Raine and Horne Commercial

NSW - Bankstown Mark Ammoun of Bankstown Commercial says industrial yields in his area are 4.0%, rising to 5.5% for retail assets and 6.0% for office property. In terms of the industrial market, Mark says, “Industrial property continues to lead the charge and is performing exceptionally well. With many people still working from home, and this trend is expected to remain into the foreseeable future. This will ensure that e-commence growth will continue its upward trajectory. “As a result, companies are aggressively seeking well-positioned storage, distribution centres and warehousing to satisfy the significant rise in e-commerce. These factors, coupled with low vacancy rates, limited supply and record low interest rates will ensure that industrial property remains the asset of choice for investors and owner occupies.” To date, Mark says he is seeing both buyers and tenants offer over the asking price to secure an industrial property. Regarding office property, Mark notes, “COVID-19 certainly disrupted the idea of a ‘traditional office’ work environment. Although the long-held idea of needing to work from an office has changed for good, the normality of returning to the office in most sectors has already taken place. Over the medium term, this will result in a decrease in the vacancy rate, albeit over a period of time. With COVID-19 etched in the mind, tenants are seeking flexibility when committing to leases.” According to Mark, there are a number of market drivers in the South West/Western Sydney region. He explains, “While investors are chasing assets representing decent yield, tenants are looking to transition from leasing to acquiring property, driven by the fact that it can be cheaper to own than rent. He adds that this is having a particularly strong impact on demand for industrial assets. 08 - Mark Ammoun m.ammoun@rhc.com.au