Raine & Horne Commercial

NSW - Bankstown Across the Bankstown area vacancy rates are low, ranging from 2.0% on industrial property to 6.0% and 7.0% for office and retail assets respectively. Mark Ammoun of Commercial Bankstown reports that yields vary from 6.0% on office and retail stock to 4.75% in the industrial market. Mark notes, “industrial properties are benefitting from an increase in e-commerce activity backed by low vacancies and low interest rates. Yields on retail and office assets could rise to 6.5% as we are seeing a shift away from traditional use of office space through COVID-19, and online sales are having an impact on demand for retail property”. According to Mark, the current, unprecedented “cheap money environment” is giving businesses an opportunity to acquire property for a holding cost similar to renting. This is having a particularly strong impact on demand for industrial property. “We have seen an uplift in inquiries, particularly from sectors in e-commerce, transport and food, looking for leasing opportunities to accommodate increased levels of demand,” explains Mark. The uncertainty generated by the pandemic is seeing owners hold onto their commercial assets, and this is leading to an acute shortage of stock. “The silver lining is that we are seeing buyers paying solid sums for assets that come onto the market,” adds Mark. Leasing activity in the industrial market remains strong. Mark says, “within our management portfolio, only 5.0% of tenancies requested rent relief, and only 2.0% were eligible for assistance. We haven’t had a significant increase in our rental arrears, and zero increase in vacancy rates. In fact, several of our industrial tenants reported significant increases in turnover during COVID-19.” 12 - Mark Ammoun m.ammoun@rhc.com.au