Games to drive market higher
A LEADING agent says the announcement of southeast Queensland as the preferred candidate for the 2032 Olympic Games will place further pressure on industrial stock with businesses already struggling to find room to expand.
“We are being inundated with calls from businesses wanting to move to the Gold Coast from Sydney and Melbourne,” Crew Commercial director Josh Wright said.
“With local industrial land prices at their highest, this strong population growth together with the expected increase in demand to accommodate an event such as the Olympic Games, will put further pressure on dwindling supply.”
Mr Wright said industrial land prices had increased 10 per cent in the past 12 months compared to 20 per cent in the previous three years.
“This time last year typical industrial land parcels were trading in the early-to-mid $500 per square metre exclusive of GST. Last week a freehold land parcel of about 2500 square metres in Carrara sold for $1.5m reflecting a square metre rate in excess of $600.”
Mr Wright said $600sq m had become the average price across the central Gold Coast region. “We have seen rates of up to $800 a square metre in
Burleigh with the developers needing to get upward of $4000 to $5000 for strata-titled developments. And most importantly that end product is selling.
“There has been a realisation in the market of the lack of developable industrial land sites between Coomera and Burleigh. Many existing businesses operating in this area are seeking to grow their warehousing or manufacturing capabilities but are hampered by a lack of suitable sites.”
Mr Wright said there was also “solid evidence” rental rates were increasing.
“Over the 10 years there has only been a modest increase of about 10 per cent for net rental rates, however the recent increase in land pricing has meant developers are chasing rates of about $140 to $160 per square metre for a new unit development which would have previously leased at $120.
“The same trend has occurred for freestanding buildings with incentives falling over the past twelve months.”
He said this was having a two-pronged effect.
“The upward pricing of the underlying land will flow through to the State Government’s assessment of land values. This will increase land tax. Landlords typically pass this bill on to their tenant.”