Coast Commercial
Commercial Property Overview for the Central Coast
A case of Lick, Sip & Suck
The past few years have shaped a very different
commercial property landscape for various reasons, the
least of which is certainly not the Global Financial
Crisis. The GFC had many of the Central Coast developers,
builders and businesses ‘licking their wounds’ – at least
until the middle of 2013 as they continued to try and make
sense of what was happening in the global economy.
When the federal election was over, business sentiment
improved greatly and confidence flowed quickly into the
Commercial Property sector. It was the ‘shot of courage’
business peopled needed to get them into action mode,
launching off the pad of plans they had in the top drawer.
Now, we have a federal Budget that has been met with
mixed feelings and this, it seems, is the ‘bitter lime’ that
we need to suck to clear the pallet and make way for a
stronger national economy.
Essentially when we consider commercial property it falls
within three sub-sectors being: Retail, Commercial (Office
Space) and Industrial property.
On the Central Coast we have a massive geographical
spread that also sees distinct variations in separate market
locations; each with its own specific characteristics and
different rates per square metre, capitalisation rates
(yields) and vacancy rates.
As an example, office space in Erina, West Gosford,
Gosford, Tuggerah and Wyong all have unique drivers affecting leasing and sales. In much the same ways, an
industrial unit in Charmhaven will have different factors
Great Opportunities with some Special Properties
that represent amazing value!
There are some unique opportunities in the current
marketplace, with vendors that are motivated and
properties that are multipurpose with specific
non-ordinary characteristics.
and comparable pricing affecting the market, in say
comparison to a factory unit in Somersby or Tuggerah
Business Park.
Self-Managed Super Funds
If we analyse the demand patterns in a more general
fashion, there have been notable chargers over the past
twelve months as a result of the GFC (being diluted with
the Federal Election) and improved business confidence.
Investors who have been susceptible to volatility in the
share market have started to return the commercial
property market, and a critical mass has been reached
within the superannuation market as many more new Self
Managed Super Funds (SMSF’s) have chosen to find higher
yielding property alternatives with the industrial, office and
retail investment markets.
This of course, is one of the primary drivers of demand for
commercial property – because the higher yields do not
always have to reflect a higher risk. In many cases there
will be an opportunity for the business owner to purchase
the property they will (or already do) operate the
business enterprise from. As long as the entity that owns
the business is the lessee and the SMSF purchases as the
‘sale of a going concern’, the sale does not attract GST on
the purchase price.
More importantly however, as a result of the SMSF leasing
the property to the owners business, the fund can legally
receive a higher (market) yield with significantly decreased
risk