Raine & Horne Commercial

VIC - Brunswick Across Brunswick, retail property is yielding 5.0%, office assets 4.0-5.0% and industrial property is delivering yields of 5.0-7.0% depending on location. Tim Frlan of Commercial Brunswick says it is difficult to predict how retail yields will fare given the uncertainty of the pandemic, however he notes that the office market has experienced significant disruption as a result of COVID-19 and the direction of yields will be clearer when JobKeeper stimulus ends in March 2021. In terms of industrial yields, Tim expects prices to rise and yields to fall by around 0.5% driven by demand for warehousing as a result of online sales and demand for manufacturing space. At present, industrial property is experiencing low vacancy rates of about 5.0%. In the retail market, vacancies are around 20.0% though this can be higher for some of the main retail strips such as Chapel Street. Tim notes, “COVID-19 restrictions and lockdowns have slowed retail and office businesses, although industrial is ticking over.” He adds the medical sector is driving demand for industrial warehousing for use as distribution centres for medical products such as face masks and hand sanitisers. In regards to leasing, Tim says, “most tenants are happy to stay, and expect to make money in the long term.” Commercial Brunswick were instrumental in the sale of a $7.3 million development site in highly sought-after Balwyn, which has zoning for a high density development. 41 - Tim Frlan tim.frlan@brunswick.rh.com.au