TOP 10 REGIONAL MARKETS FOR COMMERCIAL INVESTMENT OVER THE LAST 12 MONTHS

Over the last few years we have seen a growing volume of buyers invest across regional markets of Australia. The affordability often associated with these assets was highlighted during the COVID-19 period where interest rates were low and greater first time buyers sought after affordable, higher yielding investment opportunities. Further growing attention to regional markets, was the increased population in some locations as lock downs and work from home mandates saw large population movements to these regions. Activity remains in these markets with close to $10 billion transacting across the non-metropolitan regions in the year to Q1 2023.

1. GOLD COAST, QUEENSLAND

The Gold Coast and its proximity to Brisbane has seen it evolve over the years from a tourist town to a legitimate business hub within commutable distance to greater employment opportunities in Brisbane. Over the last 12 months, close to $1.4 billion has changed hands due to a number of larger retail centre transactions. Larger industrial holdings, hotels and office assets also added to this high volume, however the high number of smaller sub $1.5 million sales have resulted in close to 500 transactions recorded over this period at an average sale price of $3.2 million.

2. NEWCASTLE, NEW SOUTH WALES

Another high growth node for New South Wales, Newcastle falls within the broader Hunter Valley region which has also gained strong population increases. Investment over over $900 million has been across the board with industrial a key asset class while regional motel and pub assets also feature. Smaller retail, industrial and alternative uses such as service stations and childcare at price points sub $4 million have also been attractive to investors.

3. SUNSHINE COAST, QUEENSLAND

Another key population growth zone in south east Queensland, the Sunshine Coast has been one of the star performers over the last few years. Strong demand for office and industrial assets have seen this market one for both experienced and first timers to jump into. With institutional buyers also active, this regional market has been one to watch.

4. CAPRICORN COAST, QUEENSLAND

The Capricorn Coast moves further north of Queensland and includes areas such as Gladstone, Rockhampton up through to Mackay. Investment has been centred around major asset classes such as retail, industrial but also medical, childcare and hotel assets. The affordability of the region being attractive to buyers with the average sale price sub $1.5 million and recording close to 500 transactions.

5. GEELONG, VICTORIA

Geelong is part of Greater Melbourne which increases the attractiveness of investment by those seeking an affordable investment option. With over $400 million transacting across the region over the last 12 months, this market is home to a number of larger value office assets which have changed hands, while smaller industrial, retail and childcare have also been active. The hotel sector also features in this region with tourism assets such as caravan parks and motels as well as development site sales taking place.

6. CENTRAL COAST, QUEENSLAND

Investment has continued up the coast of Queensland over the last year, the Central Coast region including Bowen up to Townsville and towns between. A larger city shopping centre and office asset dominated transactions however tourism assets from pubs, motels and caravan parks also added to this years volume. A high number of smaller industrial and retail assets also attractive to investors have changed hands with the average sale price of $1.7 million.

7. WOLLONGONG, NEW SOUTH WALES

Located south of Sydney, Wollongong enjoyed population gains over the last few years given its affordability and commutable distance to Sydney. This region has not gone unnoticed by investors, particularly those from Sydney willing to move up the risk curve to a more regional centre. Industrial is a key investment class in this region given its proximity to Port Kembla while office, retail and tourism assets have shared a large portion of volume. Childcare and residential development sites also a key investment capitalising on increased population.

8. DARLING DOWNS, QUEENSLAND

The region west of Brisbane and Moreton including Toowoomba has enjoyed an uptick in investment activity over the last year, representing close to $300 million in sales. Larger retail centres account for the bulk of transactions, however, investors have been attracted to this location’s affordability, accessibility, and opportunity, resulting in a strong number of sub $1 million assets.

9. NORTHERN TASMANIA

The northern half of Tasmania has had a busy 12 months recording a number of industrial sales including cold storage and distribution assets aiding full year results to shy of $300 million. Coupled with a high volume of smaller industrial, retail, and tourism asset transactions, this region of Tasmania has been attractive to not only locals but mainland buyers looking tor affordable diversification options.

10. RICHMOND-TWEED, NEW SOUTH WALES

This region, immediately south of the Queensland border extends to Byron, Ballina and Evans Head and inland past Lismore and Casino, has been a strong region for population gains during COVID-19. As residential prices moved upward, interest in commercial property was quick to follow. While this has dissipated somewhat over the last 18 months, its attractiveness for assets such as retail, childcare/medical, and office continues, particularly given the average sale price of $1.4 million.

Head of Research