Insights H1 2024
Welcome 03 At a Glance - Key Market Drivers 04 National Auction Event 06 How to Achieve the Maximum Result 07 Australian Capital Territory 08 New South Wales 10 Queensland 25 South Australia 33 Tasmania 36 Victoria 38 Western Australia 40 National & International Strength 42 Contents Disclaimer: Information contained herein has been gathered from sources we deem to be reliable however warrant no guarantees as to accuracy. Readers are encouraged to rely upon their own due diligence and enquiries. All rights reserved.
The Australian commercial real estate market in 2024 appears to be on the brink of significant transformation, opening up new opportunities for savvy owners and purchasers. Influenced by multifaceted elements such as supply chain and construction costs, the cost of borrowing, evolving investment strategies, and changing consumer habits, the commercial sector is witnessing nuanced shifts across various market sectors. The prevailing cost of money is driving a trend towards softer yields across investment properties, Welcome to our H1 2024 Insights Angus Raine Executive Chairman Raine & Horne Group which is likely to trigger a reassessment among investors, potentially prompting the entry of properties into the market. Despite these transitions, a sense of cautious optimism permeates commercial sector. Rental sectors, like logistics, or retail properties with CPI-linked rental growth, are expected to remain relatively stable and profitable in the near future. Now is the ideal time to talk to your local Raine & Horne Commercial team to discuss how beneficial commercial property can be with the help of an expert team. “With the current trends in play, particularly in the office and retail sectors, we see plenty of opportunity for tenants, owner occupiers and investors.” Chris Nicholl General Manager - Raine & Horne Commercial Chris Nicholl General Manager Raine & Horne Commercial Insights H1 2024 | 03
At a glance: Key market drivers The current commercial property market climate is in the midst of significant change, which for the astute individual or business, can mean a number of potential opportunities. Investors should be mindful of the current market, however, and be prepared to move quickly when the right opportunity arises. Individuals and businesses should also ensure that their financial planning is properly tailored to the current market and aware of the economic conditions and trends that can influence their decisions. 04 | Insights H1 2024 Retail Demand As anticipated, retail markets are currently being driven by a renewed trend in consumers seeking to engage with products physically at local shopping centres and the like. This shift in consumer behaviour hints at a potential resurgence in demand for physical spaces in which to explore, touch and feel products.
Insights H1 2024 | 05 Owner Occupiers Borrowing costs over the long term remain relatively affordable for owner-occupiers, suggesting that the competitive landscape for industrial leases, marked by high demand and rents, will continue to prevail and encourage more individuals toward owner occupation. Asset Assurance In the market, rent review mechanisms and the cost of finance are becoming increasingly important for investors to understand, both in the short-term and long-term. To offset inflation and increased debt costs, these buyers are increasingly seeking frequent reviews and are focusing on long-term gains rather than short-term. Quality Incentives With employers expecting staff to spend more time in the office, there is a continuing increase in leased premises’ occupancy. Demand currently persists for smaller office suites in the office leasing market, where tenants are leveraging incentives to secure superior and quality office environments.
06 | Insights H1 2024 The inaugural Raine & Horne Commercial “National Auction Event” held on 30 November 2023 in rooms and online, generated over $40 million in total value sold from the successful sale of 12 high-calibre commercial properties, including four sold prior to auction. Mr Chris Nicholl, General Manager, Raine & Horne Commercial, highlighted that the auction showcased an array of multimillion-dollar industrial properties alongside a diverse selection of office spaces, retail units, medical suites and even a Hungry Jacks restaurant. “Significantly, with more than 600 physical and online viewers, the National Auction Event appealed to a broad range of commercial real estate buyers from private clients, investors, self-managed super funds, developers, and investment managers,” Mr Nicholl said. “The deep pool of properties from city and regional markets is also a testament to Raine & Horne Commercial’s extensive experience working with local and private clients since 1883 and our market presence nationwide. “By undertaking initiatives like this, we provide a national platform for our agents to market their vendor’s properties while still leveraging their invaluable local knowledge of their respective suburbs and towns, which has always been Raine & Horne Commercial’s competitive edge.” Mr Nicholl continued, “Raine & Horne Commercial’s unique strength lies in its focus on working with SMEs, owners, investors, fund managers and developers of commercial properties that cater to local businesses nationwide. Our ability to collaborate as an office network allows us to maximise the benefits of the auction method for our vendors.” National Auction Event yields sales of over $40 million
Increasing competition to achieve the maximum result Maximum result Our ability to market properties locally, regionally, nationally and internationally makes us your ideal property partner. Together we will tailor a unique and broad-reaching marketing campaign that will put your property in front of millions of potential buyers. Holding regular National Auction Events throughout the year, our aim is to generate as much competition as possible, which allows us to achieve the best result for your property. The numbers speak for themselves; at our most recent National Auction Event we sold in excess of $40 million worth of property and achieved an excellent 66% clearance rate. If you’re considering selling a commercial property, speak to the expert team at Raine & Horne Commercial to maximise your property’s exposure and achieve an optimum result. Join us at our next National Auction Event. Scan the QR code to view the properties for our next auction event. National exposure Increased competition
Australian Capital Territory
Mark Nicholls of Raine & Horne Commercial Canberra says the industrial market remains strong in the ACT. The lack of standalone warehouses for sale, and a limited supply of industrial zoned land being released by the ACT Government, continues to drive values up. “This is creating further pressure for owner occupiers seeking a functional and affordable premises to operate their business,” says Mark. The office and retail markets across Canberra remain stable with a steady supply of stock and take-up in mixed use developments. Despite interest rate increases and rising council rates, passive buyers are continuing to invest in commercial property assets in the ACT, especially when new NET leases are offered and values are sub-$1.8 million, reflecting the stamp duty-free threshold in the ACT. “Raine & Horne Commercial Canberra have not seen many owners being forced to sell due to the pressures of higher interest rates and a cost-of-living squeeze,” says Mark. “While we have seen very few mortgagee in possession sales, we expect affordability to drive a higher level of activity in the leasing market through 2024.” Mark Nicholls mark.nicholls@canberra.rhc.com.au Canberra Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $350-$600 $200-$400 $400-$950 Vacancy 9.5% 1-2% n/a Yields 6-7.5% 5-6.5% 5.5-7% Rates p/m² $4,000-$6,000 $3,000-$4,500 $6,000-$12,000 Current market conditions $2,000,000 Units 181 & 182/8 Gribble Street, Gungahlin Recent Notable Transactions SOLD $2,496,000 Units 2 & 3/49 Mort Street, Braddon SOLD Australian Capital Territory | 09
New South Wales
Industrial assets have certainly bucked the trend and continue to perform exceptionally well in the south-west of Sydney according to Mark Ammoun of Commercial Bankstown. “A large cohort of owner occupiers is still aggressively seeking assets to operate their businesses,” says Mark. “Demand is particularly strong for freestanding assets, resulting in a large imbalance between supply and demand.” The chronic supply constraints across the Bankstown area have generated outstanding sales and leasing results for property owners. That said, higher interest rates have resulted in a softening of investor activity, with values of assets on medium to longer term leases being adversely affected. “Buyers are taking a wait and see approach – at least until we see certainty around interest rates crystalising,” says Mark. “When interest rates return to something resembling a resting rate, we will have a better idea of the ‘normal’ investor appetite.” The sale of 97 Yerrick Road, Lakemba – a 460 square metre freestanding warehouse plus office, for $2.7 million confirms that well-priced and well-located properties are continuing to command buyer interest. Mark Ammoun m.ammoun@rhc.com.au Bankstown Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$300 $180-$250 $450-$1,000 Vacancy 8% 1% 5% Yields 7% 4% 7% Rates p/m² $3,500-$5,500 $4,000-$6,500 $5,500-$15,000 Current market conditions $2,700,000 97 Yerrick Road, Lakemba Recent Notable Transactions SOLD $324,000 p.a. + GST 119-125 Hume Highway, Greenacre LEASED New South Wales | 11
The office leasing market across the Central Coast is experiencing a remarkable surge, attracting smaller businesses from a variety of sectors including dentistry, IT, and medical consulting – all migrating from Sydney to the Central Coast. Geoff Tilden of Commercial Central Coast attributes this migration to the region’s strategic appeal, offering a convenient location between Sydney and Newcastle. Additionally, the completion of the North Connex tunnel has reduced commute times between Sydney and the Central Coast by around 30 minutes. Leasing activities encompass diverse spaces, ranging from 170 square metre freestanding buildings leasing for $265 per square metre net to conventional 50-250 square metre office areas, each commanding distinct rates, showcasing the market’s diversity. Office space yields, currently around 6% to 6.5%, may potentially tighten this year. Geoff says, “Despite challenges faced by larger office spaces due to surplus stock in the Sydney market, the Central Coast remains resilient, driven by the influx of businesses capitalising on the region’s strategic advantages and promising prospects.” Geoff Tilden geoff.tilden@gosford.rh.com.au Central Coast Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$300 $120-$150 $250-$400 Vacancy 10-17% Less than 5% 15% Yields 6-6.5% 6-7% 6-6.5% Rates p/m² $3,100 $2,755-$3,500 $3,200-$4,000 Current market conditions $3,250,000 Level Ground, 1, 2, 3/26-30 Railway Street, Woy Woy Recent Notable Transactions SOLD $1,750,000 11/1 Reliance Drive, Tuggerah SOLD 12 | New South Wales
Luke Smith of Commercial Inner West/South Sydney is seeing strong market conditions across the region, with tight vacancy rates of 5% or below across office, retail and industrial property sectors. “A consistent theme over the course of 2023 was the strength of the industrial market,” says Luke. “Our team has seen this first-hand in the inner ring industrial regions, the Inner West and South Sydney.” The recent auction of an industrial building (with office space) at 158-160 Victoria Road, Marrickville reflects the buoyancy of the market, attracting significant buyer competition. The hammer fell on a sale price of $5.48 million, which was $980,000 above the reserve, to deliver a final result of $9,133 per square metre. Luke’s team managed the sale of 16-18 Cahill Street, Annandale, which presented a rare opportunity to secure a 1,185square metre industrial warehouse property with parking for 16 cars, situated just metres from Parramatta Road, one of Sydney’s busiest thoroughfares. The $6.140 million auction result reinforces the enduring appeal of the Inner West’s commercial market. Inner West | South Sydney Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $400-$600 $250-$500 $500-$900 Vacancy 5% 3% 4% Yields 4-5% 3.5-4.5% 3.5-5.5% Rates p/m² $8,500-$12,000 $6,500-$11,000 $8,500-$13,000 Current market conditions $5,480,000 158-160 Victoria Road, Marrickville Recent Notable Transactions SOLD SOLD $6,410,000 16-18 Cahill Street, Annadale New South Wales | 13 For more information, contact: Nicholas Smith nsmith@rhcss.com.au Luke Smith lsmith@rhcss.com.au
Vincent Stevens of Commercial Liverpool says the market in the Liverpool area is extremely active. Vincent reports that the industrial sector remains as strong as ever. “Demand is high from tenants, owner occupiers and investors,” he says. “With very limited stock available we continue to see record rates being achieved across sale and leasing transactions.” Within the Liverpool CBD, the council’s development of the Civic Centre and new council office building has been completed, which Vincent says has “revitalised the southern end of the CBD”. The Western Sydney Airport development continues to create demand within the Liverpool area and surrounding suburbs, and this is seeing rural properties become re-zoned for industrial, commercial, mixed use or residential. “Depending on the location of certain sites, developers are mindful of things such as sewer/ water services, critical road upgrades, active transport links, public open spaces and community infrastructure, which all impact the price and timing of the various developments underway,” notes Vincent. Vincent Stevens vincent.stevens@rhc.com.au Liverpool Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $350-$450 $180-$230 $600-$800 Vacancy >5% <1% 5% Yields 6.5% 5.5% 5% Rates p/m² $5,500-$6,500 $4,500-$5,000 $10,000 Current market conditions $7,100,000 77 Jedda Road, Prestons Recent Notable Transactions SOLD $320,000 p.a. + GST 25 Garner Place, Ingleburn LEASED 14 | New South Wales For more information, contact:
The Macarthur region is still experiencing a shortage of industrial property for sale or lease according to Daniel Krobot of Commercial Macarthur however he adds, “We are starting to see a softening in demand”. In the strata office market, buyer demand remains strong in the sub-$1 million sector. Similarly, leasing activity is robust among properties in the sub-$75,000 per annum bracket. “Larger office spaces, those of around 300 square metres or more, are becoming difficult to lease,” adds Daniel. Retail demand is relatively slow across the Macarthur region with the exception being well-located food outlets. “Overall, deals are getting harder to complete,” says Daniel. “Funding is becoming harder to secure, and mum and dad investors have almost completely dropped out of the market.” The $9.35 million sale of 1 Yulong Close, Moorebank reflects the health of the industrial market. The prominently located asset provides excellent main road exposure plus easy access to the M5 Motorway. Situated on over 4,000 square metres of land, the property features two warehouse units plus café with a total building area of 1,961 square metres. Daniel Krobot daniel.krobot@rhc.com.au Macarthur Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $350 $180 $400-$500 Vacancy 15-20% 0% 15% Yields 6% 5-6% 6% Rates p/m² $7,000-$8,500 $4,000-$4,500 $8,000-$10,000 Current market conditions $5,850,000 + GST 50 Douglas Road, Moss Vale Recent Notable Transactions SOLD $9,350,000 1 Yulong Close, Moorebank SOLD New South Wales | 15
Brad Wallace of Commercial Newcastle says the current commercial sales and leasing market in Newcastle remains steady. Increased yields are evident for most short- to mediumterm leases. According to Brad this is “primarily driven by the tail end of the current interest rate hike cycle”. Industrial land values across Newcastle appear to have levelled out following unprecedented capital growth over the last 3-5 years. Brad notes, “Leasing rates are still trying to catch up with the cost of construction and land values.” The Newcastle team secured the $635,000 sale of 1/3 Edge Street, Boolaroo – a 171 square metre industrial strata unit in the Bundera industrial estate. The property is leased for $33,345 net per annum plus GST and outgoings and is located in one of Newcastle’s retail hubs with a nearby Bunnings Hardware outlet. The sale of 21 Broadmeadow Road, Broadmeadow for $1.035 million indicates the health of Newcastle’s property market more broadly. The 512 square metre lot is zoned R3 medium density residential, and as such offered attractive opportunities for redevelopment. Brad Wallace brad.wallace@newcastle.rh.com.au Newcastle Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $250-$350 $150-$240 $250-$500 Vacancy 20% 15% 20% Yields 6-8% 6-7% 5-7% Rates p/m² $3,500-$5,000 $3,000-$4,500 $4,000-$6,000 Current market conditions $635,000 1/3 Edge Street, Boolaroo Recent Notable Transactions SOLD $1,035,000 221 Broadmeadow Road, Broadmeadow SOLD 16 | New South Wales
Nick Moloney of Commercial North Sydney says interest rate stability in recent months has fueled interest in the North Shore commercial market among owner-occupiers and investors alike. Nick is expecting a “surge in selling sentiment” among commercial property owners, which he believes is a natural response to the prolonged period of subdued sales volumes through the COVID pandemic, when owners opted to retain assets during uncertain times. An uptick in selling sentiment is expected to boost stock levels, bringing the potential for an abundance of options in the market, which will be widely welcomed. In the leasing market, the North Sydney team has seen a healthy increase in demand, with office requirements up 32.5% in the final quarter of 2023. “For commercial property owners, reinvesting in your current asset(s) – especially if vacant – is paramount in the current climate,” says Jay Sheffield. “We recently worked with a client to reposition an office suite in Kirribilli. After cosmetic upgrades, the property attracted strong interest and was leased in only three weeks, achieving a 35%-plus increase in rent and a strong covenant.” Jay expects continuing strong lessee interest in 2024. North Sydney Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $300-$950 $200-$550 $350-$2,000 Vacancy n/a n/a n/a Yields 5.5-6% 5.5-6.5% 5-6% Rates p/m² $5,000-$12,700 $5,000-$8,000 $8,000-$20,000 Current market conditions $3,750,000 + GST Level 6/156 Pacific Highway, St Leonards Recent Notable Transactions SOLD $620/m² Gross + GST 102/20 Chandos Street, St Leonards LEASED New South Wales | 17 For more information, contact: Jay Sheffield jay@rhcns.com.au Nick Moloney nick@rhcns.com.au
According to Duarte Figueira of Commercial Parramatta, the area’s CBD office market is still being hampered by the ‘work from home’ movement, and this has seen leasing incentives reach a 10year high. Duarte explains that this is having an impact beyond office properties. He notes, “The domino effect of fewer workers in the CBD Monday to Friday is impacting local retailers. Many businesses cannot survive on the equivalent of around three fulltime days per week trade.” While the situation has seen yields soften in the office and retail markets, Duarte says the market for industrial property across the Parramatta region continues to go from strength to strength. “The sector continues to outperform for rates per square metre in terms of both sales and leasing, as demand consistently outweighs stock on market,” adds Duarte. The recent sale of 38-42 East Street, Granville – a 1,494.7square metre mixed use development site, by the Duarte’s team, reflects the depth of demand for Granville, which is rapidly undergoing significant gentrification and fast becoming a dining hub supported by robust local transport options. Parramatta Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $350-$750 $180-$220 $400-$1,200 Vacancy 30% 3% 10% Yields 6-6.5% 5-5.5% 6-6.5% Rates p/m² $7,000-$12,000 $4,500-$6,000 $8,000-$12,000 Current market conditions Price Confidential 38-42 East Street, Granville Recent Notable Transactions SOLD $532,000 + GST G.01 & G.02/224-240 Pitt Street, Merrylands LEASED 18 | New South Wales For more information, contact: Duarte Figueira dfigueira@rhc.com.au Christian Cirillo ccirillo@rhc.com.au
As we head towards 2026, when the new Western Sydney International (Nancy-Bird Walton) Airport is scheduled for completion, John Henry of Commercial Penrith, says the development of the airport is driving demand for commercial property across the Penrith area. With demand being driven by both investors and owner occupiers, John says, “This significant piece of infrastructure is contributing to historically low vacancy across all asset classes.” Industrial property remains the stand out sector according to John, who says the region is experiencing very low stock available for purchase, and currently only 10 warehouses over 1,000 square metres are available for lease. Retail and office vendors are also experiencing increasing rents and minimal supply. “Only prime grade office space accommodation is challenging to lease due to the premium rent being demanded,” notes John. Penrith Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $350-$450 $200-$220 $500-$550 Vacancy <3% <2% <2% Yields 6% 5.5% 5.5-6% Rates p/m² $6,000-$7,000 $4,200-$4,600 $8,000-$9,000 Current market conditions $760,000 + GST 453 Great Western Highway, Faulconbridge Recent Notable Transactions SOLD $1,847,550 + GST Unit 5, 7 Renshaw Street, Cranebrook SOLD New South Wales | 19 John Henry john.henry@rhc.com.au For more information, contact:
The North Coast market remains strong, with Graeme Garrett of Commercial Port Macquarie reporting, “We are still experiencing good levels of interest from both owner occupiers and investors.” He adds, “We are experiencing a tougher market in the retail leasing sector however the industrial leasing market is still performing reasonably well.” The $10.25 million sale of 8-12 Acacia Avenue, Port Macquarie represented a strong result for the region and Graeme’s team. The 16,150 square metre site with a lettable area of 7,838 square metres, generates gross income of over $1 million annually spread across 61 tenants. The property, featuring commercial and industrial units, is located just 4 kilometres away from the Port Macquarie CBD. Longer term, Port Macquarie’s commercial property market holds plenty of appeal for owner occupiers and investors, with the local population forecast to grow by 28% by 2036. This growth is supported by the expansion of Charles Sturt University, the development of new housing estates and retail centres and the rejuvenation of Port Macquarie airport. Graeme Garrett ggarrett@rhcpmq.com.au Port Macquarie Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $350-$500 $150-$250 $450-$650 Vacancy 8-10% 5-8% 10-12% Yields 6-7.5% 6-7.5% 6-7.5% Rates p/m² $3,000-$4,000 $2,500-$3,000 $6,000-$8,000 Current market conditions $10,250,000 8-12 Acacia Avenue, Port Macquarie Recent Notable Transactions SOLD $3,600,000 1613 Ocean Drive, Lake Cathie SOLD 20 | New South Wales Luke Horton lhorton@rhcpmq.com.au For more information, contact:
Anthony Bouteris of Commercial Sutherland Shire says The Shire’s industrial market is proving to be a “consistent performer” with several significant sales rounding off 2023. The industrial sector is also experiencing tight vacancy levels, which is driving rents higher. The team at Sutherland Shire secured the sale of 1107 Old Princes Highway, in the heart of Engadine, for $3.025 million representing a 5.5% net return. This freestanding property, which is purposed as a medical centre, highlights the appeal of specialist suburban properties such as medical centres, which are typically recession-proof. The off-market sale also highlights the health of the market, and the breadth of Raine & Horne’s contacts, which allowed the team to rapidly connect with buyers within a short time of the Engadine property becoming available. Anthony’s team were able to draw on their contacts with the off-market sale of 69-71 Elouera Road, Cronulla. Antony says the block of 11 residential apartments located one block from the beach was sold in one line. Anthony Bouteris anthony@rhmiranda.com.au Sutherland Shire Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $300-$320 $220-$300 $500-$1,000 Vacancy 30% 10% 30% Yields 5-6% 5-6% 6-7% Rates p/m² $5,000-$6,000 $6,000-$9,500 $8,000-$10,000 Current market conditions Price Confidential 69-71 Elouera Road, Cronulla Recent Notable Transactions SOLD $3,025,000 1107 Old Princes Highway, Engadine SOLD New South Wales | 21
Sydney’s CBD is experiencing weak office demand, causing vacancy rates to head towards 12% says Chris Nicholl of Commercial Sydney CBD. “Demand has softened generally but it is most noticeable postCOVID among large occupiers, and in particular in the Banking and Tech sectors,” explains Chris. “In response, the landlord market has moved to introduce significant leasing incentives and offer turnkey solutions to meet the needs of tenants.” According to Chris, these initiatives are stimulating a flight to quality buildings, with small and medium-sized enterprises being most active. The sales market continues to see transaction volumes that are below the long-term average, and this has seen values fall by 10% to 20% largely due to the increased cost of capital. Nevertheless, Chris says the Sydney market looks to hold significant opportunities for tenants and investors alike as we head into 2024. “We expect leasing incentives to remain at their current levels, with a continued period of lower capital transaction values, given the prolonged period of inflation and its impact on the cost of debt,” Chris says. Sydney CBD Office Industrial Retail Rents p/m² n/a Vacancy n/a Yields n/a Rates p/m² n/a Six-month market outlook Office Industrial Retail Rents p/m² $400-$2,200 n/a $500-$2,000 Vacancy 12% n/a 11% Yields 5.25-7.5% n/a 5-8.5% Rates p/m² $10,000-$30,000 n/a $10,000-$30,000 Current market conditions $1,360,000 Suite 502, 447 Kent Street, Sydney Recent Notable Transactions SOLD $100,000 p.a. Level 1, 100 Clarence Street, Sydney LEASED Chris Nicholl chris.nicholl@sydneycbd.rhc.com.au For more information, contact: 22 | New South Wales
Craig Tait of Commercial Wagga Wagga says the Wagga Wagga commercial market continues to demonstrate strength especially in the industrial sector. “A lack of industrial land is putting supply pressures on established properties,” notes Craig. The recent lease by Craig’s team of 15 Houtman Street, Wagga Wagga, highlights the buoyancy of the region’s industrial market. The 974 square metre brand new warehouse with parking for 10 cars is located in the East Wagga industrial precinct. The retail and office sectors across Wagga Wagga have softened according to Craig, and vacancies have risen slightly in the past 12 months. That said, Craig expects vacancy rates and yields to hold steady in these markets through 2024. Craig and his team were able to secure the lease of 130 Baylis Street, Wagga Wagga – a 173 square metre retail property offering strong foot and vehicle traffic, and close proximity to the Sturt Mall and The Market Place. The Wagga Wagga region more broadly offers solid long-term prospects owing to its diverse economy, which encompasses tertiary education, logistics and defence. Craig Tait craig.tait@wagga.rh.com.au Wagga Wagga Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $200-$400 $80-$140 $250-$500 Vacancy 10-12% 3-5% 5-10% Yields 7-8% 6.5-7.5% 6-6.5% Rates p/m² $3,000-$5,000 $2,000-$3,000 $2,000-$3,500 Current market conditions $150,000 p.a. + GST 15 Houtman Street, Wagga Wagga Recent Notable Transactions LEASED $60,000 p.a. + GST 130 Baylis Street, Wagga Wagga LEASED For more information, contact: New South Wales | 23
Mathew Ivanoff of Commercial Wollongong says while the industrial market is currently experiencing a temporary slowdown, the office and retail markets are thriving. Demand for office space is primarily being driven by allied health businesses that require additional space to accommodate their NDIS (National Disability Insurance Scheme) clients. “These service providers specifically require administrative facilities, while some are diversifying their offerings to include services like physiotherapy, massage therapy, and occupational therapy.” Mathew also points out that the biggest challenge lies in meeting the supply requirements for purpose-built spaces. As a result, office space vacanies have reached an all-time low, which is advantageous for lessors. Mathew Ivanoff mathew@rhw.com.au Wollongong Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $350-$450 $180-$300 $500 Vacancy 10% >2% 3.5-4% Yields 7% 5-5.5% 7% Rates p/m² $7,500 $1,500 $6,500 Current market conditions $9,000,000 13 Crown Street, Wollongong Recent Notable Transactions SOLD $130,000 p.a. + GST 1/51 Crown Street, Wollongong LEASED 24 | New South Wales
Queensland
Brisbane’s commercial property market is experiencing a notable trend of increasing industrial rents according to Trent Bruce of Commercial Brisbane North. He explains, “The surge in demand for industrial space reflects the city’s thriving economy and burgeoning business activities.” Investors are actively seeking high-quality A-grade assets to capitalise on the lucrative opportunities presented by Brisbane’s commercial landscape. B- and C-grade properties are also performing well, indicating a broad-based growth in the commercial real estate sector. “Investors seem to be drawn not only by the quality of assets but also by the strategic locations and easy accessibility of these properties,” notes Trent. Proximity to transport hubs and major logistical routes is becoming a crucial factor for investors. Mixed-use facilities are emerging as strong performers, with the combination of retail, office, and residential space within a single development proving attractive to businesses and residents alike. This diversification is contributing to the resilience of the commercial property market together with Brisbane’s status as one of Australia’s fastestgrowing cities. Trent Bruce tbruce@rhcommercial.com Brisbane North Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $300-$400 $150-$230 $450-$600 Vacancy 12% 5% 8% Yields 6.5-7% 6-6.5% 5.5-6% Rates p/m² $5,000-$6,000 $3,000-$3,500 $7,500-$8,500 Current market conditions $3,875,000 37-43 Morrisby Street, Geebung Recent Notable Transactions SOLD $1,670,000 554 South Pine Road, Everton Park SOLD 26 | Queensland
Joseph Grasso of Commercial Brisbane Southside says demand for industrial assets among owner occupiers currently outweighs supply. “We are starting to see leasing enquiries decrease slightly, and investors are now looking for higher yields due to interest rate rises,” explains Joseph. Developers are now having to look further out from traditional industrial areas to find land, a factor which contributed to the market appeal of 106 Medway Street, Rocklea, a multi-tenanted, fully leased warehouse/office complex situated 11 kilometres from the Brisbane CBD. The property offers 7,447 square metres of land and a lettable area of 5,634 square metres, and generates gross rent of $690,807 per annum plus GST. According to Joseph, smaller industrial units continue to command strong interest in both sales and leasing. He adds that in the office market, suburban properties are seeing limited demand from tenants though rents and vacancy rates are expected to hold steady through 2024. Longer term Brisbane is set to benefit from its role as host city of the 2032 Olympic games. Nick Comino nick@rnhcommercial.com.au Brisbane Southside Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $200-$275 $115-$150 $450-$600 Vacancy 15% 3% 10% Yields 5.75-6.75% 5.8-6.75% 5.5-6.5% Rates p/m² $3,500-$4,500 $1,800-$3,000 $6,000-$8,000 Current market conditions $7,520,000 106 Medway Street, Rocklea Recent Notable Transactions SOLD Price Confidential 3269-3271 Logan Road, Underwood LEASED For more information, contact: Joseph Grasso joseph@rnhcommercial.com.au Queensland | 27
The Gold Coast is once again taking off as a holiday destination attracting large numbers of international and domestic tourists, and enjoying a boost to the local economy, according to Michael Parisi of Commercial Gold Coast. “The Gold Coast economy is yet to be affected by cost-of-living increases,” explains Michael. “The region is supported by the migration of baby boomers relocating to the area, and this has further boosted confidence in the market.” This confidence is reflected in low vacancy rates and the higher rentals being achieved coupled with low stock levels. “This ensures properties do not remain on the market for long, with a growing number of commercial properties being sold off market,” adds Michael. The strength of the market is highlighted by the recent lease of L1/F3/3197 Surfers Paradise Boulevard, Surfers Paradise situated in a prime location and with a generous building area of approximately 900 square metres. Located in the heart of Surfers Paradise, this property benefits from high foot traffic and excellent exposure, and was successfully leased by Michael’s team for $275,000 per annum. Michael Parisi michael.parisi@rhc.com.au Gold Coast Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $300-$400 $250-$350 $700-$1,200 Vacancy 5% 5% 5% Yields 6-7% 6-7% 5-6% Rates p/m² $4,000 $2,500 $10,000 Current market conditions $275,000 p.a. 3197 Surfers Paradise Boulevard, Gold Coast Recent Notable Transactions LEASED $110,960 p.a. 149 Cotlew Street, Ashmore LEASED 28 | Queensland
As a result of the global pandemic, Hervey Bay has seen a rapid population increase in recent years. With the CBD Master Plan currently underway and projected to guide the growth and improvement of the area over the next 20 years, Hervey Bay will broaden its employment and economic opportunities which in turn will drive commercial buying and leasing activity. According to Graham Cockerill of Raine & Horne Commercial Hervey Bay, this will create a wealth of new opportunities for local businesses, developers, and investors. “Hervey Bay will continue to benefit from increasing tourism which enhances demand for commercial property assets, further stimulating the local economy,” says Mr Cockerill. The CBD is poised to be the region’s principal centre of business and commerce with access to a wide range of amenities which will be a key attraction for investors and businesses in the months ahead. Graham Cockerill graham.cockerill@herveybay.rh.com.au Hervey Bay Office Industrial Retail Rents p/m² Vacancy n/a Yields Rates p/m² n/a n/a n/a Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $240-$400 $170-$200 $280-$330 Vacancy 5% 15% 10% Yields 6.5-7% 8-10% 8-9% Rates p/m² $4,300 $1,900-$2,000 $2,500 Current market conditions $35,000 p.a. 207 Bazaar Street, Maryborough Recent Notable Transactions LEASED Price Confidential 5/16-18 Driftwood Court, Urangan SOLD Queensland | 29
Des Besanko of Commercial Mackay says buyer activity remains strong across the region despite the higher interest rate environment. “Owner occupiers are seeking vacant properties, while investors are on the hunt for leased assets,” says Des. Across the broader Mackay market, Des sees all sectors of commercial property remaining steady through 2024. Yields typically range from 6.5% to 8.0% depending on the sector and asset, which is helping to attract investor interest in the region. The recent sale of 10 Grandview Drive, Mt Pleasant for $2.897 million presented a unique and rare opportunity for the Mackay team. The property was the popular Red Rooster Mt Pleasant Drive-thru, located in the North Mackay retail precinct. The land area is 1,900 square metres with a floor area of 237 square metres. It sold on a lean 6% initial yield. Looking ahead, Mackay is shaping up as a regional economic powerhouse, and one of the fastest growing local government areas in Queensland. The region benefits from a diverse economy fueled by the resources sector, resurgence in agribusiness, and growth in construction, logistics and tourism. Des Besanko des.b@rhc.com.au Mackay Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$300 $150-$200 $150-$200 Vacancy n/a n/a n/a Yields 7-8% 6.5-7.5% 7-8% Rates p/m² n/a n/a n/a Current market conditions $1,625,000 10/30-38 Margaret Vella Drive, Paget Recent Notable Transactions SOLD $2,867,000 10 Grandview Drive, Mt Pleasant SOLD 30 | Queensland
Monica Smith of commercial Sunshine Coast describes 2023 as one of the more interesting years for commercial property in the region. On one hand, a lack of stock across all markets coupled with a shortage of new commercial developments has contributed to price escalation. On the other side of the ledger, interest rate rises plus cost-of-living pressures have fueled uncertainty in the market, slowing down commercial lease and sales activity. In this climate, vendors are often securing strong results as demonstrated by the sale of 6/2-4 Ocean Street, Maroochydore for $435,000 plus GST. The 60 square metre ground floor retail space offers close proximity to Sun Central CBD, easy access to Sunshine Coast Motorway and major connecting roads, and a nearby array of Ocean Street cafes, restaurants and bars. An industrial unit at 3/38-40 Claude Boyd Parade, Corbould Park was recently sold by the Commercial Sunshine Coast team. The property offered a unique opportunity for buyers seeking a prime industrial warehouse/office space in a gated complex in a highly sought-after location just off the Bruce Highway. David Smith davidcsmith@csc.rhc.com.au Sunshine Coast Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $350-$420 $160-$200 $200-$400 Vacancy 4% <1% <3% Yields 5.5-6.5% 6% 6% Rates p/m² $4,000-$6,500 $3,000-$4,000 $4,000-$12,000 Current market conditions $435,000 + GST 6/2-4 Ocean Street, Maroochydore Recent Notable Transactions SOLD $550,000 + GST 3/38-40 Claude Boyd, Corbould Park SOLD Monica Smith monica.smith@csc.rhc.com.au Queensland | 31
The Townsville commercial property market remains strong due to continued population growth and high demand notes Peter McCann of Commercial Townsville. “Demand is strong across most sectors, and property values have enjoyed a steady increase over the last 12 months,” says Peter. “There has been a rise in building costs, which is causing the value of secondary buildings to increase. This, coupled with a short supply of available stock, is fueling enquiries”. According to Peter, the Townsville region is still seeing a strong contingent of owner occupiers looking to purchase locally. In addition, the Mackay team is experiencing a high level of interest from investors outside the region. The sale of 222 Flinders Street, Townsville City attracted plenty of interest. Situated on a 730 square metre site with a floor area of 194 square metres and two car spaces, the heritage retail building boasts a prime position on Flinders Street East, with the first floor tenanted until 2025. The $730,000 selling price represents a great result for the city. Peter McCann peter.mccann@townsville.rhc.com.au Townsville Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $200-$350 $120-$150 $200-$400 Vacancy 20-25% 5% n/a Yields 8-9% 7.5-8.5% 8-9% Rates p/m² $2,500-$3,000 $1,800-$2,200 $2,500-$3,500 Current market conditions $730,000 222 Flinders Street, Townsville Recent Notable Transactions SOLD $330,000 Lot 13/16-24 Brampton Avenue, Cranbrook SOLD For more information, contact: 32 | Queensland
South Australia
Simon Winter of Business Sales SA reports that the first half of 2023/24 saw the strongest market for business sales in over 20 years. “The number of transactions is up, the median sale price has increased and the time on the market has shortened,” says Simon. “We find that the post-COVID period has changed the market substantially,” he explains. “To bring any business to the market during this time was to guarantee a disappointing outcome. These businesses have now stabilised and are again strong, and retirement is once again a major consideration for the vendors,” Simon adds. According to Simon, almost all the businesses his team have listed for sale involve retiring vendors, and the market for top end sales is unrivalled. “Buyers have money, and the transactions are unemotional,” says Simon. “The critical requirement of getting a deal done is to present the business well, give the purchasers the information they want and get the price right.” Demand for very small businesses, where buyers are effectively purchasing an income, is less robust. “Workers with even modest skills don’t need to buy a business because they can get a job without much difficulty,” Simon explains. Simon Winter simon.winter@bsa.rh.com.au Business Sales For more information, contact: Price Confidential FoodWorks, Nuriootpa Recent Notable Transactions SOLD Price Confidential Caravan Park, Tumby Bay SOLD 34 | South Australia
David Ente of Commercial Adelaide says the city’s commercial property market is stable though there are preliminary indicators that some of the heat may be coming out of the market. As David explains, “Interest rates finally seem to be biting”. The team at Commercial Adelaide have experienced solid results particularly in the industrial market though here too enquiry numbers are starting to soften making now a good time for both tenants and buyers to secure their ideal property. The recent sale of 3 Kiwi Court, Lonsdale is indicative of the resilience of the Adelaide market. The property features an industrial warehouse of 1,250 square metres on a land area of 2,465 square metres. The property, which was sold for $1.65 million prior to auction, boasts a long-term lease to a longestablished tenant. The current lease is for $100,000 plus GST per annum. Rent is reviewed annually to 4% with a market review at the commencement of lease terms. The current lease is due to expire in late 2028 with two five-year options to renew. David Ente david.ente@rhc.com.au Adelaide Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$400 $95-$160 $200-$600 Vacancy 16-24% <5% 5-10% Yields 6-7% 5-6% 5-6% Rates p/m² $3,500-$5,500 $1,500-$2,000 $3,500-$5,500 Current market conditions $1,650,000 3 Kiwi Court, Lonsdale Recent Notable Transactions SOLD $4,975,000 724 Port Road, Beverley SOLD South Australia | 35
Tasmania
The Hobart market is seeing a softening of yields across all market sectors according to Leslie Simpson of Commercial Hobart. The city’s industrial market is still strong, and is being driven by a wealth of major infrastructure projects including the construction of the new Bridgewater Bridge – Tasmania’s largest ever transport infrastructure project. Other infrastructure projects supporting the industrial sector are the much-anticipated $715-million Mac Point Multipurpose Stadium, described as a once in a lifetime opportunity for the state, the AFL High Performance Centre, and UTAS developments. The interest these projects are generating is further cemented by activity among owner occupiers who are able to secure funding in the current interest rate regime. As in many regions of Australia, high building costs are impacting the rate of development of vacant industrial land purchased over the past few years. This is putting a cap on supply, which is helping to support commercial property prices. Leslie Simpson leslie.simpson@rhc.com.au Hobart Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $400-$450 $170-$200 $800-$900 Vacancy 0-1% 0-1% 5% Yields 6.5-7.5% 5.5-6.5% 5.5-6.5% Rates p/m² $4,500-$5,500 $1,500-$3,500 $8,000-$10,000 Current market conditions $800,000 3/59 Cherokee Drive, Cambridge Recent Notable Transactions SOLD $850,000 57 Cherokee Drive, Cambridge SOLD Tasmania | 37 Annisa Burns annisa.burns@hobart.rh.com.au
Victoria
Tim Frlan of Commercial Brunswick says owner occupiers and self-funded investors are still driving the commercial property market across Melbourne. “Many are looking for new investment properties that are well built and reasonably priced,” notes Tim. He adds that the market continues to be tightly held, and the lack of available stock is helping to hold prices firm despite high interest rates. While Tim expects the market for industrial and office properties to hold steady through 2024, the retail market may experience a rise in vacancies though this is contingent on the broader economy and interest rate movements. The team at Commercial Brunswick have managed several sales of 28 Longford Road, Epping – a modern complex of industrial warehouses situated in what many regard as one of the best commercial locations in Epping, offering outstanding proximity to key transport links. The units ranged from 143 square metres to 294 square metres each featuring several car parks in the unit titles. Tim Frlan tim.frlan@brunswick.rh.com.au Brunswick Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook For more information, contact: Office Industrial Retail Rents p/m² $200-$300 $100-$120 $400-$600 Vacancy 12% 5% 8% Yields 4.5-5% 5-6% 5-6% Rates p/m² $6,000-$7,000 $3,800-$4,300 $8,000-$9,000 Current market conditions $1,000,000 5/28 Longford Road, Epping Recent Notable Transactions SOLD $750,000 15/28 Longford Road, Epping SOLD Victoria | 39
Western Australia
Anthony Vulinovich from Commercial WA highlights the ongoing success of Perth’s commercial market, attributing it once again to the support of the mining sector and various infrastructure projects in 2023, a trend expected to persist in 2024. Key projects, including Perth’s Metronet that is about to see the completion of the Yanchep Rail Extension with operational testing underway and the ongoing $232 million extension of the Mitchell Freeway, contribute to this positive outlook. Several new infrastructure and government projects are also set to enter the tender phase. Industrial developments in prime and emerging areas such as Kenwick, Maddington, Hazelmere, Canning Vale, and southeast to Forrestdale are further driving market momentum. Despite market tempering due to interest rates, Anthony notes that demand for industrial space in Perth remains robust in both leasing and sales. Ending 2023 on a high note, Anthony and his team celebrated the sale of 17 Wellard Street, Bibra Lake WA, in December 2023. The property, spanning 2.15 hectares with a building area of 3,495 sqm over 14 factories, was successfully sold for $5,500,000 plus GST. Terry Menage terry.menage@rhcwa.com.au Perth Office Industrial Retail Rents p/m² Vacancy Yields Rates p/m² Six-month market outlook Office Industrial Retail Rents p/m² $250-$455 $120-$150 n/a Vacancy 5% <2% n/a Yields 6.5-8% 5.75-7.5% n/a Rates p/m² $3,500-$5,500 $2,000-$2,800 n/a Current market conditions $5,550,000 + GST 17 Wellard Street, Bilbra Lake Recent Notable Transactions SOLD 4,100,000 + GST 147 High Road, Willetton SOLD Western Australia | 41 For more information, contact: Anthony Vulinovich anthony.vulinovich@rhcwa.com.au
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