Corporate Park East
Owner’s Report - December 2024
Corporate Park East Summary
Welcome to our quarterly wrap up of Corporate Park East activity.
There has been plenty of activity, both In our estate and around the region in the second half of the year. Both the State and US elections saw a bit of “wait and see” through September/October, but the usual pre-Christmas flurry is definitely in full swing.
The last finishing touches are being added to the sold out final land release, with new owners expected to take possession in January and February. We will likely see new built form product start to break ground in the second quarter of next year, with the first businesses likely moving in after midyear.
The following report is designed to help you make better commercial property decisions, based on real time market evidence and observations from our team at the coalface. We trust you will find some useful insights in this report and invite you to call up or call in to our office and discuss what this all means for your specific property and where the opportunity might be for you.
Chris Massie Director 0412 490 840 chris.massie@raywhite.com
Aaron Canavan
Commercial Principal 0447 744 948 aaron.canavan@raywhite.com
James Garnett
Sales & Leasing Associate 0422 087 745 james.garnett@raywhite.com
Troy Sturgess
Sales & Leasing Executive 0432 701 600 troy.sturgess@raywhite.com
Ashley Rees Director 0411 707 410 ashley.rees@raywhite.com
Michael Nides
Sales & Leasing Associate 0468 517 956 michael.nides@raywhite.com
Market Drivers
“These are the market factors that are shaping the landscape for your Corporate Park East property in the coming year”
-Ashley Rees, SeniorAnalyst
POPULATION GROWTH
This will be a topic that we continue to touch on because it is hard to overstate the impact that 100,000 new residents has on a region with already limited commercial land. We have the population of Rockhampton moving to Caboolture over the next few decades. All levels of government are falling behind their allocated new home construction targets, which will likely lead to further incentives and red-tape slashing for areas like Caboolture West and Elimbah.
LAND SUPPLY CONSTRAINTS
Land prices have jumped again this quarter, providing immediate equity uplift for those luck enough to have blocks secured in the new stage. Asking rates in nearby Burpengary, Narangba and North Harbour are over $650m2. Some major transactions are in the works for parcels in North Lakes and Elimbah, but nothing that will address the supply issues for at least the next three years. A boutique release in Hickey Road, Caboolture could prove to be the only industrial land of consequence to hit the market in FY26 and should be very well received once launched.
INFLATION, INTEREST RATES & CONSTRUCTION COSTS
While the strong post COVID capital growth in commercial assets has been great news for owners, we do have real concerns over affordability for businesses. The cumulative impact of outgoings, electricity, land tax and market rents means the true cost of occupancy has increased by almost $80m2 in the last four years. Add this to the increased labour, transport and material costs and there is real stresson many businesses in this SME bracket.
Construction prices have levelled off in the last six months in particular, which is reassuring for those looking to commence new projects in the 2025 calendar year. Steel and timber have fallen while increases in concrete, plaster board and Labour have negated any of these savings. Current inflation, bond prices and labour market statistics indicate there is more chance of a rate increase than decrease in the coming quarter.
OWNER OCCUPIER DEMAND
The increased home equity of business owners across the regions has given them confidence to invest in the bricks and mortar of their business. This is especially true for the sub $1.5m price point. There is a definite backlog of demand for businesses that currently lease who want to purchase, but are limited by lease term commitments or lack of options. The ongoing influx of business owners relocating from southern states, where both residential and commercial property prices are higher, is compounding this effect.
Sale Demand & Transactions
Owner Occupier Sales:
Owner occupiers still dominate our enquiry across the industrial sector due to high residential equity and relatively low interest rates. Our actual volume of transactions has averaged just over one per month through 2024, but this has been hindered more by low stock availability in key sizes than by demand.
Arecent auction we held for an older freestanding facility nearby (2 Roseby Road) was the perfect case study of the willingness of owner occupiers to outbid investors, with the thirty year old property selling at “as-new” rates due to lack of options. We expect this demand trend to continue, with an interest rate rise the only factor that may cool this sector.
Sale Demand & Transactions
Investor Sales:
There have been no tenanted units offered to market in the last quarter, but appetite from investors across the regions remains strong. The trend continues of investors rolling the dice on buying vacant property in order to “beat the rush” on tenanted assets. The strategy is working well for those who avoid the size brackets where there is a supply glut (150-300m2).
There has been a noticeable shift in the attitudes of accountants towards commercial investment in the last two years, which has been further compounded by the proliferation of commercial buyer’s agents helping investors transition away from residential. The result has been increased enquiry from relatively inexperienced investors, who require a bit more time and guidance from us.
Market sentiment is that we are at the peak of the interest rate cycle. The RBAhas concerns around the labour market plateauing above full employment, and inflation has yet to show signs of a sustainable return to the 2-3% target band.This implies a greater chance of a rate hike than a rate cut towards the end of 2024 and the beginning of 2025, which would impact confidence.
Tenant Demand & Transactions
The State and US election cycles had a noticeable impact on our team’s ability to convert enquiry into genuine inspections and offers, as business owners waited for clarity on outcomes. The tightening of government spending and inability of key departments to make decisions while in “caretaker mode” leading up to elections has a real flow on effect. The tap has since turned back on, with noticeable improvement in speed of action from businesses. This is likely compounded by the run into Christmas, where tenants can capitalise on downtime to relocate.
Current Stock on Market
Of the 30 available tenancies for lease or sale across the estate, only 4 are over 300m2 and none are over 600m2. We currently have no complete buildings for sale or lease over 300m2!
Like last quarter, we see the bulk of our current stock for both sale and lease falling within the sub 300m2 range, with a limited number of warehouses exceeding 1,000m2 also available.Those developers yet to build should be interested in the persistent gap in available stock within the 300-1000+m2 range.
For Lease For Sale
Current Stock - FOR LEASE
Current Stock - FOR SALE
Final Stage Update
Construction of the final release of Corporate Park East is now all but complete, with the last compliance checks with council being undertaken. The 40 lots in the final stage of the estate sold out quickly to a mix of developers and owner occupiers. We anticipate the first buildings to be complete in the third quarter of 2025.
Recent Transactions
Chris Massie Director - Commercial Principal 0412 490 840 chris.massie@raywhite.com
Caboolture Team
Troy Sturgess Sales & Leasing Executive 0432 701 600 troy.sturgess@raywhite.com
Michael Nides
Sales & Leasing Associate 0468 517 956 michael.nides@raywhite.com
Ashley Rees Director 0411 707 410 ashley.rees@raywhite.com
Aaron Canavan Commercial Principal 0447 744 948 aaron.canavan@raywhite.com
Bianca Jensen
Sales & Leasing Associate 0434 053 164 bianca.jensen@rayhite.com
