Confident first half year for commercial property
DESPITE some uncertainty creeping into other markets around the country, the Sunshine Coast commercial market is motoring along in 2017 with confidence throughout the property industry on the back of a large amount of capital and infrastructure investment occurring over the next five years.
Colliers International managing director Nick Dowling said that the first quarter of 2017 was a record quarter for the firm.
"While activity levels have slowed down a bit, there are a lot of exciting things in the pipeline for the remainder of 2017,'' Mr Dowling said.
Office leasing and strata titled activity has been strong despite concerns about an oversupply. Colliers International's office leasing expert Brand Moore said "our office is currently handling 10 office requirements of 500sq m or larger with a mix of medical, government, semi-government and construction based businesses making up the bulk of the larger enquiry.
"This is a great indicator of the positive sentiment in the region at present. Strata titled office stock is also in tight supply with some sales as high as $5000 per square metre occurring in Maroochydore."
The investment sales market has remained very strong with yields in the 5% and 6% range becoming a regular occurrence for well-located assets.
Mr Dowling commented that "there is still a lot of southern money coming up here in search of better yields.
"Wealthy privates are now investing in properties as much as $25million on the Sunshine Coast with high profile assets in particular being sought after.''
He added that while quality stock remains tight, yields will remain firm.
The big mover through 2017 has been the rapid take-up of industrial land in Coolum, Noosa and Caloundra. The past 12 months has seen at least 60 industrial land sales with developers making up about 50% of these sales.
Compared to the average of 30 land sales per annum over the past five years, we can safely say that the industrial market is enjoying a strong period at present.
Industrial property expert Ben Flower said that while sales volumes have increase, land prices have remained relatively steady which his keeping rental growth to a minimum.
He added that the volume and value of industrial unit sales has improved considerably, particularly for newer stock. This is encouraging developers to keep buying.
From a residential development perspective, Colliers special projects director Baydn Dodds said sales activity in the residential development site sector continues to remain strong.
Land developers have been achieving record sales rates and solid price growth, with demand coming from builders, owner-occupiers and investors.
With a number of projects completed or nearing completion such as Oceanside Birtinya, Parklakes II, Creekwood and Peregian Breeze, developers are actively looking for new sites to meet current and forecast demand.
Townhouse development sites are in short supply and finished product in market have seen solid levels of price growth, pulled along by increasing house and land prices.
The apartment market is also performing well with solid demand for sites in established high amenity areas such as Cotton Tree, Mooloolaba and Kawana.
Developers have reported promising results for good size units in these areas targeted at owner occupier down-sizers and empty-nesters. The investment and owner-occupier unit market in Oceanside has been performing well, driven by the new hospitals, with the town centre and Bokarina Beach forecast to start this year.