Newcastle super auction scores booming hit

November, 2017 by

A private Sydney developer paying $1.75 million for a 2,000 square metre site in the heart of Nelson Bay was a highlight of Raine & Horne Commercial Newcastle’s Super Action held on September 14 at Fort Scratchley.

Auction coordinator Steve Dick, Director of Raine & Horne Commercial Newcastle, told the Newcastle Herald that six of the nine commercial properties on offer sold under the hammer and the event attracted more than 60 interested parties and 22 registered bidders, including several “big guns” from Sydney and Newcastle.

“Six of the properties sold under the hammer, a result that confirms the health of commercial real estate markets in Newcastle and the Hunter region,” said Steve. He said the market’s vigour was exemplified by the auction of a small shop at 207 Cessnock Road, Abermain, which sold for $335,000 to a Sydney investor.

Victorian retail selling on record low yields

November, 2017 by

Retail assets in Melbourne are selling on yields as low as 5.0%, sometimes as low as 3.0-4.0% if a quality long term tenant is in place, according to Jason Beveridge, Principal of Raine & Horne Commercial Victoria.

Industrial property and office assets are generating yields of around 6.0% – 6.50% depending on location. While these yields are expected to remain stable, Jason says they could rise if interest rates change. Vacancy rates in Melbourne are low – around 2.0-3.0%, contingent on stock levels. “Industrial vacancies will most likely remain tight as new construction is about 20% down on longer-term averages,” said Jason. “Of the new development activity, a significant amount is slated for Melbourne’s north, with the balance shared by the city’s eastern and western regions.”

Self-managed super funds (SMSFs) are a key driver of the market, typically in the sub-$500,000 range. A typical example of this is the recent sale of a small unit complex at 4, 5 Turbo Drive Bayswater for $285,000. This small warehouse comprised of 130 square metres with two car parks is in a good location, running off Canterbury Road. Jason says, “It was a cash purchase, and the investor quite rightly felt the asset was a better option than leaving money in the bank.”

Lack of stock contributes to record North Sydney sale

November, 2017 by

A significant shortage of stock is the central theme for commercial properties on Sydney’s Lower North Shore, according to Nick Moloney, Sales Director, Raine & Horne Commercial North Sydney.

“This is directly related to the large number of off-market transactions that have occurred in the last few months,” said Nick. “At the same time, the auction clearance rates for commercial real estate in Sydney were 72.3% compared to 68% for residential property. In other words, commercial clearance rates are 4.3% higher than residential, which is very unusual.”

These results underpin the message that demand is strong and the proof is in the pudding with Nick Moloney brokering some excellent recent sales. This includes the $8513/sqm rate achieved for Unit 604/83 Mount Street, a record for a commercial strata office in the North Sydney CBD. “We’re only getting good results where the vendor prices and markets the property correctly to ensure buyers attend auctions.”

Anthony Vulinovich named WA’s best commercial sales agent

November, 2017 by

Anthony Vulinovich, Director of Raine & Horne Commercial WA was recognised as WA’s leading commercial property sales agent at the 2017 REIWA Awards for Excellence announced recently in Perth.

“There are many hundreds of commercial sales agents in Western Australia, so this is a terrific win for Anthony and testament to his hard work and strategic commitment to selling commercial real estate over many years,” said Terry Menage, Director, Raine & Horne Commercial WA. “Anthony’s point of difference is that he has undertaken a great deal of pre-sale work to secure buyer interest on behalf of land developers and as far as possible, de-risking the land subdivision before development.

Mr Vulinovich’s strategic approach has been vindicated with his significant pre-sales to market large numbers of industrial lots within Northlink Industrial Estate at Wangara, Canning Vale’s Swan Brewery Estate Canning Vale and Tonkin Highway Industrial Estate in Bayswater. “We sold pre-title over $45 million worth of land in the Tonkin Highway Industrial Estate, Perth, which is the city’s latest inner metropolitan industrial opportunity,” said Mr Vulinovich.

Other significant sales in the last 12 months included a 35,500 square metre industrial site at 10 Craft Street, Canning Vale, which was purchased by Sigma Healthcare for $11.5 million. Raine & Horne Commercial WA also sold 9 Brewer Road, Canning Vale to St Vincent De Paul Society WA Inc. for $5.4 million.

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.

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