Top 10 Australian regions for commercial investment growth
The top 10 regional markets across Australia raking in billions in commercial investment have been revealed.
Ray White Commercial has listed the top 10 over the last 12 months spanning from the Capricorn Coast in Queensland to Northern region of Tasmania.
“Over the last few years we have seen a growing volume of buyers invest across regional markets of Australia,” Ray White Commercial’s head of research Vanessa Rader said.
“The affordability often associated with these assets was highlighted during the COVID-19 period where interest rates were low and greater first time buyers sought after affordable, higher yielding investment opportunities.
“Further growing attention to regional markets, was the increased population in some locations as lockdowns and work from home mandates saw large population movements to these regions.”
The investments range from large retail centres to industrial, along with pubs, motels, service stations and childcare centres to cope with population demands.
Ms Rader said investment activity was continuing in early 2023 with “close to $10 billion transacting across the non-metropolitan regions in the year to Q1 2023”.
The top 10 regions are:
1. GOLD COAST, QUEENSLAND
The Gold Coast has evolved over the years due to its proximity to Brisbane.
Ms Rader said it had evolved from a “tourist town to a legitimate business hub within commutable distance to greater employment opportunities in Brisbane”.
“Over the last 12 months, close to $1.4 billion has changed hands due to a number of larger retail centre transactions,” she said.
“Larger industrial holdings, hotels and office assets also added to this high volume, however the high number of smaller sub $1.5 million sales have resulted in close to 500 transactions recorded over this period at an average sale price of $3.2 million.”
2. NEWCASTLE, NEW SOUTH WALES
Newcastle has been described as a “high growth node” for NSW with population growth across the entire Hunter Region.
“Investment over $900 million has been across the board with industrial a key asset class while regional motel and pub assets also feature,” Ms Rader said.
“Smaller retail, industrial and alternative uses such as service stations and childcare at price points sub $4 million have also been attractive to investors.”
3. SUNSHINE COAST, QLD
The key population growth zone of south east Queensland has seen the Sunshine Coast emerge as “the one to watch” in terms of commercial investment.
“Strong demand for office and industrial assets have seen this market one for both experienced and first timers to jump into,” Ms Rader said.
“With institutional buyers also active, this regional market has been one to watch.”
4. CAPRICORN COAST, QLD
The Capricorn Coast is located north of Queensland including areas such as Gladstone, Rockhampton and Mackay.
Investment has come from retail, industrial as well as medical, childcare and hotel assets.
“The affordability of the region being attractive to buyers with the average sale price sub $1.5 million and recording close to 500 transactions,” Ms Rader said.
5. GEELONG, VICTORIA
The Greater Melbourne region of Geelong provides opportunities for more affordable investment options.
“With over $400 million transacting across the region over the last 12 months, this market is home to a number of larger value office assets which have changed hands, while smaller industrial, retail and childcare have also been active,” Ms Rader said.
“The hotel sector also features in this region with tourism assets such as caravan parks and motels as well as development site sales taking place.”
6. CENTRAL COAST, QLD
Investment has continued up the coast of Queensland over the last year, including the Central Coast region which takes in Bowen up to Townsville.
“A larger city shopping centre and office asset dominated transactions however tourism assets from pubs, motels and caravan parks also added to this years volume,” Ms Rader said.
“A high number of smaller industrial and retail assets also attractive to investors have changed hands with the average sale price of $1.7 million.”
7. WOLLONGONG, NSW
Wollongong, south of Sydney, has had significant increases in population over the last few years, which has been noticed by investors.
“Industrial is a key investment class in this region given its proximity to Port Kembla while office, retail and tourism assets have shared a large portion of volume,” Ms Rader said.
“Childcare and residential development sites also a key investment capitalising on increased population.”
8. DARLING DOWNS, QLD
Close to $300 million in commercial sales was recorded in the Darling Downs region which includes Toowoomba.
“Larger retail centres account for the bulk of transactions, however, investors have been attracted to this location’s affordability, accessibility, and opportunity, resulting in a strong number of sub $1 million assets,” Ms Rader said.
9. NORTHERN, TASMANIA
The northern half of Tasmania has had a busy 12 months, according to Ray White Commercial.
Ms Rader said the region had a number of industrial sales including cold storage and distribution assets bringing the full year result close to $300 million.
“Coupled with a high volume of smaller industrial, retail, and tourism asset transactions, this region of Tasmania has been attractive to not only locals but mainland buyers looking tor affordable diversification options,” she said.
10. RICHMOND-TWEED, NSW
Rounding out the top 10 is the region immediately south of the Queensland border which includes Byron, Ballina and Evans Head and inland past Lismore and Casino.
This region had strong population growth during Covid, including some notable celebrities.
“As residential prices moved upward, interest in commercial property was quick to follow,” Ms Rader said.
“While this has dissipated somewhat over the last 18 months, its attractiveness for assets such as retail, childcare/medical, and office continues, particularly given the average sale price of $1.4 million.”