Late Surge Boosts Gold Coast’s Commercial Sales to $1.3 Billion

HE Gold Coast’s commercial property market held up strongly over 2018 with a combined total of $1.28 billion in sales recorded during the year.

Research compiled by Ray White Commercial shows that while the total was just shy of the record $1.33 billion achieved in 2017, sales volumes remain more than double the level of two years ago.

Ray White Commercial director Greg Bell says the highlight of the past year has been the size of transactions as well as the broader level of interest emerging from institutional and high-net-worth investors.

“We saw some very large transactions during the year, mostly due to large funds and offshore investors adding quality investments to their portfolios,” said Mr Bell.

“Overall sales volumes have held up remarkably well in light of the finance constraints on investors which largely affected many smaller commercial sales.

“While the actual number of transactions on the Gold Coast was down on the previous year, the overall size of the deals has boosted the average value of transactions by 40 per cent compared with 2017.”

Ray White Commercial data shows there were 390 commercial property transactions in 2018 for an average sale price of $3.28 million. This compares with 571 sales in 2017 at an average of $2.33 million.

Mr Bell said the latest annual result was driven by a flurry of deals in the December quarter after a relatively subdued performance the previous three months.

“The third quarter was supported by a number of large-scale retail transactions where more than half the value of the year’s total retail property sales was recorded,” he said.

The retail sector accounted for 46.5 per cent of total sales, or about $595 million, with $325 million of that changing hands in the last three months of 2018.

Industrial sales accounted for 19.15 per cent, followed by hotels and tourism (16.69 per cent), development sites (8.1 per cent), and offices (7.56 per cent). The childcare and medical sector comprised the remaining 2 per cent of sales by value.

Mr Bell noted that the big-ticket transactions continued into 2019 with a $70 million contract secured for the landmark Hilton Surfers Paradise.

“The Gold Coast commercial property market is increasingly finding itself on the radar of more investors and it’s likely to remain in focus into 2019,” Mr Bell said.

“Yields have largely held up across the year, although we have seen some tightening across smaller industrial properties.

“The Gold Coast is still perceived as a value market which is supported by the ongoing stability of the economy, including one of the lowest unemployment rates in the country.

“The commercial market this year should also continue to benefit from the remarkable strength in the tourism sector and the interstate migration trend that is currently driving the residential market and the economy more broadly.”