Southern investors snapping up Rocky properties
SOUTHERN investors are developing a taste for Rockhampton's commercial properties.
Looking after commercial sales and leasing for Knight Frank's Rockhampton and region office, Jonathon Offord said they had successfully negotiated the commercial sale of the fully tenanted CBD building on 190 Alma Street.
"The property is fully tenanted to secure tenants and was purchased by a Sydney investor attracted to the high return and long lease length on the anchor tenant,” Mr Offord said.
Mr Offord said there was an extremely high demand for similar properties.
According to the Herron Todd White Commercial report for October, which was released prior to the recent Adani FIFO announcement, the rental market for office accommodation in Rockhampton had remained relatively steady throughout 2017.
It identified a demand for realistically priced and tidy office space that was well located with on site car parking.
An increase in rental rates in the immediate term wasn't expected "until current supply is absorbed and local economic conditions improve”.
"There has been a slight softening of rentals due to current supply mainly for secondary office accommodation,” the report said.
"Secondary office accommodation of sub 300 square metres is generally attracting a rate range of $150 to $200 per square metre gross.”
Currently office rentals for space below 300 square metres within the CBD or other well situated locations were typically achieving rents in the order of $250 to $350 per square metre gross.
The report said national tenants were generally prepared to pay a premium for a better quality building with one national tenant paying $400 per square metre gross for a 250 square metre office for premium grade office space in the CBD.
"Given the higher supply relative to demand, negotiable conditions are available to tenants and incentives such as rent free periods or contributions to fit out are common in new lease negotiations,” it said.