Downsizers dig man caves in Australia's Industrial Heartland
(Article from The Age, Jun 16, 2017 by Simon Johanson)
It’s a First World problem: What do you do with the toys in your garage when you downsize the family home? And it has a First World solution. Buy a “man cave” to store them in.
Cashed-up downsizers and small businesses are underpinning strong sales of “man caves” – small industrial units in commercial-zoned suburbs, often built with a mezzanine, kitchenette, toilet and shower for comfort.
The shift towards apartment living in Sydney and Melbourne and the ability to purchase property in self-managed super funds has resulted in a corresponding boom in sales of industrial warehouse/office units.
Small units close to the city centre with easy road access are now considered “luxury” items.
“There’s a bit of snobbery there,” said Sector Property’s David Loakes, a builder and developer who has sold hundreds of small units within a four-kilometre range of Melbourne’s city centre.
“People aren’t using them for traditional business. If you’ve got that much stuff in your garage and your wife is telling you to move it out, you’ve got a bit of money, you’re cashed up … It can be anyone from a guy getting a truck out of the garage to someone wanting to store four vintage Porches.”
In Sydney’s Marrickville, developers are selling 15- to 50-square-metre boxes for about $7000 per sq m.
“That’s more than they get for industrial strata,” LJ Hooker Commercial’s Daniel O’Brien said.
The increase in apartment development in south Sydney has seen demand from residents who do not have adequate storage rise sharply.
“They’re cheap to build, too,” he said. “Renting a storage cage costs about $300 a month. You can actually buy a little storage unit about 45 sq m in size for the equivalent of renting.”
Demand is also spurring land sales in industrial suburbs on the outskirts of cities.
Knight Frank’s Joel Davy and Tony Tripodi sold two 5000-sq-m blocks in the Link 360 Industrial Estate in Truganina, on Melbourne’s west, for about $2 million.
Renting a storage cage costs about $300 a month. You can actually buy a little storage unit about 45 sq m in size for the equivalent of renting.
The buyer, a developer intending to build small industrial man caves, paid about $210 per sq m, a record for the area, Mr Davy said.
“At a price point circa $250,000 for a 100 sq m man cave, people can afford it and they put them in their self-managed super fund,” he said.
In Mr Loakes’ two developments – The Base in Yarraville, where 45 out of 50 units have sold, and newly launched Workspace Brooklyn – most buyers, up to 90 per cent, had purchased units through self-managed super funds, with an even split between owner-occupiers and investors
They were particularly popular with tradespeople, he said. “They meet there in morning, gear up, come back in afternoon and drop their stuff off, have a shower and go to dinner.”
One woman purchased a unit to use as an art studio, he said.
Larger units above 200 sq m were generally bought by small businesses wanting to store merchandise or equipment.
“Some investors are not looking for growth, they’re looking for income,” said Jason Beveridge from Raine & Horne Commercial.
They would typically lease units for two to three years on a yield between 6 and 6.5 per cent.
“We haven’t seen complete saturation at the moment because the take-up is still there,” he said.
CBRE’s Peter Mangraviti said a lack of suitable land in Sydney’s lower north shore was holding back development of small industrial units.
Strata industrial units constructed further out in Belrose and Brookvale were being purchased by downsizers looking to park and store hobby cars, boats and jet skis in spaces between 80 and 100 sq m, he said.
“As soon as product becomes available, it is selling and leasing quite quickly,” he said.
New Office Warehouses, Warehouse Units and Warehouse stores in Point Cook now selling www.thebasepointcook.com.au
New Urban Workspaces in Brooklyn now selling www.workspacebrooklyn.com.au
New Urban Workspaces in Yarraville now for lease at www.thebaseyarraville.com.au