Paget properties sell for $8M
THE multi-million dollar sales of two Paget properties have set the tone for the industrial market in Mackay.
In late 2018, a heavy engineering workshop complex at 21 Gateway Drive sold for $4.84 million at a passing yield of 8.15 per cent while a workshop complex at 12-16 Progress Drive sold for $3.012 million at a passing yield of 8 per cent.
The properties have both been leased for 10 years, to Maintec and Aust Bore Pty Ltd respectively.
In the Herron Todd White Month in Review Property Report for April, it was noted yields so low had not been seen since 2015.
"The exceptionally long lease terms and high tenant quality were key investment considerations with these acquisitions to drive the lower yields,” HTW property experts said in the report.
"Importantly, we believe that the local coal mining based economy and market sentiment has improved to the extent that tenants are now willing to commit to long-term leases at historically low rental levels which are beginning to recover from a cyclical trough.
"We expect that long-term leases and lower investment yields will continue throughout 2019 as investors rediscover Paget, the premier industrial precinct in regional Queensland.”
HTW experts said smaller vacant industrial warehouses and workshops priced below $2 million continued to attract attention from potential owner-occupiers.
A potential resurgence in the industrial unit market, which had suffered most through the coal mining downturn, was also noted.
"The industrial unit market also appears to be attracting renewed interest with a couple of larger vacant units presently under contract at prices between $550,000 and $700,000,” property experts said.
"Prices in these two sectors are well below the 2012 market peak.
"We expect increased sale volumes in these sectors through the year with modest price improvement.”
- Melanie Plane