July 29, 2024 • 34 mins
Welcome to The Gagliardi Scott Real Estate Podcast brought to you by two of our directors, Gerald Sabri and Rocky Gagliardi.
On this show, we look forward to bringing you information on real estate, special guests, hot topics, and much more!
In this week's episode of the GSRE Podcast, we feature none other than our very own Rocky Gagliardi with over 26 years of experience, Rocky shares his journey from residential to commercial real estate and provides an in-depth look into the world of commercial and industrial sales and leasing.
On today's show, we cover…
- Current market trends
- Impact of COVID-19 on the market
- Valuable advice for both seasoned investors and newcomers to the market compared to Cavaliers (Custom Builder)
- Insights into the area's resilience and potential for future investments
and much more...
Thanks for listening!
* Disclaimer - The information provided in this podcast is reliable but may be subject to change. Please consult your trusted legal and property representatives before taking action.*
SPECIAL MENTIONS:
This podcast is professionally mixed and edited by AttentionMedia.
LET’S MAKE THIS GROW!
If you enjoyed this episode, the biggest compliment you can give is to leave a rating and review!
Reviews are extremely helpful to boost the ranking of the show, plus, we read each and every review on the show!
To ensure you don’t miss an episode please subscribe and follow on your preferred podcast platform or head over to the Gagliardi Scott Real Estate Socials Pages.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:20):
Music.
Podcast. Today it is episode 13 and here with me today is a special guest and
director Rocky Gagliardi. So Rocky, thank you for coming in today.
(00:41):
You're welcome, Sean. Thanks for having me on. So today's episode for all the
guests here is in regards to commercial and industrial sales and leasing.
Before we get into that sort of those questions, Rock, for listeners that don't
know who you are, tell us a little bit about yourself, your experience and how
you sort of of come up to being director and more so in the commercial background.
(01:02):
Okay. So I've been, I think, 26, 28. I can't remember, 27 years or something in real estate.
I was fortunate enough to start under Roland Crosby, formerly known as Alice Scoff Real Estate.
So a lot of my older listeners would appreciate who that is. Pretty big names.
Alice Scoff was an incredible agent in town in the early days,
(01:23):
had a great reputation with regards to land development and commercial real
estate, which was intriguing to me. and sort of allowed that.
Rowan allowed me to sort of flourish in the residential world,
but I was fortunate enough to learn all aspects of real estate,
which is, you know, very difficult to do in real estate when you first join
and you're sort of either doing one specialised field or another.
(01:43):
So, yeah, I was very fortunate with that, progressed further.
Eventually, you know, went into another business, ended up buying out Ron Stewart,
which was formerly known as Stewart and white real estate.
Ron had a huge reputation as
the best commercial agent in the country of Victoria, region of Victoria.
(02:07):
I sort of wanted to get into that field a bit and enjoy that part of the aspect of real estate.
I was a benefit, you know, I've worked two or three years under Ron, which was great.
He was a tremendous wealth of knowledge and experience and allowed me to,
you know, obviously open up my contact base over further with other Melbourne
agents, which I do a lot with, a lot of those bigger Melbourne sort of commercial agents.
(02:31):
And that also allowed me to develop my skills and so forth. So I've been specialising
probably 14 years now in commercial real estate, commercial industrial and retail,
all aspects of real estate.
Probably a bit different to say Melbourne agents when the volume of work they've
got to do in certain areas of real estate specific specialists, they can do that.
We haven't got that luxury here, but it's good because I get to learn all parts
(02:53):
of it and every part of real estate, which is terrific.
Yeah. And more specifically for the viewers that don't know,
so commercial and industrial, what does that entail? What does that mean?
Oh, well, obviously different to residential where you have your mum and dad.
Buyers, the family home, you grow up, more your investment properties where
industrial commercials, a lot of us place a business and a lot of businesses
(03:17):
either flourish or not, obviously, in commercial world.
So there's different aspects. We lease commercial leasing. We have properties
we lease to businesses and obviously each commercial, whether it's industrial
or retail or food or cafes or whatever,
whether it's even health-wise or, you know, you've been a massage or chiropractor or whatever.
(03:41):
There are different aspects. There's such a wide field of different businesses,
obviously, which is completely different.
And people or businesses operate to service a community or obviously to make
their own enterprise and so forth.
So, yeah, it's different from the residential world. You talk different language as such.
Yeah, that's right. As you probably understand, you hear that in the office.
(04:04):
Different wavelengths, different – but it's all relative, I suppose.
It's no different. So it's very good.
Yeah. I mean, myself, obviously, being more on the resi side of things at the
moment, I'm learning a lot with commercial a lot of the time.
So it's very, I guess –.
It's a completely whole different ballgame because then you look at contracts
(04:25):
and, you know, so you go down that contractual law.
Yeah. It's very, what would you say, there's no emotion to it.
It's a very numbers game and there's a different way of going about how you
balance things, which we can touch on later. Yeah.
So in terms of the sales and the leasing market currently, how things are tracking
sort of post that COVID boom now?
(04:46):
Obviously, we had a fairly good growth over the last sort of three or four years,
which, you know, if you could touch on that too, but how is that sector going at the moment?
Yeah, we've had a graph like every, like residentials as well.
Like it's across the board, obviously.
Commercials held up very, very strong. We've come from a huge boom period through
(05:07):
the COVID and a lot of wealth was created through that period.
And obviously a lot of entrepreneurs or investors or developers have made a
lot of money over that time, the smart and astute ones.
But what they've also seen is a lot of the equity has obviously grown as well.
(05:27):
So commercial real estate as a whole hasn't really dropped off as such.
I think it's almost back to where it was before COVID time, which is at a steadier pace.
But the demand and appetite for commercial investment, blue chip investments
is still there. It's pretty strong.
(05:48):
Industrial, we saw a tremendous amount of growth where pre-COVID was,
you know, you're selling land at $85 to $95 a square metre.
You know, we got up to about $275 a square metre in certain parts.
We saw a different change in mindset where.
But once upon a time, the smaller blocks of land were selling at a higher rate
of square meter and the larger blocks of land were selling for small, lots of square meter.
(06:11):
But that changed. It changed where a combination of many things,
but a lot of businesses got smarter, bought a bigger footprint,
paid the bigger money to get that footprint and encourage developers not to
cut blocks into smaller sizes, but larger sizes. So that had to pay for that.
In doing so, a lot of businesses become more efficient because businesses grew
on the one one roofline, not spread over certain areas in town and you're sort
(06:35):
of, you know, fragmented from your staff or your different, you know.
Different costs associated with being in different areas.
So, you know, the smarter, you know, generally the business world's become,
you know, the commercial's become
smarter and obviously you're not doing things on the bit a little bit.
So as I go, they plan, their forward planning is so much more sophisticated
(06:56):
now and more educated going forward and obviously advice.
So that saw a tremendous growth, but along with that come a huge price in building, obviously, as well.
So that part of it has seen a tremendous amount of growth.
We're still seeing a lag of that rental yield, especially in the industrial
(07:17):
field world where we're still stuck in prices a while ago, even though that's lifted a bit.
But it's not quite the right where it should be still because you're still stuck
in the old. So we're waiting.
We're probably 12 months or eight months away from that sort of field to catch
up, but we'll see that come pretty quick.
Generally, we've seen a lot of commercial development in Shepparton.
(07:39):
It's a very wealthy town. It's a big building to develop at the moment.
That hasn't slowed down at all. That's still proceeding as it was no matter what.
I mean, obviously, that's part of the, you know, what do you call it,
conveyor belt sort of thing that's still in the pros, still coming along,
you know, still coming along in the next 12, 18 months. and obviously the residential
building factor as well. That's still ticking along.
(08:00):
So that'll probably get us through, I think, and it's obviously still beneficial
for our jobs and employment market in the area as well.
Obviously the injection of that capital in the area and the economy is terrific.
Yeah. And so what are the current yields and auction clearance rates at the moment?
And for the listeners out there as well, they don't understand what that means
or probably more specifically yields. Can you explain that a little bit more?
(08:23):
Yeah, auction processes, we've had 100%.
The last seven, eight, nine years, every time we've gone auction with a commercial
property, we sort of can't think of anything offhand that we haven't sold at auction.
And not every property gets auctioned and every property has a different process.
We tend to go, Shepparton has a tendency to, and always has,
(08:47):
that the locals are always sort of a bit behind the out-of-town yield,
which basically means that we're always battling.
So, for example, our commercial portfolio in the last seven years has grown
from 50 properties to 200 properties.
And I would say 99.99% of those out-of-town landlords, no landlords from Shepparton.
(09:09):
I mean, we've got a couple of locals that bought or transferred,
but as far as buying the big ticket items or whatever, Shepparton's seen a tremendous
growth. We've seen it personally.
We've got investors from Sydney, Melbourne, Queensland. land.
And recently we sold the Clean Away building last week.
He flew in from WA. So he's bought that. So our reach is far and wide.
(09:32):
We haven't just got the local reach.
I keep telling the story how I sold A-Mart six years ago to a Chinese buyer
who flew in and come in and bought it. From China.
From China, come in and bought it, went around the property that morning,
that afternoon, we're in our boardroom and we signed off the deal, which was terrific.
I mean, And if we haven't got that reach where back in the days when I mentioned
(09:55):
Ellis Goff, we mentioned Ron Stewart, they didn't quite have,
I mean, that reach is what we've got now.
So you've got international reach as well as local reach. So what I mean local is Australia.
So, you know, we've got that reach in the database to achieve that.
So, yeah, so at the moment –.
It's still powering along. There's a lot of money out there still.
(10:17):
The difference is when we're talking yields, I mean, money's more expensive
than it was two or three years ago.
So to get that return back on the money, you're not paying the rates that you
were paying two years ago.
So for the listeners out there, the higher the yield, so if we're talking 5%,
6%, 7%, the higher it means the lower money. There's less value for the property.
(10:37):
And the lower the yields means more. So in investment return,
for example, you're spending $100,000 in layman's terms, and you're getting,
you know, $5,000, that's a 5% yield.
You know, if you're getting 4%, you know, it's 4,000, 6%. So the yield and the
high of the yield are obviously the less value of the property.
Yeah. So for any buyers out there looking for a commercial property,
(11:00):
you want the highest yield as possible to get the best possible return.
So I've been educating a lot of my clients too that,
you know, not necessarily everything needs to be tenanted and it's the myth
that a lot of owners of commercial property believe that they have to find a
tenant to get the best value for their property, which is not always the case.
(11:23):
And just recently, I think we sold the Salvation Army building on the corner of St.
George's Road, and I was very lucky enough to have clients who were prepared to listen.
I mean, Salvation Army will list that for, yeah, Salvation Army, I think.
Got a good 20 years, I think, they're listing, and they become empty,
and they're hoping to find a tenant.
And I said, no, don't find a tenant.
(11:44):
Keep it empty, because there'll be an owner-occupier that'll buy this.
And what tends to happen with the owner-occupiers, and obviously not every property
is the same, but that's a buy that you haven't got when you sell a tenanted.
So when you do that, you have got an opportunity to get an investor.
And these days, we find investors are more sophisticated and more educated,
and they tend to find their own tenants or match up a lot of tenants they understand.
(12:07):
So it's not always a big negative to have no tenant because an astute investor
will be able to competently understand the market, understand the property it
has, understand what it needs to be spent on the property.
And they're happy to take the risk of buying the property to put a tenant in
there, but they're fighting against the owner-occupier.
(12:28):
And the owner-occupier hasn't got that opportunity very often because it's a
lot of tenanted property.
So it's an extra buyer in the market that you give a crack at.
And a lot of them use self-managed super funds where they've got a lot of equity,
a lot of it's like companies that sort of invest in so they can then do their
own developments or investment in the property.
(12:48):
They can, you know, if they're going for the process, they can invest confidently
knowing that they're going to get it back in their own property.
So I think we sold that one on St. George's Road and we got,
I think, you know, well over the reserve.
That was a great result. Great result. out and it was an own-occupier that bought
it, which was great because they outbid two or three investors.
So that tends to happen a lot with industrial sheds and I always get the strange look from.
(13:14):
Owners of sheds, which is hard to get. You don't get many.
It's the hardest property. If I had 20 sheds, I'd be wrapped,
but it just doesn't happen that way.
So my advice is, A, depending on the property, obviously, but nine times out
of 100, I've tried to encourage to auction an industrial share simply because,
(13:34):
with industrial properties, they're very scarce.
To build and buy a block of land and build something is very tough.
No land available. No land available. No future development.
Correct. But also self-managed super funds, a lot of smaller type businesses,
you're talking your tradies, your mechanics and all sorts of businesses and
(13:55):
that, they have a good nest egg in their self-managed super funds.
They might have a couple hundred thousand dollars or $300,000 in it,
so it's up in a super and they've been renting for a number of years.
They, they can't go ahead and buy a block of land and build because the banks
won't lend them the money on a self-managed super fund. Yeah.
They'll only lend them the money.
On an existing and they can have that equity over it.
(14:19):
So I've noticed even when way back in even in the GFC time and I was auctioning
properties under duress sometimes where obviously people wanted to sell.
But what tended to happen was what we're quoting and what we're signing for
was always surpassed the reserve price because our own occupiers were ready to buy.
Yeah. And they were in the market where originally they couldn't do that.
(14:42):
So we've had some really great results and I'm happy to go through that with
any potential seller who's looking to sell commercial sheds or industrial shed.
Happy to sit down and go through that with you.
But that's always been, we're talking 12, 13 years now in Shepparton,
it's always been a really big tick for us that we've noticed that that's always
been a trend even to as early as this year.
(15:03):
So it always, the empty sheds or depending what the empty property is, seems to sell better.
Yeah. You know, and definitely, I think even, and horses for courses that matter.
It doesn't mean everything does, but that's right.
That's right. And, and same with the buyers or anyone that actually owns a business too.
I think that might even be a good thing to chat to you as well.
And how that sort of works, obviously not an account or anything like that apart,
(15:26):
you know, it's always good to sort of discuss that with you because it's,
you know, if you can, yeah.
Run that smartly and you can really benefit on the other side,
especially when you're retired.
Well, a lot of small businesses, they've got a nest egg and they don't want to be campaign rent.
If they can pay rent to themselves and have their business, they've got a retirement fund.
So when they sell their business, they've got this asset they've paid off or
(15:47):
potentially paid off most of it, which they can store in a super fund and they
can get a return back and they've done it themselves.
So that seems to be a really big tick for a lot of small type businesses that
want to grow and want to see something, I think, you know, the reward for their efforts over the years.
Before we sort of touch on to the next point, I think you mentioned before a
lot of the businesses, owner-occupiers buying in.
(16:09):
Touching on the leasing side of things, I think when I first started real estate before COVID,
you know, you could probably see probably more, probably not so much industrial
but more commercial, especially, you know, along High Street,
there's a lot of empty shops. Yeah. Not the case anymore.
Correct. You know, there's a lot of now businesses leasing and we've been very,
very busy within our leasing umbrella as well.
(16:31):
So I'm going to quickly touch on that and what you've seen over the last few
years in terms of a lot of local businesses now starting up their own thing
and filling up the vacant shops.
Yeah, I think the landscape, I think the investment, obviously the council put
in, obviously around the Kmart, Bourne Street area, obviously injected a lot
of confidence in that area.
(16:52):
Then we got backed up with Courthouse. So I think that, you know,
the $70 million drew a lot of businesses towards the courthouse and you're talking
a lot of them are legal officers.
So that drew a lot of businesses. They filled up a lot of Long Wyndham Street
and High Street, where High Street, you'll see a couple of lawyers starting
to sort of fill in some space.
(17:13):
Yeah. What turned out with High Street was that Target has that big long wall
and the walking traffic sort of didn't allow it.
So we had to be a bit smarter than you were working with me at the time.
Helping me out, Sean, was we started targeting more office space in High Street.
Businesses that wanted car parks to back where, you know, no one knew that High Street had that.
(17:36):
They didn't really necessarily want the passing walking traffic.
We want the access to park. Parking. Yeah.
And it was unknown, you know, that that was the case where you come off Rose Street and you park.
So a lot of those businesses are filled up along there. We've hardly got any
vacancies. There's probably one or two maybe vacancies.
It isn't a ghost town. Wyndham Street was the same. You'll see Legal Aid moved along there.
(17:58):
A lot of other businesses moved along there. and a lot of new eateries and cafes
and that sort of moved along there because obviously the food traffic was moving
towards there too. So that changed the landscape.
It was more of an L-sized spillage off Fry Street. You couldn't get on Fry Street.
That was obviously the next best
thing where a lot of businesses that congregate in that area, they walk.
If you just look at businesses and you might be familiar with,
(18:20):
like Stella made a really big success of what they're doing, capitalised on that.
I think Lazy Joe's have gone in. and, you know, you've got Nando's and you've
got Glory Jeans and a lot of those businesses along there.
Plus, you know, you've got other businesses, Barker Love on the other side,
Aloe Vera, they're all there.
So, you know, you look at that, all those, it's sort of made a name for itself.
(18:41):
So that's been very successful and obviously a lot of businesses are in that
area to allow that foot traffic to get along that.
So generally our lease vacancies is not that great in the CBD as it was after
COVID, that really kicked us in the guts. Yeah.
And, you know, Shepparton had it, you know, COVID, sorry, not COVID, sorry,
(19:03):
the GFC, then on the back of a drought, on the back of a couple of financial,
local financial arms that went down and sort of, and I think there was a big
cloud over the cover of SPC, which sort of put a real dark side over Shepparton.
I think everyone, you know, from council to local groups now have done an amazing
job to pick Shepparton off the canvas and really make us now Now,
(19:25):
arguably one of the most thriving and profitable companies.
Regional areas in a lot of aspects, whether it's residential, commercial, business.
It's a very, we see a lot of national companies here now, they identify Shepparton
as a place to put their businesses where 10 or 15 years ago,
franchises weren't really the done thing. It was just a waste of money,
(19:46):
sort of great. A lot of locals would be successful.
As well as the local different demographic that's sort of come into the area.
That's also helped different and spread our population and implementality.
You just look at the cafe culture, like 10 years ago, that wouldn't have been the case.
But now, you know, Shipman's very strong with the cafe culture,
you know. So, you know, Shipman's in the right direction. It's going well.
(20:09):
Yeah, definitely, definitely.
And I think even not just the central CBD, but stretching that further out now,
Shep North, Kyle, obviously we've got some big growth.
Kyle's obviously had their growth over the last sort of 20 years with Kyle Lakes
and everything like that. Sevens Creek.
Sevens Creek. Sanctuary Park. So now it's finally coming to the north.
We've got a lot more options getting there now. So, and obviously,
(20:30):
you know, there's been, you know, in the papers and everything like that with
potential redevelopment there with, you know, commercial businesses there too.
So, it's really great to see.
So, in terms of how you value properties, it's not, it's a bit,
there's a bit of an art there. It's not all just, again, we talked about emotion and things like that.
(20:50):
There's obviously a way and a process of how you go about things.
Talking about yields, square meter rate, those sort of things.
So you want to touch on how you value both for sales and for lease and what
the process is and how you go about that and, yeah.
Okay. So, yeah, I mean, each property is different, obviously.
(21:11):
We take into consideration a lot of things. It's not just, you know,
put a prize to the back of an event and guess and hope it works that way.
Look, properties, you know, starts from where its location is.
It's a no-brainer. But the condition of the property, whether it's empty or
whether it's not, whether it's got a tenant, what type of tenant,
(21:33):
the length of the lease of the tenant, the actual.
The terms in the lease itself, all those things sort of contribute,
which you've got to obviously have an understanding of the contract and lease
documents to get that because there's nothing worse and going to market with
promoting something that's completely contradictory to what your lease is or
(21:54):
you're getting told what's in a lease and you sort of leave yourself short.
So there is a lot of tricky things that after a period of time,
you understand it and you look for those sort of signs.
So those things all contribute to that.
Obviously, not every business can make money or there's a certain threshold
(22:16):
they can sort of pay before they can make money. That property is also relevant
to the size to a tenant that wants to rent it and what the opportunities of
that tenant make of money.
And that also, in the end of the day, dictates what the rate is.
But after a while, you'll have a certain rule of thumb where what certain businesses
can pay compared to what the business or freehold offers and the size offers
(22:39):
and where its frontage is.
But generally, we'll have an extensive list of market evidence to suggest what
is the normal rate. and that obviously flows with CPIs, inflation, market reviews.
And each business is different, right?
So when you go to a lease, potentially a lot of landlords offer a warm shell,
(23:01):
so it's just four walls and a roof.
It's depending on what the fit out is. So you'll have a basic rent for certain
things and then if a tenant needs to go in there and they want to sign a long-term
lease, for example, and they want to contribute all they want to spend a couple hundred grand.
And let's say it's a medical compared to, say, a retail, they'll be dictated
by the amount of parks they get, obviously dictated by what council gives us
(23:24):
a permit and then obviously what their fit-out's going to be.
Like, you know, a majority of doctors or medicals will want a sink and certain
things in each room and a certain amount of floor coverings and top,
you know, how that's sort of, you know, going to stand the test of time and their tenancy.
So their rate is significantly different than, say, an accountant that's renting
(23:45):
the same building with a different fit out up the road.
So it's all relative and obviously they apportion what the outlay or a developer
or an investor or a landlord will put into the property and that will also reflect
what goes into the lease and what they attribute that over the certain course
of the period of the lease that they'll get recouped that money as well.
(24:07):
Yeah, different businesses, different ferry holes, different locations all dictate,
you know, the leasing part of it and also dictates the end value of the property as well.
Definitely. And I think that probably goes to show why, you know,
you need an experienced agent, particularly yourself because you've probably
been the number one commercial agent, not to pump your tyres or all, but it's factual,
(24:29):
but because there's all these different factors that come into whether it's for lease or for sale.
So, I think that's probably the biggest thing where, you know,
if you're just a landlord and you just whack a number up,
you're probably going to sell – or you're either going to sell yourself short
and sell for too cheap or you put an absolute huge dollar on it and it's not going to – And look,
(24:52):
90% of the owners of commercial property understand more than probably you do sometimes.
You know, they get it, you know. So you're talking the same language and you're
not trying to hoodwink anyone to think that you know what you're talking about
when they can see right through you that you certainly don't know.
So that's where I really appreciated the experience under Ron Stewart over those
(25:14):
years and obviously rubbing shoulders with the best in Melbourne and their mentalities
and their education and their experiences. It's been terrific.
So commercial real estate is completely different to residential real estate.
So it takes years to understand it properly. and even then I'm still learning
different factors, different economic situations, different search situations
(25:35):
actually dictate, you know, you've got to learn that.
Like, for example, just a small figure, we've just had COVID.
People work from home a lot, all of a sudden it's changed the landscape on offices,
you know, and the value of offices, spaces to investors is not as great as it was pre-COVID.
And then, you know, but what we're lucky enough in Shepparton is in that aspect
(25:56):
is I found that a lot of larger office space that were looking to scratch their
heads going, what are we going to do now?
Because either accountants have downsized or decided to work from home and obviously
outsource from overseas and so forth.
We've been lucky enough to have a growth in that physio OT field where they've
(26:17):
grown their businesses, not just consulting and send them on their way and send
them to a gym and come back.
They've actually built their own extra floor space for gym areas where they
can sort of bring them back and spend time rehabilitating and teach them the
right techniques and not going to a gym. So they've got, you know- One-stop shop.
One-stop shop where they've obviously grown their businesses and filled in those spaces,
(26:40):
which has been great for Shepparton because that's, you know,
and obviously we've had a lot of other businesses too that have grown and sort
of filled those spaces as well.
So we're fortunate in that respect.
And obviously, you know, you talk to legal lawyers also at the courthouse.
You've noticed a lot more criminal lawyers also in Shepparton.
You know, that's also filled a lot of the voids and a lot of spaces as well.
(27:05):
Before we finish up, Rock, is there anything else? Do you feel like there's
anything that for landlords or even buyers, any particular things they need
to know or any other sort of thoughts?
Not really. I mean- Covered a fair bit, so. Yeah, we have covered a fair bit.
You're really scratching the surface, to be honest. Yeah, correct.
No, I think the commercial world
(27:26):
is pretty strong. Like Shepparton's very strong. Oh, I fell over there.
We're lucky that we've, our population is growing at a rapid rate.
You know, you look at the investment that, you know, that we've put in the area.
You just have to look at, you know, the hospital, the courthouse, the SAM.
And, you know, they all can have their negatives and positives,
(27:48):
but one thing is it's an investment in an area that we've never had before.
And the Golden Valley has always battled against your Bendigos,
your, you know, Ballaratts and Geelong.
And it's always come last, but we've seen a rapid growth in that area.
And I think a lot had to do with, you know, Suzanne and Ashid coming into power
as an independent, which allowed sort of to direct that.
(28:10):
So that had a big say and a big swing and things.
We just have to look at all the, we'd probably underestimate the amount of industrial
businesses that are in our area.
And, you know, we're probably the strongest, one of the most strongest employment
areas in Victoria, and we continue to be so.
And we attract, obviously, that population growth is because we've got such
(28:33):
a lot of unskilled opportunities for labourers that pay very well.
So Shepparton in general with the older money and the new people coming in,
with the opportunities.
It's a very wealthy town in a lot of ways, not just monetary ways,
but we're lucky and fortunate enough that we sit here in the middle of Victoria,
strategically placed between Melbourne and Sydney and Brisbane and obviously
(28:53):
the areas like that. So we're very fortunate.
I think, you know, hence why we're a bit slow on the uptake,
a lot of the conservative nature.
A lot of out-of-town investors have really seen Shepparton as a massive opportunity to put their money,
and I'm talking, I'm not talking thousands, we're talking millions of their
investment money in confidence in Shepparton, probably more than, say, our locals.
(29:17):
Does that make sense? Though we have got some really great developers in Shepparton,
whether it's residential and commercial, that know themselves.
They're putting a lot of money in sales and investing in Shepparton.
I mean, you'll see that sort of unfold even further in the next two or three years.
So, you know, the common investors probably should relax a bit and enjoy the
fact that they can invest confidently in our area. Yeah.
(29:41):
Just quickly before we finish up, you spoke about Susanna Sheard.
You know, me, when I first started, I didn't realize actually,
we won't go into politics too much, but, you know, how that affected our landscape
in terms of money being spent into Shepparton because before that,
probably the last, I don't know, 20 years or so, we didn't really have much investment,
(30:04):
within the town. the town.
We had to battle for every cent.
I mean, yeah, we had a well-held seat and national, it's a national seat.
But there's a shift to move that. I think when Jeanette Powell stepped aside,
there was an opening there to really ram home an independent.
And by doing that, it allowed the Labor government to spend,
to keep the seat independent to favour themselves.
(30:26):
And I think Susanna Shee did an excellent job in doing that.
But, you know, obviously as things progress with COVID, it's sort of undone
a bit with the locals and so forth.
So we've sort of gone back to the normal seat now. Now, hopefully that doesn't
stop the funding and the continuation of investment by Labor governments that's
(30:48):
currently in Melbourne at the moment or Victoria.
So, yeah, we'll see how that transpires. I mean, I know Jacinta Allen's a Bendigo
lady, but, you know, you would have noticed last week or so,
I don't know if you've read the paper, Sean, but huge investments in Bendigo
over the last couple of weeks. Especially the basketball stadium.
Yeah. They just announced more funding when they just finished.
Swimming centre and there's a lot of millions, you know, We're talking lots
(31:11):
of millions of dollars that we haven't seen and we're probably not going to
see, which is frustrating. Yeah.
So yeah, that's just the life. But the landscape, I think, for the future for
Shepparton's, on the up at least.
Oh, no, I think Shepparton's self-sufficient. It's developed really well.
It's got to a stage where the population's grown.
We're heading to 75,000, 80,000 people, and we've got a catchment of 120.
(31:33):
It's our time. Yeah, and you're right. We are self-efficient.
And when the money wasn't coming in, we'd still make our own wave.
We've diversified. It's actually our strengths are not just relying on the SPC
where it once was. Yeah. SPC is not as important.
It's important but not as important where the town sort of lived and breathed, survived by SPC.
(31:54):
It's not that way at all. Yeah, really diversified. A lot of new businesses
coming in. Industrial businesses. Yeah, definitely.
Well, thank you again, Rock, for coming along and having a quick chat and thank
you for you listeners tuning in.
If you'd like to listen to more, we've got...
(32:19):
Music.
Music.
Podcast. Today it is episode 13 and here with me today is a special guest and
director Rocky Gagliardi. So Rocky, thank you for coming in today.
(00:41):
You're welcome, Sean. Thanks for having me on. So today's episode for all the
guests here is in regards to commercial and industrial sales and leasing.
Before we get into that sort of those questions, Rock, for listeners that don't
know who you are, tell us a little bit about yourself, your experience and how
you sort of of come up to being director and more so in the commercial background.
(01:02):
Okay. So I've been, I think, 26, 28. I can't remember, 27 years or something in real estate.
I was fortunate enough to start under Roland Crosby, formerly known as Alice Scoff Real Estate.
So a lot of my older listeners would appreciate who that is. Pretty big names.
Alice Scoff was an incredible agent in town in the early days,
(01:23):
had a great reputation with regards to land development and commercial real
estate, which was intriguing to me. and sort of allowed that.
Rowan allowed me to sort of flourish in the residential world,
but I was fortunate enough to learn all aspects of real estate,
which is, you know, very difficult to do in real estate when you first join
and you're sort of either doing one specialised field or another.
(01:43):
So, yeah, I was very fortunate with that, progressed further.
Eventually, you know, went into another business, ended up buying out Ron Stewart,
which was formerly known as Stewart and white real estate.
Ron had a huge reputation as
the best commercial agent in the country of Victoria, region of Victoria.
(02:07):
I sort of wanted to get into that field a bit and enjoy that part of the aspect of real estate.
I was a benefit, you know, I've worked two or three years under Ron, which was great.
He was a tremendous wealth of knowledge and experience and allowed me to,
you know, obviously open up my contact base over further with other Melbourne
agents, which I do a lot with, a lot of those bigger Melbourne sort of commercial agents.
(02:31):
And that also allowed me to develop my skills and so forth. So I've been specialising
probably 14 years now in commercial real estate, commercial industrial and retail,
all aspects of real estate.
Probably a bit different to say Melbourne agents when the volume of work they've
got to do in certain areas of real estate specific specialists, they can do that.
We haven't got that luxury here, but it's good because I get to learn all parts
(02:53):
of it and every part of real estate, which is terrific.
Yeah. And more specifically for the viewers that don't know,
so commercial and industrial, what does that entail? What does that mean?
Oh, well, obviously different to residential where you have your mum and dad.
Buyers, the family home, you grow up, more your investment properties where
industrial commercials, a lot of us place a business and a lot of businesses
(03:17):
either flourish or not, obviously, in commercial world.
So there's different aspects. We lease commercial leasing. We have properties
we lease to businesses and obviously each commercial, whether it's industrial
or retail or food or cafes or whatever,
whether it's even health-wise or, you know, you've been a massage or chiropractor or whatever.
(03:41):
There are different aspects. There's such a wide field of different businesses,
obviously, which is completely different.
And people or businesses operate to service a community or obviously to make
their own enterprise and so forth.
So, yeah, it's different from the residential world. You talk different language as such.
Yeah, that's right. As you probably understand, you hear that in the office.
(04:04):
Different wavelengths, different – but it's all relative, I suppose.
It's no different. So it's very good.
Yeah. I mean, myself, obviously, being more on the resi side of things at the
moment, I'm learning a lot with commercial a lot of the time.
So it's very, I guess –.
It's a completely whole different ballgame because then you look at contracts
(04:25):
and, you know, so you go down that contractual law.
Yeah. It's very, what would you say, there's no emotion to it.
It's a very numbers game and there's a different way of going about how you
balance things, which we can touch on later. Yeah.
So in terms of the sales and the leasing market currently, how things are tracking
sort of post that COVID boom now?
(04:46):
Obviously, we had a fairly good growth over the last sort of three or four years,
which, you know, if you could touch on that too, but how is that sector going at the moment?
Yeah, we've had a graph like every, like residentials as well.
Like it's across the board, obviously.
Commercials held up very, very strong. We've come from a huge boom period through
(05:07):
the COVID and a lot of wealth was created through that period.
And obviously a lot of entrepreneurs or investors or developers have made a
lot of money over that time, the smart and astute ones.
But what they've also seen is a lot of the equity has obviously grown as well.
(05:27):
So commercial real estate as a whole hasn't really dropped off as such.
I think it's almost back to where it was before COVID time, which is at a steadier pace.
But the demand and appetite for commercial investment, blue chip investments
is still there. It's pretty strong.
(05:48):
Industrial, we saw a tremendous amount of growth where pre-COVID was,
you know, you're selling land at $85 to $95 a square metre.
You know, we got up to about $275 a square metre in certain parts.
We saw a different change in mindset where.
But once upon a time, the smaller blocks of land were selling at a higher rate
of square meter and the larger blocks of land were selling for small, lots of square meter.
(06:11):
But that changed. It changed where a combination of many things,
but a lot of businesses got smarter, bought a bigger footprint,
paid the bigger money to get that footprint and encourage developers not to
cut blocks into smaller sizes, but larger sizes. So that had to pay for that.
In doing so, a lot of businesses become more efficient because businesses grew
on the one one roofline, not spread over certain areas in town and you're sort
(06:35):
of, you know, fragmented from your staff or your different, you know.
Different costs associated with being in different areas.
So, you know, the smarter, you know, generally the business world's become,
you know, the commercial's become
smarter and obviously you're not doing things on the bit a little bit.
So as I go, they plan, their forward planning is so much more sophisticated
(06:56):
now and more educated going forward and obviously advice.
So that saw a tremendous growth, but along with that come a huge price in building, obviously, as well.
So that part of it has seen a tremendous amount of growth.
We're still seeing a lag of that rental yield, especially in the industrial
(07:17):
field world where we're still stuck in prices a while ago, even though that's lifted a bit.
But it's not quite the right where it should be still because you're still stuck
in the old. So we're waiting.
We're probably 12 months or eight months away from that sort of field to catch
up, but we'll see that come pretty quick.
Generally, we've seen a lot of commercial development in Shepparton.
(07:39):
It's a very wealthy town. It's a big building to develop at the moment.
That hasn't slowed down at all. That's still proceeding as it was no matter what.
I mean, obviously, that's part of the, you know, what do you call it,
conveyor belt sort of thing that's still in the pros, still coming along,
you know, still coming along in the next 12, 18 months. and obviously the residential
building factor as well. That's still ticking along.
(08:00):
So that'll probably get us through, I think, and it's obviously still beneficial
for our jobs and employment market in the area as well.
Obviously the injection of that capital in the area and the economy is terrific.
Yeah. And so what are the current yields and auction clearance rates at the moment?
And for the listeners out there as well, they don't understand what that means
or probably more specifically yields. Can you explain that a little bit more?
(08:23):
Yeah, auction processes, we've had 100%.
The last seven, eight, nine years, every time we've gone auction with a commercial
property, we sort of can't think of anything offhand that we haven't sold at auction.
And not every property gets auctioned and every property has a different process.
We tend to go, Shepparton has a tendency to, and always has,
(08:47):
that the locals are always sort of a bit behind the out-of-town yield,
which basically means that we're always battling.
So, for example, our commercial portfolio in the last seven years has grown
from 50 properties to 200 properties.
And I would say 99.99% of those out-of-town landlords, no landlords from Shepparton.
(09:09):
I mean, we've got a couple of locals that bought or transferred,
but as far as buying the big ticket items or whatever, Shepparton's seen a tremendous
growth. We've seen it personally.
We've got investors from Sydney, Melbourne, Queensland. land.
And recently we sold the Clean Away building last week.
He flew in from WA. So he's bought that. So our reach is far and wide.
(09:32):
We haven't just got the local reach.
I keep telling the story how I sold A-Mart six years ago to a Chinese buyer
who flew in and come in and bought it. From China.
From China, come in and bought it, went around the property that morning,
that afternoon, we're in our boardroom and we signed off the deal, which was terrific.
I mean, And if we haven't got that reach where back in the days when I mentioned
(09:55):
Ellis Goff, we mentioned Ron Stewart, they didn't quite have,
I mean, that reach is what we've got now.
So you've got international reach as well as local reach. So what I mean local is Australia.
So, you know, we've got that reach in the database to achieve that.
So, yeah, so at the moment –.
It's still powering along. There's a lot of money out there still.
(10:17):
The difference is when we're talking yields, I mean, money's more expensive
than it was two or three years ago.
So to get that return back on the money, you're not paying the rates that you
were paying two years ago.
So for the listeners out there, the higher the yield, so if we're talking 5%,
6%, 7%, the higher it means the lower money. There's less value for the property.
(10:37):
And the lower the yields means more. So in investment return,
for example, you're spending $100,000 in layman's terms, and you're getting,
you know, $5,000, that's a 5% yield.
You know, if you're getting 4%, you know, it's 4,000, 6%. So the yield and the
high of the yield are obviously the less value of the property.
Yeah. So for any buyers out there looking for a commercial property,
(11:00):
you want the highest yield as possible to get the best possible return.
So I've been educating a lot of my clients too that,
you know, not necessarily everything needs to be tenanted and it's the myth
that a lot of owners of commercial property believe that they have to find a
tenant to get the best value for their property, which is not always the case.
(11:23):
And just recently, I think we sold the Salvation Army building on the corner of St.
George's Road, and I was very lucky enough to have clients who were prepared to listen.
I mean, Salvation Army will list that for, yeah, Salvation Army, I think.
Got a good 20 years, I think, they're listing, and they become empty,
and they're hoping to find a tenant.
And I said, no, don't find a tenant.
(11:44):
Keep it empty, because there'll be an owner-occupier that'll buy this.
And what tends to happen with the owner-occupiers, and obviously not every property
is the same, but that's a buy that you haven't got when you sell a tenanted.
So when you do that, you have got an opportunity to get an investor.
And these days, we find investors are more sophisticated and more educated,
and they tend to find their own tenants or match up a lot of tenants they understand.
(12:07):
So it's not always a big negative to have no tenant because an astute investor
will be able to competently understand the market, understand the property it
has, understand what it needs to be spent on the property.
And they're happy to take the risk of buying the property to put a tenant in
there, but they're fighting against the owner-occupier.
(12:28):
And the owner-occupier hasn't got that opportunity very often because it's a
lot of tenanted property.
So it's an extra buyer in the market that you give a crack at.
And a lot of them use self-managed super funds where they've got a lot of equity,
a lot of it's like companies that sort of invest in so they can then do their
own developments or investment in the property.
(12:48):
They can, you know, if they're going for the process, they can invest confidently
knowing that they're going to get it back in their own property.
So I think we sold that one on St. George's Road and we got,
I think, you know, well over the reserve.
That was a great result. Great result. out and it was an own-occupier that bought
it, which was great because they outbid two or three investors.
So that tends to happen a lot with industrial sheds and I always get the strange look from.
(13:14):
Owners of sheds, which is hard to get. You don't get many.
It's the hardest property. If I had 20 sheds, I'd be wrapped,
but it just doesn't happen that way.
So my advice is, A, depending on the property, obviously, but nine times out
of 100, I've tried to encourage to auction an industrial share simply because,
(13:34):
with industrial properties, they're very scarce.
To build and buy a block of land and build something is very tough.
No land available. No land available. No future development.
Correct. But also self-managed super funds, a lot of smaller type businesses,
you're talking your tradies, your mechanics and all sorts of businesses and
(13:55):
that, they have a good nest egg in their self-managed super funds.
They might have a couple hundred thousand dollars or $300,000 in it,
so it's up in a super and they've been renting for a number of years.
They, they can't go ahead and buy a block of land and build because the banks
won't lend them the money on a self-managed super fund. Yeah.
They'll only lend them the money.
On an existing and they can have that equity over it.
(14:19):
So I've noticed even when way back in even in the GFC time and I was auctioning
properties under duress sometimes where obviously people wanted to sell.
But what tended to happen was what we're quoting and what we're signing for
was always surpassed the reserve price because our own occupiers were ready to buy.
Yeah. And they were in the market where originally they couldn't do that.
(14:42):
So we've had some really great results and I'm happy to go through that with
any potential seller who's looking to sell commercial sheds or industrial shed.
Happy to sit down and go through that with you.
But that's always been, we're talking 12, 13 years now in Shepparton,
it's always been a really big tick for us that we've noticed that that's always
been a trend even to as early as this year.
(15:03):
So it always, the empty sheds or depending what the empty property is, seems to sell better.
Yeah. You know, and definitely, I think even, and horses for courses that matter.
It doesn't mean everything does, but that's right.
That's right. And, and same with the buyers or anyone that actually owns a business too.
I think that might even be a good thing to chat to you as well.
And how that sort of works, obviously not an account or anything like that apart,
(15:26):
you know, it's always good to sort of discuss that with you because it's,
you know, if you can, yeah.
Run that smartly and you can really benefit on the other side,
especially when you're retired.
Well, a lot of small businesses, they've got a nest egg and they don't want to be campaign rent.
If they can pay rent to themselves and have their business, they've got a retirement fund.
So when they sell their business, they've got this asset they've paid off or
(15:47):
potentially paid off most of it, which they can store in a super fund and they
can get a return back and they've done it themselves.
So that seems to be a really big tick for a lot of small type businesses that
want to grow and want to see something, I think, you know, the reward for their efforts over the years.
Before we sort of touch on to the next point, I think you mentioned before a
lot of the businesses, owner-occupiers buying in.
(16:09):
Touching on the leasing side of things, I think when I first started real estate before COVID,
you know, you could probably see probably more, probably not so much industrial
but more commercial, especially, you know, along High Street,
there's a lot of empty shops. Yeah. Not the case anymore.
Correct. You know, there's a lot of now businesses leasing and we've been very,
very busy within our leasing umbrella as well.
(16:31):
So I'm going to quickly touch on that and what you've seen over the last few
years in terms of a lot of local businesses now starting up their own thing
and filling up the vacant shops.
Yeah, I think the landscape, I think the investment, obviously the council put
in, obviously around the Kmart, Bourne Street area, obviously injected a lot
of confidence in that area.
(16:52):
Then we got backed up with Courthouse. So I think that, you know,
the $70 million drew a lot of businesses towards the courthouse and you're talking
a lot of them are legal officers.
So that drew a lot of businesses. They filled up a lot of Long Wyndham Street
and High Street, where High Street, you'll see a couple of lawyers starting
to sort of fill in some space.
(17:13):
Yeah. What turned out with High Street was that Target has that big long wall
and the walking traffic sort of didn't allow it.
So we had to be a bit smarter than you were working with me at the time.
Helping me out, Sean, was we started targeting more office space in High Street.
Businesses that wanted car parks to back where, you know, no one knew that High Street had that.
(17:36):
They didn't really necessarily want the passing walking traffic.
We want the access to park. Parking. Yeah.
And it was unknown, you know, that that was the case where you come off Rose Street and you park.
So a lot of those businesses are filled up along there. We've hardly got any
vacancies. There's probably one or two maybe vacancies.
It isn't a ghost town. Wyndham Street was the same. You'll see Legal Aid moved along there.
(17:58):
A lot of other businesses moved along there. and a lot of new eateries and cafes
and that sort of moved along there because obviously the food traffic was moving
towards there too. So that changed the landscape.
It was more of an L-sized spillage off Fry Street. You couldn't get on Fry Street.
That was obviously the next best
thing where a lot of businesses that congregate in that area, they walk.
If you just look at businesses and you might be familiar with,
(18:20):
like Stella made a really big success of what they're doing, capitalised on that.
I think Lazy Joe's have gone in. and, you know, you've got Nando's and you've
got Glory Jeans and a lot of those businesses along there.
Plus, you know, you've got other businesses, Barker Love on the other side,
Aloe Vera, they're all there.
So, you know, you look at that, all those, it's sort of made a name for itself.
(18:41):
So that's been very successful and obviously a lot of businesses are in that
area to allow that foot traffic to get along that.
So generally our lease vacancies is not that great in the CBD as it was after
COVID, that really kicked us in the guts. Yeah.
And, you know, Shepparton had it, you know, COVID, sorry, not COVID, sorry,
(19:03):
the GFC, then on the back of a drought, on the back of a couple of financial,
local financial arms that went down and sort of, and I think there was a big
cloud over the cover of SPC, which sort of put a real dark side over Shepparton.
I think everyone, you know, from council to local groups now have done an amazing
job to pick Shepparton off the canvas and really make us now Now,
(19:25):
arguably one of the most thriving and profitable companies.
Regional areas in a lot of aspects, whether it's residential, commercial, business.
It's a very, we see a lot of national companies here now, they identify Shepparton
as a place to put their businesses where 10 or 15 years ago,
franchises weren't really the done thing. It was just a waste of money,
(19:46):
sort of great. A lot of locals would be successful.
As well as the local different demographic that's sort of come into the area.
That's also helped different and spread our population and implementality.
You just look at the cafe culture, like 10 years ago, that wouldn't have been the case.
But now, you know, Shipman's very strong with the cafe culture,
you know. So, you know, Shipman's in the right direction. It's going well.
(20:09):
Yeah, definitely, definitely.
And I think even not just the central CBD, but stretching that further out now,
Shep North, Kyle, obviously we've got some big growth.
Kyle's obviously had their growth over the last sort of 20 years with Kyle Lakes
and everything like that. Sevens Creek.
Sevens Creek. Sanctuary Park. So now it's finally coming to the north.
We've got a lot more options getting there now. So, and obviously,
(20:30):
you know, there's been, you know, in the papers and everything like that with
potential redevelopment there with, you know, commercial businesses there too.
So, it's really great to see.
So, in terms of how you value properties, it's not, it's a bit,
there's a bit of an art there. It's not all just, again, we talked about emotion and things like that.
(20:50):
There's obviously a way and a process of how you go about things.
Talking about yields, square meter rate, those sort of things.
So you want to touch on how you value both for sales and for lease and what
the process is and how you go about that and, yeah.
Okay. So, yeah, I mean, each property is different, obviously.
(21:11):
We take into consideration a lot of things. It's not just, you know,
put a prize to the back of an event and guess and hope it works that way.
Look, properties, you know, starts from where its location is.
It's a no-brainer. But the condition of the property, whether it's empty or
whether it's not, whether it's got a tenant, what type of tenant,
(21:33):
the length of the lease of the tenant, the actual.
The terms in the lease itself, all those things sort of contribute,
which you've got to obviously have an understanding of the contract and lease
documents to get that because there's nothing worse and going to market with
promoting something that's completely contradictory to what your lease is or
(21:54):
you're getting told what's in a lease and you sort of leave yourself short.
So there is a lot of tricky things that after a period of time,
you understand it and you look for those sort of signs.
So those things all contribute to that.
Obviously, not every business can make money or there's a certain threshold
(22:16):
they can sort of pay before they can make money. That property is also relevant
to the size to a tenant that wants to rent it and what the opportunities of
that tenant make of money.
And that also, in the end of the day, dictates what the rate is.
But after a while, you'll have a certain rule of thumb where what certain businesses
can pay compared to what the business or freehold offers and the size offers
(22:39):
and where its frontage is.
But generally, we'll have an extensive list of market evidence to suggest what
is the normal rate. and that obviously flows with CPIs, inflation, market reviews.
And each business is different, right?
So when you go to a lease, potentially a lot of landlords offer a warm shell,
(23:01):
so it's just four walls and a roof.
It's depending on what the fit out is. So you'll have a basic rent for certain
things and then if a tenant needs to go in there and they want to sign a long-term
lease, for example, and they want to contribute all they want to spend a couple hundred grand.
And let's say it's a medical compared to, say, a retail, they'll be dictated
by the amount of parks they get, obviously dictated by what council gives us
(23:24):
a permit and then obviously what their fit-out's going to be.
Like, you know, a majority of doctors or medicals will want a sink and certain
things in each room and a certain amount of floor coverings and top,
you know, how that's sort of, you know, going to stand the test of time and their tenancy.
So their rate is significantly different than, say, an accountant that's renting
(23:45):
the same building with a different fit out up the road.
So it's all relative and obviously they apportion what the outlay or a developer
or an investor or a landlord will put into the property and that will also reflect
what goes into the lease and what they attribute that over the certain course
of the period of the lease that they'll get recouped that money as well.
(24:07):
Yeah, different businesses, different ferry holes, different locations all dictate,
you know, the leasing part of it and also dictates the end value of the property as well.
Definitely. And I think that probably goes to show why, you know,
you need an experienced agent, particularly yourself because you've probably
been the number one commercial agent, not to pump your tyres or all, but it's factual,
(24:29):
but because there's all these different factors that come into whether it's for lease or for sale.
So, I think that's probably the biggest thing where, you know,
if you're just a landlord and you just whack a number up,
you're probably going to sell – or you're either going to sell yourself short
and sell for too cheap or you put an absolute huge dollar on it and it's not going to – And look,
(24:52):
90% of the owners of commercial property understand more than probably you do sometimes.
You know, they get it, you know. So you're talking the same language and you're
not trying to hoodwink anyone to think that you know what you're talking about
when they can see right through you that you certainly don't know.
So that's where I really appreciated the experience under Ron Stewart over those
(25:14):
years and obviously rubbing shoulders with the best in Melbourne and their mentalities
and their education and their experiences. It's been terrific.
So commercial real estate is completely different to residential real estate.
So it takes years to understand it properly. and even then I'm still learning
different factors, different economic situations, different search situations
(25:35):
actually dictate, you know, you've got to learn that.
Like, for example, just a small figure, we've just had COVID.
People work from home a lot, all of a sudden it's changed the landscape on offices,
you know, and the value of offices, spaces to investors is not as great as it was pre-COVID.
And then, you know, but what we're lucky enough in Shepparton is in that aspect
(25:56):
is I found that a lot of larger office space that were looking to scratch their
heads going, what are we going to do now?
Because either accountants have downsized or decided to work from home and obviously
outsource from overseas and so forth.
We've been lucky enough to have a growth in that physio OT field where they've
(26:17):
grown their businesses, not just consulting and send them on their way and send
them to a gym and come back.
They've actually built their own extra floor space for gym areas where they
can sort of bring them back and spend time rehabilitating and teach them the
right techniques and not going to a gym. So they've got, you know- One-stop shop.
One-stop shop where they've obviously grown their businesses and filled in those spaces,
(26:40):
which has been great for Shepparton because that's, you know,
and obviously we've had a lot of other businesses too that have grown and sort
of filled those spaces as well.
So we're fortunate in that respect.
And obviously, you know, you talk to legal lawyers also at the courthouse.
You've noticed a lot more criminal lawyers also in Shepparton.
You know, that's also filled a lot of the voids and a lot of spaces as well.
(27:05):
Before we finish up, Rock, is there anything else? Do you feel like there's
anything that for landlords or even buyers, any particular things they need
to know or any other sort of thoughts?
Not really. I mean- Covered a fair bit, so. Yeah, we have covered a fair bit.
You're really scratching the surface, to be honest. Yeah, correct.
No, I think the commercial world
(27:26):
is pretty strong. Like Shepparton's very strong. Oh, I fell over there.
We're lucky that we've, our population is growing at a rapid rate.
You know, you look at the investment that, you know, that we've put in the area.
You just have to look at, you know, the hospital, the courthouse, the SAM.
And, you know, they all can have their negatives and positives,
(27:48):
but one thing is it's an investment in an area that we've never had before.
And the Golden Valley has always battled against your Bendigos,
your, you know, Ballaratts and Geelong.
And it's always come last, but we've seen a rapid growth in that area.
And I think a lot had to do with, you know, Suzanne and Ashid coming into power
as an independent, which allowed sort of to direct that.
(28:10):
So that had a big say and a big swing and things.
We just have to look at all the, we'd probably underestimate the amount of industrial
businesses that are in our area.
And, you know, we're probably the strongest, one of the most strongest employment
areas in Victoria, and we continue to be so.
And we attract, obviously, that population growth is because we've got such
(28:33):
a lot of unskilled opportunities for labourers that pay very well.
So Shepparton in general with the older money and the new people coming in,
with the opportunities.
It's a very wealthy town in a lot of ways, not just monetary ways,
but we're lucky and fortunate enough that we sit here in the middle of Victoria,
strategically placed between Melbourne and Sydney and Brisbane and obviously
(28:53):
the areas like that. So we're very fortunate.
I think, you know, hence why we're a bit slow on the uptake,
a lot of the conservative nature.
A lot of out-of-town investors have really seen Shepparton as a massive opportunity to put their money,
and I'm talking, I'm not talking thousands, we're talking millions of their
investment money in confidence in Shepparton, probably more than, say, our locals.
(29:17):
Does that make sense? Though we have got some really great developers in Shepparton,
whether it's residential and commercial, that know themselves.
They're putting a lot of money in sales and investing in Shepparton.
I mean, you'll see that sort of unfold even further in the next two or three years.
So, you know, the common investors probably should relax a bit and enjoy the
fact that they can invest confidently in our area. Yeah.
(29:41):
Just quickly before we finish up, you spoke about Susanna Sheard.
You know, me, when I first started, I didn't realize actually,
we won't go into politics too much, but, you know, how that affected our landscape
in terms of money being spent into Shepparton because before that,
probably the last, I don't know, 20 years or so, we didn't really have much investment,
(30:04):
within the town. the town.
We had to battle for every cent.
I mean, yeah, we had a well-held seat and national, it's a national seat.
But there's a shift to move that. I think when Jeanette Powell stepped aside,
there was an opening there to really ram home an independent.
And by doing that, it allowed the Labor government to spend,
to keep the seat independent to favour themselves.
(30:26):
And I think Susanna Shee did an excellent job in doing that.
But, you know, obviously as things progress with COVID, it's sort of undone
a bit with the locals and so forth.
So we've sort of gone back to the normal seat now. Now, hopefully that doesn't
stop the funding and the continuation of investment by Labor governments that's
(30:48):
currently in Melbourne at the moment or Victoria.
So, yeah, we'll see how that transpires. I mean, I know Jacinta Allen's a Bendigo
lady, but, you know, you would have noticed last week or so,
I don't know if you've read the paper, Sean, but huge investments in Bendigo
over the last couple of weeks. Especially the basketball stadium.
Yeah. They just announced more funding when they just finished.
Swimming centre and there's a lot of millions, you know, We're talking lots
(31:11):
of millions of dollars that we haven't seen and we're probably not going to
see, which is frustrating. Yeah.
So yeah, that's just the life. But the landscape, I think, for the future for
Shepparton's, on the up at least.
Oh, no, I think Shepparton's self-sufficient. It's developed really well.
It's got to a stage where the population's grown.
We're heading to 75,000, 80,000 people, and we've got a catchment of 120.
(31:33):
It's our time. Yeah, and you're right. We are self-efficient.
And when the money wasn't coming in, we'd still make our own wave.
We've diversified. It's actually our strengths are not just relying on the SPC
where it once was. Yeah. SPC is not as important.
It's important but not as important where the town sort of lived and breathed, survived by SPC.
(31:54):
It's not that way at all. Yeah, really diversified. A lot of new businesses
coming in. Industrial businesses. Yeah, definitely.
Well, thank you again, Rock, for coming along and having a quick chat and thank
you for you listeners tuning in.
If you'd like to listen to more, we've got...
(32:19):
Music.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
24/7 News: The Latest
The latest news in 4 minutes updated every hour, every day.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com