Ray White - Portfolio Magazine - Summer Special

P O R T F O L I O SUMMER SPECIAL

2 0 2 1 : A W R A P O F T H E S TA N D O U T GOLD COAST COMMERCIAL MARKET

2 | PORTFOLIO | Ray White Commercial

ANDREW FREEMAN Head of Agency Operations

As we kick off 2022 with Ray White Surfers Paradise Group’s highly anticipated The Event, it is an absolute pleasure to bring you this special edition of the Ray White Commercial Portfolio magazine, featuring properties from a range of our Gold Coast agents.

In this edition of Portfolio, we showcase a number of commercial properties which will be featured in The Event on Sunday, January 23, at RACV Royal Pines. Now in its 30th year, the world class auction event commands the attention of buyers from throughout Australia and internationally. With the Queensland borders now open, the pent up demand from interstate buyers migrating north will see this January’s auctions become the largest ever.

The demand for quality assets throughout Southeast Queensland has never been stronger. Seen as a COVID-19 resilient market, investors are flocking to secure quality real estate across all asset classes.

The Gold Coast has recorded historic high levels of commercial sales transactions in 2021, up a huge 80 per cent on last year’s results.

With yields continuing to compress across all asset classes, we expect some amazing results carrying into 2022.

The increased demand is being driven by availability of finance and weight of funds across all buyer types, from local private investors through to larger institutional investors including offshore groups.

The great northern migration is evident across the burgeoning commercial and residential markets in South East Queensland, and the properties listed in this magazine give savvy investors and developers the opportunity to capitalise.

I hope you enjoy the special summer edition of Portfolio Magazine.

PORTFOLIO | Ray White Commercial | 3

2021: A WRAP OF THE STANDOUT GOLD COAST COMMERCIAL MARKET The Gold Coast commercial market has had some mixed results over the past 24 months.

Prior to COVID-19 the trajectory was positive, demand levels were increasing, and occupancy was improving across most asset classes as population growth was poised to continue and infrastructure spending was up. Upon the pandemic’s onset, we saw all these positive results halt, the market remained in a holding pattern for most of 2020 as both occupiers and owners grappled with the unprecedented social and economic conditions impacting our way of life. While activity did continue, most owners opted to hold until greater certainty came to the marketplace.

Queensland enjoyed limited lockdowns over the coming months due to strong border controls which resulted in an influx of interstate migration, aiding in growing residential values as well as demand for commercial space. New business starts were instrumental in the changing vacancy position for many assets while we saw more assets come to market as owners look to capitalise on the strong demand to invest in quality offerings. With location not a concern for many investors, local buyers and owner occupiers were soon in competition with interstate investors looking to secure an income producing asset in the sunshine (and COVID-19 free) state. The announcement of Brisbane securing the 2032 Olympics further fueling demand for assets across South East Queensland as many infrastructure improvements would be fast-tracked further benefiting the local property markets.

This has all culminated into 2021 recording the highest sales volume on record, as buyers across the country and offshore all compete for assets setting new benchmarks in value and yield.

VANESSA RADER Head of Research

4 | PORTFOLIO | Ray White Commercial

and owner occupiers were soon in competition with interstate investors looking to secure an income producing asset in the sunshine (and COVID-19 free) state. The announcement of Brisbane securing the 2032 Olympics further fueling demand for assets across South East Queensland as many infrastructure improvements would be fast-tracked further benefiting the local property markets.

This has all culminated into 2021 recording the highest sales volume on record, as buyers across the country and offshore all compete for assets setting new benchmarks in value and yield.

HISTORICAL SALES VOLUME AND TRANSACTION NUMBER GOLD COAST

Historical Sales Volume & Transaction Number

Millions

Gold Coast

$3,000

$2,500

237: NO. TRANSACTIONS 237: NO. TRANSACTIONS

623

$2,000

$1,500

571

390

465

2017

2018

2019

509

$1,000 237

$500

$2016

2020

2021*

Source: Ray White Commercial, RCA, PIMS*to 1 December

Source: Ray White Commercial, RCA, PIMS *to 1 December During 2021 through to 1 December, we have recorded 623 transactions totaling $2.42 billion, this represents a 79.79% increase on the full 2020 calendar year.

By the conclusion of this year, we expect sales will further increase to over $3 billion, making this the busiest 12-month period for the Gold Coast commercial property market.

Historically industrial sales do dominate investment activity, however several high value retail centre sales has resulted in close to 40% of all turnover being devoted to this asset type. Despite the uncertainties surrounding the retail market given COVID-19 and growth in online retailing, demand for bricks and mortar establishments remain high by both occupiers and investors including domestic trusts and funds. We have also seen Gold Coast office assets enjoy strong improvements in demand which is expected to reduce vacancies back to 2012 levels, as a result buyers amassed $550 million in sales this period.Industrial assets have accounted for just 20.04% of sales this year, while a number of larger institutional transactions have occurred, 201 of the 277 sales recorded were for assets in the sub $1.5 million price range, highlighting the local demand by both the owner occupier market and private investor. We have also witnessed an uptick in interstate buyers converging on the Gold Coast, a combination of interstate migration fueling population gains, growth in business starts and affordability making this an attractive investment choice.

We continue to see demand high in emerging sectors including medical which has seen a 161% growth in turnover compared to last year. Hotel & Leisure transactions are also up, dominated by the vibrant pub sector.

The sub $5 million assets recorded over 550 of the 623 transactions (of which 75% was in the sub $1.5 million price range) highlighting the increased appetite by the smaller investor, private buyer and owner occupier given the weight of funds in the marketplace, low interest rates and stable returns. A number of high value transactions this year including the office asset at 50 Cavill Avenue, Surfers Paradise for $113.5 million and a few shopping centres including Runaway Bay Shopping Village for $256 million has been instrumental in elevating the average price this year to $3.89 million after averaging $2.64 million the prior two years.

PORTFOLIO | Ray White Commercial | 5

emerging sectors including medical which has seen a 161% growth in turnover compared to last year. Hotel & Leisure transactions are also up, dominated by the vibrant pub sector.

The sub $5million assets recorded over 550 of the 623 transactions (of which 75% was in the sub $1.5million price range) highlighting the increased appetite by the smaller investor, private buyer and owner occupier given the weight of funds in the marketplace, low interest rates and stable returns. A number of high value transactions this year including the office asset at 50 Cavill Avenue, Surfers Paradise for $113.5million and a few shopping centres including Runaway Bay Shopping Village for $256million has been instrumental in elevating the average price this year to $3.89million after averaging $2.64million the prior two years.

GOLD COAST COMMERCIAL YIELD RANGES 2H 2021

Gold Coast Commercial Yield Ranges 2H 2021 12.00% 10.00%

8.00% 6.00% 4.00% 2.00%

0.00% INDUSTRIAL

OFFICE

RETAIL

ALTERNATIVE INVESTMENTS

Source: Ray White Commercial, RCA, PIMS

The huge appetite for commercial investment stock has resulted in both activity rising and yields compressing. Over the past 12 months we have seen average yields drop and ranges narrow as buyers activity compete for all stock on the market, many moving up the risk curve and the fear of missing out bringing emotion to the commercial property market we do not usually see. This chart identifies a trend which has been solidifying over the last year, with the average yield very similar across all asset types. While industrial assets have been the big winner during the COVID-19 era keeping occupancy up and yields down, assets such as retail and office which were more adversely affected by restrictions, lockdowns and changing sentiments continue to result in similar yield profiles albeit within a broader range.

The industrial average however does remain the tightest at 6.07% (4.00% to 8.09% range), followed by retail which ranges broadly from the larger neighbourhood/sub regional centre through to strata strip shops keeping yields between 3.28% to 10.00% averaging 6.28%. Office slightly ahead ranging from 3.87% for smaller strata offerings to 8.19% with an average of 6.72%.

Alternative investments keep within a narrow yield range, given the strong competition and quality lease covenants which they usually enjoy. Assets such as childcare, service stations, medical, fast food all hotly contested by both local and interstate investors vying for a long term, secure income stream. Yields for these investments average 5.75% within a small 4.50% to 6.73% range.

It has been a busy 12-month period for the Gold Coast. Strong population gains, business growth, and the Olympics announcement, together with strict border restrictions which kept COVID-19 disruption limited (compared to the other eastern states), have put the spotlight on this location for investors.

Commercial property sales have far exceeded prior years and with buyers converging on the coast from across Australia as well as overseas which has brought yields down to a new all-time low. The weight of funds in the marketplace suggest there will be a continued appetite for investment however the threat of interest rate rises may stifle some smaller first-time investors who have been speculating in the marketplace.

Availability of stock will remain an issue with owners opting to hold their assets given the low bond rates on offer, however as more secondary grade stock enters the market, buyers may become more considered slowing the FOMO trend and high turnover levels. Demand will remain high for quality, well leased investment stock across all property types, those which offer secure, long term returns will continue to be highly sought after by both local and interstate buyers keeping yields low. We anxiously await what 2022 holds for the Gold Coast with borders reopening aiding the tourism sector and employment growth anticipated to be up bringing vibrancy back to this local economy.

To download the full Ray White Commercial Between the Lines research report on the Gold Coast market, visit our website: https://www.raywhitecommercial.com/research/

PORTFOLIO | Ray White Commercial | 7

'FENWICK FARM' - MUST BE SOLD - HORSE TRAINING & REHABILITATION COMPLEX 325 Mundoolun Connection Road, Boyland QLD

Outlines Indicative Only

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • • • •

Freehold equine complex in the picturesque Canungra Valley 33.24* hectares (82.13* acres) Net income $248,727.27* per annum + GST Currently leased until August 2024 Can be sold vacant possession by 31 March 2022 40* mins to Gold Coast Turf Club & 50* mins to Brisbane racecourses

Michael Willems 0412 240 176 m.willems@rwsp.net Jackson Rameau 0438 451 112 j.rameau@rwsp.net

raywhitecommercialgoldcoast.com

VACANT INDUSTRIAL UNIT - CENTRAL LOCATION 4/20 Manufacturer Drive, Molendinar Qld

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • • • •

Vacant possession GFA 307m2* + additional mezzanine Industrial height roller door & high clearance throughout Multiple exclusive use car parks Located in a highly sought after industrial estate Motivated seller! Don't miss out!

Jackson Rameau 0438 451 112 j.rameau@rwsp.net Michael Willems 0412 240 176 m.willems@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

PRIME RETAIL SHOP WITH MASSIVE EXPOSURE 1/25 Orchid Avenue, Surfers Paradise QLD

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • Vacant 281m2* two level premises in the heart of Surfers Paradise • Prime street frontage • Retail / office / food & beverage opportunity • To be sold with vacant possession

• Buy to lease or operate own business • High quality retail & office fit-out plus ducted air-conditioning throughout • Ample storage space at the rear of the property • Must be sold!

Scott Wells 0412 766 163 s.wells@rwsp.net Michael Willems 0412 240 176 m.willems@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

EXCEPTIONAL SURFERS PARADISE OFFICE / RETAIL OPPORTUNITY Lots 61 & 62/3131 Surfers Paradise Boulevard, Surfers Paradise QLD

Outlines Indicative Only

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • • • •

Deceased estate Vacant first level office or retail space Two Lots comprising 101m2* with modern fit-out Central Surfers Paradise location Fantastic exposure with high foot traffic Absolutely must be sold at Auction!

Scott Wells 0412 766 163 s.wells@rwsp.net Jackson Rameau 0438 451 112 j.rameau@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

DECEASED ESTATE - FANTASTIC RETAIL OPPORTUNITY IN SURFERS PARADISE Lots 23 & 24/3131 Surfers Paradise Boulevard, Surfers Paradise QLD

Outlines Indicative Only

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • •

Deceased estate Two Lots comprising 91.3m2* of retail space Fantastic investment opportunity!

Currently operating as a convenience store with lease expiring July 2025 plus two 5-year options • Absolutely must be sold at Auction!

Scott Wells 0412 766 163 s.wells@rwsp.net Jackson Rameau 0438 451 112 j.rameau@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

DECEASED ESTATE - PRIME OFFICE SPACE IN THE HEART OF SURFERS PARADISE Lot 66/18-22 Orchid Avenue, Surfers Paradise QLD

Outlines Indicative Only

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • • • •

Deceased estate 296m2* Level 5 office space Fantastic investment opportunity!

Central location on Orchid Avenue Current lease expiring November 2024 Absolutely must be sold at Auction!

Scott Wells 0412 766 163 s.wells@rwsp.net Jackson Rameau 0438 451 112 j.rameau@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

DECEASED ESTATE - PRIME RETAIL / FOOD & BEVERAGE OPPORTUNITY Lots 58 & 59/18-22 Orchid Avenue, Surfers Paradise QLD

Outlines Indicative Only

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • • • •

Deceased estate Shops 1-4 La Promenade - Total area comprising 250m2* Currently leased to La Porchetta Restaurant Prominent Orchid Avenue frontage High foot traffic area providing massive exposure Absolutely must be sold at Auction!

Scott Wells 0412 766 163 s.wells@rwsp.net Jackson Rameau 0438 451 112 j.rameau@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

DA APPROVED - 1 LOT INTO 2 LOTS RESIDENTIAL LAND SUBDIVISION 549 Reserve Road, Upper Coomera QLD

Outlines Indicative Only

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • Currently 1,948m2* in total land size • Low Density Residential Zoning • DA approval to subdivide into 2 x 861m2* residential land lots • Lot 1 = 861m2* and Lot 2 = 1,087m2* including driveway

• All services connected (water, sewer, Energex, NBN) • Elevated 'flood free' land parcel • Nestled among mature trees with a true country feeling • Must be sold!

Travis Rayner 0416 628 930 t.rayner@rwsp.net

*Approx

raywhitecommercialgoldcoast.com

VACANT POSSESSION AVAILABLE 9/18 Export Drive, Molendinar QLD

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort • • • • • •

215m2* ground floor area 4m2* approved mezzanine 11m* additional mezzanine office Rear roller door with small courtyard 2 allocated car parks Additional visitor parking

• • • • •

3 phase power, manual roller door Own amenities including shower Tenant vacating end of Feb 2022 NBN Fibre to the Curb (FTTC) available Gated complex 6 minutes from M1 Motorway (Smith Street exit)

Lisa Dunne 0420 208 891 l.dunne@rwsp.net

raywhiteindustrialgoldcoast.com

MOTIVATED OWNER SEEKS YOUR OFFER 5/17 Indy Court, Carrara QLD

AUCTION

Sunday 23 January at 10am, RACV Royal Pines Resort On the market for the first time in over 12 years, this 316m2* property is in a prime location next to the M1 Motorway, providing easy access to the north and south.

• • • • • •

218m2* ground floor area Additional 98m2* carpeted mezzanine Split system air conditioning Amenities including full kitchenette 6 allocated car parking spaces Suit owner occupier or investor

Lisa Dunne 0420 208 891 l.dunne@rwsp.net Teresa Skordou 0424 054 226 t.skordou@rwsp.net

raywhiteindustrialgoldcoast.com

VACANT POSSESSION 430*M2 FACTORY IN PRIME GOLD COAST 6/7 Hinde Street, Ashmore QLD

AUCTION

Thursday 10th February • • • • • •

To be sold vacant possession Low impact industry zoning Perfect for owner occupier or investors Approximately 430*sqm of floor space Mezzanine floor Toilet amenities

• 5 High roller door access points • Warehouse and office space • Surrounded by the automotive and trades industries Don"t miss out enquire today!

Thomas Clark 0426 287 188 thomas.clark@raywhite.com Ryan Langham 0420 581 164 ryan.langham@raywhite.com

raywhitecommercialbroadbeach.com

A GRADE FULLY TENANTED FREEHOLD BUILDING 2 Boston Court, Varsity Lakes QLD

SALE

$15,000,000 • • • • • •

Land area 2,419*sqm Net lettable area 3,160*sqm Fully tenanted freehold asset Net income $1,008,497.25*p.a.

101 car parking spaces Potential rental upside

• Centre Zoning and positioned within 10 minutes of 3X Bunnings, 2x Major Shopping Centres and surrounded by amazing restaurants and nightlife.

Don't miss this outstanding opportunity!

Thomas Clark 0426 287 188 thomas.clark@raywhite.com Ryan Langham 0420 581 164 ryan.langham@raywhite.com

*Approx

raywhitecommercialbroadbeach.com

HIGH EXPOSURE DA APPROVED DEVELOPMENT SITE IN AN OUTSTANDING LOCATION 2 Springfield Street, MacGregor QLD

SALE

$8.8 million negotiable • High-profile Corner Positioning in the Heart of MacGregor • DA Approved, 4,116m2* site • Massive 109.4m Main Road Frontage • Are You Ready For the Opportunity of the 2032 Brisbane Olympics ?!

Calling all investors who are looking for an exceptional location with retail, food, education, public transport, health, sport and recreation all rolled into one.

Bodey Reynoldson 0437 331 003 bodey.reynoldson@raywhite.com Alex Wu 0425117828 alex.wu@raywhite.com

raywhiterobina.com.au

LAGOON PLAZA AIRLIE BEACH - DON'T MISS THIS VERY RARE OPPORTINITY 263-265 Shute Harbour Road, Airlie Beach, Whitsundays QLD

SALE Properties like this don't come to the market very often. This is a very rare opportunity to buy one of Airlie Beach's best main street commercial properties. Lagoon Plaza is in central Airlie Beach with a high visual street presence and direct access to the Airlie Beach Lagoon precinct. Lagoon Plaza is home to 14 individual tenants, including restaurants, retail, travel booking, night club and personal health services. Total rental income is $544,666.19 per annum + GST & tenants pay nearly all the outgoings.

Brett Dwyer 0447583759 brett.dwyer@raywhite.com

raywhitewhitsunday.com.au