Scott O’Neill explains why commercial property investors are flocking to Townsville

A leading property expert has lifted the lid on why southern-based commercial property investors are flocking to Townsville. See what was being targeted.

Scott O’Neill and his wife Mina experienced a great deal of success since launching Rethink Investing in 2014. Picture: Supplied.

After helping purchase hundreds of Townsville’s commercial properties, one of Australia’s leading experts has explained why so many southern-based investors are snapping them up.

Rethink Investing, launched in 2014 by Scott O’Neill and his wife Mina, is a Sydney-based buyer’s agency with a portfolio valued at $80m. They say they buy about 40 properties a month on behalf of their clients.

Since 2018, Scott’s worked closely with Townsville’s commercial agents to make over 250 purchases, including multimillion-dollar deals recently secured in Currajong, Mysterton, and Thuringowa Central.

“They’re fairly agnostic about the locations where they invest,” Mr O’Neill said.

“They just want the best return and they want good capital growth on top so we help them make those decisions.”

Rethink Investing helped secure the purchase of 232 Woolcock Street, Currajong for $4.3 million. Picture: Supplied.

For Mr O’Neill, Townsville’s attractiveness for investors boiled down to one key word – yield.

In commercial real estate, yield refers to the annual income generated by a property as a percentage of its market value.

“There’s a there’s a lot of factors we look at, but the yields were much stronger in Townsville, especially relative to other capital cities and even regional cities,” he said.

Rethink Investing's Scott O’Neill has helped buyers purchase hundreds of commercial properties throughout Townsville since 2018. Picture: Supplied.

“We found that returns were very good from a cash flow sense in Townsville.

“(As) interest rates have gone up, we see the demand for high yielding real estate becoming more important than ever.”

Rethink Investing is targeting Townsville’s industrial properties and shopping centres anchored by either a high percentage of medical or a supermarket.

“One thing that Townsville offers, that most parts of the country don’t, is that you are buying below replacement costs a lot of the time … so you can’t build it for the same money you’re buying,” he said.

Rethink Investing's Scott and Mina O’Neill have co-authored a book on commercial property investing. Picture: Supplied.

“That’s the opportunity and that’s why you’re probably not seeing a lot of new development in this particular space – you’re literally buying it cheaper existing.”

He praised Townsville’s “balanced” economy which was supported by a variety of “recession proof” industries like health care, public administration and safety, and education, along with increasing spending on defence.

“When it comes to commercial (property), you do want balance, you don’t want extremes,” he said.

Mr O’Neill has co-authored a book with his wife called Rethink Property Investing.

Rethink Investing’s recent commercial property deals

• 178-186 Hugh St, 8 Bain St, 58-62 Keane St, 106 Dalrymple Rd, Currajong – $9.55m (9.10 per cent net yield)

• 259-261 Charters Towers Road, Mysterton – $5.25m (6.52 per cent net yield)

• 232 Woolcock Street, Currajong – $4.3m (7.32 per cent net yield)

• 161 Hugh Street, Townsville – $5.75m (7.72 per cent net yield)

• 6 Burnda Street, Kirwan – $760k (7.27 per cent net yield)

• 22 Hervey Range Rd, Thuringowa Central $4.75m (7.75 per cent net yield)

Originally published as Scott O’Neill explains why commercial property investors are flocking to Townsville