Gold Coast rides development wave to $130m sales boost

Booming interest in development sites has seen the Gold Coast record a $134 million jump in commercial property sales so far this year.

To the end of September, 300 sales totalling more than $693 million were recorded across the tourist region, compared with just 105 sales totalling $558.84 during the first nine months of 2016, according to Ray White research.

While it was hotel sales that dominated the Gold Coast market in 2016, Ray White Commercial’s Steven King says it’s development sites that have spurred sales this year.

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“The major change in the investment profile between 2017 and 2016 is the greater move back to development site sales, which now account for close to a quarter of all sales this year compared to just 6.10% last year,” King says.

“Conversely, during 2016 hotel sales represented 34.24% of the total pool of investment.”

The majority of the sales have come during a dramatic uplift in investor interest between July and September, with more than $417 million worth of deals done in the third quarter of the year.

Surfers Paradise Police Station sold for more than $5 million.

Retail sales accounted for $167.78 million of those deals, while office transactions totalled $144.03 million.

Ray White Commercial head of research Vanessa Rader says the quiet start to the year is the result of owners opting to hold onto their assets, while the recent flurry of activity and rapidly shrinking yields has spurred many into action.

“This (Q3 result) is up 53.35% on Q3 2016, where $272.03 million sold and again an improvement on the Q3 2015 result of $153.21 million,” Rader says.

The largest Gold Coast deal signed off throughout 2017 so far was the sale of Southport’s The Brickworks building, which traded for $137.54 million on a 5.09% yield.

And in September a building occupied by the Surfers Paradise Police Station sold for $5.4 million.

Smaller industrial deals with sale prices averaging less than $1 million dominated overall sales during the first half of the year, King says, while Rader adds that most properties are still achieving yields of between 6.5% and 9.5%, highlighting the value on offer for investors.