New challenges face Gold Coast industrial property

By Greg Bell

Industrial property for sale on the Gold Coast might be in high demand at the moment, but it hasn't necessarily been an easy ride for the sector. There have been various ups and downs to contend with, although it's reassuring that industrial property has emerged stronger than ever.

Figures from IBISWorld show that the sector has experienced annual growth of around 5.9 per cent between 2011 and 2016, with revenue across the industry totaling around $10billion. This shows just how important industrial leasing on the Gold Coast is to the wider economy – and gives plenty of incentive for further supporting the sector.

Demand for more space is increasing 

As the size of industrial leasing firms increases, as does their need for space. Mark Courtney, MacroPlan's General Manager in Queensland, recently told the Urban Developer that the average floor space has increased by as much as 30 per cent over the past few years.

The 20 May article highlighted that both distribution centres and warehouse facilities are growing, so large amounts of space is likely to be something people look for when industrial leasing in Surfers Paradise.

Generating decent returns

Any investor is seeking to generate the maximum returns on their industrial property investment, and many of them have managed to do just that. The June 2015 Property Council/IPD Australia All Property Index shows that the capital growth of industrial property had increased 4.5 per cent over the past year. Meanwhile, the income return was up 8.1 per cent.

Moving forward, the challenge will be making sure these returns can be maintained. Companies will need to make sure they are moving into premises that are the right size and in the right location for their requirements, which involves being increasingly savvy.

There is potential to generate strong returns on Gold Coast industrial leasing as the figures show, but it's not something that will happen by chance. Having the expertise of a real estate agent with experience in this area can be a major advantage, especially as levels of competition reach fever pitch.

Outsourcing certain aspects of operations

Another trend Mr Courtney identified is the preference for outsourcing certain aspects of day-to-day operations. This will also have implications for commercial property on the Gold Coast, as businesses may find themselves in need of satellite centres, or the facilities of other businesses.

There are many different functions that outsourced operators can provide, including everything from logistics to distribution. As the global workplace becomes more digitally connected, these providers don't necessarily have to be in the vicinity of the central company – or even the same country if it makes practical sense to do so.

Businesses have to weigh up the pros and cons of outsourcing to determine whether it will deliver the advantages they are hoping for. In some situations, it might make more sense to centralise everything at a single industrial property on the Gold Coast, but this won't always be the case.

Moving into converted properties

As the need for industrial property grows, it's hardly surprising that conversions are starting to grab the attention of investors. Supply levels are soon likely to start dwindling, which is why existing commercial real estate may have to be upgraded to meet companies' needs.

This is something that might soon start to become more prominent across the Gold Coast. Although there's already a strong provision of industrial property, a situation may soon be reached where more is needed, meaning older premises can be upgraded to provide the space these companies need.

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