Raine and Horne Commercial

Welcome to Insights Q4 2021 Welcome to Raine & Horne Commercial Insights for Q4 2021. 4 Key Factors Shaping the Commercial Property Market Through 2021, the commercial property market has been shaped by a quartet of driving forces. Let’s take a closer look at what they are. Low Interest Rates It’s a no-brainer that low rates on cash savings are encouraging investors to seek assets with higher returns, and this has certainly been a leading force behind rising demand for commercial property. However, today’s record low interest rates have fuelled a new, and ongoing phenomenon – the rise of the owner occupier. In many areas it is now cheaper for businesses to own rather than lease their premises. Not only is this underpinning high demand for commercial properties – especially those sold with vacant possession, it is also putting a squeeze on leasing markets as fewer properties are available to let. The Impact of COVID-19 The pandemic, and in particular lockdowns and the growing trend to work from home, have had varying impacts on the commercial property market both in terms of geography and sector. In those states, regions and cities where there has been minimal or zero lockdowns in 2021, Raine & Horne Commercial property experts report ‘business as usual’ across the market. However, in Sydney and Melbourne, which have been hardest hit by lockdowns this year, the greatest brunt has been felt across retail and office markets. There is a view among many Raine & Horne Commercial property experts that the office market will rebound as workplace teams steadily make a return to the formal office. The retail market is likely to follow, however the impact of online retailing had been making an impact in this market long before COVID-19. It’s likely that the pre-pandemic trend for retail properties to be used by a greater variety of enterprises – from nail salons to cafes, will continue longer term. The Buoyancy of Industrial Property For anyone who currently owns industrial property, the stars have absolutely aligned. The growth of