Rent and construction crisis sparks surge in business owner-occupiers
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23/8 Distribution Court, Arundel, saw eight bidders register, most of whom were commercial owner occupiers.
The rent and construction crisis has sparked a surge in owner occupiers driving up prices in the commercial market to secure property they’d otherwise have to wait up to year for.
Around 90 per cent of buyers were owner occupiers rather than investors looking for vacant commercial properties at the Ray White Surfers Paradise’s July auction event this week where 67 per cent of properties sold under the hammer.
The demand drove up the price of properties, with sales “well above” seller expectations, according to the Ray White Group.
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Potential buyers at the Ray White auction event on Thursday July 28 on the Gold Coast.
Ray White Commercial Gold Coast team leader Luke Boulden said there had been mass migration to SEQ throughout the Covid-19 pandemic which had brought a higher skillset of people looking to relocate not just their families but also their businesses.
“We have seen a surge in local investment on the back end of that, and interstate investment as a follow on from that, and it’s a driver of the prices, while still being affordable compared to those other states and cities.”
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The Gold Coast has seen a rise in relocations from interstate, which has boosted demand.
Ray White Commercial and Industrial Gold Coast agent Jackson Rameau said it was mainly commercial owner occupiers on the hunt, sparked by the construction crisis blowing out time frames for new premises and the uncertainty around interest rate hikes.
“Around 90 per cent of them were owner occupiers. We have a large influx, the appetite is for properties under $1.5m in the industrial sector,” he said.
“At the auctions (this week) we saw more than five bidders per auction on the vacant industrial properties, and saw all vacant industrial properties sell as part of our monthly auction.”
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Demand for vacant commercial property at auction is at a high.
“There was competitive bidding and all properties sold well above reserve, with demand for vacant property at a high because it’s currently so difficult and expensive to lease properties.”
Mr Rameau said many buyers were purchasing in super funds or looking to buy before interest rates got much higher.
“Things are taking a little longer to build at the moment,” he said, with time frames pushed out to a year in some cases.
“We also find buyers looking to secure mortgages now rather than waiting for interest rates to rise even further, hence the spike of property prices.”
He said the commercial owner occupiers were “predominantly looking to utilise space rather than waiting six to 12 months for new development”.
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23/8 Distribution Court, Arundel, has a floor area of 148sq m.
Among the sales was 23/8 Distribution Court, Arundel, which saw eight bidders competing to secure the vacant industrial property, with it selling under the hammer for $575,000. Another at 16/8 Hopper Avenue, Ormeau, went for $646,000 – with both sale prices “well above the sellers’ expectations” – while a third at 6/27 Motorway Circuit, Ormeau, sold before auction.
“I would anyone thinking of selling in the next five years may look at selling now to secure the hype of owner occupiers rather than uncertainty of the future but predominantly it’s up to the person who owns the property,” Mr Rameau said.
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The mezzanine level with office space.
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23/8 Distribution Court, Arundel, is ready for occupation.
Mr Boulden – who sold an office suite at 11/39-47 Lawrence Drive, Nerang, prior to auction – said the Gold Coast office market was stable “if not continuing to increase” in the face of low interest rates.
“If you look at the Gold Coast office market over the past 12 months, we’ve been one of the best performing office markets in the nation as we saw those Sydney and Melbourne markets start to retract, we’ve still been bolstered.”
“The same can be said for the other markets as well. South East Queensland, and especially the Gold Coast, has seen a massive increase in the strength of the industry. We’ve seen all the sectors grow and I think that will continue to be a trend as the years go on.”
Mr Boulden said there were “still a lot of affordable acquisitions out there too”.
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