Investors focus on Rocky's retail properties under $1 million
INVESTORS are still actively pursuing retail property in Rockhampton, particularly in the sub $1million range returning yields as high as 11.5%.
Property valuer Herron Todd White in its June in review statement noted a marked preference by investors for property leased to "strong local businesses" offering unexpired lease terms or WALE (weighted average lease expiry) in excess of two years.
There was reportedly little appetite to buy vacant property.
"Yields can vary with investors paying considerable attention to the quality of the tenant," HTW said.
Recent yields tend to sit between 7% and up to 11.5% with most being around the 8% to 9%.
HTW said there had been a few "outliers" below the 7% yield, however these sales had been to "quality, multinational tenants with very good lease conditions generally sitting at a price point above the price-accessible range.
"Price points vary considerably, with retail properties in traditional retail locations achieving prices from the mid to high $400,000s through to over $1 million," HTW said.
"Asking prices in secondary areas can be below $200,000.
"However, these are for small retail premises and the properties themselves normally require some work to attract a tenant."
HTW said the key ingredient for leasing purposes in this market seemed to be a modernised property in a quality retail location with good exposure at an affordable rental. While owner-occupiers have been active in the property market under $500,000, few seem to have a retail focus and most tend to prefer commercial space.
Two examples of recent sub $1 million retail sales are:
An 1800sq m site in central North Rockhampton improved with a three-tenant retail centre.
It offered an unexpired lease term of 2.43 years and analysed to a 8.15% yield; and
A 3422sq m site in central North Rockhampton, improved with an eight-tenancy retail centre with vacancies, offering an unexpired lease term of 1.42 years and analysed to a 9.77% yield.