Gold Coast industrial market is hot with the local investors and owner occupiers competing for property ranging from $200,000 to $6 million. Since January this year.
Colliers International industrial team has transacted in excess of $20 million worth of industrial property on the Gold Coast. In addition there is about $10 million worth of property currently under contract or under negotiation.
Pat Cavanagh, Director of Industrial at Colliers International said the properties in demand range from small 200sq m to large 25,000sq m facilities and are mostly attracting Gold Coast based owner occupiers and investors.
“Unlike 12 months ago, vendors in the current market are listing properties and getting desired outcomes as the buyer pool increases. An example of this is an industrial facility in Helensvale which recently sold at the Colliers International auction event for $530,000 with 7.9 per cent return and a four year lease term.
“Demand is also strong for large industrial holdings that are centrally located and offer future redevelopment potential. A current campaign for a 2.5 hectare site in Molendinar has attracted a range of buyers with more than five strong offers to purchase within weeks of marketing. One to two years ago it was difficult to find a buyer for an asset of this size.
“The subject property is located at 14 Enterprise Street and 5 Industrial Avenue in Molendinar and has been owned and occupied by Northstate Carpet Mills for 40 years. The property comprises five warehouses, totaling 7,000sq m under roof and over 25,000sq m of land. Northstate Carpet Mills may lease part of the property back and continue operating from one of the warehouses for a short period.
“The market has turned the corner since the last quarter of 2013 with Gold Coast experiencing a new wave of confidence, particularly since the federal election. In addition to this, the Gold Coast City Council has put initiatives in place in the last 12 months to kick start construction, fast track change of use applications and create economic benefits for businesses to attract them into the region.
“This along with stable low interest rate environment, significant infrastructure spending, improved tourism, foreign investment and development opportunities all have had a positive flow on effect on the industrial service and supplier industries.
“According to the latest Colliers International industrial research report “Investors Tighten Their Grip”, industrial property is currently the market leader amongst the commercial property asset classes from an investment perspective,” Mr Cavanagh said. “Analysis of IPD statistics show that over the past four years income has represented an average 86.3 per cent of industrial’s total return. This is markedly above the income return proportions for retail and office which for both is around 75 per cent.
“If income is the component of the total return that matters most to the investor, then industrial should clearly be the preferred property option,” said Mr Cavanagh.
“On the Gold Coast investors and developers are chasing passive industrial properties as well as redevelopment sites with upside, whilst owner occupiers are emerging as serious players again and will generally outbid investors. Of the $30 million worth of industrial properties sold or under contract by our office, over fifty percent has been to local owner occupiers.
“Some of the owner occupiers that have purchased recently are manufactures, storage businesses, and users from the recreational, distribution, auto and construction type industries.
“Gold Coast industrial hotspots are southern regions of Tweed, Burleigh Heads and Currumbin, central suburbs of Molendinar, Ashmore and Nerang and the northern suburbs of Arundel, Helensvale and Yatala.
"With little new development speculative stock on the market, most of the new development has come from owner occupiers in terms of specifically designed and constructed buildings to suit their individual needs. This activity has not been seen for quite a few years, so the outlook for the Gold Coast industrial market overall is a very positive one,” said Mr Cavanagh.