Sunshine Coast Commercial Real Estate

ABOUT THE AREA

A robust and busy commercial sector underpins the Noosa Commercial Market which offers investors a variety of freehold retail/industrial property through the Shire's business precincts. The major commercial markets in Noosa are identified by location and these also loosely define the type of activity that predominates for each precinct.

Hastings St is the showcase retail precinct of the Sunshine Coast . Upmarket restaurants, fashion stores, jewellery retailers and a handful of general merchandise shops occupy the street fronts of the resort buildings that provide for the luxury accommodation market.

Freehold property is very tightly held and is seldom available to purchase. Even though retail space is in strong demand, yields in Hastings Street seldom exceed 5%.

Noosaville has two retail areas. Along Gympie Terrace there is a similarity to Hastings St with an emphasis on restaurants and boutique retail stores.

The newly completed Colonial Resort provided a limited opportunity for new retailers but now that this development is finalised demand will need to look for the small projects on Mary St and the future re-development of the Davos' complex on Thomas Street.

 Noosa Village ' on Gibson St through to Mary St finds favour with warehouse style retail showrooms and though leases do come up from time to time yields return landlords about 8%. Freehold turnover is very limited.

Noosa Junction is the original Noosa retail and service centre. Banks and Government agencies are located here along with a wide variety of retail shops including the Cinema Complex.

The recently completed parking allotment at the southern end of the junction and the Coles Noosa Fair shopping Centre refurbishment has given the area a much needed lift.

Tewantin also offers mature strip retailing with considerable streetscaping and some renewal updating the town centre. Noosa Shire Council is located at the southern end of Poinciana Ave. At the other end of the strip, expansion is occurring with the older houses giving way to small developments creating professional offices.

Eenie Creek Rd (Shire Business Centre) Whilst Council has given this major new retail/enterprise centre development approval there are objections by some lobby groups to the construction proceeding. In the event a planned court case to substantially alter the development fails it is likely to offer tenancies in 2006.

Industrial property is very restricted in Noosa to a well defined precinct adjacent to Eumundi Rd in Noosaville with two industrial estates housing the bulk of the industrial activities in Noosa.

The availability of State owned blocks has diminished substantially as several manufacturing companies have commenced business.

Good quality Noosa industrial freehold property sells for yields between 8-9%.

MARKET REPORT

There remains a small selection of freehold industrial/commercial property but a wider choice of businesses for sale. These include retail, speciality tourism, management rights, and hospitality.
Industrial property has gained the attention of investors with the recent release of several small developments. The end user market has maintained reasonable demand due to firming rental rates as a function of higher industrial property values.
The demand for commercial redevopment property, however, has eased and several properties have been withdrawn or put on hold since our last report.

Looking at Noosa's non residential property market we report the following activity:

Noosaville:

Noosa Civic: Forecast to open prior to mid 2006, it has also been announced that Woolworths and Big W will be anchor tenants. Specialised retail tenants are being selected to provide as wide a variety of business as is possible.
The business and commercial tenancies of Noosa Civic are now being actively promoted.
Gympie Terrace, Noosa Village and the Gibson Rd complex remain under tightly held tenancies with any available shops reflecting rentals set by Noosa Civic.
Mary St has seen some reduction in activity as developments have completed and in two cases been withdrawn in favour of existing arrangements. Though rental rates have eased somewhat from the highs reached in early 2004 there is still some smaller office space offered at $400-$450 per square metre.

Noosa Heads:

Hastings Street 's Bay Village has now been almost completely sold off with just three smaller sites left. Selling at comparatively low yields on recent increases in rental rates, this has been quite a test of investor interest.
Noosa Junction business confidence will be tested with the continued marketing of Noosa Civic. It seems inevitable that some renovation work of the buildings on Sunshine Rd will need to be undertaken if the historical business centre of Noosa is to retain its current tenancies.
Freehold property is seldom offered in this precinct and the low yields do not encourage new investors to take on redevelopment. It will be interesting to see whether vacancies develop and the current landlords review their attitude to upgrading the shops of Noosa Junction.

The suburbs:

Strip shopping in various shopping centres sees few vacancies and it is expected that rentals will continue to increase.

Summary:

The next 12 months will see a climax in the restructuring of Noosa's commercial and industrial precincts. Noosa Civic along with smaller Professional/Medical Centre will provide choice to new and existing business owners and professionals.
The shortage of good commercial/industrial freehold property is expected to continue but there may well become a choice of leasehold property for business owners.

Report amended 1 April 2005

For details contact Geoff Leadley on 0416 051611 or geoffleadley@remaxnoosa.com.au