Major projects key to commercial property boom: report
Bold investment in major city infrastructure has been identified as key to Australia’s booming commercial property market.
Raine and Horne executive chairman Angus Raine says market conditions are most buoyant in areas where major projects were being rolled out or had been completed.
The trend has been identified in the national property group’s latest Commercial Insights report.
It also shows high sale volumes are being driven by low interest rates and increasing demand from self-managed super funds as well as eager overseas investors.
“In conjunction with historically low lending rates and incoming changes to superannuation, interest in commercial properties is coming from a range of investors – both local and offshore, as well as small to medium businesses seizing opportunities to own their premises,’’ Raine says.
But he says it is major projects that are proving to be the linchpin for many Australian capitals.
The study found:
THE development of Barangaroo in Sydney, coupled with a string of conversions from commercial to residential spaces, had resulted in CBD rents jumping by 10%;
RECORD prices and vacancy rates of just two percent in Sydney’s west;
MAJOR projects in Brisbane, including the $1.2 billion Redcliffe Peninsula Rail Line to the north and the Waratah Industry Park at Acacia Ridge in the city’s south compounding commercial sales strength; and
ROBUST yields on the Gold Coast supported by preparations for next year’s Commonwealth Games ranging up to nine percent on office property.
“The wealth of infrastructure developments across many parts of the country is having a major impact on commercial property values, yields and vacancy rates,’’ Raine says.
He says Melbourne’s eastern suburbs, from Box Hill to Bayswater show growth of up to 6% but new unit complexes in Yarraville and Keilor East have come as a significant boost to the west.
In Hobart, the construction of several new high-rise hotels has sparked international interest in the city by local and offshore developers and investors.