While the residential property market for investors is roaring along, the commercial property market is just as hot and likely to stay that way well into the future.
It’s gone “completely bananas” says industry expert and managing director of Colliers Sunshine Coast, Nick Dowling.
“Business confidence is pretty high on the Coast,” he says. “The industrial market, and in particular the industrial land sale market, is a good barometer of how the economy is going.”
While 12 months ago he had about 60 industrial land parcels for sale he says now, “there are no lots left”.
“The take up has been huge,” Mr Dowling says. “It’s a little bit of FOMO.”
He uses the example of some government-owned property at Coolum which about 12 months ago had 10 or so blocks for sale at $135 to $140 per metre.
He got down to one left — an odd-shaped block. It sold for over $200 per metre. An earlier block sale of $135 per metre then fell-over and subsequently sold for $285 per metre.
Many of these land parcels are being filled with industrial units then quickly leased or sold.
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Established industrial land is also selling quickly.
The rents are also heading up, but not quite at the same rate as the prices. A place that was $120pm is now renting for about $140 per metre.
“In the 25 years of doing this, I have never seen as much activity, both from the leasing and sales perspectives,” Mr Dowling says.
Looking forward there is a downside to future sales — there is a severe shortage of industrial land.
While the Sunshine Coast Council is aware of this issue, Mr Dowling admits the region is “hamstrung” by its geography with the mountain range, flood prone land, a high demand for residential estates and a desire to protect the beauty of the region.
The answer to the council’s quandary doesn’t appear straightforward.
If the promised new infrastructure can come into place quickly, particularly heavy rail, Mr Dowling sees it will add even more value to the Coast.
Rezoning land along this and other transport corridors for industrial use is a likely solution.
“With limited amount of stock in the market, tenants, owner-occupiers and investors are all scrambling to secure industrial premises,” Mr Dowling says.
“We are no longer the little country town; we have grown up and people are recognising that everywhere,” he adds.
