The Event was just the beginning. After the gargantuan residential auction function in January, the team at Ray White Surfers Paradise held another big auction day – of a different kind.
Focusing on commercial real estate on the Gold Coast, this second auction day on February 16 saw some incredibly good results, which bodes well for the year to come. Greg Bell, Director at Ray White Surfers Paradise, is here to fill you in on how it went.
"We run this big commercial auction every year after The Event," Greg says. "It is a big follow-on from the residential auctions, and helps to really gauge the temperature of the commercial market on the Gold Coast."
"We had a total of 24 properties listed this year, many of them really quite big. While they didn't all sell under the hammer, right now we've seen fourteen of these commercial titles bought. We had more than 90 registered bidders, and closer to 200 people in attendance buying up more than $20million of property – it was a really successful day."
But what does it tell you about who is buying?
Greg noted that while there was some local interest in the commercial auctions, much of it was from elsewhere.
"I'd say about 40 per cent of the buyers were from Melbourne and Sydney, with another 20-30 per cent from Brisbane. The rest were likely local, but there was a very strong level of interest from interstate and elsewhere in Australia."
"There also wasn't any foreign interest for these auctions – the audience was 100 per cent Australian buyers."
Something which puts paid to complaints about overseas investment taking up space in local markets. It seems Australian buyers are hungry for commercial investment, and ready to make a lengthy trip to the Gold Coast for it in some cases.
Overall, Greg thinks the commercial event is a good indicator for the market in 2017. "These results tell me that the Gold Coast market is alive and kicking in 2017. We haven't had this many registered bidders at a commercial auction event in a very long time – it's really positive."
"I think investors are beginning to realise that interest rates will stay low for a little while yet. It means that self-managed super funds and many other investments are a bit out of favour – they just don't provide the returns that commercial property can. In SE Queensland you can get commercial yields of 6 or 7 per cent, which can be difficult to find in other places – especially Sydney and Melbourne."
However, that doesn't mean every part of the market is ripe for the picking – Greg notes that some kinds of commercial real estate on the Gold Coast are still in oversupply.
"Most of what we sold at our event was retail or industrial. Retail is always going to be popular for investors, while industrial sites are a recent emergence with strong demand. Our biggest sale was actually a Ford dealership in Beaudesert – it went for $9.8million."
"However, we did have a couple of office spaces that didn't get sold. With vacancy rates still up around 12 per cent, absorption will take a while yet."
All told, it was a successful day that presents many opportunities for the coming year. And as Greg concludes, buyers and sellers aren't done yet.
"Our next set of auctions are in April – supply levels aren't through the roof, which means the competition will be up, and prices should be great." If you want to find out more about upcoming commercial property auctions on the Gold Coast, get in touch with Ray White Surfers Paradise.