The upside of investing in Australias regional centres
Written by Brian Hodges from Ray White Commercial Toowoomba
Australia’s regional centres have so much to offer commercial investors willing to cast their eyes beyond city limits. If you do your research, you’re likely to find properties with higher yields, potential for better capital growth and of course – reliable tenants. What’s more, you can find all this at a price point far lower than you can in most capital cities.
Commercial investment is never foolproof though. Here’s what you need to look for to make sure you find a high-performing property in an area outside the capital cities.
Find potential for future growth
Always invest in a strong economy with positive growth prospects.
Before you invest in any regional centre, look closely at its economy and research current developments and future plans. Always invest in a strong economy with positive growth prospects, as such areas will generally offer more reliable investments.
A perfect example can be found in Toowoomba. Our economy is growing at a rate of 3.5 per cent a year (more than the state average of 3.1 per cent), and unemployment is at just 4 per cent, according to Council data.
Furthermore, our region attracts considerable government spend through the health and education sectors, and areas like finance and construction are expanding. The addition of the Toowoomba airport and several large road and infrastructure projects will continue to drive future growth.
Invest in a diverse economy
Be cautious of towns supported by one or two industries, such as mining or agriculture.
When searching for the right area, be cautious of towns supported by one or two industries, such as mining or agriculture. If those sectors start to perform poorly, so too will the town and any commercial property investments located within. Look for a region with a diverse economy, not a one trick pony.
Using Toowoomba as an example again – we’re the second most populous inland centre in Australia, which means we can support a wide range of industries.
Queensland Government data shows our $9billion economy is supported by several fast growing trades such as agriculture, food production, health and wellbeing and education and training.
Thanks to government investment, a growing economy and the rise of new sectors, an investment in a town like Toowoomba is just as secure as one in any capital city.
Talk to the locals
Regional economies all behave uniquely – they all present different risks and opportunities. To find and manage a property that performs in these environments, you need to have an in-depth understanding of how they work, as well as relationships with tenants and businesses in the area.
That’s why talking to a local before you buy is absolutely essential. Form a relationship with an experienced commercial agent or agency in the area, and with the help of their expertise, you’ll be perfectly placed to reap the considerable rewards of investing in a thriving regional centre.