Raine & Horne Commercial

Angus Raine Executive Chairman Raine & Horne Group Welcome to Insights 2020 For many (if not all) Australians, 2020 has been a year of challenges and change. COVID-19 has created uncertainty for households, many businesses, and also for investors who earlier this year faced one of the biggest sharemarket routs ever seen in Australia. There is positive news also. Interest rates are the lowest on record, and initiatives such as the SME Guarantee scheme are allowing businesses to access extremely low cost finance. In addition, the 2020/21 Federal Budget offered a wealth of incentives for businesses, including the expanded instant asset write off, encouraging investment in plant and equipment, plus personal tax cuts to foster household spending. Despite the upheaval of 2020, demand for industrial space is soaring. It is testimony to the strength of industrial property as an asset class that quality properties are selling fast, and typically attracting multiple competing bidders at auction. The key driver is low rates, which are making it cheaper for many businesses to own rather than lease, their premises. The growth of online retailing, which has gained traction as a result of lockdowns, is further boosting demand for industrial property, and in the leasing market we see a serious undersupply of space across many Raine &Horne offices. At the same time, e-tailing is fast-tracking the trend for retail space to be repurposed into cafes, health and wellbeing centres, beauty and nail salons. In the office market, COVID-19 has wrought a degree of change. Earlier in the pandemic, lockdowns sawwork from home practices become mandatory for many businesses. However, an abundance of research indicates that teams are more productive and creative when working side by side in an office environment. What is clear, is that the pandemic has had remarkably little impact on commercial tenants’ ability to manage their lease obligations. The overwhelming experience across the Raine &Horne Commercial network is that only a very small percentage of lessees requested rent relief, and the vast majority were back on track from 1 July 2020. This is not just good news for investors, it also augurs well for the health of Australia’s business community more broadly. The key take-out from this edition of Insights is that commercial property owners looking to transition into other assets have an outstanding opportunity to secure robust prices for their assets especially industrial properties. For buyers, be they small businesses or investors such as self- managed super funds, a well-chosen commercial property still stacks up as an exceptional long term investment. Your local Raine &Horne Commercial expert can guide you towards the property best-suited to your needs.