September 2016 Market Wrap Up
COMMERCIAL MARKET WRAP: CENTRAL COAST
Investment Trends, Leased, Sold, New To The Market and Coming Soon
Erina & Gosford are the latest suburbs to benefit from a hot investment market and firming yields. With the Service NSW Gosford Strata achieving a sale at 6.6% net and 55 Hills Street, Gosford with an even stronger 6.17% net yield on the sale price of $1.96 million.
The strongest recent yield in the local market has been Shop 2/202 The Entrance Rd, Erina. This 115m2 shop with a 1 year lease in place has been sold for $500,000 representing a 6.00% net return. It was not too long ago that this type of investment achieved closer to double digits due to the short term of the lease.
There can be no doubt that the strength in the investment market, driven by record low cash rates & interest rates remain the hottest tickets in town. It is not only the traditional blue chip property investments that are attracting investment attention according to a recent article in The Australian.
‘Hospitals, car yards and college dorms used to be the ugly ducklings of Australian real estate — shunned by the big domestic property trusts in favour of glitzy office towers and big-box retail malls offering better returns.
‘Not any longer.
‘An influx of capital from foreign investors, including Middle East sovereign-wealth funds and Asian property trusts, has shifted the competitive landscape in Australia, pushing up prices for commercial property and forcing many local real-estate investment trusts, or REITs, to expand their horizons in search of yield.’
Whilst the Central Coast market may not have any great number of large format properties that attract Middle East sovereign wealth funds, we are experiencing a greater number of non-local investors being attracted to the local Central Coast market in an attempt to compete against a smaller field of competitive purchasers.
If you are wanting to know the value of your investment in today’s aggressive investment market, please give us a call, we are happy to help.
INSIGHTS 2016. Hosted by Ray Hadley, with guest speakers,
Angus Raine, Executive Chairman Raine & Horne
Nerida Conisbee, Chief Economist REA
Paul Mirams, Partner Korda Mentha