Raine and Horne Commercial

11 | INSIGHTS SPRING 2018 QLD | Southside & Bayside Nick Comino of Commercial Brisbane Southside says retail property in the area is generating yields of 5.5-6.25%, office assets are delivering yields of 6.5-7.75%, and yields on industrial property are between 6.75-7.55%. Yields on retail and office space are expected to remain the same as the market is experiencing steady demand and supply conditions. However, industrial yields could fall by around 0.25% by the end of 2018 as land values start to rise and the number of properties listed for sale or lease begins to tighten. Vacancy rates range from 5% on industrial assets and 8.0% on retail properties to as much as 15% for office space. Owner occupiers are active in the market, and Nick says the key drivers are continued low interest rates, which are making it “cheaper to own and pay interest than it is to take out a lease.” While the commercial market is being supported by the $400 million upgrade of the Ipswich Motorway to six lanes between Rocklea and Darra, Nick says, “Banks are tightening their lending policies particularly for SMSF investors. Even so, demand for investment properties and older owner occupier properties held outside of super will increase as land prices continue to rise, reflecting a shortage of suitable industrial sub-divisions.” Nick notes, “Industrial space continues to be a consistent performer. It is less volatile and a safer investment, particularly when you source a good property in a well- established proven area.” Brisbane Southside Bayside “ Industrial yields could fall by around 0.25% by the end of 2018 as land values start to rise and the number of properties listed for sale or lease begins to tighten. ”