Recent asset sale spikes investor interest in Western Downs
THE recent sale of a Western Downs commercial office space has property investment experts predicting a fresh wave of interest in the region.
The property at 26 Middle Street in Chinchilla sold earlier this year for a cool $450,000 - and has recently secured a new five year lease until August 2023 with options to extend to 2029.
Australia's largest locally owned commercial agency, Burgess Rawson, said the sale indicated a great deal of potential for the township.
"Known as an important service centre for South West Queensland and the gateway to the booming Surat Basin, Chinchilla offers investors strong regional value, which buyers have discovered following the $450,000 sale of a commercial property asset on a 10.44 per cent yield at Burgess Rawson's recent Portfolio Auction,” a spokeswoman said.
The large 1,217 square metre landholding features a modern refurbished office and a new five year lease to national financial services tenant, Crowe Horwath, who have been leasing the property since 2001.
According to selling agent Craig Chapman, the site ticks all the right boxes for investors seeking a robust regional property for their portfolio.
"In terms of regional gems, this property has been subject to significant investor interest and its prompt sale under the hammer certainly reflected this demand,” Mr Chapman said.
"Not only does the site boast a strategic location close to Chinchilla's CBD and a recent $39,000 refurbishment, but it has also been occupied by a long-term national tenant for 17 years, now on a new five-year lease plus,” he said.
"Chinchilla itself is an agricultural hub with many rural and out-of-town businesses using the town's services, such as Crowe Horwath, to help run their operations.
"The rare asset offers the new buyer a net income of $47,000 per annum plus GST and allows guaranteed rental growth with annual CPI rent increases in place, as well as the tenant agreeing to pay all outgoings.”
According to RP Data, the property was last sold for $84,000 in 2001, about the same time that Crowe Horwath started leasing it.
Surat Basin Real Estate Director and Commercial and Industrial Sales expert Warren Daniells said in the last twelve 12 months he has managed to sell three industrial properties, one with about a 10 per cent plus return, with the other two being owner occupiers, as well as a sale in Emerson Street with an approximate ten per cent net return.
"I think this shows confidence in the local market with the result of the last federal election sending a positive light on property investment in our region,” Mr Daniells said.
"It's great to see the confidence within local businesses to purchase a local property to operate their business out of the Western Downs region.
It's hard to believe the positive news after a quick walk down Heeney Street reveals a handful of empty store fronts, but Mr Daniells insists commercially, Chinchilla is on the up.
"In the last 12 months, the Drakes supermarket centre has filled all tenancies with three new businesses, including a dentist and a cafe, and is now at a hundred per cent capacity,” he said.
"In the grand scheme of things, three commercial spaces sitting empty in the main street is not a big concern,” he said.