Aura Owner's Report

Aura Business Park Owner’s Report - Q3 2024

raywhitecommercialncg.com

Aura Business Park Summary

Welcome to our quarterly wrap up of Aura Business Park.

Much has happened since December last year, both locally and nationally, that has played a hand in shaping the current state of the Aura market. We have seen some record sale and lease rates achieved, a shift in supply numbers of certain building sizes and some larger economic drivers that have us shifting a few key predictions for what is coming next quarter.

The following report is designed to give you the insights and market knowledge necessary to help you make better commercial property decisions. We start with a look at the national market drivers before zooming in to more local activity and the actual lease, sale and building stock levels at Aura.

We’re lucky to have the largest active team in the Northern Corridor providing us with real time market feedback from hundreds of enquiries per quarter.

We trust you will find some useful insights in this report and invite you to call up or call in to our office and discuss what this all means for your specific property and where the opportunity might be for you.

(Team photos & Contacts)

Market Drivers “These are the market factors that are shaping the landscape for your Aura property in the coming year” - Michael Shadforth, Director

POPULATION GROWTH The Sunshine Coast is projected to grow from 350,000 to over 510,000 in the next 15 years. With 50,000 new residents projected to occupy 20,000 homes, Aura represents 80% of the Sunshine Coast’s current residential expansion pipeline.

Stockland’s proven track record at delivering similar projects has given other developers and businesses alike the confidence to make bold growth assumptions and position themselves early to capitalise on the potential in this area.

LAND SUPPLY CONSTRAINTS The next five years in particular will see further tightening of what is already a chronic supply shortage of industrial land in the region. Vacant industrial rates have increased from $215m2 in 2020 to over $500m2 in 2024. A recent third party Needs Analysis identified that the Sunshine Coast has an industrial supply shortage of 178ha, which is the equivalent of the entire Harmony estate.

CONSTRUCTION COSTS Construction prices have been a major source of the CPI issues that drove the interest rate hikes of 2023. There has been a perfect storm of international conflict, labour shortages, fuel, materials and competing infrastructure projects impacting all facets of commercial construction. The South East Queensland market has been impacted more than most areas due to the Olympic infrastructure pipeline of projects that has taken tier 1 builders out of the private industrial construction pool.

AFFORDABLE HOUSING & LABOUR Industrial businesses across the country are struggling to access the necessary skilled labour and housing affordability and cost of commuting are the two factors that dictate workforce location. The Sunshine Coast has the potential to supply close to 40,000 new homes, spurred on by the Government’s Affordable Housing mandate. This is proving doubly attractive for businesses in the trade services and building supply industries, who want to position themselves to servicing the demand from the same residential construction projects that this new labour force will call home.

Demand Summary The following is a summary of what our team is seeing at the coalface of Aura Business Park property activity over the last quarter: OWNER OCCUPIERS: While the run of interest rate rises in 2022-23 cooled the market off somewhat, this was offset by a massive increase in equity of many homeowners across the Sunshine Coast. The result has been that owner occupier demand has remained quite buoyant, as they can access equity in their home to subsidise their commercial purchase.

INVESTORS: At the start of the year we predicted an increase in activity from investors transitioning from residential to commercial, due to the tightening restrictions on residential landlords. This has definitely been the case. The settling of inflation and stable interest rates, combined with confidence in the greater Sunshine Coast growth and supply/demand metrics have given investors a more bullish outlook than we saw at the start of the year. Unfortunately these new investors are concentrated in the smaller end of the market, where tenant vacancy rates are currently the highest.

Much of our work is going into helping buyers understand the replacement costs, land constraints and population demands of this area are, so they do not get fixated on passing yield. In spite of this, buyers do not quite have the confidence to buy vacant and trust the absorption rates. While there have not been a high volume of tenanted sales, the yields achieved have been at or under 6%, compared to the trend towards mid-6% yields at the start of the year. This has been driven by low stenanted stock volumes and the confidence in capital growth projections due to high comparable land and construction prices for future stock.

TENANTS: Demand from businesses in the last quarter has continued the trend towards larger footprint buildings (500m2+). We have seen multiple small shed projects reach completion at similar times.

This, combined with the softening in demand in this sub 300m2 range, is pushing out our average days on market. Stand alone buildings over 1,000m2 remain the most sought after product and the rates being achieved by our team have now pushed through the $170m2 net bracket.

Regardless of size, building functionality and inclusions remain the key considerations for tenants looking to relocate. The rapidly increasing rent rates and outgoings over recent years makes for some interesting initial conversations, but Caboolture remains at the lower end of comparable prices.

“Watch for the sub-200m2 investor market to regain a bit of lost momentum as residential investors make the shift to avoid the coming tenant protection and negative gearing turmoil” - Ashley Rees, Senior Analyst

2024 Transactions The following is a summary of all the transactions completed in Aura in the last six months: Total Sales:

14 sales worth $10,013,941 at an average sale rate of $3,701m2

Total Leases:

19 leases across 6,117m2 at an average net rent of $187m2

Lease or Sale

Unit #

Street #

Sold

1

60

Sold

4

Sold

Street Name

Size

Price

$ Per m2

Edison Crescent

513

$2,025,441

$3,948

13 - 15

Packer Road

296

$745,000

$2,517

12

24-26

Hancock Way

288

$907,500

$3,151

Sold

8

19-21

Packer Road

219

$910,000

$4,155

Sold

6

13-15

Packer Road

218

$726,500

$3,333

Sold

3

6

Strong Street

199

$640,000

$3,216

Sold

7

60

Edison Crescent

166

$630,000

$3,795

Sold

3

1

Packer Road

158

542,000

$3,430

Sold

7

9

Packer Road

141

$535,000

$3,794

Sold

2

4

Packer Road

135

$530,000

$3,926

Sold

5

9

Packer Road

131

$566,500

$4,324

Sold

5

11

Strong Street

122

$460,000

$3,770

Sold

6

6

Strong Street

100

$400,000

$4,000

Sold

7

1

Packer Road

89

$396,000

$4,449

Lease or Sale

Unit #

Street #

Size

Price

$ Per m2

Leased

3&4

7-13

Carnegie Street

1999

$495,000

$248

Leased

2

4

Abeles Street

562

$87,110

$155

Leased

2

9

Edison Crescent

512

$125,000

$244

Leased

1

3

Strong Street

375

$142,344

$380

Leased

1

1

Carnegie Street

354

$70,000

$198

Leased

4

10

Strong Street

315

$49,999

$159

Leased

5

24-26

Hancock Way

259

$33,020

$127

Leased

8

9-13

Matheson Street

252

$36,540

$145

Leased

4

17

Hancock Way

247

$29,040

$118

Leased

5

11

Packer Road

208

$31,200

$150

Leased

5

6

Strong Street

199

$33,530

$168

Leased

1

9

Strong Street

150

$25,000

$167

Leased

4

25

Hancock Way

128

$22,000

$172

Leased

2

31

Hancock Way

121

$18,000

$149

Leased

5

19

Hancock Way

94

$18,330

$195

Leased

6

13

Strong Street

91

$17,000

$187

Leased

5

13

Strong Street

89

$17,000

$191

Leased

4

13

Strong Street

89

$17,000

$191

Leased

6

11

Packer Road

73

$15,000

$205

Street Name

Stock Summary We see the bulk of our current stock for both sale and lease falls in the sub 300m2 range, with a limited number of warehouses exceeding 1,000m2 also available. Those developers yet to build should be interested in the persistent gap in available stock within the 300-1000m2 range.

Recent transaction data show 88% of our sale and lease transactions falling within the sub 300m2 range, indicating sustained demand in this segment. We expect the strong recent enquiry in the 1,000m2+ stand-alone bracket should yield results for those owners in the coming quarter.

Lease

Sale

Under Construction

Complete

Average Asking Rent $m2

0-150m2

-

6

$198

0

3

$4,642

150-300m2

-

19

$173

2

8

$3,933

300-600m2

1

5

$182

1

2

$3,545

600-1,000m2

1

2

$195

-

-

-

1,000m2+

2

1

$165

-

-

-

Total

4

33

$179

3

13

$3,997

Size Range

Under Construction

Complete

Average Asking Sale $m2

Current Sale Stock on Market Unit #

Street #

3

6

2

Street Name

Building Area

Price

$ Per m2

Status

Abeles

410

$1,349,500

$3,291

Under Construction

17

Hancock Way

324

$1,198,800

$3,700

Complete

3

5

Edison Crescent

315

$1,197,00

$3,800

Complete

4

6

Abeles

269

$1,024,500

$3,808

Under Construction

3

24-26

Hancock Way

252

$950,000

$3,770

Complete

3

9

Packer Road

247

EOI

-

Complete

2

6

Abeles

241

$919,500

$3,815

Under Construction

1

13-15

Packer Road

223

EOI

-

Complete

5

19-21

Packer Road

219

$941,700

$4,300

Complete

1

23

Hancock Way

180

$720,000

$4,000

Complete

4

11

Strong Street

173

$680,000

$3,931

Complete

5

10

Strong Street

165

$595,000

$3,606

Complete

2

10

Strong Street

164

$655,000

$3,994

Complete

2

19

Hancock Way

134

$550,000

$4,104

Complete

4

3

Packer Road

93

$416,250

$4,476

Complete

8

1

Packer Road

83

$399,000

$4,807

Complete

Current Lease Stock on Market

Unit #

Street #

Street Name

Building Area

Price

$ Per m2

Status

62

Edison Crescent

2551

$380,000

$148

Under Construction

66

Edison Crescent

2061

$350,371

$170

Under Construction

64

Edison Crescent

1043

$167,000

$160

Under Construction

1

7-13

Carnegie Street

997

$220,000

$221

Complete

2

66

Edison Crescent

953

$162,100

$170

Under Construction

16

Strong Street

600

$96,000

$160

Complete

1

5

Edison Crescent

487

$110,000

$226

Complete

3

5

Carnegie Street

352

$77,440

$220

Complete

5

60

Edison Crescent

350

$61,000

$174

Complete

2

17

Hancock Way

342

$48,600

$142

Complete

1

6

Abeles Street

317

$60,000

$189

Under Construction

2

11

Packer Road

302

$54,592

$181

Complete

1

24-26

Hancock Way

293

$51,304

$175

Complete

6

7

Matheson Street

291

$55,515

$191

Complete

2

8 - 12

Matheson Street

245

$36,750

$150

Complete

5

8 - 12

Matheson Street

245

$36,750

$150

Complete

14

8 - 12

Matheson Street

245

$36,750

$150

Complete

4

8 - 12

Matheson Street

237

$36,735

$155

Complete

12

8 - 12

Matheson Street

230

$35,650

$155

Complete

13

8 - 12

Matheson Street

230

$35,650

$155

Complete

2

19-21

Packer Road

219

$35,000

$160

Complete

1

8

Strong Street

214

$42,800

$200

Complete

8

18

Hancock Way

206

$32,080

$156

Complete

5

20

Hancock Way

204

$33,660

$165

Complete

9

8 - 12

Matheson Street

196

$37,240

$190

Complete

10

8 - 12

Matheson Street

196

$37,240

$190

Complete

1

8 - 12

Matheson Street

194

$35,890

$185

Complete

6

10

Strong Street

178

$27,000

$152

Complete

5

1

Carnegie Street

164

$32,870

$200

Complete

2

1

Carnegie Street

163

$32,592

$200

Complete

4

1

Carnegie Street

163

$32,592

$200

Complete

6

18

Hancock Way

147

$25,330

$172

Complete

8

8 - 12

Matheson Street

143

$28,600

$200

Complete

7

8 - 12

Matheson Street

138

$27,600

$200

Complete

3

19

Hancock Way

132

$23,760

$180

Complete

4

3

Packer Road

93

$18,000

$194

Complete

6

1

Packer Road

90

$22,000

$244

Complete

1

Construction Progress

Your NGC Aura Team

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