How the ‘influencer effect’ is driving commercial property prices in Byron
The ‘influencer effect’, which has helped Byron Bay’s house prices skyrocket in recent years, is now being felt in the commercial property sector, according to real estate professionals.
Agents say picture-perfect images of the once-quiet coastal haven spread via social media platforms such as Instagram, where lifestyle gurus, wellness warriors and “murfers” – chic mums who surf – extol Byron’s virtues, have attracted new cashed-up residents and visitors, who in turn want high-end businesses and services.
As a result, national and international brands are setting up shop in Byron, pushing commercial property prices and rents up.
David Gordon, principal of Ray White Byron Bay, told REA Group the average annual rent per sqm in the town’s most popular retail strips in Jonson, Lawson and Fletcher streets, has risen a whopping 50% in the last two years alone, from $1,000 to $1,500. He said yields are sitting at around 4%.
“Rents and values didn’t grow during 2020 [because of COVID], but since November, we have seen unprecedented demand for commercial real estate in Byron Bay, with properties selling at well above market expectations,” Mr Gordon said.
“The average sale price, on a yield basis, is now in the vicinity of 4%, whereas two years ago buyers were looking to buy on a 6% yield,” he said. But because rents are now rising, investors feel secure and are buying on a lower yield.”
On average, at least four national brands apply for his commercial rental openings in Byron’s main streets, Mr Gordon said, and he currently has 11 national and international brands looking for space.
That’s because big brands have identified Byron as a place they simply “have to be”, he said.
“We have seen a lot of fashion brands from Sydney and Melbourne open a second or third store in Byron, giving their customers another venue to shop in while they are on holidays.
“A few new business owners have told me that the majority of their customers in their city stores have said they ‘must open a store in Byron’, as they go there all the time.
“A large number of the owners of the national brands also own holiday houses here or have been coming to Byron for holidays for years, and the lifestyle resonates with why they open a business here,” Mr Gordon said.
Influencers in Byron are also set to feature in the controversial Netflix series Byron Baes, with the cast being named this week. But locals are far from happy with the production and fear it will have a negative impact on local businesses.
Local mayor Simon Richardson told the ABC the series could potentially damage the reputation the town has spent so long building.
“We don’t need it, it’s only going to offer us a threat really to who we are as a community. It’s potentially going to threaten businesses if the portrayal of Bryon is as absurd as I guess a lot of the doco/soap/reality shows are,” Mr Richardson said.
Anecdotally, the number of Byron-based influencers parlaying their success into business ventures is growing too, but they mainly tend to be home-based.
“I’m not seeing businesses that started online moving into commercial spaces, however some are taking small industrial factory outlets in our arts and industry estate,” Mr Gordon said.
One Byron business located near that precinct is Parkes Ave Dispensary, founded by naturopath Jules Galloway and her husband James.
Ms Galloway, a naturopath since 2006, started her business at home in 2014, offering telehealth consults and electronic books and courses, using the power of social media to build a loyal clientele base.
Then in June 2019, her husband joined her in opening a bricks and mortar naturopathic clinic and walk-in apothecary, offering naturopathy, traditional herbal medicines, nutritional supplements and functional medicine testing.
“We were very lucky to buy our commercial space when the Habitat precinct was built in Byron Bay, just before the real estate market went crazy,” she said.
“Traditionally, commercial rents were always sky-high in the CBD, and taken up by places that cater to tourists, so a lot of start-ups have had to look elsewhere for a place that’s more affordable.
“Because of this, some of the most exciting, creative and influential businesses are out in the arts and industry estate, near us. It’s a whole other vibe out here!” Ms Galloway said.
She said while some long-standing businesses in town had folded during COVID, the town is now bouncing back.
“Recently, we’ve noticed some fresh new shops and businesses popping up, which is exciting,” Ms Galloway said.
“Byron is a hotbed for emerging businesses and creatives, so I’m optimistic that we will emerge from COVID stronger than before.”
While she has 16,000 followers on social media and a podcast, the naturopath definitely doesn’t consider herself an influencer.
“It’s a drop in the ocean compared to the hundreds of thousands of followers that some Byron Bay influencers have. Social media has been the cornerstone of my business since 2014,” she said.
“I rely heavily on Facebook advertising, social media posts and my podcast as ways of reaching potential customers and getting my message out there.”