2020 has been a year of change and uncertainty, yet Brett Hunter, Principal of Raine & Horne Commercial Erina, says, “We have continued to see how resilient the commercial market is on the Central Coast.”
Yields across commercial space on the Central Coast are averaging 7.0-8.0%, and Brett is predicting that retail and industrial properties will continue to experience strong demand supported by a lack of stock.
“Small businesses that are thriving require more space,” says Brett. “Retail assets are seeing a tiny 3% vacancy rate.”
He adds that when shops in popular strip locations on the Coast become available, there is “a high level of enquiry, and properties are typically leased within 4-6 weeks”.
Industrial assets are also seeing strong demand, with vacancy rates in the order of 3%.
The outlook is less robust for office space as a result of the pandemic. “With a lot of businesses now working from home due to Covid-19, many no longer require the space that was previously essential, and we are seeing an oversupplied market,” explains Brett.
Buyers lap up aquatic centre
As a measure of the health of the broader market, Raine & Horne Commercial Erina has notched up some impressive sales.
A popular Aquatic and Fitness Centre at Terrigal was recently listed for sale. The property included 2.03 hectares of prime acreage complete with a 4-bedroom home, large machinery shed, and a 25-metre heated pool and spa. A favourite among locals, the property sold for $3.2 million.
A block of eight fully tenanted shops in Ettalong Beach sold for $2.95 million, and a bulky goods facility of 1,273 square metres, sold for $2.8 million.
Yields expected to remain stable
Brett says average yields in Erina are currently 7.0-8.0% across all commercial sectors, and this is expected to remain stable.
The main market drivers for investors are long leases, high-quality tenants, and appealing property locations. For owner-occupiers, the prime challenge is finding a property that suits their business amid the tight availability of quality assets in prime locations.
The Central Coast commercial market has plenty to gain from the soon-to-open NorthConnex project, a nine-kilometre twin tunnel linking the M1 Pacific Motorway at Wahroonga to the Hills M2 Motorway at West Pennant Hills. Described as ‘the missing link’ in the national transport network, NorthConnex will improve freight access, connectivity and reliability across Greater Sydney by bypassing Pennant Hills Road – one of NSW’s most congested routes. And it has the potential to make the Central Coast a leading commercial hub.
For all your commercial property sales and leasing enquiries on the Central Coast of NSW contact Raine & Horne Commercial Erina on (02) 4365 0645.