It wasn’t that long ago that the only time you went to an industrial precinct was if your car had broken down or you needed to buy some plumbing supplies for a renovation.
These days, the evolution of industrial real estate means that punters are just as likely to be sitting down for a beer, listening to a band, or feasting on some tasty barbecue.
The changing face of the industrial sector is happening nationwide and Burleigh Heads at the southern end of the Gold Coast, is an area that is reaping the rewards.
Not only is demand from owner occupiers soaring and pushing prices up to unprecedented levels, a different breed of business is setting up shop.
“Something that struck me about the industrial real estate in that area is that it demonstrates this trend of businesses evolving where they were traditionally set in commercial or retail spaces, and now they’re moving into industrial spaces,” Domain Group research analyst Eliza Owen said.
“For example, the presence of breweries, a food market, dance studios, gyms. It’s speaks to the demand more generally for industrial real estate because it’s such a versatile asset, it really can be anything.”
BBQ Bazaar opened its doors in 2018 in a former warehouse on Junction Road in Burleigh Heads and today is a night market venue that serves beers, bands and barbecue.
“It’s an example of where you have hospitality occupying industrial space,” Ms Owen said.
The median price of industrial real estate in Burleigh Heads has grown by 12 per cent to $1.2 million in the 12 months to November last year, Domain Group data shows.
An example of some of the industrial units for sale in the area. LJ Hooker’s Adam Roberts is selling this one. Photo: Supplied
The median price increased by 41 per cent over the past five years.
LJ Hooker Commercial Burleigh Heads sales manager Adam Roberts said lifestyle was a factor for some buyers who were often consolidating their businesses in Brisbane to get into a Burleigh Heads industrial holding.
“Anything under the $500,000 price point has found strong demand and competition. The demand from buyers in that price point is driving prices up,” Mr Roberts said.
He said service industries were the main drivers of the robust market demand, while there was a growing number of hospitality businesses lodging applications to operate from industrial locations.
“Once that happens, industrial will be more like fringe mixed-use precincts,” he said.
“(Industries) are getting lighter so you’re finding your tenant mix is a lot cleaner use and the presentation of properties is getting better, which is driving yields up, too.”
Herron Todd White commercial valuer James Hayward said owner occupiers were pushing investors out of the industrial market in Burleigh, with the benchmark sale price per square metre recently hitting $3500 – up from about $3000 just six months ago.
The price increase was partly due to population growth on the Gold Coast generally, he said, but also the region’s geographical constraints made the supply of industrial land finite.
Mr Hayward said new industrial strata units of between 120 to 150 square metres were in strong demand from owner occupiers in particular because the majority of stock was constructed in the 1970s and 1980s.
“The actual rate per square metre is reaching unprecedented levels because of the demand versus supply, which is being strangled,” Mr Hayward said.
“That’s just goes to show, for a new product, people are jumping over themselves just to get into it.
“As units start to sell out, again, it’s just restricting that supply, people are more desperate, and they increase their price level.”
Ms Owen said technology made it easier for people to be entrepreneurial, with Burleigh Heads ideally located on the Pacific Highway with easy access north and south.
“Burleigh Heads has ample distribution space sitting on the Pacific Highway, so I imagine smaller online retailers would be taking advantage of that as well,” she said.