Townsville commercial property
Adani, the Singapore military training initiative, solar energy projects, increased activity in the resources sector, including new mines, have contributed to positive sentiment in the Townsville commercial property market.
However, these highly anticipated projects have not resulted in any improvement in transaction volumes or price points in the industrial property market.
Based on the December 2018 property report from Herron Todd White, southern capital-city investors are seeking “high quantum assets with strong lease covenants”.
One of the highlights in the commercial space in Townsville was the Sentinel Property Group’s purchase of a packing factory at the Bohle for $12.6 million at the reported yield of 9.59 per cent. The property is leased to Orara Pty Ltd.
A southern investor reportedly purchased a warehouse/office complex in Mount Louisa for $4 million. The property is leased to a multinational company with an initial yield of 8.45 per cent.
Herron Todd White’s analysis of Townsville commercial property market reported that “activity is continuing from owner-occupiers however, this sector is very much price point driven in the sub $1 million market.”
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As the industrial market in Townsville is at the bottom of the market cycle, greater investment risk exposure exists in 2nd tier locations where adverse appeal is identified, rather than market conditions where more favourable features attract a higher quality rating.
Townsville’s industrial market continues to experience an oversupply of general lease stock relative to demand.
Agents are reporting that inquiries have increased in the sector. The data however, does not indicate an uptake of activity is occuring in the Townsville commercial market.
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