With the announcement of the recent Budget, investors and industry stakeholders continue to look through the fine details to see the benefits that may flow through. The commercial property sector is one such industry that can look to see where the flow-on effects of the Budget may be felt.
Government infrastructure investment is an important driver in confidence levels, and whilst the Budget didn’t see direct announcements to benefit Tasmania, the announced measures of $472 million for a Regional Growth Fund, which aims to grow regional productivity by investing in infrastructure projects, has the potential to benefit our regions.
The previous commitment of $7.5 million for the ‘City Heart Project’ in Launceston’s CBD will continue to see much needed investment in our fledging CBD with the opportunity to provide and create a shopping experience to attract shoppers back to a revitalised city centre.
Knight Frank is seeing firsthand the impact of these announcements on the commercial property sector and the renewed confidence levels in the market as a result of the government investment decisions.
The opportunity to offer to the market some 1,000sqm of retail space in Launceston’s Brisbane Street Mall (ex Birchalls property) has seen an extremely strong enquiry level from both national and local retailers looking to secure the prime location in the mall. These retailers are seeing the Northern Tasmanian demographics as an ideal indicator to establish here, and the investment being made to revitalise the city centre as further reasons to be part of the exciting transformation of the city.
Another area in the CBD which has suffered and become somewhat of a ‘second choice’ location for retailers is St John Street, between Brisbane Street and York Street. The City Heart Project has taken some steps to remediate this area, however far greater planning needs to be given to return it to the once vibrant retail strip.
The proposed investment for this precinct has seen five significant commercial retail properties change hands in the past 18 months, with other significant assets currently on the market, and attracting strong interest.
Investors are seeing this as an ideal opportunity to enter the Launceston retail market, with the confidence that government infrastructure spends will play its role in revitalising what is currently a neglected strip.
Knight Frank is seeing a very similar scenario in the Devonport market with the ‘Living City Project’ again benefiting from infrastructure investment. Stage 1 of this project is already well underway with the civic centre, car park and food court well out of the ground.
A recent flurry of activity of commercial sales in the Devonport CBD can be attributed to the renewed confidence levels of such government spend in an area. The past three months have seen multiple sales in Rooke Street and Best Street, with these properties each realising well in excess of $1 million.
These projects have certainly highlighted the need to continue lobbying for our share of the infrastructure dollar. The projects currently underway in these two major regional cities are injecting confidence in many sectors, emphasising the importance of securing this funding.
By Rob Dixon, Knight Frank Tasmania’s Director – Commercial Sales and Leasing (North)