Commercial property to turn corner

TOWNSVILLE’S c o mmercial and industrial property markets have bottomed out and are expected to begin their recovery, according to the latest Colliers International Townsville Market Snapshot Report.

The report points to significant gains in crucial economic conditions that are expected to flow on to the commercial property market, including workforce growth, business sentiment, and major investments.

Colliers Townsville managing director Peter Wheeler said government investment in Townsville and construction projects were all signs the market was edging towards recovery.

“We’ve got a combined $ 1.5 billion in investment in Townsville coming from all levels of government over this financial year,” he said.

“These major projects are driving growth in the construction industry and we’ve definitely seen a rise in inquiry for office space from these types of firms.

“Already as you drive around town, we’re seeing more cranes on the horizon than we have in over a decade. There’s a lot more construction activity and that’s good for the property market.”

The North Queensland Stadium, Haughton Pipeline Duplication, Haughton River Floodplain Upgrade, and Mater Hospital Redevelopment, among others, are all referred to in the report as part of a series of major project investments in Townsville leading to strengthening of market conditions.

Based on these projects and the positive growth in key economic indicators, the report predicts the increasing trend in commercial property inquiries will continue and grow towards the end of 2018 and into 2019.

More than $ 243 million in sales occurred in the Townsville commercial property market in the year to June 2018 and the median sales price was $ 515,000.

In the industrial sector $ 42 million worth of properties sold with most sales recording prices of below $ 1 million and predominantly to owneroccupiers although investors are also showing interest in industrial properties with strong yields and lease covenants. Yields for industrial properties have remained steady at 7- 8 per cent for premium properties.

Mr Wheeler said he was not expecting the market to fall any further.

“From the inquiries we’re getting, we feel like we’ve reached the bottom of the market and the signs are there that we’re moving into a recovery phase,” he said.

“We’re hoping for a better performing commercial market in the second half of 2018 and into next year.”

ALREADY AS YOU DRIVE AROUND TOWN, WE’RE SEEING MORE CRANES ON THE HORIZON THAN WE HAVE IN OVER A DECADE. THERE’S A LOT MORE CONSTRUCTION ACTIVITY AND THAT’S GOOD FOR THE PROPERTY MARKET. PETER WHEELER