Raine and Horne Commercial

QLD - Brisbane North Trent Bruce of Commercial Brisbane North says yields in the area range between 5-6.5% across all retail, industrial and office categories. There is currently an acute shortage of investment opportunities available within the market with high demand so we believe yields will hold around their current levels and possibly tighten even further moving forward. Trent says, “Astute investors are taking advantage of the low interest rate environment, which is fueling higher than normal sale volumes. Investors frequently comment that low interest rates mean they have to look for alternative places to park their funds, so quality assets with good tenants are in high demand. “Tenants with strong cash flow are looking to become owner occupiers and are taking advantage of loan repayments below current rents, creating a surge in owner occupation. We are also seeing an increase in the number of investors from Sydney and Melbourne showing interest in the Brisbane market, which undoubtedly is a result of the strong interstate migration currently being experienced.” Recent sales results reflect these observations. A 4,411sqm site at 314 Gympie Road, Strathpine sold for $2.650 million, while 621 Gympie Road, Chermside commanded a sale price of $5.250 million. During due diligence, the buyers of this 2,663sqm site acquired DA approval for a 3-storey medical hub, which is now being offered for lease via pre-commitment. In the leasing market, 276 Abbotsford Road, Bowen Hills, a 286sqm office/warehouse, located four kilometres from Brisbane CBD, was leased for $297 per sqm, plus outgoings and GST. 1/1814 Sandgate Road, Virginia, a 405sqm bulky goods/showroom located on a busy arterial road, was leased for $247 per sqm net plus outgoings and GST. Trent adds that the Brisbane North team has achieved a more than 85% success rate at auction, indicating that despite the disruption of COVID-19, plenty of industries are prospering. Across North Brisbane, industrial property has just a 5% vacancy rate, compared to 10% for the retail market and 15% for office space. 23 - Trent Bruce tbruce@rhcommercial.com