By Vanessa Cavasinni, editor Australian Hotelier
Queensland’s Sunshine Coast is a burgeoning commercial property market, thanks to four major projects taking place in the region. The latest CBRE Viewpoint report has found that the alignment of four major developments in the region have propelled the Sunshine Coast into a period of major growth, one that hotel operators and investors should make the most of.
The four key projects that will drive population growth and property development of the area are the construction of the Sunshine Coast Public University Hospital; the planned Maroochydore Principal Development Area; the proposed expansion of the Sunshine Coast airport; and the development of the residential area of Aura (formerly known as Caloundra South).
CBRE managing director Rem Rafter, believes these four projects make the region an attractive option for investors.
“These key projects will redefine the Sunshine Coast’s property landscape, presenting new opportunities that will attract both interstate and offshore investors.”
Each of the four major projects should lead to further population growth and, in turn, commercial land development. The Sunshine Coast Public University Hospital and the associated Kawana Health Campus, are due for completion this year. Craig Godber, CBRE’s research manager, suggested that there would be development flow-on effects from the project, including a future town centre and commercial precinct.
The Maroochydore City Centre Priority Development Area (PDA), which covers 62 hectares of land, is intended as a new central business district for the Sunshine Coast region. Included in the development are 165,000 sqm of commercial space and 2000 private dwellings. Property within the development will become available incrementally over the next two decades.
Aura is currently the largest residential city development project and will be constructed over a 30-year span. Upon completion, there will be approximately 20,000 residences, housing an approximate population of 50,000. The proposed expansion of Sunshine Coast airport would also see a significant boost in tourism to the region.
Glenn Price, CBRE’s senior manager of hotels in Queensland, believes these factors make the region and Queensland in general an enticing market for hotel operators and investors in 2016.
“Over the past few years, the Queensland hotel market has been starved of quality opportunities, however, improving conditions in 2016 will see demand strengthen for hospitality assets in the region.
“The Sunshine Coast is a desirable area for tourism and living, underpinned by strong local growth off the back of an expanding population and a number of significant projects such as the new Maroochydore City Centre and Public University Hospital.
He added: “The lower Australian dollar is also supporting the holiday market, with more tourists from both overseas and interstate taking advantage of the more favourable economic conditions to visit some of Australia’s most sought after destinations.
“The Sunshine Coast boasts some quality pubs and gaming assets, which will be of strong interest to both corporate and private buyers in 2016.”
“In 2015, we saw multiple new entrants to the Queensland hotel market and we expect that to continue in 2016, with a particular focus from interstate buyers looking to capitalise on the higher returns on offer.”
Price also suggested that larger than average yields will likely attract investors.
“We expect the Sunshine Coast will entice a number of new entrants this year, with it offering yields of 10-12 per cent for going concern hotels when compared with the NSW market, which offers around 8-9 per cent.
“Investment assets will also be of strong interest to buyers, with those backed by secure covenants to be on the radar of investors, offering yields of circa 5.5-7 per cent.”