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Enormous Potential for Coolum Industrial Owners

By Michele Dale

Unprecedented demand means now is a perfect time for long-term Sunshine Coast commercial property owners to realise their capital growth.

Significant opportunities exist for owners of industrial zoned land or units across the region. Owners of industrial stock, particularly in the Coolum area, are well-positioned to achieve maximum returns by selling or developing now.

Demand for industrial land and sheds of any size far outstrips supply across the entire eastern seaboard. Vacant space across the east coast fell by 7% in the fourth quarter of 2020 to just over 2.22 million square metres.[1]

The current competitive environment is generating a record number of enquiries. With industrial stock declining to a critical point, Ray White Commercial Noosa and Sunshine Coast North is looking for owners of industrial land or units who are ready to go to market.

Coolum industrial property is finally reaching its potential now that many Brisbane and Sunshine Coast industrial estates are at capacity.

WHY SELL OR DEVELOP NOW?

Demand is coming from all angles. There is no longer sufficient land available in the Coolum area for growing medium to large businesses that require over 500 square metres. The only exception is state government-owned land which requires significant fill at additional cost.

The continued expansion of e-commerce, a desire for more agile supply chains and a “reshoring” of manufacturing are just some of the factors contributing to demand. Online sales are forecast to grow by $12.8 billion in 2021, which will result in about one million square metres of warehouse demand from e-commerce alone in 2021.[2]

As well, the small shed phenomena shows no signs of abating. Locally, online store operators needing small-scale distribution centres and trade-related businesses too big for home garages are adding pressure to already limited stocks.

So, where does that leave property owners? With plenty of options, according to Tracey Ryan, Coolum specialist with Ray White Commercial Noosa and Sunshine Coast North.

“There is enormous potential for anyone with industrial land or property in the Coolum industrial area, particularly for long-term owners who bought in the first stage of the Watpac development, to realise some capital gain on either vacant land or built product. There is strong demand for blocks of land, freestanding buildings and unit or strata-titled developments,” Tracey said.

Vacant land prices hovering around $200 per square metre 16-18 months ago are now attracting more than $400 per square metre. Industrial leasing rates had not increased on the coast since 2012. However, they are finally beginning to rise from a low base of $120/sqm for small industrial units and $90/sqm for larger format industrial units.

ACHIEVE MAXIMUM YIELD BY SELLING ON-MARKET

While it’s impossible to predict what is next, these are the best commercial prices seen for ten years. It’s fair to say that Coolum has gone from being the poor cousin of Noosa and Kunda Park to a sought after locality in its own right.

“Coolum industrial area has all the features required for industrial hubs right now, including great proximity to major road routes, an international airport on your doorstep and the Port of Brisbane just an hour and a half away. And it’s right in the middle of the growing beachside areas of Mooloolaba and Kawana in the south and Noosa in the north,” says Paul Butler, co-principal of Ray White Noosa and Sunshine Coast North.

Preliminary planning is underway to double the Sunshine Motorway from two to four lanes from the David Low Interchange to the north of Yandina Coolum Road. The additional lanes will improve northbound and southbound access from Coolum and provide better linkages with the growing business hub of Maroochydore, which will only add to the area’s appeal.[3]

Owners can achieve the best returns by selling on-market with a proactive, well-executed sales strategy. Going to market means opening up to a broader range of local and possibly interstate buyers with bigger budgets which means potential for higher returns. “Expression of Interest” or “Offer to Purchase” campaigns are achieving outstanding results for commercial owners opting to go to market without a price.

END OF LEASE LOOMING? GET A FREE APPRAISAL

For owners with tenanted investments seeking a new tenant, it’s a good idea to get an appraisal as the market has risen considerably over the past three years.

Ray White Commercial Noosa and Sunshine Coast North offers an obligation free market appraisal service. Call our office on +617 5474 7600 or book a property appraisal here, and one of our Commercial Property Consultants will be in touch.

[1] Michael Bleby, Australian Financial Review, The shed building boom is getting louder, 21 March 2021. [2] Larry Schlesinger, Australian Financial Review, E-commerce growth to drive another record year for industrial property, 27 January 2021. [3] Queensland Government, Planning ahead for more Sunshine Motorway lanes, 27 July 2021.

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