Buy­ers look smart

Townsville Bulletin - - NEWS - TONY RAGGATT

YOU can’t make a silk purse out of a sow’s ear, ap­par­ently, but you can do well up­grad­ing some of Townsville’s older, unloved com­mer­cial prop­er­ties.

Par­tic­u­larly so if it is ac­ces­si­ble and has good park­ing, which the old set of shops in 208 Char­ters Tow­ers Rd, Her­mit Park, has in good mea­sure.

Troy Townsend of Ray White Com­mer­cial Townsville has just sold this fully leased site for $ 2.12 mil­lion to a New­cas­tle in­vestor.

With a net rent of just over $ 200,000 per an­num, the deal shows a re­turn of 9.5 per cent.

Mr Townsend said that yield was al­most dou­ble the re­turns be­ing achieved in the hot mar­kets of south­ern cap­i­tals and was a key rea­son in­vestors were look­ing to re­gional cen­tres like Townsville.

“A big pos­i­tive for this site was that 80 per cent of the build­ing is leased for a min­i­mum of five years. It has a very strong WALE ( weighted av­er­age lease ex­piry), one that many peo­ple go out look­ing to spot,” Mr Townsend said. But it wasn’t al­ways so. The prop­erty lan­guished mostly va­cant for sev­eral years be­fore a buyer picked it up last year for $ 1.25 mil­lion and through a makeover and fitout in­cen­tives, be­lieved to have cost around $ 650,000, at­tracted two new ten­ants for much of its floorspace.

“It was 80 per cent va­cant when the ( pre­vi­ous) owner took it over. They man­aged to se­cure two new qual­ity ten­ants through fitout in­cen­tives and a facelift of the build­ing,” Mr Townsend said.

The prop­erty has a gross floor area 860sq m on a 2007sq m site with 26 on- site car parks.

It is one of sev­eral sites in Char­ters Tow­ers Rd which have been given a new lease of life in re­cent years as mostly owner- oc­cu­piers – ac­coun­tants, fi­nan­cial plan­ners and busi­ness ser­vices firms – have taken the op­por­tu­nity to buy their own site and in­vest in a makeover.

Mr Townsend be­lieved buy­ers had opted for Char­ters Tow­ers Rd over a CBD lo­ca­tion be­cause park­ing was eas­ier and the sites were more ac­ces­si­ble.

How­ever, while there were still plenty of prop­er­ties avail­able for lease in Char­ters Tow­ers Rd, there was very lit­tle for sale, he said.

“We are des­per­ately short of good qual­ity in­vest­ment stock. South­ern- based in­vestors are very in­ter­ested in Townsville and es­pe­cially want multi- ten­ant high­yield­ing prop­er­ties,” Mr Townsend said.

“Any­thing 8 per cent plus sell­ing re­ally well.”

Mean­while, pro­vid­ing a good fitout re­mained a big in­cen­tive to at­tract ten­ants.

“( Ten­ants) may not have the time to co- or­di­nate a fitout and some­times they don’t have the money. If you are as­tute, you can do ( a build­ing makeover) eco­nom­i­cally.” is

AS­TUTE IN­VESTORS: Ray White Com­mer­cial agent Troy Townsend at the Char­ters Tow­ers Rd com­plex. Pic­ture: EVAN MORGAN

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.