An improving industrial market in sales and leasing is leading the way in Mackay.
Predominantly driven by good coal prices and some infrastructure projects in the region, businesses are now feeling more confident.
Des Besanko of Commercial Mackay says, “There’s been some reinvestment because after many years of corporations tightening their belts and extracting a lot of coal, they are now reinvesting back into maintenance and also increasing their capital equipment expenditure to meet high coal demand. This bodes well for the Mackay service industry.
“They’re finally getting a good price again. So that’s giving them a bit of freedom. So after many of years of streamlining labour costs and making things more efficient, they now have free cash to put into maintenance and capital equipment. So that’s part of the cycle of what’s happening.”
With most vacant ‘standalone’ facilities now tenanted, companies are now also exploring the option of buying land and constructing a new facility.
Des says investors struggling to find properties in Brisbane, were turning to regional areas and were keen to buy as long as a good lease covenant was in place.
Average yields in Mackay are about 9.0 to 9.5 % and as the market improves, owners will feel confident about selling assets and achieving a decent sale price, Des believes.
The return of confidence to the industrial sector has bought more people to Mackay for employment, which in turn was having a positive impact on the retail and residential markets, notes Des.