Marketing Commentary - March 2016
It has definitely been a very busy first few months to the 2016 calendar year with high levels of activity within the market place. Most notably for our office has been the sale of 99 Hastings River Drive - a 4,214 sqm land site with multiple income streams and located on a main commercial entry corridor. The sale price was in excess of $2.5 million and calculated to a net return of 8% on purchase price.
Another exciting result in March was the auction sale of Lot 5, 56 Clarence Street - a retail strata shop with additional first floor office = two incomes. The marketing for sale of this property created considerable interest from investors and ultimately sold for $622,500 GST EX which equates to a nett return of 6.6% approx on purchase price. This property was sold under auction conditions to an out of town buyer. It is interesting to note that with investment property, more often than not we are experiencing that out of town buyers are seeing more value in investing in Port Macquarie commercial property where local investors may have not seen such an opportunity and miss out.
In this Market Update, we have analysed the recorded number of commercial/industrial property sales in Port Macquarie and Wauchope post codes for the 2015 calendar year. This information has been extracted from RP DATA/CoreLogic property monitors and although not 100% accurate, it will be sufficient to gain some overall understanding of the market.
Interesting to note that only 69 Sales were recorded in Port Macquarie for 2015 and 11 sales were recorded in Wauchope for the same period. By comparison we understand there were over 1,500 residential sales recorded in Port Macquarie in the 2015 year.
The number of sales may surprise you as being low, this can be explained as follows;
- Unlike residential subdivisions development which is moving leaps and bounds, the number of commercially zoned streets has remained all but static for at least the past 5 years. In fact, there are only around 20 or so Commercial/Industrial Zoned streets in Port Macquarie as compared to over 625 approx residential streets.
- Commercial and Industrial property is very tightly held. Many owners are unwilling to sell due to lack of better investment options. To be a seller at the moment, owners generally require strong motivation in addition to a healthy sale price i.e. funds required to purchase elsewhere, debt reduction or finalisation of an estate (as a result of marriage split or death).
This all means that opportunities will remain low and keen buyers need to make quick decisions.