According to Kollosche commercial property specialist Adam Grbcic, this is a good thing for the market.  

He says that despite vendors facing reduced competition for their assets, those buyers who remain in the market hold true purchasing power – and they’re cashed-up, ready to invest.   

“Although you may not have the same level of competition that you would have in previous years, you are dealing with a more premium-level buyer,” Adam says.  

“And I don’t think there’s ever a good or bad time to sell in the commercial market. If you are selling and reinvesting in the same market, it’s relatively safe.” 

For those who are seeking to invest, Adam says that industrial is leading the pack.  

“The underlying fundamentals for industrial continue to be strong on the Gold Coast,” Adam says. 

“It has been well reported that industrial performs the best. This is because the barrier to entry is lower, which leads to a higher level of transactions.” 

It is also the only asset class where stock has been delivered.  

“I can’t think of anything other than Morris Group’s [Mermaid Beach Plaza] development in Markeri Street where additional retail and commercial space has been added to the Gold Coast over the past three years,” Adam says. 

“Comparatively, in industrial, you’ve got “man caves” and small industrial parks being frequently developed and delivered in locations such as Southport and Burleigh.” 

Lower-grade office opportunity

For anyone with $5 million to $10 million to invest in the sector now, Adam says he would be investing in office space. 

“I would be buying C and D-grade office buildings in key Gold Coast commercial precincts, because if you look at floorplates within those precincts, they have all been cut to suit small and start-up businesses. 

“So, if it’s a poor-quality building with a small floor plate, you can refurbish it, open the floor plates up and suddenly you’ll have additional rental coming from spaces that previously didn’t exist. 

“You can turn a building that, because of the quality and the size of the tenancies, currently leases for $250 a square metre net rent into one that earns $450 to $500 a square meter net. 

This can be achieved relatively quickly, according to Adam, “if you have the patience, capital and drive to do so”. 

Hear more of Adam’s thoughts and forecasts around Gold Coast commercial property in the latest episode of the K Series podcast.