Central Coast industrial is hot with Sydney buyers

September, 2017 by

In a sign of the times, two affordable industrial warehouses located at West Gosford on the Central Coast of NSW have been snapped up by Sydney buyers.

The first warehouse located at 5/13 Dell Road, West Gosford sold in less than 2 weeks for $450,000 to a Sydney businessman, who is seeking to expand his operation to the Central Coast. “There was so much demand for the warehouse that we contacted the owner of nearby 2/13 Dell Road, West Gosford, who sold his warehouse for $490,000 to a Sydney investor,” said Andrew Dunn, Commercial Sales & Leasing Executive, Raine & Horne Commercial Erina. The properties were sold by Andrew’s colleague Ben Purdue.

The industrial warehouse at 2/13 Dell Road, West Gosford last sold for $355,000 in 2013. “This is great growth for industrial property on the Central Coast,” said Andrew. “The dollar per square metre rate for leased space hasn’t moved much in 4 years. This result reflects the fact that the risk appetite of many buyers is lower, given the poor returns of other asset classes. The yield for 2/13 Dell Road is 6.28%, which is much better than cash in bank, noted Andrew.

Newcastle industrial vacancies fall to lowest levels in 4 years

September, 2017 by

The latest Raine & Horne Commercial Industrial Average Index has revealed industrial vacancies in the Newcastle region of NSW fell 1% between January and July 2017.

The Raine & Horne Commercial Industrial Average Index measures the vacancy rates of major industrial centres in Newcastle and the Lower Hunter, and was launched in 2011. The reduction in industrial vacancies is a result of the leasing, or sale, of 30,000 square metres of floor space since the beginning of 2017, noted Steve Dick, Director, Raine & Horne Commercial Newcastle, the architect of the index.

“The average has fallen to its lowest level since January 2013, just before the commodities market collapsed. Low industrial vacancy rates correlate to more industrial sector jobs in the region, which is good news for NSW’s second biggest city,” he said.

Industrial vacancies fell most significantly in Carrington, with the rate slashed from 15.3% in January to 3.8% in July. The other big improver was Mayfield West, where industrial vacancy rates dropped from 11.2% – 3.2%.

“The reduction in Mayfield West can be attributed to the leasing of some of the suburb’s biggest buildings, together with the occupation of space in several older buildings on Tourle Street near the old Sandvik Building. These vacancies have been filled with an assortment of tenants,” said Steve.

Raine & Horne Commercial WA is now the biggest industrial land selling agency in the west

September, 2017 by

Raine & Horne Commercial WA is now the biggest industrial land selling agency in Western Australia and it represents three active industrial estates in the inner Perth metropolitan area.

“These estates include the Swan Brewery Estate in Canning Vale, the Tonkin Highway Industrial Estate in Bayswater and the Northern Industrial Park in Wangara,” said Anthony Vulinovich, Director Raine & Horne Commercial WA.

“We have sold pre-title over $40 million of land in the Tonkin Highway Industrial Estate, Perth, which is the city’s latest inner metropolitan industrial opportunity,” said Anthony. “Land parcels range from 1,100 – 15,000 square metres and titles expected in Stage 1 in early 2018.

“The estate sales reflect the strength of Perth’s industrial base, the unique locations of the three estates and the quality of the product.”

Other significant sales in the last 12 months for Raine & Horne Commercial WA include a 35,500 square metre industrial site at 10 Craft Street, Canning Vale, which was purchased by Sigma Healthcare for $11.557 million. The firm also sold 9 Brewer Road, Canning Vale to St Vincent De Paul Society WA Inc. for $5.454 million.

Infrastructure injection driving Toowoomba commercial markets

September, 2017 by

Raine & Horne Commercial has launched an office in Toowoomba, Queensland’s biggest regional centre.

The office is led by Principal Andrew Lynch, who said the growth of self-managed super funds seeking the higher yielding commercial real estate investments was central to the decision to launch the business. Average yields in Toowoomba are 7.0%-8.0% for retail and office property, rising to 8.0-8.5% for industrial property, according to Raine & Horne Commercial Toowoomba.

The Toowoomba region has seen significant infrastructure development in recent years. As a guide, in a project jointly funded by the Federal and Queensland State Government, a second range crossing is being constructed that will take heavy vehicle highway traffic around north of Toowoomba rather than through it. The 41 kilometre bypass route will run from the Warrego Highway at Helidon Spa in the east to the Gore Highway at Athol in the west, via Charlton, and will provide improved freight efficiency.

These developments will all help to underpin the local commercial property market, and as investor interest in Toowoomba grows, it is worth looking for properties, particularly in the office market, that offer car parking as this is an increasingly sought after feature.

Perth office market is bouncing back

July, 2017 by

In its June 2017 Office Market Report, Investa says the Perth CBD office market is finally emerging from its longest cyclical downturn since the early 1990s.

Following five-years of deteriorating market conditions, leading indicators of market activity now present a moderately optimistic outlook for the Perth office market in the coming years, according to the report. These factors include increasing net absorption of CBD office space coupled with low levels of new development for at least five years. Investa also expects Perth CBD office vacancy rates to gradually decline in the coming years.

Anthony Vulinovich, Director, Raine & Horne Commercial WA agrees this is good news for the Perth market. “I would say that it’s a tipping point whereby we are seeing the market stabilise with most tenants past the point of vacating the Perth market, or similarly downsizing their space requirements. So, the net effect is that we are not seeing vacancies increase.”

The market will stabilise now in terms of vacancy levels, noted Anthony. “Over time vacancy levels will decrease given new construction will be capped and its likely older unlettable space will be taken off the market and either refurbished or remodeled for residential or other uses,” he said. “The flight to quality will remain for great space at great rates – but vacancy rates for older stock will continue to grow and be a challenge for investors who hold it.”

REA Economist tips good times for industrial warehousing

July, 2017 by

Thanks to technological disruption, the golden child of commercial property is industrial warehousing, according to REA Chief Economist Nerida Conisbee.

“If you want to be in the best position long term then this is the asset class you should be looking at,” said Nerida in a news piece for realcommercial.com.au, a sponsor of Raine & Horne Commercial’s Insights publication.

Nerida suggests that there are number of factors that will underpin demand for industrial warehousing. “Amazon will need a lot of warehousing if it hopes to achieve the same market share in Australia as it does in the US.

“All those driverless cars will need to be stored somewhere and it is likely some sort of centralised warehousing will emerge where they can be refuelled (or recharged), as well as get appropriate maintenance.”

Working remotely will continue to drive the need for cloud storage and data centres — creating even more demand for warehouses.

Excellent time for business expansion in Brisbane says Raine & Horne commercial

July, 2017 by

Whether you’re looking to buy or lease bigger premises in Brisbane, there’s never been a better time, says Joseph Grasso, Co-Principal of Raine & Horne Commercial Southside.

“Despite the banks being forced to hike up interest rates to meet APRA lending requirements and more latterly the Federal Government’s bank tax, we still have low interest rates and therefore relatively cheap money for businesses seeking to own their own commercial space,” said Joseph. “On the leasing front, we also have plenty of listings in the 2,000-5,000 square metre range if you’re looking for more space for your growing business.”

To illustrate, Raine & Horne Commercial Southside has 4/576 Boundary Road, Archerfield for lease, which is part of new tilt panel 8 unit complex. It is a 1,992 square metre unit with excellent internal height of up to 10 metres, a warehouse that is accessed via a 3 × 6 metre high electric roller doors. It has excellent onsite car parking areas and truck manoeuvrability, as well as a 5 metre wide awning for all weather loading and unloading over the roller doors. The unit also offers high quality A-Grade office accommodation over 2 levels. “Any tenants who are looking to lease space in the 2,000-5,000 metres range in Brisbane’s south, there is a good opportunity to take advantage of volumes that currently exist in the market. These volumes weren’t available 2 years ago,” said Joseph. “If you’re having problems getting some finance from your bank, give them the flick, and lease a location.”

Private buyer acquires North Melbourne warehouse for $8.25M

July, 2017 by

A private buyer has acquired a vacant 2137-square-metre office/warehouse in North Melbourne for $8.25 million in an off-market transaction, according to commercialrealestate.com.au

The new owner will occupy the property at 56-92 Langford Street, which sits on a 3362-square-metre site. Raine & Horne Commercial Victoria’s Francis Sbaglia brokered the deal in conjunction with another agent.

Demand picks up for commercial space in NSW second biggest city

July, 2017 by

The NSW Government is building a light rail system for the Newcastle CBD, however NSW’s second largest city will continue to be a car-reliant economy, says Steve Dick, Director, Raine & Horne Commercial Newcastle.

“The city’s public transport network is ineffective at providing timely and cost-efficient commuter solutions and the 2 kilometre tram track along Hunter Street is a financial folly causing massive disruption for no benefit,” said Steve. “However, property on the fringe of the Newcastle CBD is enjoying strong rental growth as more and more property is absorbed tightening the supply with a growing demand from businesses pushed to the fringe by the disruption.”

Most investments in Newcastle are to be found in the sub-$2 million market, and vacancy rates, according to the 2017 Raine & Horne Commercial Industrial Average, start from 2.0% in locations such as Wickham – although across the city, an average vacancy rate of 6.3% applies.

Self-managed super funds are driving the owner occupier market in the industrial and commercial sectors in the sub-$2 million market. “There is an unusual situation occurring because of self-managed superfunds,” said Steve. “Nowadays, vacant owner-occupier buildings are achieving higher values than if they were leased.

“This is despite the record low yields being paid on income producing investment property.” Newcastle’s increased spending on infrastructure and apartment complexes plus the near completion of the University of Newcastle’s law and business faculty building is making the CBD a growth market despite the disruption, noted Steve.

Super funds fuel Logan property

July, 2017 by

Self-managed super funds are fuelling Logan city’s commercial property market, according to a recent report in Brisbane’s Courier Mail.

The Courier Mail cited Raine & Horne Commercial’s May Commercial Insights report that found the Logan city market was being driven by low interest rates, demand from self-managed super funds, overseas investors and business owners looking to purchase their premises.

Raine & Horne Commercial Beenleigh’s John Tamblyn said industrial property dominated the local commercial market. He said in contrast, most retail property was held as multi-tenanted buildings and not as individual strata.

He said there was a shortage of industrial land in Beenleigh with a limited supply of freestanding industrial properties coming on to the market. “This type of property is enjoying strong demand among owner occupiers, investors and tenants alike,” he said.

The majority (66%) of buyers in Beenleigh are investors, and self-managed super funds were active participants in the $200,000-$1 million price range. Fund trustees are typically looking for yields in the order of 8-9%.