Low stock continues driving Tasmanian market
A leader in the commercial property sector says there could be 12 months left in the peak of the current property market cycle.
LJ Hooker Hobart managing director Mark Devine says a lack of stock will play a role in the buoyancy of the market.
Just recently Devine sold a warehouse and office facility at Huntingfield to a private investor for $1.96 million on a passing yield of 6.7%.
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While below Hobart’s 8% average for prime industrial sales registered in the first half of this year, Devine says the Huntingfield property’s yield is in line with suggestions that the market will attract premiums for the immediate future.
The sole tenant of the 2111sqm site is Lightning Protection International, a global supplier of lightning- and surge-protection and earthing solutions. No.49 Patriarch Drive at Huntingfield is its global headquarters.
The tenant’s current lease ends mid-2021, with another five-year option available.
Devine says while the existing tenant uses all of the available space, the configuration of the pre-cast building lends itself to multiple tenancies, which helped generate interest during the campaign period.
“There is also scope to convert hardstand areas on-site, further offering the opportunity to value-add to the asset,” he says.
Huntingfield at Kingston, south of Hobart, has seen its profile increase among investors.
Devine says this is because opportunities in long-established northern industrial precincts such as Cambridge, Mornington and Brighton are rare.
“Huntingfield has been popular for light industrial and smaller-scale manufacturing operators who don’t require the northern corridor’s access to the airport or industrial linkages,” he says.
“The surrounding Kingborough municipality had proved one of the state’s fastest-growing regions.
“Only a 20-minute drive from the CBD, it is considered an affordable alternative to Hobart, which has recorded double-digit median house price growth in the past 12 months.”
According to LJ Hooker Commercial’s Industrial Market Monitor, average capital values for prime industrial sites in Hobart are about $1400 per square metre.
This article from The Mercury originally appeared as “Low stock to keep Tassie market running for 12 months”.