Queensland Commercial Transactions Summary – 21/02/2025
Queensland’s commercial property market remained active this week, with key transactions spanning development land, hotels, industrial properties, and social infrastructure. Strong investor demand continues to be evident across multiple asset classes, with notable acquisitions in planned regional developments, hospitality, and long-term leased properties.
Development & Land
· 495 Caboolture River Road, Lilywood, QLD
o Sold for $7.9 million
o Brisbane-based developer Citimark Properties secured the last remaining commercial development site in Stage 1 of Waraba (formerly Caboolture West). The 2.1-hectare parcel will be part of the future Lilywood Town Centre, positioned near a planned Coles-anchored retail development. The site received strong interest, with over 150 inquiries and nine bids.
Hotel
· The Prince Consort, Fortitude Valley & Saltwater Creek Hotel, Helensvale, QLD
o Sold for a combined $66 million
o MA Redcape Hotel Fund expanded its Queensland portfolio with the acquisition of these two landmark venues. The Prince Consort, an iconic Brisbane entertainment venue, and Saltwater Creek Hotel, a suburban pub in a growing Gold Coast corridor, mark Redcape’s continued investment in Queensland’s hospitality sector.
Social Infrastructure
· Dawson Parade & Patricks Road, Arana Hills, QLD
o Sold for $2.4 million
o A dental clinic-occupied property with a seven-year lease to National Dental Care was acquired by an offshore investor. The 101 sqm facility was sold at a 5.88% yield, reflecting continued demand for essential service assets.
Industrial
· 16 Industrial Avenue, Wacol, QLD
o Lease extension with Brisbane City Council, generating $4.5 million in rental income until 2030
o ASX-listed Desane secured a lease extension with Brisbane City Council for its fleet vehicle maintenance division. The agreement guarantees long-term rental income, while Desane also prepares for potential future warehouse expansion on-site.
· 1/10 Albion Road, Albion, QLD
o Leased for $100,000 gross per annum plus GST
o ANSIC Group signed a five-year lease plus option for a 450 sqm warehouse and office space in Brisbane’s inner north-east.
Childcare Development
· Lot 302 Wallmans Court, Rural View, QLD
o Sold (Price Undisclosed)
o A Queensland-based childcare centre owner-occupier purchased this 2,730 sqm DA-approved site in Mackay, designated for a 94-place, single-level facility. The site is in a high-demand area near multiple schools and adjacent to Northern Beaches Central Shopping Centre.
Summary
This week’s transactions reflect Queensland’s diverse and evolving commercial property market, with continued investor confidence in development opportunities, hospitality venues, and long-term leased industrial and healthcare properties. The demand for assets in planned regional cities, suburban retail hubs, and infrastructure-backed locations remains strong, positioning the market for continued growth in 2025.
Qld Cuts Red Tape to Fast-Track Projects
The Queensland government has announced a new initiative called "Building Reg Reno" to make life easier for builders, tradies, and other construction workers. The goal is to cut down on unnecessary paperwork and costs, so they can focus on building more homes.
Here's what the government is changing:
· Less Paperwork for Small Businesses:
o More than 50,000 individual builders and tradies won't have to do as much financial reporting anymore. This means they can spend less time on paperwork and more time on building. (Source: Ministerial Media Statements: https://statements.qld.gov.au/statements/100589)
· Pausing New Trust Account Rules:
o The government is temporarily stopping the introduction of new rules about project trust accounts for projects under $10 million. This gives smaller building companies a break from extra administrative work. (Source: Ministerial Media Statements: https://statements.qld.gov.au/statements/100589)
· Making Things Digital:
o The government wants to move away from paper forms and make more things digital. This will make it faster and easier for builders to get licenses and do other important tasks. (Source: Housing Queensland: https://www.housing.qld.gov.au/)
· Changes to Fire Protection Rules:
o Builders will have more time to meet new fire protection licensing requirements. Also, plumbers who already have a contractor license won't have to pay extra fees for fire protection work. (Source: Housing Queensland: https://www.housing.qld.gov.au/)
· Boosting the Building Industry:
o Queensland's building industry is worth $59 billion and employs about 270,000 people. The government wants to make it easier for these workers to do their jobs so that more homes can be built.
o The Queensland productivity commision will be reviewing the building and construction sector to find ways to improve productivity. (Source: Housing Queensland: https://www.housing.qld.gov.au/)
Industry leaders like Paul Bidwell from Master Builders are happy with these changes. They say that reducing red tape is important for helping the building industry grow. (Source: Ministerial Media Statements: https://statements.qld.gov.au/statements/100589)
The government hopes that these changes will help more Queenslanders find a place to call home.
General Impacts for Landlords:
· Potential for Increased Property Availability:
o By reducing red tape and stimulating construction, the reforms aim to increase the overall supply of properties. This could lead to:
· More options for landlords looking to expand their portfolios.
· Potentially moderating property price increases over time.
· Impacts on Development and Renovation:
o The streamlining of licensing and administrative processes can make it easier for landlords to:
· Undertake renovations or upgrades to their existing properties.
· Develop new properties for rental purposes.
o This can enhance the value and attractiveness of their properties.
· Economic Impacts:
o A healthier construction sector contributes to a stronger economy, which can:
· Increase demand for rental properties.
· Create a more stable investment environment for landlords.
Specific Considerations:
· Commercial Landlords:
o The changes to project trust accounts for projects under $10 million are particularly relevant to commercial landlords. This can:
· Simplify fit-out and renovation projects for commercial spaces.
· Reduce administrative burdens for smaller commercial developments.
o Increased efficiency in commercial construction can also lead to faster completion of projects, which can benefit landlords by reducing vacancy periods.
· Residential Landlords:
o While the reforms focus on construction, increased housing supply can influence rental market dynamics.
o Landlords should stay informed about any related changes to rental laws that may accompany these reforms.
Key Takeaways:
· The "Building Reg Reno" reforms aim to create a more efficient and productive construction industry, which can have positive ripple effects for landlords.
· Landlords should be aware of how these changes may impact their ability to develop, renovate, and manage their properties.
· Staying informed about any related changes to regulations and market conditions is crucial for landlords to navigate the evolving real estate landscape
Additional reading
· Courier Mail: https://www.couriermail.com.au/news/queensland/qld-cuts-red-tape-to-boost-construction-industry/news-story/e0a08e647565c5897914041b6c0e9d6d
RBA Rate Cuts: What They Mean for Your Commercial Properties
RBA's recent interest rate cut has significantly boosted commercial property investment. Portfolio auctions held by Burgess Rawson in Sydney and Melbourne saw strong sales, with a total of over $60 million worth of properties sold. Key sales included industrial facilities, childcare centers, and retail spaces, demonstrating high investor interest and competitive bidding. The rate cut is seen as a "turning point" for the commercial property market, particularly for well-leased properties under $20 million (https://www.theaustralian.com.au/business/property/rba-interest-rate-cut-reinvigorates-commercial-property-market-with-60m-in-sales/news-story/e0a08e647565c5897914041b6c0e9d6d)
Understanding the RBA’s Role
The RBA’s primary objective is to maintain price stability and promote sustainable economic growth. To achieve this, the RBA Board sets the cash rate, which influences interest rates across the economy. When the RBA announces a rate cut, it signals a move to stimulate economic activity by making borrowing cheaper and encouraging spending and investment.
Source: Reserve Bank of Australia - "Monetary Policy"
https://www.rba.gov.au/monetary-policy/
Impact on Commercial Landlords
For commercial landlords in Brisbane, RBA rate cuts can have several significant effects:
1. Lower Financing Costs
Reduced interest rates translate to lower borrowing costs for property acquisitions, refinancing, and development projects. This can improve cash flow and enhance profitability for landlords.
Source: Commonwealth Bank of Australia - "Economic Insights"
https://www.commbank.com.au/insights/
2. Potential for Increased Property Values
Lower interest rates can stimulate demand for commercial property as investors seek higher yields in a low-rate environment. This increased demand can drive up property values over time.
Source: Reserve Bank of Australia - "Financial Stability Review"
https://www.rba.gov.au/financial-stability/
3. Capitalization Rate Dynamics
Lower interest rates often exert downward pressure on capitalization (cap) rates, a key metric in commercial property valuation. As cap rates decrease, property values tend to rise, benefiting landlords with existing portfolios.
Impact on Commercial Tenants
Commercial tenants in Brisbane also experience the effects of RBA rate cuts:
1. Improved Business Conditions
A stimulated economy can lead to increased business activity, benefiting tenants by boosting sales and revenue. Lower interest rates reduce the cost of capital, enabling businesses to invest in growth opportunities.
Source: National Australia Bank - "Business Research and Insights"
https://business.nab.com.au/insights/
2. Potential for Increased Rental Demand
Economic growth often encourages business expansion, leading to higher demand for commercial space. This can create a more competitive leasing market, potentially driving up rental prices in prime locations.
3. Reduced Financial Pressure
For tenants with business loans, a rate cut can lessen the interest paid on those loans, freeing up cash flow for other operational expenses or investments.
RBA rate cuts are a powerful tool for stimulating economic activity, and their effects ripple through the commercial property market in Brisbane. For landlords, lower rates can mean reduced financing costs and higher property values. For tenants, they can translate to improved business conditions and reduced financial pressure. Staying informed about RBA decisions and their implications is crucial for making strategic decisions in the commercial property sector.
For a complete list of weekly commercial transactions in Queensland, visit McGees Wrap Up | McGees Property Brisbane
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