Raine and Horne Commercial

19 | INSIGHTS SPRING 2018 NSW | Inner West & South Sydney Luke Smith of Commercial Inner West/South Sydney says yields in his patch range from 3.5% - 4.2% for both retail and industrial property. He expects these yields to hold steady until the end of 2018, though longer term, Luke believes the commercial markets of the Inner West and South Sydney will be strong performers given their geographic advantage. At present, industrial assets are the market’s strongest performer. Luke notes, “The Amazon effect is making it hard for retailers, and this is making industrial assets more a ractive. Some businesses have moved west to take advantage of more affordable prices, however for those businesses that need access to the ports or CBD, the industrial markets in the Inner West and South Sydney continue to make sense strategically.” While owner occupiers are leading the charge for industrial assets, investors are buying industrial properties at yields of 3.0-5.0% compared to a historic average of 6.0%. The withdrawal of commercial assets for conversion to residential property in areas such as Alexandria and Redfern has further tightened the supply of commercial property. Inner West/ South Sydney “ For those businesses that need access to the ports or CBD, the industrial markets in the Inner West and South Sydney continue to make sense strategically. ”