With the residential property market exceeding price and growth expectations, more investors are turning to the commercial sector for opportunities.
Research released this month by commercial listings platform realcommercial.com.au shows that there has been a 57.2% increase in searches for commercial property, year on year.
One of the strongest asset classes in the current environment is industrial property. Over the past 12 months industrial properties have recorded:
- The lowest tenant turnover;
- The lowest rental reductions / abatements;
- Low levels of stock and new product coming on the market in central industrial suburbs.
Demand is high for development sites located in central suburbs, particularly those approved and unapproved sites in proximity to:
- Beachside suburbs;
- Major shopping centres and infrastructure;
- View corridors.
Based on the enquiries we have received over the past month it is also clear that investors are gaining confidence in the retail sector.
We’re seeing a surge in demand for existing retail centres where value-add opportunities are presented, such as high vacancies, the opportunity to expand and refurbish, or general repositioning potential over a long period.
Retail land is also sought after by developers with an interest in building home-maker style centres, drive-through facilities or service station sites.
Overall there is a high level of confidence in the commercial sector off the back of several months of high performance in the residential real estate market.
Historically, the commercial sector peaks after the residential peak and retail investors flock to commercial once the residential market becomes exhausted.