Infrastructure drives buoyant commercial property markets across Australia

May, 2017 by

Independent analysis by Raine & Horne Commercial, confirms Australia’s commercial property market is experiencing boom conditions.

Raine & Horne Commercial Insights was released in April and provides a deep dive into commercial real estate markets across Australia, with commentary from some of the firm’s leading local area experts.

Angus Raine, Executive Chairman, Raine & Horne told Transport and Logistics News that: “High sales volumes are being driven by low interest rates coupled with intensifying demand from self-managed super funds, overseas investors and business owners looking to purchase their premises.

Market conditions are most buoyant in those areas where major infrastructure projects are either underway or completed. “The wealth of infrastructure developments across many parts of the country is having a major impact on commercial property values, yields and vacancy rates. In conjunction with historically low lending rates and incoming changes to superannuation, interest in commercial properties is coming from a range of investors – both local and offshore, as well as small to medium businesses seizing opportunities to own their premise,” said Angus.

“The detailed analysis of Raine & Horne’s commercial property experts across Australia makes our Commercial Insights Report a rich source of information on the state of metropolitan and regional commercial markets nationally. It is a valuable resource for self-managed super funds, business owners and investors seeking healthy yields in a low return environment.

Viva Energy REIT pumps up $10.8 million for a Shell service station in Annerley

May, 2017 by

Viva Energy’s real estate arm has snapped up a newly built service station in Brisbane’s south to add to its expanding portfolio, according to the firm’s 2016 annual report.

Viva Energy REIT paid $10.8 million for the Coles Express at 338 Ipswich Rd, Annerley, in a deal struck by Raine & Horne Commercial Brisbane Southside’s Associate Director Paul Flego.

The property is located on Ipswich Road, a major Brisbane arterial road, within the Princess Alexandria Hospital precinct. There is a new 15-year triple net lease with 4 X 5 option with Viva Energy Australia and 3% annual rent increases, according to the annual report.

“We received so many inquiries from NSW, Victoria and Queensland made up mostly of wealthy individuals and syndicates,” said Paul told Brisbane’s Courier Mail. “But Viva REIT made the offer a day before the auction which was accepted.” The sale realised a yield of 5.31%.

Last year Paul sold the almost vacant 2,463 square metre outbound site where the new Coles Express service station now sits. The site was previously owned and occupied by Clements Cars and 4WD, and Paul sold it to a local developer off-market for $3.75 million plus GST. “The dual sales attest to Paul’s excellent planning, strategic sales skills and vision,” said Angus Raine, Executive Chairman, Raine & Horne Group.

Sale and leaseback win

May, 2017 by

Bay Gallery Furniture has sold its Penrith warehouse in Sydney’s west under the hammer for $3.417 million on a five-year sale and leaseback with options, according to Australian Financial Review.

Raine & Horne Commercial Penrith’s Keiran McGarity negotiated the auction sale of the 58 Leland Street warehouse.

The 2179 square metre property sold on a yield of 6.29%, according to Keiran, based on annual passing income of $215,000. Bay Gallery is paying all outgoings and has recently signed a new 5 + 5-year lease. The 4013 square metre site includes a concrete yard area ideal for storage and large vehicles.

Benevolent Society appoints Raine & Horne Commercial to support its NSW expansion

May, 2017 by

Raine & Horne Commercial has been appointed by The Benevolent Society (TBS) as its exclusive commercial agent to secure several key sites across NSW.

“The Benevolent Society is Australia’s oldest charity and securing this well-respected institution as a client is a fantastic appointment for us,” said Angus Raine, Executive Chairman of the Raine & Horne Group.

“Raine & Horne Commercial Sydney CBD’s Christian Cirillo and Meegan Graham are managing this appointment and are liaising with our extensive office network across Sydney and regional NSW to help secure suitable sites for the joining together of The Benevolent Society and NSW Government’s Community Disability Support Teams providing clinical services,” he added.  Already Christian and Meeghan have identified a large number of sites across NSW for TBS.

The Benevolent Society has been selected by the NSW Government as the new operator of its FACS’ Specialist Community Disability Support teams in NSW. These services, which include 800 therapy, case management and behaviour support professionals, are joining together with The Benevolent Society to support disability clients as they transition to the National Disability Insurance Scheme (NDIS).

The Benevolent Society CEO Jo Toohey said, “Raine and Horne’s reach across NSW and their long heritage have made them a perfect partner for us in this exciting time. We will be joining, combining, refurbishing and creating new sites that will enable us to provide more and better services to all clients.”

Commercial enquiries are stronger in Adelaide

April, 2017 by

In Adelaide, demand for retail, commercial and office properties with good leases and long-term tenants has improved in 2017, according to David Ente, Co-principal, Raine & Horne Commercial South Australia.

David listed several reasons for the trend: “It seems that there are some business owners who have decided to get on with the business of expansion, even though market conditions are still challenging. Owners are either taking out new leases or buying a commercial property to support their expansion plans.”

On the investment front, there is a shortage of properties for sale. “Anything with a reasonable tenant or lease will go to auction and produce a good result,” said David. “The trouble is that with interest rates so low, most investors are happy to hold on to their commercial properties. As a result, anything with a longer lease will be snapped up fast.”

Private investor bowled over by Kedron landmark

April, 2017 by

A private Brisbane-based investor has scored a strike with the purchase of a high-profile 5,539-square-metre outbound site in Kedron for $5 million.

 The property at 278 Gympie Road, Kedron, which comes with dual street frontage, was sold by Trent Bruce, Principal of Raine & Horne Commercial Brisbane North, on behalf of a private investor.

“There was plenty of interest in the property, which will be vacated by AMF Bowl shortly. The property has a holding income of $474,041 per annum net,” said Trent. “The site has a substantial 1,866-square-metre existing building. Its major commercial neighbours include Volkswagen, Puma, Hungry Jacks, KFC, Coles and Dulux.

“The property is located within the Lutwyche Road Corridor Neighbourhood Plan and it has extensive future redevelopment potential.”

Perth’s best industrial site selling fast

April, 2017 by

Tonkin Highway Industrial Estate in Bayswater, Perth’s best located industrial estate, is selling fast, with $25 million worth of sales squared away, according to selling agent, Anthony Vulinovich, Director of Raine & Horne Commercial WA.

“Prior to release on the open market this week, we undertook a short off-market sales campaign with selected buyers with a very high level of uptake from those approached, resulting in 28 sales of lots ranging from 1,110-20,000 square metres,” said Anthony.

“The Tonkin Highway Industrial Estate represents a once-off opportunity for corporates, owner-occupiers, developers and investors to secure affordable industrial land within a landscaped business park just 8 kilometres from the Perth CBD, and on one of city’s main logistics routes.

“Bayswater is significantly undervalued historically as a commercial precinct given its proximity to the CBD, while around 70,000 motorists use the Tonkin Highway on a daily basis and it provides connections to Roe Highway, Reid Highway, Great Eastern Highway and Leach Highway.

Tonkin Highway Industrial Estate is being developed by Linc Property[i], a Western Australian firm specialising in the development of high-quality industrial estates. The developer’s commercial projects include Landsdale North Industrial Estate, Northlink Industrial Park, Swan Brewery Industrial Estate and the South Central and Midland Central large-format retail centres.



Investment opportunity in south-west Sydney sells for $5.9 million

April, 2017 by

SJC Investments P/L and Vendlein P/L have sold a 2336-square-metre bulk goods warehouse at 9 Blaxland Road, Campbelltown, to a private investor.

According to selling agent Daniel Krobot, Co-Principal of Raine & Horne Commercial Macarthur, the quality property, which is purpose built for bulky goods warehousing, sold prior to auction.

“The property is ideally located on Blaxland Road, the main bulky goods retail precinct of the Macarthur Region,” said Daniel. “The site is surrounded by a variety of high-profile retailers, including Harvey Norman, The Good Guys, BCF, Super Cheap Auto and Fantastic Furniture.”

Tenant Nick Scali has signed a brand-new 6-year lease, with an option to extend. The lease is delivering a net passing income of approximately $355,000 per annum plus GST.

Demand continues to outstrip supply in a red-hot Macarthur market. Daniel described the market as “phenomenal”, with demand firmly driven by a confident small business sector and increasing investor activity. On the supply side, no new industrial land has come up for release and available stock is tightly held.

Shortage of stock in Melbourne

March, 2017 by

Melbourne’s commercial property market is experiencing the same shortage of commercial property stock being seen in so many metropolitan markets across Australia, according to Jason Beveridge of Raine & Horne Commercial Victoria,

At present, yields on industrial property are in the order of 5.0-6.0% depending on location and quality, with the Eastern suburbs being especially strong right through from Box Hill to Bayswater.

The industrial property market in Melbourne’s western suburbs is performing well, particularly in and around property Yarraville and Keilor East, where several new unit complexes have been developed.

Low interest rates will continue to drive Victoria’s commercial market however areas with good proximity to infrastructure developments hold additional appeal.  In 2016, for instance, Melbourne saw major works conducted on the City Link Tullamarine Freeway, and an upgrade of the Monash Freeway at Hallam.

These improvements are likely to underpin demand for quality commercial properties in surrounding locations, however the big fillip to the commercial market could be the Western Distributor, the proposed 5 kilometre link from the West Gate Freeway at Yarraville with CityLink at Docklands via a tunnel beneath Yarraville. The $5.5 billion project is due to begin in late 2017 with a completion date of 2022.

Dexus settles on Auburn bulky goods site for $65 million

March, 2017 by

Raine & Horne Commercial Olympic Park Principals Duarte Figueira and Christian Cirillo have secured the sale of a prime industrial site in Auburn for $65 million on behalf of Dexus Property Group (DEXUS).

A Chinese bulky goods firm has secured the flexible 22,000 square metre property located at 79-99 St Hilliers Road, Auburn via an off-market sale.

The sale price was well above expectations, according to Mr Figueira. “This is one of the biggest sales transacted in the Auburn and Silverwater areas in the last decade,” he said.

“The buyer has recognised the property is a flexible industrial site in a thriving retail district with valuable connectivity to wider Sydney.

“The high visibility of busy St Hilliers Road was another attraction, along with the property’s relative proximity to Sydney Airport.”