Shepparton, by all accounts is burgeoning. The city is growing, investment is pouring in, industry is booming and the city is developing into a prominent regional city.
As this growth happens of course, a number of things need to happen. With a growing economy, industries often need to upscale their accommodation, new buildings need to appear to support the demand, land needs to be made available in anticipation.
Growth in the city has largely taken shape in an extended north-south urban footprint spread over 10 to 12 kilometres long and with no capacity to expand west, growth in the east is constrained to a little over three kilometres wide going no further than Doyles Road other than some small developed zones.
Rocky Gagliardi from Gagliardi Scott Real Estate sees a rising demand for new industrial land, a need supported by a supply and demand assessment undertaken by the council in 2019. Spatial Economics concluded that Shepparton is falling behind the rest of the state in vacant industrial allotments, at 11 percent compared to 25-30 percent and is not equipped well enough to handle future needs. On small allotments, there are less than half a dozen available lots.
Rocky also contemplated the return rates on commercial property. Local investors are looking somewhat unrealistically at yield rates in the order of seven and a half to eight and a half percent while current sales to international and interstate investors have been around the six percent range with good solid leases and tenants.
“Low interest is here to stay and people need to get used to it,” said Rocky.
“Two recent large commercial sales have been to interstate and overseas investors who are satisfied with the lower yields. These interstate investments were satisfied with the lower yields compared to metropolitan investments.
“On the other hand, low interest rates and a low US dollar can only be beneficial to our agricultural sector which in turn is a boost to the economy and that in turn will put pressure on access to available development property.”
As the consultants report suggests, if land stocks are not available when needed, firms will readily locate to competing areas
