According to the Victorian arm of real estate agency MMJ, 2015 has seen a steady stream of retail real estate investors make their way into the Queensland market.
Much of Queensland’s popularity with residential investors is a result of it being much more affordable than areas such as Victoria or New South Wales, and Joel Wald, director of MMJ Melbourne, said it’s a similar story for the state’s retail real estate.
“At the moment we’re getting a lot of people coming to us and asking us to try and find something in Queensland,” Wald said.
“I think a lot of that is people just looking around locally and realising there’s not really anything that attractive on offer, so they’re starting to look a bit further abroad,” Wald said.
That doesn’t mean the Queensland retail market is simply the best of a bad bunch, however. Wald believes there are positive signs for the sector in the sunshine state.
“The returns up there are pretty good. Yields have tightened a little bit recently, but a lot of the people we’re working with are looking to buy quality stock that is going to return good capital growth,” he said.
“There are other positives as well. Queensland has strong population growth, which is great for the retail sector and a lot of the recent sales we’ve done have had covenants in place with companies like Officeworks for them to occupy the sites.
“Having major companies like that looking for locations is definitely a great sign for the market and I think it will help attract more investors to Queensland.”
While Wald said investment in Queensland’s retail sector is picking up, he wouldn’t be surprised if it starts to take off in other areas of the country.
“There’s not a lot of choice out there at the moment. Prices in the residential market have gone up and with interest rates so low there’s a lot of competition from owner occupiers as well.
“The industrial sector isn’t really seen as an attractive one either, so I think we’ll see more and more people start to consider the retail sector.
“With the RBA leaving rates on hold this week and there being the possibility of further reductions in the future, I really can’t see the sector waning at all.”
