By Conrad Pedersen, Colliers International

Every time I meet a new person and am asked what my profession is, I know, for a fact that the next question will be ‘how is the market?’ I also find that many people are already well educated on the economy and the perceived effects on property matters.

We all look around and see that construction has stopped. For Lease signs are hammered in, 6 deep on most street corners. The papers tell us that the town’s developers are selling their land, and selling their homes! The jobless rates are the highest since 2004, and Kevin 07 says we’ve still got some economic problems to come.

Apart from the State Government’s new 10 level office tower in First Avenue, Maroochydore, it is true that construction has all but stopped. Most commercial development sites are ‘For Sale.’ Some businessmen have even realised it is not absolutely necessary to own their own penthouse, and holiday house on the hill. A shame for some, some things are not as positive as they have been.

So, why don’t we consider, to whose advantage are the current market conditions?

•    For a lower cost than taking up an option where you currently lease, did you know that you could relocate into brand new, environmentally co-operative, comfortable office accommodation with loads of windows, car parks and harvested rain water for the garden, with a list of other incentives thrown in?
•     Without new commercial space being constructed it might not be long before we have to consider staying in our old building and wearing the reviews Lessors demand
•    Consider that if your competitors consider what you don’t, your best staff and clients might consider them.

Smart investors and developers know that in this market:

•    The tight grip hold on CBD property by a privileged few is loosening up. Assets can be acquired. Some are improved and provide strong returns.
•    Our regional market is not exposed to the effect of foreign markets like major cities are. Our investments are safer and nationally the Coast continues to attract the focus of wealthy private investors and other diversified interests.
•    Our beaches and lifestyle ensure a standard of living that more and more people want to share.

At Colliers International we continually field good enquiry every day for quality commercial assets from both owner occupiers and investors. We are overwhelmed by demand for quality commercial investments within the $500,000 - $5,000,000 range.

It is accurate that vacant A grade office space is quickly being taken up. And that is why there are so many signs going up on secondary stock. Some excellent incentives are being offered in both A grade and secondary space, some is very attractive. I encourage everyone to look into all of their options before they re-sign any lease.  
                                                

In the Sunshine Coast’s Principal Activity Centre, Maroochydore, there has been no new strata titled commercial space offered for sale since 2007. Colliers International sold the last new strata suite in 61 Primary School Court in May 2008, 91m² for $437,500 ($4800/m²) + GST.

Kawana has filled the demand for Commercial Strata space since then. Sold by Colliers International in June 2009, Lot 7 at Regatta Lake Business Village sold for $2,100,000 or $4000/m². Both these sales were to owner occupiers.

It is expected that the price to produce new A grade strata titled office space will increase in line with land and construction costs. An example of which will be Corporate Vue, in Pikki Street Maroochydore (commencement circa October 2009), and the Edge at Kawana (Completed). Colliers International have negotiated the sale of new office space in the Edge at $5300/m² and are Exclusively marketing Corporate Vue, at $5200/m².

Now offered at $4,250/m², Regatta Lake Business Village at Kawana could be seen as an absolute premium buying opportunity for both investors and owner occupiers. Less than 800m² remains available in this architecturally designed A grade Business Village. There will never again be new A grade commercial strata space offered on the Sunshine Coast at these rates. The Regatta Lake Business Village is open for inspection each Wednesday from 12pm to 1.30pm. All investors, tenants and agents are welcome to the viewings.

Although the market is not as good as it was to some in the past, it is an excellent market to re-negotiate lease terms or in which to invest in commercial property assets. Enquiry in our commercial department has strengthened during the past 3 months. We expect to see a slowly progressive rate of activity in commercial construction during the year ahead.

To revise your portfolio options, whether acquiring or disposing, or to appraise the market value of your commercial assets, please call me at Colliers International.