38 | Victoria Patrick Mammone of Commercial Victoria says current average yields for retail property are around 4-5% for industrial assets, and 4.355% for office property. Patrick expects these yields to remain stable through 2022. In the retail market Patrick says, “The government is working hard to restore confidence among retailers, supporting them in re-opening shops and re-engaging with customers. There is also a trend for workplace teams to return to the office, which is positive for the retail segment.” The industrial market, where the vacancy rate is a tiny 2%, has remained relatively quiet during the pandemic according to Patrick. However, key indicators suggest this sector has become significantly more active in the last 2 years. There is a huge shortage of large parcels of industrial land within 40 kilometres of the Melbourne CBD. Prices indicate that another rise is on its way and yields are expected to move with the market. Increases in the last 2 years are a staggering 360% across the board and Patrick expects that this will slowly start to stabilise by Q4 of 2022. In the office sector, a growing number of employers are encouraging their workforce to return to the office. That said, a lasting trend for hybrid working space may underpin alternative uses for offices such as co-shared space. The team at Commercial Victoria recently secured the sale of 27-39 Miller Street, Epping – a 40,522 square metre, Activity Centre Zone property, for $18.2 million an increase of 343% since the property last sold in 2015. Patrick Mammone patrick@vic.rhc.com.au Commercial VIC
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