The Deal Magazine | November 2021 By Ray White AKG

C ommercial

BY RAY WHITE AKG

THE DEAL MAGAZINE NOVEMBER 2021

CONTENTS 3

AN INSIDE LOOK AT INDUSTRIAL DEVELOPMENT WITH GARRY MCNAMARA OF IDG BY ANGUS PAGE

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4 REASONS TO SELL YOUR PROPERTY VIA AUCTION WITH JAMIE DAVEY

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LEASING NOW (FEATURED PROPERTIES) SELLING NOW (FEATURED PROPERTIES)

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JUST LEASED (FEATURED PROPERTY)

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JUST SOLD (FEATURED PROPERTIES)

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WHAT TO LOOK FOR WHEN INVESTING IN COMMERCIAL PROPERTY WITH RAY WHITE ECONOMICS TEAM

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LANDLORDS MAKE THE MOVE TO RAY WHITE AKG WITH AVI KHAN

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KNOW THE TEAM

An Inside Look At Industrial Development With Garry McNamara of IDG

by Angus Page Industrial Development Group (IDG) is an industrial development company that have been operating since 2003 and have successfully completed more than 50 industrial projects across Brisbane. I was fortunate enough to discuss the challenges and future of the industrial development industry with the Managing Director of IDG, Garry McNamara. Mr. McNamara has been active in Brisbane’s industrial property market for over 34 years and was previously a Director at Raine & Horne International prior to establishing IDG. IDG currently have several projects underway in Yatala, Brendale, and Crestmead.

Challenges Facing the Development Sector The industrial development sector has changed significantly over the past 18 months and whilst property prices are at all time highs, the industry is facing many challenges that will persist into 2022. Mr. McNamara’s main concern moving forward is the 'lack of land available for sale in South East Queensland and the inability to see any in the near future'. Low interest rates and uncertainty in the volatile stock market has resulted in increased investor demand for industrial zoned land. Additionally, increases in interstate migration has improved the local economy and more owner occupiers are now willing to buy land and develop their own facility. This increased demand from both investors and owner occupiers has resulted in increased competition for developers and a shortage of industrial zoned land for sale.

The viability and feasibility of these industrial development projects are determined by calculating all associated costs and forecasting future market conditions. These two factors are currently incredibly difficult to estimate with property values rapidly rising and building costs increasing due to a global shortage of raw materials.

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Mr. McNamara outlined that it is very hard to predict and lock in prices when we have seen about a 20% increase in the cost of concrete, steal and labour over the last 8 months.

How the Development Market Has Changed Since the COVID - 19 Pandemic Industrial development projects prior to the COVID-19 outbreak were most commonly leased and sold as tenanted investment properties. The limited supply of investment opportunities has pressured investors to absorb more risk and purchase industrial assets off the plan without a tenant pre-committed. Mr. McNamara outlined that the current market is very different from 18 months ago and provides very minimal discounts, incentives, or guarantees to persuade investors to purchase a vacant property. Record low interest rates are making it cheaper for many business to purchase a property rather than lease. Furthermore, these businesses also have the benefit of owning an appreciating asset. Selling an industrial property off the plan was extremely rare prior to COVID-19.

However, the high demand for premium industrial assets has resulted in IDG selling 3 of the last 5 of their projects off the plan.

Key Takeaways There is a severe shortage of industrial land prime for development across South East Queensland and building costs are continuing to rise making it difficult to fix prices on projects. The industrial market is moving quickly and more people are willing to pre-commit to off the plan developments with no guarantees to ensure they secure a suitable property.

Angus Page Associate Director of Commercial

0433 627 769 angus.page@raywhite.com

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4 Reasons To Sell Your Property Via Auction with Jamie Davey With clearance rates and attendance at an all-time high, auctions are quickly becoming the go to method of sale for all property types. Whether it be an industrial warehouse or a residential home both sellers and buyers are beginning to notice the distinct advantages that comes along with the auction process.

Vendor Control When conducted properly, the auction process can give the vendor a lot more control over the sale of their property, more than any other sale method. Vendors have the ability to set the length of time their property is on market for, they are able to establish the reserve after receiving qualified and accurate market feedback, they have the choice to sell either before, during or after the auction and can choose to receive a cash unconditional contract at the point of sale.

Transparency Auctions are quite unique in the sense that they are often the most transparent method of sale. When it comes to auction day all buyers and bidders know who they are up against and exactly where they need to be positioned in order to secure the property. It is also a great way for both the sellers and the buyers to gain a live understanding of the sale price and market values in the area.

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Competition Auctions are a great way of creating a competitive bidding environment. The transparency of auctions gives buyers more confidence in bidding when they know other people want it and this encourages them to leave nothing on the auction floor. This competition also results in a premium price being achieved for the vendors.

Urgency Having a set date of sale for a property often encourages bidders who may otherwise procrastinate, to make a decision about a property sooner. Buyers become aware that the aim of the auction is to sell on the day, so if they waste anytime they risk losing the opportunity.

All of these points make the auction process stand out above all other methods of sale. However, the only way to truly maximise the potential sale price and ensure the entire process is seamless is by appointing a competent sales agent coupled with a great marketing campaign. Doing this will almost guarantee that you will achieve the best price for your property on auction day.

Jamie Davey Associate Director of Commercial 0400 763 772 jamie.davey@raywhite.com

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LEASING NOW

Featured Properties This Month RETAIL Unit 11B/10 Old Chatswood Road SPRINGWOOD $165,000 PA Gross + GST Building/Land: 660sqm

Corporate Office Suite With Ample Onsite Parking - 660m²* Generous reception area with client waiting room Functional fit out comprising of partitioned offices and open plan Multiple conference/training rooms Large lunchroom with kitchen and staff balcony

JAMIE DAVEY 0400 763 772

INDUSTRIAL Lot 32 Warehouse Circuit

YATALA

CONTACT AGENT Building: 1,688sqm Land: 2,915sqm

Premium Industrial Facility - Available Mid 2022 Brand new 1688sqm* facility on a 2915sqm* block 1473sqm* of clearspan warehouse 176sqm* of high quality office space 39sqm* of mezzanine storage Minimum internal warehouse clearance of 8m Warehouse access via 3 container height electric roller doors

ANGUS PAGE 0433 627 769 7

LEASING NOW

Featured Properties This Month

OFFICE 1.05/9 Murrajong Road SPRINGWOOD $48,000 Gross PA + GST Building/Land: 150sqm

Corporate Office Suite In Springwood Tower Hotel - 150m²* Entry reception / waiting area Multiple partitioned offices and open plan area Access to private balcony Ducted air conditioning and internal kitchenette Secure basement car parking and ample onsite parking

JAMIE DAVEY 0400 763 772

RETAIL 13/40 Browns Plains Road

BROWNS PLAINS

$45,000 + Outs + GST Building: 145sqm

Well Located Office/Showroom with High Exposure 145sqm* of showroom/office space Large glass frontage Rear door access Ducted air-conditioning throughout Kitchenette Daily exposure to thousand's of cars on Browns Plains Road

ANGUS PAGE 0433 627 769 8

SELLING NOW

Featured Properties This Month RETAIL 1/104 Compton Road WOODRIDGE $599,000 + GST Building/Land: 254sqm

Office/Retail Space With Great Exposure To Compton Road Total floor area of 254sqm* over 2 levels Ideally suited for professional offices or retail users Generous entry showroom/reception area Multiple partitioned offices with meeting/boardrooms over both levels Full glass frontage providing ample natural lighting

JAMIE DAVEY 0400 763 772

RETAIL 14/40 Browns Plains Road

BROWNS PLAINS

CONTACT AGENT Building: 151sqm

Incredible Investment Opportunity!

Annual rental return of $83,124.00 + GST Fresh 5 year lease that commenced on the 26th of November 2020 3% annual rental increases 151sqm of high quality retail space extensive high quality fitout Large glass frontage

ANGUS PAGE 0433 627 769 9

SELLING NOW

Featured Properties This Month RETAIL 2/104 Compton Road WOODRIDGE $399,000 + GST Building/Land: 178sqm

Retail Showroom In High Profile Location Total floor area of 178sqm* with additional 80sqm* of mezzanine storage Ideally suited for showroom retail or professional offices Substantial entry showroom area First floor office area with air conditioning Full glass frontage providing ample natural lighting

JAMIE DAVEY 0400 763 772

INDUSTRIAL Lot 19 Warehouse Circuit

YATALA

CONTACT AGENT Building: 1,256sqm Land: 2,450sqm

Brand New A-Grade Facility in Prime Location New 1256sqm* facility on a 2450sqm* block 1019sqm* of clearspan warehouse 237sqm* of A-grade office space over two levels 8m minimum internal warehouse clearance Warehouse access via 3 container height electric roller doors

ANGUS PAGE 0433 627 769 10

JUST LEASED

Featured Properties This Month OFFICE 1/18-20 Johnson Road HILLCREST

Building/Land: 53sqm

LEASED BY JAMIE DAVEY! After a strong campaign and receiving multiple offers from a variety of different businesses, the owner was very excited to secure a 3 year lease from a company looking to establish themselves in the Hillcrest area.

JAMIE DAVEY Associate Director of Commercial 0400 763 772 jamie.davey@raywhite.com

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JUST SOLD

Featured Property This Month INDUSTRIAL 22/22 Mavis Court ORMEAU $547,000 (Going Concern) Building: 204sqm

SOLD BY ANGUS PAGE! 22/22 Mavis Court was on the market with another agency for three months before the vendor decided to engage Ray White AKG. We initially marketed the property internally and within 24 hours it was unconditionally sold for asking price to one of our valued investors. The vendor wished to continue to run his business from the property and was delighted to hear that he could remain in the property and lease it for the next two years.

ANGUS PAGE Associate Director of Commercial 0433 627 769 angus.page@raywhite.com

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JUST SOLD

Featured Property This Month LAND 6+8 Mayes Avenue LOGAN CENTRAL

$1,500,000 Building: 1,836sqm

SOLD BY JAMIE DAVEY! After having the properties under contract for over 18 months with a developer, the owners decide it was time to get serious and employed Ray White AKG to assist with the sale process.

During the marketing campaign we received over 20 inquiries and multiple offers from both commercial developers and land bankers. After receiving the multiple offers it didn't take long to negotiate a cash unconditional contract at the asking price for the owners from an interstate investor who is looking to land bank the properties for future development.

JAMIE DAVEY Associate Director of Commercial 0400 763 772 jamie.davey@raywhite.com

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WHAT TO LOOK FOR WHEN INVESTING IN

COMMERCIAL PROPERTY with Ray White Economics Team In 2021 we have seen a large increase in commercial sales transactions after a quiet 2020. Last year we saw both vendors and buyers adopt a “wait and see” attitude and were more cautious in coming to market and transacting in an uncertain economy. This year we have seen transaction levels soar as interest rates maintained their low rate with a combination of growing confidence and buyers' quest for increased returns.

As a result we have witnessed a greater volume of first time buyers in the marketplace as well as experienced investors moving up the risk curve. Turnover levels have seen improvement across all asset classes notably industrial assets which have been best poised to weather the COVID-19 storm as well as alternative assets such as childcare, service stations and medical facilities. More traditional assets like retail and office continue to be in hot pursuit by savvy buyers however there are a number of fundamentals you need to watch for when purchasing your next commercial asset.

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Building approvals - Often we see assets which have been added to and amended over the years, be certain that the property you are purchasing has the adequate approval and its use is permissible under the current zoning. Check with the local council if you are unsure, this will limit future issues with building regulations and could save you from costly fines.

Hidden problems - While it's hard to see some problems with the asset, ask the questions and ensure you are making an informed decision. Assets like older industrial sheds; what are they made from, will you possibly have an asbestos issue in the future?

Are there subterrain tanks on the site which may see you needing to spend money on remediating the land in the future?

Zoning - Just because a tenant is in place doesn’t necessarily mean their business type is permissible under current zoning legislation. Doing your homework on the zoning of your asset is a good exercise not just to understand who and what can occupy your property but to better understand possible highest and best uses of your property in time. Are you able to redevelop your asset to a different use or subdivide which may yield you a better return?

Leases - Commercial leases are far more complex than residential leases so it may be worthwhile to have a professional review the clauses in place for your tenant. What are your rights and obligations as a landlord to the tenant, who pays for what and what reviews or options are in place for rental arrears, esculations, sub lease etc. A qualified property manager who can manage the asset, tenant and leasing process is often a big money saver in the long run.

Research - Before you get too excited on the specifics of the asset, it's prudent to do some investigation into the asset type and location you are looking to purchase in. There are a number of key fundamentals to consider for any asset class; importantly understanding the supply of future competing stock, current occupancy rates and also local statistics like business starts and population growth. There are a number of government sources to collect this information and the council you are investigating will likely have a future plan for their LGA regarding business and development which will provide an insight into demand for your asset in the future.

Auctions - We have seen a large increase in commercial assets selling under auction conditions this year. This method of sale allows vibrant competition between potential buyers and it's very easy to have a sense of FOMO and bid above your budget. Be cautious and set a limit in which you wish to purchase for, consider all the outgoings as well and the income and what yield you are willing to pay and stick to it!

Exit strategy - While you are only just buying the asset now, it’s worth considering what your exit strategy may be and when you may be interested in disposing of the property.

This may be driven by your finances, retirement plan, the length or time remaining on the lease or future potential redevelopment opportunities. While this plan can change, it is worth considering your options early and create a strategy around this asset, how it sits in your portfolio and what its future may look like.

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Landlords Make The Move To Ray White AKG with Avi Khan RAY WHITE AKG has had a flurry of commercial and residential landlords joining their service offering in the last three months.

The service-focused group comprising Ray White AKG, Daisy Hill and Marsden on Brisbane’s south, has experienced hypergrowth, securing more than 122 new commercial and residential properties under management within the period of three months.

“We pride ourselves on our service and it’s great to see the team rewarded for their hard work through landlords’ referrals,” Ray White AKG’s Director of Property and Asset Management Rachael Curtis said.

“We have a 4.9 rating on Google with more than 600 satisfied clients. The industry has gone through immense change and is in the midst of more change.

We believe that landlords have made the determination that we are best equipped for the change."

Ms. Curtis said, “Ray White AKG has positioned itself for growth by recruiting experienced property managers and moving to industry leading technologies.

By truly understanding our consumers' demands, we are able to provide the right technology platforms to give our landlords access to information 24/7.

Our clients are never left waiting days for a response, it's simultaneous for them to access reports & information at the touch of a button. Our investors also have full autonomy of when they get paid, using our portal they can transfer their rent when they want. We genuinely feel we have the formula for award winning service by truly listening to what our clients want.”

When you merge experienced commercial and residential property managers with the best technology, the result for landlords is always optimal.

We are proud of how our team has adjusted to uncertainty and change in the industry. Instead of withdrawing, we’re expanding and exploring new business options and avenues.

The growth of our asset management business reflected the team’s pursuit of exemplary service standards. We’ve all worked tirelessly for our landlords and taken the time to understand their investment journey.

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Rebecca Turner, Head of Asset Management Growth said, “Clients will always gravitate towards trusted operators, the team had demonstrated that they were a safe pair of hands during the height of Covid 19 and now with the market surging buyers are paying more for property and getting an expert asset manager is more crucial than ever before.”

Ray White Group CEO of Property Management, Emily Sim, said, “Hypergrowth is an exciting prospect. Being able to maintain client satisfaction comes down to experienced property managers and superior technology. Ray White Marsden and Daisy Hill are structured to support their new clients expectations. Growth of these proportions is widely sought and rarely secured, it is the qualified property/client managers and technology combination that is supporting Ray White Marsden and Daisy Hill to maintain their momentum." ​At Ray White AKG, we are a true team of experienced experts, ensuring that our client’s journey can all be done in the same place. We often facilitate many services such as refinancing of investment loans, depreciation schedules and conveyancing. We are humbled to be able to say, Your journey starts and finishes with Ray White AKG.

Avi Khan Director 0400 666 809 avi.khan@raywhite.com

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KNOW THE TEAM

AVI KHAN Director 0400 666 809

ANGUS PAGE

Associate Director of Commercial

0433 627 769

RACHAEL CURTIS

Director of Commercial Asset Management

0490 471 535

JAMIE DAVEY Associate Director of Commercial 0400 763 772

GENEVIEVE TREW

Group General Manager

07 3805 3108

Prepared by:

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