The Sunshine Coast Industrial market has picked up in investment demand during 2013 and 2014. The period post 2007 saw a swift reduction in investment activity, 2011 achieved strong results off the back of a number of larger logistic type transactions however reduced again in 2012.
During 2013 a combination of low interest rates, an influx of Self-Managed Super Funds (SMSF) looking for small investment properties together with infrastructure investment has improved sentiment fuelling this increase in transactional activity. 2014 results have not mirrored the high of 2013; however annual turnover in excess of $35 million signals an uptick in confidence across the broader Sunshine Coast market. A combination of improved employment projections and favourable increases in the residential market has done much to recover sentiment across local business in the area showing encouraging signs for 2015.
Considering sales in this region, the largest volume in investment over the past two calendar years (2013–2014) has come from the suburbs of Maroochydore and Caloundra. Maroochydore historically not as strong however given the $14.3 million industrial development site transaction in September 2014 has skewed the results. Noosaville and Caloundra show a more consistent level of turnover representing average sale prices of $620,000 and $885,000 respectively due to a handful of larger sales within Sunshine Coast Industrial Park.
However suburbs such as Kunda Park, Coolum Beach, Moffat Beach and Warana highlights the strong private investor, owner occupier and SMSF activity for the region with sale prices ranging from $210,000 to $850,000. The following chart highlights the volumes in each region, we note the high Other suburb section which includes larger sales such as Kennards Self Storage in Alexandra Headland for $10,050,000 and warehouse facility in Palmwoods for $9,400,000 both selling in late 2013.
Leasing in this market has been tough over the last couple of years resulting in some compression in rental rates, an outlook of stability is expected while investment yields maintain within a similar broad range depending on size and lease covenant. Industrial land values are also expected to remain steady averaging in the region of $150/sqm for mid size lots in the 2,500sqm Zange.
2015 has started well with a strong volume of sub $800,000 transactions across the region, ahead of the start to 2014. The largest transaction however was recorded in February 2015 for a 6358sqm warehouse/office property at 498 Maroochydore Highway, Kunda Park, the property sold for $2.76 million representing a yield of 9.01%.