NEW YEAR SHAPING UP NICELY FOR MARKET
Strong business confidence and yields are boosting demand from investors, putting the Gold Coast in a great position as 2019 looms
THE Gold Coast commercial property market is set to enter next year in good shape with strong business confidence and yields boosting demand from southern investors for retail, office and industrial assets.
Knight Frank Gold Coast partner Mark Witheriff said he expected the office vacancy rate to fall further next year. “The office vacancy rate is expected to hold around 12 per cent heading into 2019,” he said.
“But with limited new supply additions proposed we should see vacancy fall to below 10 per cent in the near future.”
He said the retail sector continued to consolidate, mirroring national trends.
“The investment market across the Gold Coast remains strong, based on core fundamentals of employment and population growth and continued investment into infrastructure projects such as stage three of the light rail network.
“Looking to 2019, current business confidence should continue to improve across all sectors. Unlike national trends, the residential marketplace offers real opportunity, particularly given our current low vacancy rate in that sector of 2 per cent, and a modest pipeline of development under construction across the city.”
Ray White Commercial Gold Coast director Greg Bell said the gap in yields between the Gold Coast and Sydney, Melbourne and Brisbane put the Gold Coast in the box seat for a strong 2019.
Mr Bell said this gap was positioning the Gold Coast as an attractive destination for private capital, leading to a spike in inquiries for industrial, retail and office assets in the past year.
“Rising demand has put some pressure on Gold Coast commercial property yields this year, but the numbers are still stacking up well for investors looking for opportunities on the Coast,” he said.
“Prices have firmed, but so have rents in some areas which has stabilised yields.
“That continues to give the Gold Coast an edge for investors seeking strong returns.
Research conducted by Ray White Commercial found industrial property sales in key markets, such as Melbourne’s southeast and Sydney’s central west, were struck on yields of between 5 per cent and 7 per cent.
This compared to Gold Coast yields of between 6.25 per cent and 8.5 per cent.
Data shows most Gold Coast retail assets sold in 2018 reflected average yields between 6 per cent and 8.25 per cent.