How fares foreign investment in commercial property?

By Greg Bell

The activities of overseas buyers and their impacts on our local market can sometimes be difficult to ascertain. That formed part of the reasoning for a shift in our foreign investment framework in May, with Prime Minister Tony Abbott announcing that the Australian Taxation Office (ATO) would take over the management and analysis of this buying group.

In the 2 May press release from Mr Abbott's office, it was noted that foreign investment in residential dwellings here would have the impact of increasing our housing supply. But what about activity surrounding commercial real estate on the Gold Coast?

According to Reserve Bank of Australia (RBA) research, about a quarter of all major value commercial real estate purchases since 2008 have been from overseas. Over the previous fifteen years, this figure was a mere 10 per cent. So overseas investment in commercial property is booming – what does it mean for our markets? 

A boost for construction

According to this RBA report, foreign investment in commercial real estate has seen an increase in capital values, which has likely boosted construction. Overseas capital has enabled local businesses to expand their production and floor space, which has seen more commercial construction undertaken.

If you are interested in industrial leasing on the Gold Coast, partnering with a foreign investors could mean you play a crucial part in boosting commercial real estate stock! 

Better bottom lines for business

The RBA also notes that the increase in real estate stock has downward pressures on rent prices for commercial property. This facilitates much more affordable property for firms interested in retail leasing on the Gold Coast or perhaps just looking to expand their office base.

On top of this, foreign interest in our commercial stock allows local companies to sell business at a higher price than they could domestically, which has further benefits for their financial status. 

More money for Queensland

While research from KPMG and the University of Sydney has found that the majority of overseas investment in commercial real estate has gone to New South Wales, Queensland still plays an important part in this process. NSW accounts for 72 per cent of Chinese purchases in this sector, but Queensland sits in third place on 12 per cent, only one per cent behind Victoria.

However, our proportion of commercial real estate investment compared to other purchases is significant. A total of 64 per cent of foreign investment here goes into this sector. 

This shows we get our fair share of the investment pie, even though it could be expected that more profits should come our way. Engaging our teams to list commercial property for sale at Surfers Paradise is a fantastic way forward for this, as we have a client list that expands right across the globe. This enables wide-ranging promotion of and hopefully growth within the Gold Coast commercial market. 

Make sure you do it right

According to the RBA, "foreigners may lack the country-specific expertise required to develop new properties". This highlights the clarity and intelligence that the right real estate agent can bring to the purchase of commercial or industrial property for sale on the Gold Coast.

Whether it's finding the ideal tenants for empty industrial space, connecting you with enthusiastic buyers, or providing you with clear market trends and forecasts to help you create profit, we can be your one stop shop. 

At Ray White Surfers Paradise, we have decades of experience making sure people from both Australia and abroad make smart investments that lend themselves well to productive retail leasing and positive cashflow. To find out more about how to advance your commercial property prospects, make sure to give us a call. 

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