Rise in commercial property on the Gold Coast linked to the Commonwealth Games, tourism and construction
The strong residential property market, along with a strengthened rental market, is helping to encourage investors to purchase commercial property on the Gold Coast.
Examples of this are:
The Surfers Paradise police beat which sold for $5.4 million in earlier September.
The Cavil Lane, Surfers Paradise which is undergoing changes to be an Asian food precinct. This multi-million dollar project has already drawn the attention of potential tenants happy to pay in excess of $40,000/year for leasing in the precinct.
Tourism and construction are being bolstered by the continued expansion of the light rail, Coolangatta airport as well as suburbs in close proximity to the beach.
Tourism, construction and a strengthened rental market among reasons for commercial property market rise
Shortly after the Commonwealth Games were announced, investors and owner-occupiers have flocked to the Coast. Commercial property priced between 2 and 10 million dollars have soared, and this demand looks like it will be around for a least the next 12 to 18 months.
The two biggest performing sectors are the Industrial and Retail sectors. The industrial sector has seen a 50% increase in sales volume over five years—which amounts to roughly $82 million. This Industrial boom has been attributed to the construction and tourism sectors. The retail sector has grown 42% over five years; which is about $75.5 million.
Investing in commercial property
According to the latest numbers, the Gold Coast has the highest number of SMEs in Australia. Which in turn, drives up demand for business and retail property.
A surprising sector which is seeing growth at the moment is petrol/service stations. The traditional business model is changing—petrol stations are becoming more and more your local corner shop as well as petrol bowser. This is putting pressure on companies like IGA, NightOwl and 7-Eleven to step up their game.
With one petrol station in Labrador, Gold Coast selling for $8.75 million, and plans with Woolworths and private investors set “to facilitate the sale of 527 service stations and 16 development sites to BP [around Queensland].”
The forecast for commercial property market
All signs point to a strong market until at least December 2018. However, investors are waiting to see how successful certain events and projects are before making any more long-term predictions.
Two of the forecasting factors investors are waiting on are:
- The success (or not) of the Commonwealth Games.
- How successful The Star Gold Coast (formerly Jupiter’s Hotel & Casino) is in drawing a crowd.
Three uncontrollable variables that can throw predictions out window:
- Performance of Australian currency
- Tourist numbers
- International economic climate
These reasons—among others—are why investors are forecasting up to December 2018.
Why now’s the time to invest in the Gold Coast
The city’s population is growing, the tourism numbers remain strong and all the best property is being snatched up. Now’s the best time to invest in property in prime locations. With tenants willing to pay a premium because of demand, you have a higher chance of seeing a return during this boom.
If you would like to know more about Investment property on the Gold Coast, please download our free investment property guide.