50 CAVILL SALE TIPPED TO TEST COAST MARKET
Rush of office buildings on the market is an early indication that more owners will seek to realise capital gains next year, says valuation firm
THE sale of 50 Cavill Ave in Surfers Paradise is likely to be a litmus test for the Gold Coast commercial property market, according to valuation firm Herron Todd White.
The company tackles the Gold Coast office market in its latest month in review, pointing towards buoyant conditions for the first three quarters of the year with strong inquiry from tenants, particularly for a-grade and bgrade stock.
A so-called “flight to quality” from c-grade and dgrade office space to a-grade and b-grade has put upward rental pressure on the latter stock and downward pressure on the former.
HTW lists a-grade and bgrade gross square metres rates falling within the range of $400 to $550sq m and $400 to $550sq m for lower grades.
The level of incentives across the board have remained fairly static at circa 10 per cent of the first term’s rental,” the report said.
A number of office buildings, including the aforementioned 50 Cavill, have hit the market recently, which HTW says may reflect owners looking to capitalise on strong market conditions in the past few years.
That is certainly the case for the GDI Property Groupowned 50 Cavill Ave, which was bought by GDI for $48.75 million in 2016 and is on the market for $100 million.
“50 Cavill Avenue in particular will be a litmus test of market sentiment,” HTW’s report said. It says the rush of office buildings on the market is an early indication that more owners will seek to realise capital gains next year.