Brisbane

Counter cyclical investors circle opportunities in recovering Gladstone market

Gladstone's property market is at the start of a recovery phase, with a new CBRE review suggesting the city is positioned at 7 o’clock on the national property clock.

13 Jul 2018

Gladstone's property market is at the start of a recovery phase, with a new CBRE review suggesting the city is positioned at 7 o’clock on the national property clock.

CBRE Research Associate Director Ally McDade said the market was poised to benefit from an uptick in the region’s economy as large mining and liquefied natural gas (LNG) projects moved into the production phase, increasing Gladstone’s export capacity.

“LNG is set to become Australia’s second-largest source of commodity export revenue by next year, which will provide significant impetus for port focused markets such a Gladstone,” Ms McDade said.

“The region is also benefitting from continued growth in coal exports, with the Queensland Government recently announcing that higher-than-expected coal royalties had increased the state’s annual budget surplus by around $1 billion more than predicted six months earlier.”

Darryl Branthwaite, CEO for Gladstone Area Promotion and Development, said the green shoots emerging in Gladstone were driving higher levels of investor confidence and were associated with investment in both natural resources and the region’s tourism industry. 

“Gladstone’s three LNG plants have the potential to expand with two doubling in size, while coal exports from Gladstone ports have increased over recent years with the entry of the multibillion dollar Wiggins Island Coal Export Terminal (WICET). Rio Tinto’s Yarwun alumina refinery has also recently undergone improvements to increase efficiencies as has Queensland Alumina Ltd (QAL),” Mr Branthwaite said.

“These projects, with their significant, prolonged and intense construction phases, have represented a ‘once in a lifetime’ economic event that has heralded significant and unprecedented capital investment and a multitude of new jobs in the region.”
 
Mr Branthwaite also noted the recently announced $29.5 million East Shores Stage 1B project, which would include a dedicated cruise ship facility.

“Ahead of the development of East Shores, 14 cruise ships have visited Gladstone, injecting well over $8.5 million into the local economy,” Mr Branthwaite said, adding that a further 15 ships were scheduled to visit in the next 12-18 months. 

CBRE Hotels’ Queensland Director Paul Fraser said the market’s continued recovery had sparked the interest of counter-cyclical property investors, who had the ability to secure assets for well below replacement value.

This was driving interest in current sales campaigns such as Rydges Gladstone, for which Expressions of Interest close later this month.

The Rydges campaign coincides with stronger fundamentals in the broader Queensland accommodation market, with international visitor numbers to the state reaching a record high of 2.7 million over the past year.

“The real benefit here is that this visitor segment stays twice as long as traditional visitors and they spend four times more,” CBRE Hotels’ Senior Negotiator Hayley Manvell said, noting that Chinese visitor numbers were tipped to double to 1 million by 2026.
 
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About CBRE Group, Inc.

CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2017 revenue). The company has more than 80,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.

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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2021 revenue). The company has more than 105,000 employees (excluding Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at https://www.cbre.com.