Middlemount business passed in
CAN the beef boom turn CQ commercial property around?
Wednesday 13 April 2016
THE market for commercial property remains patchy across the Bowen Basin reflecting the mixed outlook for the region's dominant business sectors.
In a notable auction last week, the Middlemount Rural Traders business was passed in after bidders failed to make the reserve.
The sale is noteworthy because it gives an insight into communities that are exposed to both the booming beef sector and the depressed coal industry.
At the height of the mining boom in 2012, Middlemount had the sixth highest average income per capita in Queensland according to the Australian Taxation Office, with average take home pay of $86,674.
The Middlemount Traders business has been around for 34 years with the current owners having owned it for the last six. It sells everything from hardware to plants and farm supplies, and according to the agent handling the sale, Kent Street from Ray White Rural in Sarina, this has made it attractive to a diverse group of people.
“There has been a good lineup of inspections, and the vendors are keen to sell,” he told Shift Miner.
“It is a predominantly rural business, and has been operating through the downturn very well, so the downturn in the mining sector hasn’t affected turnover.
“In fact, improvements in that area are an opportunity for growth because the business is a preferred supplier to some the surrounding mines.”
Elsewhere in commercial property the trends established in 2015 in Central Queensland are continuing, according to property valuers Herron Todd White (HTW).
Generally speaking, in the communities of Gladstone, Rockhampton and Mackay there has been every little sale activity, and leasing rates have continued to experience downward pressure.
However, there are some notable bright spots.
“In Mackay agents marketing some larger industrial assets in Paget are reporting strong interest from investors,” HTW said in their latest monthly report.
“These assets are leased to ASX listed tenants, on long lease terms and comprise modern buildings with good depreciation benefits available.
“The current marketing campaign of the Blackwoods premises at 69-79 Diesel Drive, Paget is one example of a large asset that is attracting strong interest, if this property sells, it will be one of the highest valued investment sales in Mackay in recent years.”
Meanwhile, in Rockhampton some members of the grazing community are using the current pessimism in the resources sector to make countercyclical off-farm investments.
“We anticipate that some graziers throughout the central Queensland region may be looking to make some off-farm investment purchases in the area, and this may have the potential to tighten yields slightly in the sub $2.5 million range,” HTW added.
“ However, with few key investment opportunities presently on the market, this is yet to be tested.
“We are aware of one industrial property currently under contract for $2.4 million, purchased by a Central Queensland grazier.
"This is a speculative investment, and the building was vacant.”