The Commercial Property Market with Maggie Brennan

Fraser Coast Property Brief Episode 3 focuses on the commercial property market and how it reflects the strength and direction of the local economy. In this episode, host Glen Winney is joined by Maggie Brennan from Hervey Bay Commercial Property Management to provide a practical view of leasing, vacancies, rents, and demand across the Fraser Coast.

Maggie shares her background in commercial property management and her day-to-day experience working with landlords and tenants across the region. The conversation gives you a clear understanding of what is happening on the ground right now.

The episode explores current market conditions, including leasing demand and vacancy rates. It highlights which sectors are most active, where demand is strongest, and the types of businesses looking for space. Health services, NDIS providers, construction-related businesses, tourism operators, and industrial users are all playing a key role in driving demand.

Rental trends are also unpacked, with a focus on how commercial rents have changed over recent years. Rising construction costs, higher compliance requirements, and increased operating expenses are influencing how landlords price leases and assess new developments.

A key theme is supply. The episode explains the shortage of quality commercial buildings in certain sectors and why new supply is not keeping pace with demand. Industrial property is a standout, with strong demand for sheds and limited availability of serviced land.

From an investor perspective, Maggie outlines what buyers are looking for in commercial assets, including tenant quality, lease terms, and returns. The discussion also touches on typical yields in the Hervey Bay market and how investors assess risk and opportunity.

The importance of professional property management is another focus. Maggie explains how structured management protects assets, supports tenant relationships, and avoids common mistakes that can impact returns.

Looking ahead, the episode considers where the commercial market is heading over the next five to ten years. Growth sectors, infrastructure, and ongoing population increases are expected to continue shaping demand across the Fraser Coast.

This episode gives you a clear, practical understanding of the commercial property market, helping you see where opportunities exist and what to watch as the region continues to grow.

Transcript

SPEAKER_01 0:01

Welcome to the Fraser Coast Property Brief, the podcast where property, development, and business leaders share what's really happening across the Fraser Coast. Each episode brings you insights into local projects, market trends, and the people helping shape the future of our region. Welcome to episode three of the Fraser Coast Property Brief. Today we're going to talk about commercial property management with none other than Maggie Brown, Harvey Bay Commercial Property Manager. So welcome, Maggie. How are you?

SPEAKER_00 0:29

Thank you, Glenn.

SPEAKER_01 0:31

So I want to do a bit of a deep dive into the commercial property market on the Fraser Coast, see what trends are, see where the vacancies, movements, supply issues, and what's going on with the world as well at the moment, see us disrupting anything. So before we start, I might just get us to tell us a little bit about you and how you got into property management to start with.

SPEAKER_00 0:53

Well, I am I'm a wife, I'm a mother of two, and my background is 15 years in public practice accounting. So started out as an accountant in general, and then I specialized into auditing. My specialty with my auditing was trust account compliance and outgoings, and I really found a love for outgoings and lease compliance. So it's nice to be on the opposite side of the fence now. And I feel like I'm a matchmaker, really. If you've got a great property and a great prospective tenant, if you can merge those two together, match made.

SPEAKER_01 1:29

Arlene and Count would fall in love with uh outgoings. All right, so take off your auditing hat and we'll talk about the commercial property market. So give us a bit of a high-level oversight of where do you think the market is at the moment, you know, in commercial, what's the movements, are the rates going up and down, uh, what's the strongest in the sector? Just a high-level um overview to start with.

SPEAKER_00 1:54

As a general overview, I think commercial is performing strong in Harvey Bay. Um, for an example, if you sit at the traffic lights, the amount of cars that go past branded with either trade or service-based businesses, sparkies, plumbers, builders, um, some are brand new businesses that we've not heard of, some are expanding their fleet. So I think that's a really good indicator of how businesses are performing in Harvey Bay. Industrial is quite strong. Um, we're finding a lot of growth from down south. So plays as even as far as the Gold Coast, moving further up, Brisbane, Sunshine Coast, Gimpie, and then from the other side, Bundaberg, they're coming to Harvey Bay. They like the lifestyle change, they see the growth that's happening in the region, and naturally they want to set up a base, perhaps even a second or third location. So that's what we're finding. Industrial is the strongest performing commercial market at the moment.

SPEAKER_01 2:51

So taking on what you said before, we've just had an economist breakfast earlier today. Um, trades is probably one of our big growth areas. We've got over 860 housing types a year coming on each year. Um, we've got two and a half thousand people moving into the area each year, and that's going to continue on for about 20 years. So, with the rental trends, um, I imagine industrial is one of your your biggest pickups at the moment?

SPEAKER_00 3:19

Yes.

SPEAKER_01 3:20

So, what's happening in that sector and what's the type of buildings they're chasing?

SPEAKER_00 3:25

They're chasing a bit of a hybrid space, so somewhere that they can store belongings, their tools, even their vehicles, uh, and also a bit of a space where they can serve customers or have some staff there. So, you know, as an example, with some industrial we have out at Drury Lane, some have a mes floor, they might sheet up for a bit of an office space, sheet down for a bit of a reception area, and then yes, have this massive workshop that they can use either for warehousing, storage. So that's a great performer. People are really trying to find the best bang for buck. They're really conscious with the the costs.

SPEAKER_01 4:02

So supply keeping up with the demand in that sector at the moment?

SPEAKER_00 4:06

Yes. I think it's peaking a lot of interest locally, but as well as people moving here to the region, whether it's for family reasons, growth. Um, so yes, there are a lot of a lot of factors, but there is a lot of demand for industrial at the moment.

SPEAKER_01 4:20

So with construction costs over the last few years been going up a lot since COVID. Um obviously that puts cost onto the building, which then in turn puts cost onto the rent. Is has there been a spike in rental rates per square metre or you know the amount people can afford over the last couple of years? And is that still heading north or is it steadied off?

SPEAKER_00 4:41

It is heading north, but I do feel it is becoming a quite steady. People are very conscious of what they're paying. So some inquiries that we receive, they have all these grand plans uh before of what they'd like to do, and you know, picking a bigger space and thinking we could do this in the future, what we're finding now is they're quite conscious, right? Let's see what we can make do with the space that we have and really maximize that. So, yes, they're paying um market rates out there, the market is quite strong. That's what we're finding at the moment.

SPEAKER_01 5:14

So, has the crisis in the Middle East and the fuel pricing going up put a bit of nervousness in the market over the last couple of weeks? Is it is it making people sit back and pull back on their ideas or just hold back a little bit before a decision?

SPEAKER_00 5:28

I think so. It's a bit of a roller coaster. I found after Christmas and especially after the new year period where people had settled back into their routine, they were quite keen to look for new space. They have all these big grand ideas, but with the prices that are going up globally, whether it's the cost of living or petrol, they're very becoming very fee conscious. So they're looking at all the they're looking at the leases, they're looking at the proposals inside out rather than before just taking a bit of a gamble and saying, yes, we can do this, let's go ahead.

SPEAKER_01 6:03

Yep. I suppose with our long-term growth, this should stabilize and people should get back in the market over the coming weeks or months. So I think it's only a short-term glitch. Uh let's talk about the big sector here in in the Frey's case. So health is our number one employer. We have over 22% of our workforce employed in the health sector, which is double anything else we've got in the region. Uh, we've got a shortage of doctors, nurses, and medical facilities. So, how strong is the health sector in the commercial property market?

SPEAKER_00 6:38

From our portfolio, I believe it's quite strong. As an example, we had a medical complex, one tenant had vacated, and within two weeks we had already secured another medical professional to go into that space. I think it's all about the surrounding areas. Um, those precincts are quite strong. Even in the NDIS space, we've had other examples of you know, they've got one location, they expand into next door. Whether that's just for their office staff, uh, where they have whether they have staff on the road that they need a base. Some have even gone down the storage route, they just need extra space. So we're finding health, NDIS, and all of those allied services, it's quite a strong sector.

SPEAKER_01 7:21

Are they trying to focus around the two hospitals or are they spread off around the whole of Harvey Bay?

SPEAKER_00 7:26

I st I think they're still around that area. Even Drury Lane is only minutes away from Arrowen Road and the hospital sector. Um, so yes, that's a that's strong.

SPEAKER_01 7:36

Yep. And our retail shops on the Esplanade, um, tourism strong, our airports doing record numbers coming in here. Uh retail sector is the third biggest employer in Harvey Bay area.

SPEAKER_00 7:50

Well, I agree. As you drive down the Esplanade at those peak times, school holiday times, uh you see no vacancies. And then some of those precincts that are really busy, fish and chip shops, ice cream shops, you see customers just spilling out of there, lining up. It's it's great to see.

unknown 8:07

Yeah.

SPEAKER_01 8:08

So what do you what's your prediction over the next two or three years in the uh, especially in the Harvey Bay market, where do you see the strongest demand? Uh, where do you see the growth coming in? Um, do you see any changes in the market?

SPEAKER_00 8:21

I still think commercial will stay quite strong. Uh, as we mentioned earlier, from all directions we're having people relocating to Harvey Bay. So naturally they need somewhere to set up their base. Um, I think people are shifting from home-based businesses if they're a trade or a service. Um, somewhere with a bit of frontage helps, uh, and even storage of their fleet. Um, trades, the industrial, retail, and medical, I don't think that will change. Um, as more and more people are coming to the area, those services are needed, they're in demand.

SPEAKER_01 8:57

So, what about office space? Um, trend post-COVID is work from home or diversify or you know, shared spaces. Is has that affected the office space or is there a changing environment in there?

SPEAKER_00 9:10

I think it has changed. So, you know, back in the day where you might have 10 staff to fit in your your office, people are working from home, or they might have come off maternity leave, they might be relocating to another city but still work for the same company. So there is a bit of a hybrid working environment. Um, naturally, some people might be downsizing, but then on the flip side, you also see some people that are expanding, uh, whether it's health or NDIS, they're always looking for more room.

SPEAKER_01 9:39

All right. So a lot of people um don't understand commercial and it makes them a bit fearful. And you know, people invest in houses and they think that's great because they understand the product, because they live in one. Um, but you know, when you when you invest in a house, you're probably only getting a three or four percent net return. A lot of the industrial um properties will achieve seven percent plus net return, and they're also longer-term leases. So explain a little bit about how a lease works in a in a commercial property compared to a residential property.

SPEAKER_00 10:16

I'll come back to that. It's it's funny that you mentioned because quite often people say, Oh, I thought all you do is collect rent. Commercial property management is so much more than just collecting rent. So I think it starts with firstly the location and the quality of the tenant. If you can make that work together, that's step one. Yes, you have to look at things like the lease, the length of the lease, the way it's structured around rent. Is it a CPI increase? Is it a fixed increase? Is it market review? There are many components. Outgoings is another thing compared to residential. So in residential, you just collect the rent and the landlord is still responsible to pay for council rates, insurance. Generally speaking, with commercial, those charges are being on charge to the tenant through outgoings. So the the landlord, it is really lucrative. Uh, you know, it's a it's a different industry, complete different game to residential.

SPEAKER_01 11:12

So when you're actually getting a net rent, it's net rent in your hand, basically. So the property managers fees, rates, body corporate, everything's paid by the tenant normally, and the owner gets a net rent to as an investment. So usually it's a lot stronger than a residential. The sale price and demand is probably more based around the actual rent, so it is important to keep it keep your properties at market rent and reviewing it. So, what do you do for your landlords to make sure that their property is still performing within the market? Because we get spikes and troughs. So, how do you maintain uh a good property for a landlord?

SPEAKER_00 11:55

If we have a new property that's come on board, we look at things from how does it present? Is their signage nice and modern and up to date? Are the gardens maintained well? Does it need a bit of a gurney? Does it need a bit of a cleanup? So I think if you're presenting your building well, you can naturally get rent that is towards the upper end of the market. Um, you know, qual quality buildings attract attract quality rent. That also attracts a quality tenant too, because um they want their business to be a reflection in that area.

SPEAKER_01 12:28

All right, so yeah, so presentation is everything. It is normally and quality tenants. Um obviously a lot of people want to start a business or small, maybe to run the fund it or want to start. How do you actually choose a good quality tenant for a landlord?

SPEAKER_00 12:45

Cash flow. How can you afford this rent? What is your history? Um, you know, things that they would need to pay for up front, for example, bond might be three months worth of rent. They also need to pay their first month's rent and outgoings up front. Um, there might be legal fees attached to that, there might be fit-out costs attached to that. So you'd want a bit of a proposal to see, yes, it's it's great to have this big grand plan, but what's the thought process that's gone into it? And that's what we're really that's our job, really. We're protecting the asset of our of our landlord.

SPEAKER_01 13:20

That's good. Uh is there any other information give us about the the commercial property market in in Harvey Bay and Maribor?

SPEAKER_00 13:28

I think watch this space. We are booming here. I think industrial is the one to watch, and um with people relocating into the region, um, they'll be bringing new services, new businesses here.

SPEAKER_01 13:43

All right, so uh we might even call that a wrap, Maggie, and thank you very much for coming to the Fraser Cast Property Brief. Um any more information, we can put a link to Maggie in our podcast. Um but sign up, uh join our podcast, like it. We're gonna do one every week and we'll have new topics. Our next topic will be around marketing, and that leads well into your uh industrial as well. So, how do you market a property? So, thank you very much again, Maggie.

SPEAKER_00 14:10

Sounds good. Thanks, Glenn.