Influx of new businesses has investors eyeing up Townsville

AN ‘UNPRECEDENTED’ number of new businesses have driven Townsville to the top of the target list for commercial investors.

AN ‘UNPRECEDENTED’ number of new businesses have driven Townsville to the top of the target list for commercial investors.

Experts from across the real estate field say the last 18 months have been a period of ‘outstanding investments’ with private buyers paying up big-time for tenanted investments.

Ray White Commercial’s Director Troy Townsend said the results were driven by soaring confidence in local businesses and the reliability of investing in regional Queensland.

“2021/22 was Ray White Commercial’s best year in history with 204 commercial property transactions settled and an 80% increase in the value of our total sales from the previous financial year,” Mr Townsend said.

“In the last financial year there have been 336 new business registrations with the biggest growths in the health care & social service, administration and support services, information media and telecommunications, manafacucturing and retail sectors.”

Industrial, medical and retail properties had all seen surges as their sectors continued to grow and thrive.

Individual commercial properties have also seen their value explode over the same period, thanks in part to a growth in the commercial rentals market.

“This has been due to growth in rentals and also yield compression. Where we used to commonly see a 9-10% yield for your average commercial property, we are now regularly seeing 6-7% achieved,” Mr Townsend said.

“This growth has lead to a lot of long-term investors listing their commercial property for sale and a flurry of investment from Sydney and Melbourne investors who are cashed up and struggling to find a good quality investment in their hometown. A lot of these southern investors have sold residential property or stocks and are looking for the higher returns that commercial property offer.”

While the recent federal election provided a momentary handbrake in some business interests, Townsend said inflation and interest rate scares had caused no drop in sentiment for commercial property sales or leasing.

“In fact, we are seeing more competition than ever for good-quality commercial property. The main reason for this is that at the end of the day people are still confident with the economy, lending is still extremely cheap and there seems to be an abundance of capital still out there wanting to be deployed into investments.”

Originally published as Influx of new businesses has investors eyeing up Townsville