HIGHGROVE SPENDS $5.35M TO EASE GROWING PAINS

Written on the 12 June 2015 by Nick Nichols

HIGHGROVE SPENDS $5.35M TO EASE GROWING PAINS GOLD COAST company Highgrove Bathrooms has splashed out $5.35 million to ease its growing pains, and help the company expand further into the national market.

The bathroom supply business, founded by Lindsay Sinclair a decade ago, has bought a 2.5ha industrial site at Molendinar where it plans to establish its new national headquarters and warehouse facility.

Highgrove general manager Steven Sinclair says strong growth by the company led the family to acquire the expansive site which he says will accommodate expected growth over the longer term.

Highgrove employs about 25 head office staff who manage the company's back-room operations.

"We've been through about six different warehouse-office areas in the last six years and we've outgrown them rather quickly," Sinclair says. "This property will suit us long term."

Highgrove, which started operations in Southport in 2005, has two Gold Coast outlets and is currently opening its 26th and 27th national store.

Sinclair says the company has achieved its growth through a joint-venture model with owner-managers.

"It actually works really well for us because it takes a lot of the staffing issues out of the equation," he says.

Sinclair says the company plans to lease part of its new Molendinar holding and later plans to undertake a small scale redevelopment of the property to suit its needs.

"We really were looking for a property that could handle the growth we've had and cater for our future growth," he says.

"That's what attracted us to this site. We saw that this property has a lot of potential. It's a big bit of land and we're looking to do, not necessarily a complete redevelopment, but some development on the site."

The business, which is currently based at Molendinar, plans to move into the new headquarters in mid-July.

The property was formerly owned and occupied by Northstate Carpet Mills for the past 40 years and comprises two titles at 14 Enterprise Street and 5 Industrial Avenue.

Highgrove plans to set up its operations across 4800sqm on Enterprise Street, while two buildings totalling 2100sqm on Industrial Avenue will be leased.

Pat Cavanagh, of Colliers International, who marketed the property in conjunction with Savills and Canford Property, says he has been jointly appointed to lease the space.

The $5.35 million sale to the Sinclairs was achieved despite an earlier sale campaign in 2013 achieving offers of between $4 million and $4.5 million.

"Late last year, when it was on the market for the second time, the number of offers tripled and ranged between $4.7 million and $5.35 million, equalling $212 per square metre of land area," says Cavanagh.

"Assets of this size and nature are tightly held and in high demand considering there is currently very little available for sale in the region. The market has been on the improving trajectory since the beginning of 2013, which is evident by the number of offers we received and the increasing values.

"An increasing number of investors, developers and owner occupiers are looking for opportunities to occupy, value add and develop speculative projects. Strong tenant demand that we are experiencing right now decreases the risk usually associated with building a speculative development.

"We are expecting similar market conditions for the remainder of the year, with a continued take up of leasing stock, which may see rents increase slightly. Owner occupiers are very active as they are starting to see some capital growth on existing properties and are buying now whilst borrowing conditions are so favourable.

"We are also seeing smaller land parcels values increase to above $300 per square metre due to increased demand and lack of supply."

Author: Nick Nichols

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