs where the retailers rely on tourism. However overall yields have compressed, industrial rates have increased by 10-15 percent and buyer appetite is at an all-time high in our opinion. Q. What are your expectations for the commercial property market over the next twelve months? A. To continue to strengthen once interstate travel reopens. Q. Talk us through the most significant deals you have transacted thus far in 2021. Lot 917 – The Lanes, MermaidWaters. A 14,170m2 site which was sold by the Sunland Group. One of very few greenfield sites on the Gold Coast, which attracted a large volume of interest nationally. After a six-week EOI campaign, we sold the property unconditionally for $16,000,000 to a local developer. We subsequently took lot 909 and 915 to market on a compressed EOI campaign which again attracted interest nationally and from the existing database of the previous campaign and sold that, unconditionally, for $32,250,000 to a local investment consortium. Other Key development sites sales which were sold at Auction include: - 37 Marine Parade, Redcliffe - $3,200,000 - 1 & 11 Lalina Avenue, Tweed Heads - $3,200,000 - 2-4 Geoff Wolter Drive, Molendinar - $2,300,000 - 2 River Terrace, Tweed Heads - $3,150,000 - 39 McLean Street, Coolangatta - $3,200,000 - Lot 8000, The Heights, Pimpama - $1,818,000 The campaign which attracted the highest volume of interest this year was The Beach House in Ballina. We ran a five-week EOI campaign and received over 200 enquiries, undertook 50 inspections and at the close of the EOI had six offers which after two rounds of offers, we sold for $7,100,000. The other notable industrial or investment sales include: - 26 Brendan Drive, Nerang - $1,250,000 - 14 Olympic Court, Nerang - $1,950,000 - 15 Olympic Circuit, Southport - $1,895,000 - 47 Watts Drive, Varsity Lakes - $3,900,000
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