YIELDS TIGHTEN IN CITY
YIELDS are continuing to tighten in Townsville as investors seek a foothold in one of Australia’s best performing regional markets, according to Colliers.
The firm’s Shaun Mclaren and Ben Wheeler have secured deals on a portfolio of three commercial properties, all showing returns of less than 7 per cent.
While properties with blue-chip tenants have been securing 6 per cent yields, it was not so long ago that eight to 9 per cent was the norm for most Townsville commercial property.
Mr Mclaren said the three properties, two in Belgian Gardens and another in Aitkenvale, were all priced about the $1m mark or less, were fully leased and in good condition.
He said there was exceptional inquiry from investors from around Australia but that in this instance the locals won the day, selling separately to Townsville and Cairns-based buyers.
They received 22 offers across the three properties with almost half the offers at or above the expected price guide.
“It shows the strength of the Townsville investment market and we need more investment stock to satisfy the strong demand,” Mr Mclaren said.
“If you are thinking about selling your investment property, let us know.
“Townsville is certainly getting interest from investors across the Australia which is great to see.”
The three properties are 81 Bundock St and 90 Bundock St, Belgian Gardens, and 291 Ross River Rd, Aitkenvale.
Tenants in the 81 Bundock St property included Miriam’s Thai Restaurant, which has been a tenant since the building was constructed.
Mr Mclaren said that, subject to merits of individual properties, yields in the past had been closer to between 8 and 9 per cent.
“Investment property is always subject to a number of factors such as location, number of tenancies and whether it is fully tenanted,” he said.