Sunshine Coast Daily Story
SOUTHERN interest in Sunshine Coast business and commercial real estate opportunities was approaching fever pitch as investors chase yield and lifestyle opportunities.
Leading business broker Rod Russell said he would take on three or four extra brokers “in a heartbeat” if they were available with strong demand and stock increasing as retiring Baby Boomers looked to cash out and slow down.
Mr Russell said business “Boomers” were now striking the same problem as farmers, unable to keep their second and third generation family members in the business and with no clear exit strategy for themselves.
CBRE managing director Rem Rafter said a combination of self-funded retirees and high nett worth individuals fed up with 1.9-2.1% returns from the banks and uncertain about the equity market were looking to commercial property for an attractive investment.
Sunshine Coast commercial property yields between 6.5-7.5% were increasingly attracting the eye of Melbourne investors in particular looking to improve the 4-5% return they have been receiving.
“When you pinpoint sales, nine out of ten will be from Melbourne,” Mr Rafter said.
He said changes to government policy which restricted individuals to assets of $1.6m in their superannuation fund and $3.2m for couples had affected demand from that sector.
However that had not slowed the constant stream of well-informed investors looking for a stake in the region.
Mr Russell, principal of Savvy Business Sales and Queensland Business Sales, has been selling businesses on the Sunshine Coast for the past 23 years and says the current market is as good as he can recall in that time.
He said demand was strong for businesses priced from $1m to $5m particularly from financially comfortable mum and dad investors and couples in the 40-60 demographic who had enjoyed successful careers but were looking to “take the foot of the gas”.
Buyers were willing to pay a premium for businesses with good staff that didn’t require 80 hours a week to run.
For that reason Mr Russell said he tended to specialise in five-day a week businesses with good structures and only sizable hospitality and tourism enterprises.
“Building services are strong as well as supply related, wholesale distribution and general service industries at scale,” he said.
“A lot of those I see relocating get their kids into school and rent at either Buderim, Minyama or Buddina while they look to buy.”
Mr Russell said location was the motivating factor for southerners shifting to the region with lifestyle trumping the better investment return available from other centres.
While they were taking advantage of strong Victorian residential markets, the buyers he is seeing were generally not those who are “cashing in and coming up”.
Instead they were buyers who had already enjoyed success who wanted to ease back and were willing to pay more for low risk businesses that didn’t demand all their time.
“Those are in short supply,” Mr Russell said. “But we’ve got ample buyers chasing stock.”