Raine & Horne Commercial

NSW - Sutherland Shire The commercial market across the Shire is mixed at present. According to Anthony Bouteris of Commercial Sutherland Shire, yields range from 4.5-5.0% on industrial assets, to 5.0% on office property, and as much as 5.5% on retail assets. Yields on retail property are expected to increase, potentially to 6.0%, as banks tighten lending to retail investors. Moreover, the retail sector is also experiencing vacancy rates of 50.0% as a result of the pandemic. The outlook is very different for industrial property, where yields are forecast to tighten, driven by high demand from the Shire’s tradespeople. Anthony explains, “industrial markets in Taren Point, Kirrawee and Caringbah have been largely unaffected by COVID-19, and we have been flooded by enquiries from trade-based businesses such as builders, electricians, and plumbers – all seeking industrial space under 500 square metres.” Vacancy rates on industrial assets are creeping up to 30.0% as more small businesses look to buy their premises while interest rates are so low. However, Anthony notes, “properties with leases below $80,000 per annum – especially those with office space, have found tenants relatively easy. Our best industrial unit lease was $40,000 per annum for an industrial unit at 15/58 Box Road, Taren Point.” There is a general shortage of office space for lease in the Shire, so vacancy rates are around 5.0%. While many firms are downsizing their office requirements amid COVID-19, Anthony says there is still “a shortage of office stock for sale in the Shire.” 25 - Anthony Bouteris anthony@rhmiranda.com.au