Commercial Property on Central Coast?

I'm a long time lurker and first time poster to this forum and the variety of opinions and investment styles has helped me formulate an investment plan for my family's future to a point where I am considering a purchase of a commercial property and was wondering on what people's thoughts were in regards to buying a commercial investment property on the central coast? It would be a tenanted retail/professional office type investment, not an industrial one.

My concern is that the commercial property market is quite slow up there at the moment, so is now a good time to buy and what type of returns should I expect at the moment given the risk that such a property may be vacant for a reasonable period of time before a tenant is sourced, or would it be better to wait and see.....

I really want/need to get this decision right, so any thoughts on this would be most appreciated.

Deb
 
hard to know

I'm a long time lurker and first time poster to this forum and the variety of opinions and investment styles has helped me formulate an investment plan for my family's future to a point where I am considering a purchase of a commercial property and was wondering on what people's thoughts were in regards to buying a commercial investment property on the central coast? It would be a tenanted retail/professional office type investment, not an industrial one.

My concern is that the commercial property market is quite slow up there at the moment, so is now a good time to buy and what type of returns should I expect at the moment given the risk that such a property may be vacant for a reasonable period of time before a tenant is sourced, or would it be better to wait and see.....

I really want/need to get this decision right, so any thoughts on this would be most appreciated.

Deb

This is quite a difficult topic. I have been looking at commercial property in gosford for some time. Generally, there are a lot of vacancies around mann street and hills street. For professional and retail offerings, I think that you can expect a 7-8% gross return on investment yearly. However, my impression is that the capital growth in the long term is limited, despite all the noises about the gosford waterfront development. So in summary, I think that if you can be confident of securing a long term quality tenant, then commercial property in gosford may be held for yield rather than growth. The other thing to consider is that in the mann street/ hills street corridor, the area is zoned for high rise. So it is possible that if gosford ever develops, then your commercial block could be purchased by developer for high rise.
 
I'm a long time lurker and first time poster to this forum and the variety of opinions and investment styles has helped me formulate an investment plan for my family's future to a point where I am considering a purchase of a commercial property and was wondering on what people's thoughts were in regards to buying a commercial investment property on the central coast? It would be a tenanted retail/professional office type investment, not an industrial one.

My concern is that the commercial property market is quite slow up there at the moment, so is now a good time to buy and what type of returns should I expect at the moment given the risk that such a property may be vacant for a reasonable period of time before a tenant is sourced, or would it be better to wait and see.....

I really want/need to get this decision right, so any thoughts on this would be most appreciated.

Deb


I suppose a lot depends on what $ value you are talking about here.

200 k commercial office suite will attract a totally diff occupier than a 500 k or a mill.............

Im sure you have looked at some of the core issues of funding with needing a 30 to 35 % deposit and variable commercial rates starting in the early to mid 7s.


ta
rolf
 
I'm a long time lurker and first time poster to this forum and the variety of opinions and investment styles has helped me formulate an investment plan for my family's future to a point where I am considering a purchase of a commercial property and was wondering on what people's thoughts were in regards to buying a commercial investment property on the central coast? It would be a tenanted retail/professional office type investment, not an industrial one.

My concern is that the commercial property market is quite slow up there at the moment, so is now a good time to buy and what type of returns should I expect at the moment given the risk that such a property may be vacant for a reasonable period of time before a tenant is sourced, or would it be better to wait and see.....

I really want/need to get this decision right, so any thoughts on this would be most appreciated.

Deb

Hi Deb and congrat's on your first posts.

Just to first clarify, you mention that the property will be tenanted but then go on to mention about vacancy so can you clarify whether the property will be purchased as a going concern (EG tenanted) or not?
I'm not a huge fan of retail at present (read Kristine recent post on her shop) as I think it's being heavily influenced by three factors.
1: Consumer confidence is still slow and whilst the public have money in their pockets, that's pretty much where it's staying at the moment.
2: The Aussie $$ is remaining stubbornly high.
3: On-line buyer sentiment is growing due to point 2 and also the evolution of the on-line experience.

Whilst I'm not familiar with that exact market, Retail in regional (IMHO) carries an even higher risk so if this is your first foray into the CIP arena, might I suggest you pick something a little closer to a major city that might carry a lower yield but higher potential CG.
If you have your heart set on one or the other, I (right now) would be putting my money toward office.

Good luck and don't be afraid of posting your potentials up here asking for feedback.

cheers

B.D
 
no capital gain in gosford

Hi Deb and congrat's on your first posts.

Just to first clarify, you mention that the property will be tenanted but then go on to mention about vacancy so can you clarify whether the property will be purchased as a going concern (EG tenanted) or not?
I'm not a huge fan of retail at present (read Kristine recent post on her shop) as I think it's being heavily influenced by three factors.
1: Consumer confidence is still slow and whilst the public have money in their pockets, that's pretty much where it's staying at the moment.
2: The Aussie $$ is remaining stubbornly high.
3: On-line buyer sentiment is growing due to point 2 and also the evolution of the on-line experience.

Whilst I'm not familiar with that exact market, Retail in regional (IMHO) carries an even higher risk so if this is your first foray into the CIP arena, might I suggest you pick something a little closer to a major city that might carry a lower yield but higher potential CG.
If you have your heart set on one or the other, I (right now) would be putting my money toward office.

Good luck and don't be afraid of posting your potentials up here asking for feedback.

cheers

B.D

Commercial property in gosford do not show much capital gain over time. The yield from offices is about 7%. I wonder whether it is worth purchasing even if I did not need funding and could purchase outright. I guess what we are all hoping for is some major change to the area and developers moving in to change the area in a big way.
 
Why do people think that a rezoning from commercial to residential would be a bonus? The cbd needs a major rework & investment not just a bit of a rezoning.
 
Thanks China, Rolf and B.D for your comments, most appreciated.

China the property is not in Gosford, I am personally not a fan of that area can't see council getting it right there in the short-medium term.

Rolf, thanks for your input, we will be looking at an LVR of 65% on the commercial, balance equity via a LOC and interest rate quoted at the moment is 7% on the Commercial, so happy with that if it stays at that.

Bird Dog, to clarify the property I am considering is currently vacant and would need some minor cosmetic work before looking for a tenant, but it will be a tenanted investment as opposed to an owner occupier. I appreciate your comments and after reading these and also Kristine's post, it is definitely a higher risk investment, particularly in the current climate and it's even more important to have more than one type of potential tenant. Definitely food for thought and will need to research a bit more to check the fundamentals before going ahead.

Thanks again for your input.

Deb
 
Rolf, thanks for your input, we will be looking at an LVR of 65% on the commercial, balance equity via a LOC and interest rate quoted at the moment is 7% on the Commercial, so happy with that if it stays at that.

hmmmmmmmm

7 % for a comm deal sub 500 k.

would have to be fixed short term rate OR you are providing resi security as well ?

Else 7 % is very good

t
arolf
 
Central Coast is a big area and some area's doing better than others.
Probably hard to advice unless you can pin point an area.
Even Morisset area these days is referred to as Central Coast.
 
I do a lot of work on the coast and am involved in some of the new infrastructure fundings.

I have one suburb in mind for my first venture into commercial real estate. It's a bit dead now, but I think it has a lot of potential due to large amount of private sector investment and a positive council.
 
I do a lot of work on the coast and am involved in some of the new infrastructure fundings.

I have one suburb in mind for my first venture into commercial real estate. It's a bit dead now, but I think it has a lot of potential due to large amount of private sector investment and a positive council.

Do share...
 
Do share...

I think the much touted Gosford waterfront development is not actually happening.

This development which was trumpeted loudly last year by local council was meant to inject hotels, stadiums, restructuring into the largely dead Gosford area.

This would have been a boon to resi and commercial property prices. But nothing has happened.
 
I think the much touted Gosford waterfront development is not actually happening.

This development which was trumpeted loudly last year by local council was meant to inject hotels, stadiums, restructuring into the largely dead Gosford area.

This would have been a boon to resi and commercial property prices. But nothing has happened.

It's not Gosford. Massive white elephant.

And no. I'm not sharing. The information is all available if you know where to look :cool:
 
And no. I'm not sharing. The information is all available if you know where to look :cool:

Charming....

I'm trying to remember what Jan and Ian Somers intentions were when they set this website up. Oh, that's right, I remember now.
 
Charming....

I'm trying to remember what Jan and Ian Somers intentions were when they set this website up. Oh, that's right, I remember now.

I'll post it up towards the end of next week - I have lost out on things posted elsewhere before, so while I am completing things I just don't want to be left out in the cold.

It's common sense.

ETA. Don't presume to lecture me on intentions on here.

I have had phone conversations with about 7 or 8 individuals regarding how to get granny flats and other complying development works approved. I take time out to help people who are getting started.

But, going by your general position on life I probably should have sent them an invoice for doing that.
 
So are you going to post up any hot leads you are actively pursuing or is it just the same old double standards?
 
Hi,

Just to give you an update, I have decided against a comm property investment on the central coast at this stage, too high risk and too long-term gain/return for my investment horizon.

I just wanted a general viewpoint re: the Central Coast, no opinions on specific areas required, so guys keep me out of it pls! :)

Rolf, the interest rate quoted by the business banker was 7% for sub $500k, but we have another commercial property with the same bank and the interest rate the bank gave us is currently 6.85% before the current rate cut on sub $500k comm prop security. But I have my business banking with them, so that may have had some impact. The bank is not on any mortgage broker list apparently....

Anyway, there are good returns available on residential properties up the coast at the moment, with more stable returns, so at present, that is where my focus is.

Thanks for all input, most appreciated.

Deb
 
Deb just be wary of putting both your business banking accounts and commercial loan with the same bank. I've heard lots of horror stories happen with that set-up.
 
So are you going to post up any hot leads you are actively pursuing or is it just the same old double standards?

Having been on this forum for over 7 years and shared hundreds of pages of very specific commercial property information to all and sundry, no-one has ever accused me of not sharing property deal details.

I'd be disappointed if there was even one other on the entire forum who agreed with your view.

That's a new low. :(
 
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