When people think Gold Coast commercial real estate, inland industrial space probably isn't what comes to mind. It's towering shore-side residential developments, pristine office buildings and retail that people think of – the glamorous side of Surfers Paradise commercial.
But the fact is, Yatala industrial precinct is emerging as an investment area that's just as lucrative as any seaside apartment building. It's an area that just keeps improving, and it's even attracting some international corporates to help it continue its impressive rate of growth in the future.
Despite it's potential, many investors may shy away from Yatala, perhaps because industrial real estate is something of an unknown to many. We've had a closer look at the Yatala, to help reveal the promise that it's showing and demystify the area for investors. With a little knowledge and the right advice, you too could invest successfully in this growing region.
Ray White research shows that although sales volume in the area are reasonably low, demand remains high and capital values have been increasing. Large corporate owners still remain in the area and smaller private investors and owner occupiers have been busier of late, thanks to increasing rents.
The smaller industrial unit market offers the ideal low cost entry point for fledgling industrial investors, with some going for as little as $257,000. If the rent for such a space sits at around the sqm average for Yatala, you'll be looking at a yield exceeding 6 per cent. That's a decent return for any investor.
As a result of increased demand, the area's average capital value has increased by 5.69 per cent, over the year to October. Capital values now range between $1200/sqm and $1900/sqm with yields as high as 7.5 and 8.5 per cent. Low turnover may make it difficult to purchase industrial property in Yatala, but with the help of an experienced local agent you'll be sure to find what you need.
Another promising sign for those looking to buy property in the area, is the fact that the supply pipeline is extremely demand driven. There's only 108,100sqm of space in the pipeline at the moment, made up of 11 separate projects at varying stages of completion.
Five of these are at the approval stage, accounting for 61,270sqm of the space in development. However, despite already having approval construction will not commence until adequate commitment is shown, delaying their construction date until as late as 2020.
Such an approach to supply may seem like an impediment to progress, however, it actually has positive implications for the future of Yatala industrial real estate. A restricted supply pipeline will ensure that vacancies remain low, placing upwards pressure on rents, increasing yields and keeping demand for space high. This means that conditions in Yatala are likely to remain positive for years to come.
In June of last year construction began on a massive industrial hub at the site of the old Darlington Park Raceaway in Yatala. It's construction will take as long as a decade, but the area and its investors will reap the benefits of increased economic activity when it's completed.
The hub is expected to pump as much as $1billion into the Gold Coast economy and provide up to 5000 new jobs. It will cover a staggering 127ha and comprise of roughly 250 buildings.
This will be the largest project of its type in the Gold Coast and one of the largest in the state. It's an indication of the direction Yatala is going, and a promising sign for all investors scouting their next purchase.
If you're considering taking advantage of the promising growth in the Yatala region, get in touch with the team at Ray White Commercial today.