Whether you’re an active investor with the vision to enhance and innovate, or a passive investor looking for stability and long-term growth, the current Gold Coast market presents an array of possibilities worth exploring.
Active investors are hands-on and actively seek opportunities to add value to their properties. They have the capital and time to invest in property improvements, take calculated risks, and often adopt an entrepreneurial mindset.
In contrast, passive investors opt for a more hands-off approach, seeking stable, established properties with the aim of generating reliable income and long-term appreciation. They are less inclined to actively manage their investments and prioritise stability and predictability.
Embrace the Evolution of Commercial Office Space
One of the most promising avenues for active investors in the current market is commercial office space. Why? The answer lies in the evolving dynamics of space utilisation. Not too long ago, property owners were slicing up floor spaces into smaller tenancies to mitigate risk during periods of high vacancy rates. By diversifying tenants, owners reduced the risk of complete income loss when some units remained vacant. This strategy was particularly prevalent on the Gold Coast where small businesses with 10 or fewer employees thrived within 200-250 square meters of space.
However, the landscape has evolved. The Gold Coast is witnessing a shift in demand, with a growing need for larger floor plates. This transition opens up a unique opportunity for active investors. By reconfiguring floor spaces and returning to larger, open floor plans, property owners can tap into unused common areas and spaces that were previously unrented. This not only attracts businesses willing to invest in customising their space but also draws in high-caliber tenants, resulting in more secure, higher-yield assets. The bottom line? This strategic move enhances the overall property value, making it a potentially lucrative investment for active investors with a keen eye for the evolving market dynamics.
Exploring Rezoned Corridors
As the Gold Coast Light Rail project makes progress in the south, Gold Coast City Council and state government are investigating rezoning certain areas to cater to the needs of the new transport infrastructure. While this shift may pose short-term challenges, especially for tenants during the construction phase, the long-term prospects are promising.
These rezoned properties will enjoy improved access, better transportation options, and access to an entirely new customer base. What’s more, these corridors hold the potential for redevelopment if zoning regulations, density, or usage undergo changes in the future. This paves the way for fresh opportunities for investors willing to navigate the short-term challenges for the promise of long-term benefits.
Seek Stability in Prime Locations
If you’re a passive investor, your strategy should focus on well-established buildings in prime locations. Instead of chasing immediate returns, consider the long-term perspective. It’s widely anticipated that population growth will drive the demand for commercial properties in the years to come. Consequently, rental income is expected to increase over time, making year-one returns less critical.
Passive investors are wise to consider prioritising properties that can attract the best tenants, aligning with the unique needs of each asset class. For retail properties, prioritise locations with good access to parking and high visibility. In the realm of commercial properties, seek out those in key commercial precincts. For industrial properties, freehold properties often stand out as reliable options, as they tend to attract strong tenants in the future.
The commercial real estate market is ripe with opportunities, catering to both active and passive investors. By aligning your investment strategy with the ever-changing landscape of the Gold Coast, you can position yourself for success now and in the future.
Reach out to Kollosche Commercial to progress your investment goals.
