Yielding strong interest

THE latest Raine & Horne commercial property market report points to a buoyant sector on the Gold Coast, with strong activity from investors including self-managed superannuation funds.

Raine & Horne Commercial Gold Coast director Michael Parisi said SMSFs are targeting industrial, retail and office properties priced from $1 million to $2 million.

Mr Parisi said yields on the Gold Coast are particularly attractive to interstate buyers.

“In Melbourne yields are as low as between 3 and 4 per cent, whereas on the Gold Coast they can reach up to 9 per cent,” he said.

Mr Parisi said many properties represented value, with a number selling for less than land and building costs.

He negotiated the sale, along with colleague David Task, of a five-title holding at 3179-3195 Surfers Paradise Blvd earlier this year for more than $16.5 million on a 6.5 per cent yield. The property included Gloria Jean’s, 7-Eleven and Noodlebox as tenants.

Mr Parisi said the deal showed strong demand from investors looking for returns higher than if they purchase shares or bank cash.

He said the vacancy rate for retail properties has fallen as low as 5 per cent.

“With the level of new developments slowing, particularly in the retail space, the time to buy on the Coast is now,” he said.

Raine & Horne executive chairman Angus Raine said a broad base of buyers is driving the market: “High sales volumes are being driven by low interest rates coupled with strong demand from self-managed super funds, overseas investors and business owners looking to purchase their premises.”