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dragline (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a. csg Mitchell Brown and friends Construction Steve Beale and Chris Dunphy, MIPEC The Hamilton family (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe Greg Byrne, Downing; Ian Reed, QNP Aboutusgenericimage_3 Melanie and Chevy Ohl Kaleb and Harmoni Mauloni (L-R) Charlie Swaffield and Friend, Jayden and Eathan Little and Rylee Flint The Smythe boys mining
dragline (L-R) Sharlani, Rhythm-Rayne, Eesiar and Khvalee'a. csg Mitchell Brown and friends Construction Steve Beale and Chris Dunphy, MIPEC The Hamilton family (L-R) Kaitlin Hodby, Leah Thorpe, Layne O'Brien, Brooke Hodby and Maddison Thorpe Greg Byrne, Downing; Ian Reed, QNP Aboutusgenericimage_3 Melanie and Chevy Ohl Kaleb and Harmoni Mauloni (L-R) Charlie Swaffield and Friend, Jayden and Eathan Little and Rylee Flint

Beef injection
Wednesday 02 March 2016  

The market for commercial office space is entering a recovery phase in Rockhampton, is continuing to fall in Mackay, and is nearing the bottom in Gladstone according to a report out this week by Valuers Herron Todd White (HTW).

While the outlook for Central Queensland commercial property remains stubbornly bleak overall in response to the ongoing downturn in the resources sector, HTW are anticipating strong beef prices will stimulate some investment in Rockhampton this year.

“Prime office rentals are likely to remain up to about $400 per square metre gross, with secondary rentals generally ranging between $200 and $250 per square metre gross depending on a variety of factors,” they said in the report.

“While the resources sector has weakened, there is stronger confidence in the cattle industry, and we anticipate that some graziers throughout the Central Queensland region may be looking to make some off-farm investment purchases in the area.

“This has the potential to tighten yields slightly in the sub $2.5 million range, however with few key investment opportunities presently on the market; this is yet to be tested.”

In Gladstone, there remains nearly no activity to speak of, apart from some tenants upgrading their office space.

“Over the past 12 months we have seen some reductions in rental levels of about 30%, and we anticipate this to continue until rentals begin to flatten out,” HTW said.

“Tenants who previously occupied tenancies on upper levels with relatively little exposure are now able to relocate to ground floor tenancies with street frontage at comparable rentals.

“This has been a result of falling demand for office accommodation since peak workforce numbers on local LNG projects were scaled back dramatically, and we are not aware of any new office accommodation under construction or in the pipeline.”

In Mackay, it is more of the same with an oversupply of office space and an under supply of demand because of the resources downturn.

The planned auction of a major office building in Wood Street last week, which is tenanted by three State Government departments was expected to provide a good insight into property values.

However Valuer Alan Finch says the property was removed from auction.

“We are not sure what happened with the sale, all we know if that on the auction day the property was removed from the list in Melbourne ” he told Shift Miner.

“We are still looking into the situation, but overall the uncertainty surrounding the mining downturn continues to undermine prices and rentals, and I can't see this changing in 2016.”


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