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NSW estate sells as cheaper option to Queensland - Financial Review
It's not often Queensland real estate is priced more expensively than in NSW, but Gold Coastdeveloper Peter Mitchell is using this fact to lure tenants to his $350 million industrial estate innorthern NSW.
Mr Mitchell spent $32 million acquiring a 55-hectare site near Murwillumbah last year and has so farattracted tenants and buyers lured by the cheap rates compared with the Gold Coast and Brisbane.
"I have attracted a 50-50 mix between manufacturers and distributors," he said.
"They are coming across the [NSW-Queensland] border. My average land price is $200 a square metre compared with Burleigh Heads which is $520 a square metre for a 3000 square metre site. If you go up to Gaven on the northern perimeter of the Gold Coast, in the Gaven Central industrial estate, the average price there is $450 a square metre." Murwillumbah has become more accessible to the Gold Coast because of the recent opening of the Tugan Bypass, Mr Mitchell said.
"Murwillumbah is the next obvious growth region. It's just a gradual expansion. Murwillumbah and the Tweed Coast have plenty of water and land." Since the launch of the Industry Central estate in December, Mr Mitchell has sold five key design and construct packages to various industrial users ranging in size from 2300 sq m to 5000 sq m.
"There's a mixture of owner-occupiers and tenants. The owner-occupier market has been the driver thus far. In the past month, I have had 10 inquiries and it's turned around to 65 per cent leasing rather than buying. I think that's because the banks have turned off the cash."
Waffle maker the Scandinavian Cone Company has committed to a purpose-built 2500 sq m bakery building at Mr Mitchell's Murwillumbah estate, and international protective linings company Rhino has committed to a 3000 sq m purpose-built facility.
All up, 12 blocks have been sold including two to Gold Coast developer Mario Iseppi. Mr Iseppi has acquired a 6000 sq m site and a second 4500 sq m site. Under the deal, Mr Mitchell will construct a 3500 sq m building for Mr Iseppi that will be for sale or lease through LJ Hooker Commercial, Surfers Paradise.
"There has been substantial interest for land, with inquiries from 2000 square metres and with an average inquiry of 3500 square metres," Mr Mitchell said.
"I am concentrating on the larger user." Mr Mitchell said he was happy to build for key tenants and planned to retain the buildings until the market picked up. "I am happy to keep the investment properties, I am not going to sell them today .. . because yields have risen. I am happy to sit and wait for the market to recover."
Mr Mitchell expects the Industry Central estate to take up to three years to complete.
