Raine and Horne Commercial

NSW - North Sydney Nick Moloney and Jay Sheffield from Commercial North Sydney, say retail property in the city’s north is generating yields of 5-6%, industrial assets 4-6% and office space 4.5-5.5%. Retail yields are expected to fall due to uncertainty among retail operators coupled with the end of financial stimulation such as JobKeeper and rent relief. While the retail market is very much in recovery mode, Jay says, “We have seen some exceptional results within our neighbourhood retail, with the likes of cafes, restaurants and gyms performing well due to the increase in employees working from home.” Industrial yields are likely to remain unchanged. Due to the strong performance of this sector throughout 2020, there continues to be a lack of stock and strong buyer interest. Nick notes, “We continue to see strong take up of industrial space from both buyers and lessees, with no new supply forecast for our market.” In the office sector, yields could rise. Nick and Jay explain, “Due to the level of withdrawn strata and small freeholds within our market, we expect prices to continue to rise moderately throughout 2021. This increase is driven more by owner occupiers, as knowledge and understanding of the benefits of owning commercial space in a super fund becomes more prevalent.” As a guide, 58 Victoria Street, McMahons Point was recently sold for $8.3 million, and leased to Oroton Group Australia on a net return of 4.95%. 14 - Nick Moloney nick@rhcns.com.au