where yields can reach as low as 4 or 5% net per annum –
while comparable yields in Gosford or Wyong would still be
around 9% net per annum.
Industrial or business park land
Where SMSF’s derive the majority of their funding from
a larger pool of (saved) capital, most developers need
to finance their projects in order to make the initial land
purchase. The GFC brought changes to Loan to Value Ratios
(LVRs) as banks sought to reduce their risk when lending
for developments. Not only have financial institutions
chosen to lend developers less, but they have constructed
lengthy documents that imply many more restrictions.
These changes make it much more challenging to put a
feasible development together and has forced developers
that in years gone by may have ‘had a go’, to redirect their
business. This in turn significantly impacts on the land
market, number of sales and land prices. Currently land is
one of the most challenging property types to sell because
it has become so difficult to borrow funds to complete
even a well thought-out development. Average
industrial land prices on the Coast range between $80$140/m² plus GST, and commercial and retail land can sit
anywhere between $130/m²-$800/m² plus GST depending
on the location and specific qualities of the land potential.
Industrial Units
New industrial units have been limited as typically these
are developed speculatively, so they are very difficult to
finance at the moment. In saying that, the Industrial
property sector across the Coast is still quite buoyant.
Prices range across the two Shires from approximately
$1000/m² plus GST in the North to approximately $1400/
m² in the Somersby/West Gosford/Erina regions for
established stock, and depending on the size of the unit,
prices can be as high as $1500 to $1800/m² plus GST. (Units
under $200,000 typically don’t have the same m² rate).
Larger industrial sales and leases have been surprisingly
strong – both for owner occupiers and investors; fuelled in
no small part by the lower interest rates available and the
favourable yields (9-10%). Many of the owner occupiers
that have been able to secure larger properties for
relocation or expansion have come from sectors of the
economy that are still experiencing considerable growth
(e.g. logistics, transport, some areas of manufacturing).
Retail. New and ongoing development in West Gosford
with Woolworths, Masters Home Improvement and
Bunnings leading the larger new developments, and in
Tuggerah with the proposed expansion of Westfield’s
Shopping Town, all indicate confidence at a corporate level.
The past six months have also seen a number of smaller
shops in retail precincts being leased or sold to small
businesses for reasonable market prices.
The Mariners Centre of Excellence at Tuggerah is an
example of a large scale integrated development which
has been well recieved by the marketplace. The Soccer5’s
is drawing around 150,000 visits a year, the YMCA Aquatic
Centre is about to open, and construction on the office
building will begin in the next few months. Large sale
items include the Medical Centre which is planned over the
ground and first floor of the office building, and a
substantial 1000m² pre-lease in progress. A new childcare
centre operator is also committing to provide a unique
quality service in the complex.
Office space is still in good supply in areas such as Wyong,
Tuggerah and Tuggerah Business Park, Erina, Gosford and
West Gosford. The price for sale and lease in the various
developments can range anywhere from $200/m² to $500/
m² PA Net + GST for lease and for sale between around
$2300/m² to $6500/m² plus GST.
The Central Coast Commercial Property market is well
positioned for the decade to come. People need to find
employment close to where they live and the Coast is a
perfect example of where governments and private
businesses are recognising the true benefits of
affordability, logistics, lifestyle and the powerfully unique
mix that skilled and unskilled labour can provide in this
great region.
The Central Coast is a ‘small pond’ between two ‘large
ponds’ and our region is quickly transforming into a
centrally located business and government hub
surrounded by the Sydney and Newcastle marketplaces of
circa 7 million people. The future looks bright, however it
will be on the back of the sustained residential property
growth an