2018 In The Know - Commercial Annual Wrap Up | Ray White Commercial | Northern Corridor Group by Ray White Commercial Northern Corridor Group

IN THE KNOW

2018 COMMERCIAL PROPERTY END OF YEAR WRAP UP RAY WHITE COMMERCIAL NORTHERN CORRIDOR GROUP

PINE RIVERS

MORETON BAY

SUNSHINE COAST

Level 1, 104 Gympie Road Strathpine, QLD 4500

3/125 Morayfield Road Morayfield QLD 4506

1/172 Brisbane Road Mooloolaba QLD 4557

T 1300 255 075 F 1300 778 887

ONE TEAM - THREE LOCATIONS

Welcome Welcome to the 2018 wrap up of commercial property activity across the Northern Corridor. The purpose of this report is to provide you with a detailed analysis of the trends that have and will continue to impact your property. With the addition of our Pine Rivers office, we now have more agents on the ground providing real time feedback from tenants, buyers, financiers and valuers from North Brisbane to Noosa. It has proven very interesting to combine the pieces of this jigsaw to reveal the areas that are leading and those that are lagging, both geographically and by property type. Additional insights from Ray White Commercials head of research has provided yet another layer of context for us to identify opportunities and potential corrections on the horizon. At the start of 2018 our team has set ourselves the goal of being the commercial property experts for the Northern Corridor, so much so that we changed our name to reflect this. We are proud of the work done to date to bring you this 2018 wrap and promise to continue providing you with the knowledge, resources and support to ensure your next property decision is made from an informed position of strength.

MICHAEL SHADFORTH COMMERCIAL PRINCIPAL

CHRIS MASSIE

COMMERCIAL PRINCIPAL

Contents NORTHERN SUNSHINE COAST

ONE TEAM THREE LOCATIONS MAP

NORTHERN CORRIDOR SUMMARY

NORTHERN CORRIDOR SUMMARY CONTINUED

NORTH LAKES

SUNSHINE COAST KEY INDICATORS

CORPORATE PARK

CENTRAL SUNSHINE COAST

MORAYFIELD & CABOOLTURE CBD

CALOUNDRA INDUSTRIAL

NARANGBA, DECEPTION BAY & BURPENGARY 17

KAWANA BUSINESS & MEDICAL

REDCLIFFE PENINSULAR

SUNSHINE COAST OFFICE & RETAIL

MORETON BAY & NORTH BRISBANE KEY INDICATORS 13

OUR TEAM

18 20

Cooran Pomona Tewantin

ONE TEAM T H R E E LOCAT I ON S

Noosa Heads Sunshine Beach

Cooroy

Eumundi

Peregian Beach

North Arm

Coolum Beach

Ninderry Kenilworth

Marcoola Bli Bli

Mapleton

Maroochydore

Montville

Buderim

Palmwoods

Witta

Eudlo

Mooloolaba Warana

Sippy Downs

Conondale Maleny Mooloolah

Currimundi

Landsborough Peachester

Booroobin Bellthorpe

Caloundra

Cedarton Glass House Mountains

Stanmore

Stony Creek

North Bribie Island

Woodford Neurum

SUNSHINE COAST Level 1 172 BRISBANE ROAD Mooloolaba, QLD 4557 +61 1300 25 50 75

Dâ&#x20AC;&#x2122;Aguilar Bracalba Mount Delaney Delaneys Creek Wamaran Basin Mount Mee

Wamuran Basin

Campbells Pocket

Mount Pleasant

Banksia Beach

Bellmere

Caboolture

Caboolture South

Burpengary East

Burpengary Deception Bay Scarborough

Rush Creek Dayboro

North Lakes

Whiteside

Samsonvale Kobble Creek Cashmere Mount Samson Mount Glorious

Mount Nebo

Beachmere

Woorim Sandstone point Bongaree

Morayfield

Narangba

Yugar

Toorbul Ningi

Moorina

King Scrub

Laceys Creek

PINE RIVERS Level 1 104 Gympie Road Strathpine, QLD 4500 +61 1300 255 075

Elimbah

Moodlu

Rocksberg

MORETON BAY Unit 3 125 Morayfield Road Morayfield, QLD 4506 +61 1300 25 50 75

Welsby Donnybrook

Kallangur Petrie Lawnton

Newport Redcliffe

Clontarf

Strathpine

Brendale

Bald Hills

Eatons Hill

Samford Valley

Carseldine Albany Creek Aspley

Banyo Chermside Arana Hills Nunda Camp Mountain Mitchelton

Wights Mountain

COMMERCIAL

PROPERTY

NORTHERN CORRIDOR SUMMARY While each individual precinct across the region is summarised in more detail later in this report, the following is a summary of the key noteworthy trends we have identified that are either true across the whole Northern Corridor or which may serve as a canary for other precincts.

TENANTED INVESTMENTS

POPULATION GROWTH & INFRASTRUCTURE

In spite of commercial property having a reputation for being an unemotional numbers game, it is often the “intangibles” that drive the actions of buyers and sellers. In no section of the market is this more evident than in the behaviour of baby boomers over the last twelve months, where Fear has been the driver in question.

Projected population growth continues to be the driver providing opportunity to almost all areas of the Northern Corridor. The latest projections through to 2031 sees North Brisbane to the Sunshine Coast braced for one of the largest population influxes in the country. The good news for the region is that state government each council have identified the importance of job creation and retention for this growth to be effective and are investing accordingly.

FEAR AND OPPORTUNITY

For many of our property owners over the age of 65, the focus has shifted from growth to security of income and estate management. The security of income is the main driver behind the high volume of transactions involving single national tenants on long leases such as fast food and service stations. While the estate management dilemma continues to prompt owners to offload properties involving partnerships. Improved market conditions mean 2018 has been the first opportunity since the GFC for many to successfully divest, and we expect to see this trend to continue due to fear of another correction that they may not have the means or patience to outlast. The good news for Boomers is the record low interest rates and volatile stock market mean there is a deep pool of buyers willing to take on their “headache” properties with longer term goals in mind.

HAND AND GLOVE

We can all be quick to criticize at times, but there is little doubt that infrastructure programs such as Sunshine Coast Hospital Precinct, Maroochy Town Centre, the undersea data cable, Petrie University, as well as highway and light rail upgrades across the region are driving employment and providing the scaffolding for ongoing expansion of businesses in the region. Moreton Bay alone is expected to experience a 54.4% growth in employment over the next 25 years.

Sunshine Coast

WASTE MANAGEMENT PILES OF GOLD

The waste management industry is currently in turmoil due to the recent change in China’s acceptance policy on recyclable waste. Public companies have taken a major hit on the stock exchange and councils are scrambling to find a market for their increasing stockpiles of material. While this sounds anything but positive, the recent announcement by the Queensland Government of the introduction of a $70 per tonne waste levy is the first in what we anticipate will be a sustained increase in legislation designed to promote improved efficiencies in resource handling state wide. With our population exploding and land at a premium, watch for this industry to drive development in general industry precincts across the region for the foreseeable future.

INDUSTRIAL STOCK LEVELS

TRANSPORT & LOGISTICS

The available stock across the region as a whole is tighter than any time in the last twelve years, though this obviously varies by precinct and type. The supply of functional industrial properties is of particular concern. In years past, the current occupancy levels (as high as 96% on some estates) prompted a flurry of speculative development to capitalise on the pent-up demand. Increasing development costs, stagnating rents, increasing outgoings and tightening lending criteria are all contributing to the current developer reluctance, meaning this stock shortage will likely worsen before it improves.

You may be tired of hearing us talk about this sector, but in a property market of increasing interruption and volatility, this is one of the few industries where all lights are green! Online shopping will continue to expand in scale and product range, with same day delivery being the benchmark consumers measure by. For this reason, “Last mile delivery” facilities will become increasingly necessary and we predict satellite distribution hubs to begin appearing within the next twelve months to cater for the coming population growth.

NEW BUSINESS PARKS

RETAIL CENTRES

The Northern Corridor is lucky to boast some of the most significant and numerous residential and commercial developments in the country. Aura, at the southern end of the Sunshine Coast, has sold more parcels of land in the last twelve months than any other residential development in the country. While Moreton Bay currently has 29 active residential projects, the highest number in South East Queensland (Oliver Hume).

The common consensus is, in the near future, that if a shopper wants a product they will go online, if they want an experience they will go to a shopping centre. The result will be an integrated combination of interactive retail outlets, cafes/restaurants and indoor entertainment businesses. There are few better examples in the country than centres like Sunshine Plaza, Kawana and North Lakes, who reacted decisively and invested heavily to reposition their offering to meet the new Experiential Retail demands of today’s shoppers.

TIGHT AND GETTING TIGHTER

HOME FOR BUSINESS

The two projects to watch in 2019 are Caboolture’s Corporate Park East and Aura Business Park. With all other proposed developments north of Pine Rivers Bridge either constrained by surrounding residential or slated for transition to residential by developers, Corporate Park East will be the only General Industry land release in an already very tight industrial land market. Aura Business Park provides the combination of accessibility and lifestyle that is increasingly attractive to business owners. With Aura’s residential component projected to accommodate a population equivalent to Gladstone, the ready-made market is providing further incentive for businesses to make the move.

DRIVING INDUSTRY

A NEW EXPERIENCE

More traditional local strip shops have been stable, but are experiencing increasing competition from the growing number of Coles, Woolworths, IGA and Aldi anchored neighbourhood centres. The foot traffic generated by these centres is attracting the fast food, hair, tobacconists and real estate agents that would normally occupy the strip shops. How this market adapts over the coming years is yet to be seen, but owners should be mindful of this trend

SUNSHINE COAST

Director Sunshine Coast

MICHAEL SHADFORTH CLOSER INSPECTION OF THE KEY FACTORS DRIVING THIS LATEST PERIOD OF SUSTAINED GROWTH SHOW THAT THE OPTIMISM IS WELL FOUNDED

Cautious optimism seems to be the overwhelming consensus as I talk with business owners and investors across the coast. Years of boom and bust cycles have left many of us with a less than bullish attitude, but closer inspection of the key factors driving this latest period of sustained growth show that the optimism is well founded.

So why is this time different? For one, the region is benefiting from an unprecedented public and private infrastructure investment of $26.5+ billion across a diverse number of projects. The most notable of which are the Sunshine Coast Airport upgrade, Bruce Highway and Caloundra Rd Interchange upgrade and the Aura master planned community. The second factor is the sustained population growth, especially across the southern region. Strong medium-term growth projections are providing local businesses with that cautious optimism necessary to expand their operations and invest in new premises, staff and technology. The final piece of the puzzle is the new industry we are beginning to see moving to the coast. Improving technology means regional businesses can be more competitive on a world market and the traditional prestige of an “Eagle Street” address no longer yields the benefits to outweigh the monetary and lifestyle price tag of a CBD office.

SUNSHINE COAST KEY INDICATORS SA LE S

LE A S I N G NUMBER

NUMBER

BUILDING SALES m

AREA

13383

ANNUAL RENT

$2,479,175

105,069m2

SALES VALUE

$30,873,790

Ray White Commercial 2018 Sales Type Office 31%

Retail 37%

9,880m2

LAND SALES m2

Ray White Commercial 2018 Leases Type Industrial 32%

50 2

Industrial 32%

Land 22%

Retail 10%

Office 36%

Sunshine Coast

SPOTLIGHT ON C E N TRA L SUN SH I NE COAST

Kunda Park remains one of the most relevant estates in the Sunshine Coast industrial market. The estate provides a strong mix of general industry and trade service businesses, primarily servicing the local area. As one of the major industry precincts, this area was among the hardest hit during the GFC, with significant vacancies and minimal construction. The tide has most definitely turned in recent years, to the point where availability of functional stock for lease or sale is extremely limited. The sale of the final few remaining land lots over the last 18 months, primarily to owner occupiers for rates up to $330m2, will do little to help supply demand. While Forest Glen is experiencing similar low vacancy rates, the upcoming release of the new estate off Chevallum Rd on the western side of the highway will provide temporary relief. Though it is rumoured that a major transport/logistics company has secured a large parcel that will significantly reduce the footprint of available land. We anticipate the majority of activity in this new estate will be the natural expansion of owner occupiers in the immediate surrounding areas.

Large speculative development (1,000m2+) is unlikely to occur due to land prices and tight returns but expect some strata complexes to emerge over the next 18 months in the sub 400m2 range. This will likely have a negative impact on the slightly inflated values of Kunda Park in the last quarter of 2019, moving into 2020. In spite of this upcoming dip, the good news for property owners in this region is that demand across the Central Sunshine Coast region is expected to far outstrip supply in the medium and long term as increasing population pressure and transport issues closer to Maroochydore forces traditional industry users west. We define Central Sunshine Coast as the traditional industry hubs of Kunda Park and Forest Glen.

CURRENT DEVELOPED V FULLY DEVELOPED

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Total Area to be Developed

lP ar k

Total Developed Area

Sunshine Coast

SPOTLIGHT ON C ALOUNDRA I NDUSTR IAL

The industrial precinct of Warana & Kawana is widely viewed as the premium industrial estate on the Sunshine Coast. This area has traditionally achieved rates comfortably higher than the rest of the Coast and the last quarter has been no different. As demonstrated in the graph below, the area is almost at capacity, with limited opportunity for new development. In the short term, expect industrial vacancies to remain low. In the medium term, look for continuing upward pressure on rents and overall sale valuations as demand from softer service industry and ancillary medical users price the more traditional general industry businesses out of the market. It is likely these businesses will relocate to the more cost-effective estates of Aura, Coolum and Forest Glen over time. The commercial and office markets are where the future opportunities truly lie. The precinct is well positioned to capitalise on the economic drivers fueling the wider coast market, underpinned by the nearby Birtinya Health Precinct â&#x20AC;&#x201C; the single largest health based infrastructure project in Australia, and the ongoing development of the Oceanside, Harmony and Aura precincts.

Lease

With the proposed light rail system to deliver an additional 1,255% increase in local trips to Kawana by 2031, the Kawana area will be transformed into a vibrant and thriving 24-hour business and health precinct. This has been designed to effectively manage the exponential population growth predicted to continue on the Sunshine Coast. With an anticipated population of 424,000 people in 2031, predominantly centred between Aura at Caloundra, Oceanside at Kawana and Maroochydore, the light rail will link these key growth areas and provide a genuine source of connectivity. Significant take up of office space has occurred over recent times, eating into the traditionally high vacancy rates of Innovation Parkway and surrounds. We anticipate this trend to continue as increased population density in the immediate area creates a self sustaining catchment capable of supporting retailers and service providers independent of the core medical sector.

AV E R AG E N E T R E N T

VAC A NC I E S

SIZE

LAST QUARTER

THIS QUARTER

SIZE

LAST QUARTER

THIS QUARTER

<200sqm

<200sqmm

NIL

186

200-500sqm

200-500sqmqm

NIL

123

500sqm+

NIL

110

TOTAL

NIL

TOTAL

NIL

140

Sunshine Coast

SPOTLIGHT ON KAWANA BUS I NESS & ME DIC AL

The industrial precinct of Warana & Kawana is widely viewed as the premium industrial estate on the Sunshine Coast. This area has traditionally achieved rates comfortably higher than the rest of the Coast and the last quarter has been no different. As demonstrated in the graph below, the area is almost at capacity, with limited opportunity for new development. In the short term, expect industrial vacancies to remain low. In the medium term, look for continuing upward pressure on rents and overall sale valuations as demand from softer service industry and ancillary medical users price the more traditional general industry businesses out of the market. It is likely these businesses will relocate to the more costeffective estates of Aura, Coolum and Forest Glen over time. The commercial and office markets are where the future opportunities truly lie. The precinct is well positioned to capitalise on the economic drivers fueling the wider coast market, underpinned by the nearby Birtinya Health Precinct â&#x20AC;&#x201C; the single largest health based infrastructure project in Australia, and the ongoing development of the Oceanside, Harmony and Aura precincts.

CURRENT DEVELOPED V FULLY DEVELOPED

ria

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Total Area to be Developed

Total Developed Area

Sunshine Coast

SPOTLIGHT ON S U N S H I N E COA ST O F F IC E & R E TAIL

Office and retail across the Sunshine Coast have proven very difficult to predict over the past year, with the market best explained via a combination of key types and areas. Shopping centres have been the major winner on the retail front, in spite of the doom-and-gloom stories of the sector on a national level. Decisive action by the key developers of centres like Sunshine Plaza and Kawana has allowed them to reposition their offering to meet the new Experiential Retail demands of today’s shoppers. The common consensus is, in the near future, that if a shopper wants a product they will go online, if they want an experience they will go to a shopping centre. The result will be an integrated combination of interactive retail outlets, cafes/restaurants and indoor entertainment businesses.

The office market is experiencing sustained organic growth from the expansion of existing professional services in the region. The coming promise of the new Maroochydore CBD is seeing these businesses gravitate towards this precinct. This is currently occurring at the expense of the Kawana/Birtinya precinct, that is struggling to attract businesses not directly reliant on the nearby medical precinct. The announcement this week of the new undersea internet cable connection to the Sunshine Coast has the potential to significantly disrupt the vacancy take up projections that reflect almost complete reliance on existing business expansion. This new infrastructure creates the genuine possibility of attracting a “Google” calibre business to the coast, the impact of which would be immeasurable.

Lease

VAC A NC I E S

AV E R AG E STAT IST IC S

SIZE

TOTAL LISTED

TOTAL TRANSACTIONS

SIZE

LAST QUARTER

THIS QUARTER

>200sqm

128

123

>200sqm

$420/M2

$428/m2

200-500sqm

$328/M2

$350/m2

500sqm+

$280/M2

$260/m2

Welcome to Aura The gates are now open

Aura Business Park comprises of 190 industrial lots ranging from 1,005m2 to 4,139m2. In addition, there are 6 super lots designated for commercial development including retail showroom, retail services, fast food and technology industries. It is intended to be the employment hub for Aura will contribute to the 20,000 jobs expected in Aura. Aura has been approved as a Priority Development Area eliminating the need to go to council for development approval.

Sunshine Coast

SPOTLIGHT ON NORTH ERN SUN SHINE COAST

The Northern sector of the Coast is in the midst of a sustained recovery across each of its precincts. While the area has traditionally been more volatile than the southern market, stock shortage across the greater Sunshine Coast has pushed interest further north.

Yandina is showing signs of improved activity as well. While options are relatively limited, some growing pains from existing businesses and an enquiry trend from transport related businesses could see some shuffling occur through the second half of this year.

Noosa remains the powerhouse of the region, with limited supply of industrial land and low vacancy. Much like our assessment of the Kawana and Mooloolaba precincts, the high demand from service industry and semi-office users is placing upward pressure on rents and pushing more traditional industry businesses out to the highway or south to Coolumn. We expect to see this trend continue as non-geographically specific business operators look to capitalise on the work-life balance that Noosa offers to those who do not need to travel.

The next twelve months should prove productive for this area in general. Landlords and owner occupiers in Noosa should be cautious of pushing the â&#x20AC;&#x2DC;approved useâ&#x20AC;&#x2122; of existing industrial units too far in the direction of commercial or office, as non-compliance can prove expensive for all involved. Developers can expect strong take up of new stock, but should talk with our leasing team to ensure intended designs will meet the specific function requirements of businesses currently in the market.

Coolumn has reaffirmed its position as a viable and affordable alternative to both Noosa to the north and Kunda Park to the south. Renewed development activity is providing functional buildings to absorb this demand, which we expect to peak over the coming 10 months before new options further south begin to break ground.

Lease

AV E R AG E STAT IST IC S

VAC A NC I E S

SIZE

TOTAL LISTED

TOTAL TRANSACTIONS

SIZE

AVERAGE SALE RATE

AVERAGE RENT

>200sqm

$3,227.76

$172.56

200-500sqm

$2,345

$138

500sqm+

$1,560.38

$152

MORETON BAY & NORTH BRISBANE

Director Moreton Bay

CHRIS MASSIE THE LATEST PROJECTIONS THROUGH TO 2031 SEES BOTH MORETON BAY AND THE SUNSHINE COAST BRACED FOR ONE OF THE LARGEST POPULATION INFLUXES IN THE COUNTRY

The key word we keep hearing around Moreton Bay is growth. The latest projections through to 2031 sees both Moreton Bay and the Sunshine Coast braced for one of the largest population influxes in the country. The industry to watch over the next year is the transport and logistics industry. A number of national operators have earmarked Caboolture in particular as a satellite distribution hub to service the coming residential construction surge and ongoing last-mile ecommerce delivery requirements of this growing population.

North Brisbane has long been a powerhouse of the South East Corner, more immune to market fluctuations than most regions due to residential affordability, access to workforce and proximity to key infrastructure. Given that the Pine Rivers office has only recently joined the Northern Corridor Group, we are yet to fully explore the individual markets in the level of detail we would like. The diversity of offerings is what excites us about delving deeper into these precincts in 2019, from the high traffic retail of Gympie Road to Brendaleâ&#x20AC;&#x2122;s major distribution facilities. Continued outward expansion pressure of key inner-city precincts, combined with major investments such as the new Petrie University site ensure this region will remain a force in the commercial property market for the foreseeable future.

MORETON BAY & NORTH BRISBANE KEY INDICATORS LE A S I N G

SA LE S

NUMBER

TOTAL m2

25435

BUILDING SALES m2

14,550m2

RENT PA

$3,941,640

VALUE

$41,203,495

Ray White Commercial 2018 Leases Type Industrial 46 %

Land 4%

Ray White Commercial 2018 Sales Type Retail 27%

Office 23%

Industrial 57 %

Retail 17%

Office 12%

Land 10% Tourism 5%

Moreton Bay & North Brisbane

SPOTLIGHT ON NORTH L A KES

North Lakes continues to set the benchmark for commercial sale and lease rates across the region and has topped the list of population growth hot spots in Queensland, according to a new report by Matusik Property Insights. Along with North Lakes, the adjoining suburbs of Dakabin & Kallangur also made the list of Top 5 fastest growing suburbs. North Lakes and the surrounding Moreton Bay region already benefits from a strong regional economy valued at nearly $13 billion in 2016. And with average annual household incomes already roughly 12 per cent higher than that of greater Brisbane, the spending power of local residents is only set to further benefit new retailers, commercial businesses and hospitality operators relocating to North Lakes. Significant investment in infrastructure in North Lakes and surrounding areas, along with affordability issues in inner-Brisbane has been the main catalyst for the growth and subsequent success of the commercial ventures. However, there is an additional benefit experienced by

VACANCIES

Lease

businesses operating in what has been awarded Australia’s No.1 master planned community. The “North Lakes Effect” is the expression used by some to describe the reluctance of residents to leave their immediate area, instead choosing to live, work and shop within the borders of the estate. This may be attributed to the higher than average ‘ex-pat’ community or the congestion issues in nearby suburbs. In either case, the result is positive for local operators catering to this catchment. The higher average rents result in few general industry businesses calling North Lakes home, but as the business park land vacancies near capacity, we can expect tenancy competition to increase for functional retail and service-industry properties. Improved remote working capacity and inner-city congestion will continue to make these fringe precincts viable alternatives for major office requirements in the near future.

AVE R AG E N E T R E N T

SIZE

THIS QUARTER

SIZE

>200sqm

193

200-500sqm

182

500sqm +

216

TOTAL

TOTAL 197

THIS QUARTER

Moreton Bay & North Brisbane

SPOTLIGHT ON CO R P ORAT E PA RK

Corporate Park continues to be the preferred location for businesses servicing the local Caboolture area but shrinking stock supply and increasing demand from national operators is changing the dynamic of the estate. Since its development in the early 90â&#x20AC;&#x2122;s, the estate has catered almost exclusively to local business, with a mix of owner-occupier and selfmanaged super fund fueled speculative development for tenants. The result has been an average tenancy size under 400m2 and few options for larger businesses. Increased congestion closer to the city and an unrivalled pipeline of upcoming development and growth for the Moreton Bay and Sunshine Coast regions has Caboolture now on the hit list for larger national companies looking to service this coming demand. The last eighteen months has seen a significant increase in leasing take up, leading to a current occupancy level of over 98% and barely a handful of functional tenancy options available in each size bracket. In spite of the limited stock, our team completed $12,683,260 of sales and secured $1,561,325 of annual rent for our owners in the last twelve months. It should be noted that 42% of the sales were off-market transactions of tenanted investments.

VAC A NC I E S

Lease

Relief for this stock squeeze will come in the form of Corporate Park East, which is now fully approved and will commence construction this September. The first stage will see 19 lots released, but it is likely that pent up expansion demand will necessitate the immediate roll-on into stage 2. While new construction will provide some relief on demand, we anticipate sustained upward pressure on average base rental rates and a slight increase in overall asset values for existing properties. In any case, the next two years will be an interesting period for the Corporate Park market

AV E R AG E N E T R E N T

SIZE

THIS QUARTER

SIZE

THIS QUARTER

>200sqm

$134sqm

200-500sqm

$112sqm

500sqm +

$108sqm

TOTAL

$118sqm av

Moreton Bay & North Brisbane

SPOTLIGHT ON M OR AYFI EL D & CAB O O LTUR E C B D

The tide is definitely turning for what has traditionally been a relatively slow-moving sector of South East Queensland. The impact of improving market conditions experienced by the greater region over the last three years has been largely offset by the change in consumer spending habits and the fear of the Amazon impact on traditional retailers that make up the bulk of Morayfield tenancies.

The result for retailers is a general improvement in business confidence among those we speak with that expansion today is a calculated risk worth taking to ensure their piece of the ever-growing pie is secured. For office space, the government funded agencies continue to soak up the little remaining office space in the CBD and owner occupiers have returned to the market via a number of building purchases through King St and Hasking St.

While the Morayfield retail and Caboolture office markets are different enough to probably warrant their own reports, the main key driver that will continue to impact them is the same. This driver is residential growth.

Watch for a continued trend of office users retro-fitting Morayfield retail sites to accommodate larger footprint requirements where zoning permits, especially among Government funded tenants. Also, keep an eye on Dickson Road, where the new Morayfield Health Hub is drawing considerable traffic to the benefit of adjoining businesses.

Caboolture West is expected to result in an estimated 63,000 additional residents, but the level of infrastructure investment required to open up this corridor to development can expect to cause a stale mate between developers and authorities for years to come. In the meantime, infill development of medium density residential in Caboolture and traditional residential through western Morayfield (Oakey Flat Rd, etc) is at fever level.

R E TAI L

O F F ICE

Lease

SIZE

THIS QUARTER

SIZE

THIS QUARTER

>100sqm

100-200sqm

200sqm +

TOTAL

TOTAL 40

Moreton Bay & North Brisbane

SPOTLIGHT ON NARANGBA, DECEPTION BAY & BURPENGARY This thin strip of industrial fringing the Bruce Highway has evolved into one of the more sort after precincts in the Northern Corridor. The estates provide a versatile mix of general industry, automotive and trade service businesses servicing both local and regional markets. While this area was traditionally viewed as ‘a bridge too far’ by businesses moving out of the inner-north of Brisbane, lower tenancy costs, access to workforce and expansion of metro delivery boundaries by transport companies all assisted in making this area a viable alternative. The flood of speculative stock that emerged through the development of Baylink Estate and Business Drive through ’06-’07 left this area particularly susceptible to the impact of the GFC, with significant vacancies and a string of forced sales impacting valuations. The tide has most definitely turned in recent years, to the point where availability of functional stock for lease or sale is extremely limited. North Lakes is providing some tenancy relief, but with rates averaging over 20% higher than these more traditional industrial precincts.

VACANCIES

Lease

SIZE

THIS QUARTER

>200sqm

200-500sqm

500sqm +

TOTAL

Of particular note is the recent sale of the bulk of remaining lots in the Narangba Industrial Estate. While traditionally a high impact/noxious industry estate, surrounding residential growth has forced a transition to more general industry use by the State Government who manage the estate. Relief is expected to come in the form of the Motorway Business Park at Burpengary, a 27-lot light industry subdivision on the western side of the Bruce Highway, though this will do little to satisfy the longer-term requirements of a region that remains one of the fastest growing in the country. Appetite for industrial tenanted assets is increasing as fears over the future of retail steer investors away from traditional commercial sectors. We anticipate the run of tenanted stand-alone industrial sales in the region to continue as owners capitalise on the compressed yields, especially for those assets with over 3 years remaining on leases.

AVE R AG E N E T R E N T

SIZE

THIS QUARTER

>200sqm

200-500sqm

115

500sqm +

104

Moreton Bay & North Brisbane

SPOTLIGHT ON R E D C L I FFE PENI N SULAR There are a few key markets that make up what we consider “The Peninsular”, starting with the Rothwell retail stretch through to the Clontarf industrial and on to the waterfront mixed use areas of Redcliffe CBD, Margate and Woody Point. Rothwell continues to suffer from the vacuum left by the transition of many national bulky goods operators into the North Lakes CBD. This has been compounded recently by the refurbishment of the North Lakes shopping centre to create a more ‘destination experience’, as is the trend in retail now. Lower face rents and higher incentives have done little to prompt activity from the minimal enquiry for this precinct. In contrast, the Clontarf industrial market is the stand out performer in the region, with record low vacancy rates among functional properties. Interestingly, average achievable rents have not increased greatly in spite of this fierce competition. Our research indicates that the cost of electricity and general outgoings increases mean overall tenancy costs are steadily increasing without any of this growth ending up in the owners’ pockets. This is a double dilemma for owners having to hold properties through periods of extended vacancy.

Lease

VACANCIES INDU S T R IAL

Closer to the water, the office and retail sectors remain patchy at best. Some new in-fill development has provided some national operators like KFC the opportunity to upgrade their facilities, but these are few and far between. Some green shoots of organic expansion among some local businesses lately gives hope to an upturn promised by the connection of the light rail. In terms of new development, we expect this sector close to the water to remain in a holding pattern through the next cycle, when land values may warrant the grouping and demolition of multiple properties in key locations. In the meantime, the trend of refurbishment and renovation by owner occupiers will likely be the only significant movement. Population growth across the region and improving connectivity for businesses who no longer need an Eagle Street address mean the medium and long term outlook for the Peninsular remains strong. The decision for owners will be do they cash out now or secure holding income and minimise sunk costs for the longer-term benefit.

AVE R AG E N E T R E N T I N DUSTR I AL

SIZE

THIS QUARTER

SIZE

THIS QUARTER

>200sqm

$150

200-500sqm

$128

500sqm +

$100

TOTAL

TOTAL 378

GENERAL INDUSTRY LAND PURPOSE BUILT LEASE HARDSTAND LEASE

Port of Brisbane

Brisbane CBD North Lakes

Brendale

North Harbour

Corporate Park

The opportunity Bruce HWY 3 Mins

Airport 25 Mins

You can now secure fully serviced General Industry land lots in Caboolture’s first estate release for over ten years. Corporate Park, at the Bribie Island Rd and Bruce Highway interchange, has long been the area’s preferred location for industrial tenants and owneroccupiers in Moreton Bay. The estate is now at capacity, so eyes are turning to the next release of Corporate Park East. Contact us today for a price list or to help design your ideal premises.

Port of Brisbane 30 Mins

Ray White Commercial Northern Corridor Group

CHRIS MASSIE chris.massie@raywhite.com 0412 490 840

ASHLEY REES ashley.rees@raywhite.com 0411 707 410

OUR TEAM

MORETON BAY

SUNSHINE COAST

CHRIS MASSIE DIRECTOR 0412 490 840 chris.massie@raywhite.com

MICHAEL SHADFORTH COMMERCIAL PRINCIPAL 0488 981 076 michael.shadforth@raywhite.com

ASHLEY REES SENIOR PROPERTY ANALYST 0411 707 410 ashley.rees@raywhite.com

EMILY PENDLETON SALES & LEASING EXECUTIVE 0402 435 446 emily.pendleton@raywhite.com

MICHAELA WEBB PA TO CHRIS MASSIE 0409 202 066 michaela.webb@raywhite.com

JORDAN HAYES SALES & LEASING EXECUTIVE 0417 999 331 jordan.hayes@raywhite.com

WARWICK PETERS SENIOR BUSINESS BROKER 0412 234 231 warwick.peters@raywhite.com

JASON WRIGHT ASSET MANAGEMENT SPECIALIST 0451 497 368 jason.wright@raywhite.com

AARON CANAVAN SALES & LEASING EXECUTIVE 0447 744 948 aaron.canavan@raywhite.com

BLAKE PRIMROSE SALES & LEASING EXECUTIVE 0423 555 043 blake.primrose@raywhite.com

PINE RIVERS TREVOR NELSON-JONES SALES & LEASING EXECUTIVE 0407 736 521 trevor.nelson-jones@raywhite.com

JUMA MARSTELLA SALES & LEASING EXECUTIVE 0450 360 321 juma.marstella@raywhite.com

HAVING THREE OFFICES NOW LETS US GIVE UNMATCHED REAL TIME INSIGHT INTO THE NORTHERN CORRIDOR COMMERCIAL PROPERTY MARKET MICHAEL SHADFORTH

For all your industrial, commercial, project marketing and property management needs contact us on 1300 25 50 75 or raywhitecommercialnortherncorridorgroup.com.au Facebook.com/rwcncc

PETER LAURENT SALES & LEASING EXECUTIVE 0429391675 peter.laurent@raywhite.com

ONE TEAM - THREE LOCATIONS

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