Boom in demand for retail space as investors seek high yields
Investors seeking high-yield returns on their money are looking to the commercial sector, with strong market fundamentals underpinning confidence
Adam Grbcic and Tony Grbcic of Kollosche Commercial said the $45.8m sale of Sunland’s The Lanes retail village showed bricks-and-mortar had a strong future on the Gold Coast, despite challenges posed by online shopping and COVID-19.
The Lanes retail sale to Panthera Group along with the signing of another $32.75m deal for a 2.2-hectare site within the masterplanned community to businessmen Brett Frizelle and Darryl Kelly caps off $113 million in deals within the precinct in the past three years.
Adam Grbcic said The Lanes was one of several retail properties that changed hands in October, including a majority stake in Pacific Fair for $2.2bn (with a half share in Sydney’s Macquarie Centre) and half of Harbour Town for $385m.
“Panthera has correctly identified the Gold Coast can do with an injection of high-quality retail offerings, particularly when underpinned with apartments,” Adam Grbcic said.
“We were able to show to Panthera the sector has strong long-term growth prospects, particularly when interstate and international travel opens up.
“The sale of The Lanes centre, which is likely to be completed in 2023 or 2024 is further proof the sector is in good health.”
Adam Grbcic said The Lanes Retail offered a fresh and modern precinct with the perfect balance of retail, convenience, entertainment and essential services.
Tony Grbcic said solid market fundamentals were underpinning the latest growth cycle, unlike the boom-and-bust cycles of the past.
“Investors who have sold residential properties are looking to invest their cash in commercial assets that come with high yields in a place which hasn’t been as affected as Sydney and Melbourne with lockdowns,” he said.
“The future prospects are looking excellent.”
The Lanes is a yet-to-be-built 12,500sq m retail centre which upon completion will feature a fresh food market hall, cafes, restaurants, medical centre, office space and lakeside community green.
Tony Grbcic said development site sales such as the $32.75m deal for lots 909 and 915, which have approval for 12-storey apartment buildings with 1500 bedrooms, went hand-in-hand with the retail side.
“There is massive demand from a range of developers for quality sites from Broadbeach to
Coolangatta,” he said.
“This is being driven by a stock shortage and high take-up of new product. Indeed, the supply of off-the-plan product has fallen dramatically, which is why more developers are aiming to get into the market.
“This residential market is fuelling interest in retail investments, which makes sense because the retail pie is getting larger to meet the increased demand from residents and visitors.”