New report shines light on southeast industrial market

By Greg Bell

Taking on property of any size requires careful planning and research. Are you buying in the right area? Will you find tenants if it is an investment? Is it close enough to that cafe that knows your order by heart? These questions grow in scale when you decide to make a move on industrial property for sale on the Gold Coast.

Industrial and commercial leasing usually works with larger vacancy margins than residential, so more careful planning and knowledge of the market is perhaps required than if you were simply buying a single residential property. To shed some more light on this sector of the market, the Property Council of Australia's Queensland division has released the third generation of its Industrial Vacancy Report.

This dissects markets across the state, and provides a detailed snapshot of the vacancies found in the industrial leasing market in many areas – as well as the changes in floor space. This allows interested parties to have a much clearer picture of the state of the market. 

Vacancies up, but so is space

With a particular focus on the Logan Motorway Corridor, situated between the Gold Coast and Brisbane, the Property Council findings indicated that vacancies for industrial real estate in this area have remained stable around 7 per cent, despite an increase in available floor space.

Across all areas reported upon by the Property Council, it was noted that 10.7 per cent of industrial properties were vacant as of March this year, compared to 8 per cent in the same month last year. However, the amount of floor space across properties increased by more than 1million square metres, reaching a total of 8,263,368. 

This could provide an indication of where industrial leasing on the Gold Coast is headed, and serves as a good reminder: Even if the vacancy rate percentage increases, net absorption could still actually be working in the favour of buyers, depending on whether floorspace is on the rise. 

Emerging trends in industrial

The other reason given for the heightened vacancy rates is the mining sector slowdown. In a 23 April media release accompanying the research, Queensland executive director of the Property Council Chris Mountford mentioned this, as well as noting that the vacancy rate for floorspace indicated that many industrial properties were on the smaller side.

This is another trend to keep an eye on. Marc Howe, writing for Sourceable on 15 April, argued that as residential property prices keep rising and compressing rental yields, commercial real estate could be the next way forward for property investors in 2015.

If this is the way forward, then matching your commercial real estate on the Gold Coast to the market will be important. Given the aforementioned trend of smaller leases within Queensland industrial property you may wish to target SMEs as tenants rather than large companies to buy out the majority of your floor space. 

The Property Council's report will soon extend to include detailed information on other areas of southeast Queensland, so the exact trends among commercial real estate on the Gold Coast should soon be available. 

Get the right real estate

The opportunity to buy industrial or commercial real estate on the Gold Coast allows you to make significantly higher rental yields than with residential property, and means your purchase is accessible by a wide range of tenants. Finding the right property is only the first step – marketing it to potential leasers is also important.

For experienced and appropriate advice on all things commercial, make sure to visit us at Ray White Surfers Paradise. We service the wider Gold Coast region, and can set you up with an excellent piece of industrial real estate. 

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