MOLENDINAR PROPERTY SELLS ABOVE RESERVE
Written on the 1 November 2013
A MOLENDINAR industrial property has been sold at auction well above its reserve price by Colliers International.
Colliers’ Pat Cavanagh says the deal was negotiated amid fierce competition on auction day for the 7378sqm, 10 Industrial Ave property, pictured, which changed hands for $150,000 above the reserve.
“We had 10 registered bidders at the auction and around four parties that were engaged in competitive bidding,” says Cavanagh.
“The property was so sought after because it was one of the only industrial sites with a large land component within the central Gold Coast.
“Given that the property is home to two older, fairly small buildings, buyers were viewing it as land value only.
“There are no other sites around of this size, certainly not in Molendinar, which is one of the most sought after suburbs for industrial users, because it is in such a central position on the Gold Coast and is the most established precinct of its type in the region.”
The property sold for $1.7 million to owner-occupiers Nathan and Dawn Huang.
Cavanagh adds that due to the current low interest rate environment, there is a tendency for industrial users to purchase rather than lease a site, and continued strong activity on the Coast’s industrial market means buyers are competing for stock, particularly for the bigger premises.
“We have been experiencing a continual stream of enquiry for industrial property all year, which is a good sign for the market in general,” he says.
“There is a new buzz around the market and every one you talk to has a more positive outlook.
“The word ‘confidence’ is used regularly among business owners negotiating new business contracts, and this trend seems as though it will continue as we head into the Christmas/New Year period.
“We are already seeing offers to purchase and lease being rushed through in time for the December break, and tenants and owner-occupiers are wanting to take advantage of this period as an opportunity to relocate and be ready for new year trading.
“Over the months of August and September we have transacted in excess of $10 million in industrial property and negotiated almost $1 million worth of first year net leases, with plenty more still in the pipeline.”
The Industrial Avenue property was divested by Economic Development Queensland, which is part of the Queensland Government, as a sell down of surplus land.
It was previously placed on the market late in 2012 via an expressions of interest campaign that saw 10 written offers ranging from $1.2 to $2.1 million, of which the highest was contracted but not completed.
Subsequent to that another party contracted the property at $1.8 million, which also fell over to due to an inability to finance.
The Huangs intend to refurbish the existing improvements and operate their business, Starbright Engineering, from the facility, after relocating from a rented premises at 19 Industrial Avenue.
“The buyers also have plans to redevelop the site in the long term,” says Cavanagh.
“Given that the buyer was an owner-occupier, and had a use for the buildings, they were prepared to pay a premium for the offering, which also assisted in driving the purchase price upwards.”