What's in store for Gladstone's retail real estate market
THERE is reason to feel positive about Gladstone's retail real estate market as residential rental vacancies fall and coronavirus restrictions ease.
Ray White Gladstone director Andrew Allen said that while it was hard to see a direct correlation, when residential rental vacancy rates tighten, commercial rates tended to follow 12 to 18 months later.
"Overall we're relatively buoyant and optimistic about the future of the retail market of Gladstone because it's coming off a very low base in what is a growing population and a growing economy," he said.
There had been an uptick in inquires after Christmas before they stopped when coronavirus hit.
"When you compare the cost of living in Gladstone with the average wage in Gladstone, the amount of discretionary income floating around is relatively high compared to other regional areas in Queensland," he said.
Mr Allen's comments follow the release of Herron Todd White's June month in review for the commercial sector.
It points to retail in Gladstone approaching the bottom of the market and said conditions in Central Queensland had been slow prior to the pandemic.
"Agents are reporting that there have been no inquiries for new leasing while the COVID-19 restrictions have been in place and there have been many concessional rentals renegotiated for existing tenants during this period," the report states.
Mr Allen said retail space in Gladstone's CBD tended to follow industrial activity.
"Looking back at all the major industrial projects that have come along over the last 30 to 40 years, retail space in the CBD will fill, then as construction work dies off and discretionary income dies off, retail stores close," he said.
"From the 1980s when the Stockland Shopping Centre was developed, a lot of retail went to a space where they have a captive audience.
"Shopping centres and traditional malls will always be the preferred destination for a shopper and a retail tenant, however for small local businesses, the high street store in the CBD is more affordable."
He said cost was one of the big barriers for someone hoping to set up a business.
"What are perceived as high rental rates are often just unfortunately the cost of ownership of the buildings," he said.
"It would be fair to say that at present, council rates represent close to 50 per cent of what an owner would get in rent."