The Toowoomba commercial property market has been hit hard in 2020, but it seems to be picking up again as we head into the second half of the year. Here’s what the market has been up to:
The majority of Toowoomba’s office space is located right in the heart of the city, with smaller numbers in the fringe. Leasing demand in the past few years has been hot and cold, while currently in Toowoomba, gross face rents are averaging $350/m2 to $420/m2 for prime buildings. Rental incentives are becoming more popular as landlords try to get tenants, and one of the factors driving property leasing is on-site parking.
Small offices that are valued at between $300,000 and $700,000 have seen the most demand in Toowoomba, and many of these are actually houses that have been converted into office space.
There hasn’t been a lot of office development in recent years, and investment sales aren’t as popular because many buildings simply aren’t becoming fully leased – which is obviously a deterrent for property investors.
For retail properties, Grand Central has been the major player in the past 12 months, with CBD retail tenants opening stores to sell national and international brands. In March, the vacancy rate for retail was estimated at around 19%, with around 30% of properties in the city centre leased to the service industry.
The industrial market in Toowoomba is actually expected to fare better than the retail, food and entertainment industries, particularly as local industries – such as manufacturing, rural and coal seam gas – remain generally unaffected by the COVID-19 crisis.
On the other hand, businesses related to restaurants and catering, as well as sports and events, have experienced a downturn and many have sought government assistance. The transport and logistics sector in Toowoomba, which is one of the fastest growing, is expecting to see more demand as the demand for warehousing and distribution facilities increase as a result of online shopping and e-commerce.
Property values, on average, decreased 0.4% in Toowoomba in April.
At McGees Property Brisbane, we aim to keep you up to date with the Toowoomba commercial property market. Stay tuned next month where we cover some of the major developments in Toowoomba for 2020.