Townsville Investment Sold for $2.12 Million
A recently refurbished investment opportunity at Hermit Park in Townsville has been sold by Ray White Commercial Townsville for $2.12 million.
The retail property at 208 Charters Towers Rd, Hermit Park, was sold fully leased to a Newcastle investor by Troy Townsend of Ray White Commercial Townsville. With a net rent of just over $200,000 per annum, the deal shows a return of 9.5 per cent.
Troy Townsend said the yield was almost double the returns being achieved in the hot markets of southern capitals and was a key reason investors were looking to regional centres like Townsville.
“A big positive for this site was that 80 per cent of the building is leased for a minimum of five years. It has a very strong WALE (weighted average lease expiry), one that many people go out looking to spot,” Troy Townsend said.
The property had languished mostly vacant for several years before a buyer picked it up last year for $1.25 million and through a makeover and fitout incentives, believed to have cost around $650,000, attracted two new tenants for much of its floorspace.
“It was 80 per cent vacant when the (previous) owner took it over. They managed to secure two new quality tenants through fitout incentives and a facelift of the building,” Troy Townsend said.
The property has a gross floor area 860sq m on a 2007sq m site with 26 on-site car parks.
It is one of several sites in Charters Towers Rd which have been given a new lease of life in recent years as mostly owner-occupiers – accountants, financial planners and business services firms – have taken the opportunity to buy their own site and invest in a makeover.
Troy Townsend believed buyers had opted for Charters Towers Rd over a CBD location because parking was easier and the sites were more accessible.
However, while there were still plenty of properties available for lease in Charters Towers Rd, there was very little for sale, he said.
“We are desperately short of good quality investment stock.
Southern-based investors are very interested in Townsville and especially want multi-tenant high yielding properties,” Troy Townsend said.
“Anything 8.0 per cent plus is selling really well.” Meanwhile, providing a good fitout remained a big incentive to attract tenants.
“(Tenants) may not have the time to co-ordinate a fitout and sometimes they don’t have the money. If you are astute, you can do (a building makeover) economically.”