Interest in Toowoomba commercial property is heating up as many non-local buyers look for investment alternatives to major metropolitan areas, according to Ray White Commercial Toowoomba.
Principal Brian Hodges says low interest rates and strong demand for high-yielding investments are behind the surge through 2017, which is expected to continue into 2018.
“Our sales agents have noticed a higher level of activity across all sectors of the commercial-industrial market coming into the festive season and we are expecting a buoyant new year,” Mr Hodges says.
Excluding the sale of Clifford Gardens shopping centre in May 2016 for about $185 million, Ray White Commercial data shows commercial sales in the Toowoomba local government area reached $56.216 million in 2016.
Up to November 2017, sales had reached $60.206 million — a 7.35 per cent uptick on 2016 and representing close to 50 transactions.
“In addition, the vast improvement of 68.22 per cent of volume in 2017 compared with the 2015 calendar year further emphasises the shift in attention to quality regional locations by many buyers,” Mr Hodges says.
Turnover across industrial assets has also increased in 2017, most notably for properties in the sub-$1 million sale category.
“These assets have attracted attention by both owner-occupiers looking to control their accommodation costs and investors seeking good returns at an affordable price point,” Mr Hodges says.
Larger retail assets such as Wyalla Plaza, which was sold for $14.45 million to an interstate investor by Ray White Commercial Toowoomba’s Peter Marks in March 2017, have also been well received by a growing group of investors.
Mr Hodges says investor inquiry for smaller (sub-$2 million) assets continued strongly even in the lead-up to Christmas, with tenanted retail and industrial properties in the greatest demand.
“We expect this elevated activity level to continue into the new year, particularly from non-local and interstate buyers chasing yield between 7.50 per cent and 9.00 per cent who are achieving sub-6.00 per cent rates in other major cities across Australia,” he says.
A fully leased heritage building in Margaret Street, Toowoomba, placed on the market in late 2017 attracted plenty of attention from prospective buyers.
By early December, agent Daniel McNamara had fielded around 80 inquiries in the expressions-of-interest campaign, which was launched in November and scheduled to close on December 14.
Comprising seven tenancies, the Exchange Building is one of Toowoomba’s most significant historical buildings and is opposite the recently redeveloped Grand Central shopping centre.
Toowoomba is 125km west of Brisbane.