Raine & Horne Commercial

At a Glance - The KeyMarket Drivers Investors seeking healthy yields and low volatility Low interest rates are encouraging investors to look beyond cash, and seek assets offering attractive returns without the volatility seen on sharemarkets through 2020. Commercial property fits this bill, with the potential to deliver healthy net yields and long termvalue growth. Changes to our way of life and doing business COVID-19 has underpinned ongoing growth in online retailing, which has served to increase demand for warehousing space. At the same time, lifestyle shifts are seeing traditional retail properties repurposed into gyms, wellbeing studios, and cafes. COVID-19 has seen a 10% spike in newbusiness registrations, whichwill drive additional demand for commercial space . Low Interest Rates Interest rates in Australia are at record lows – and the Reserve Bank has made it clear that rates will remain low for some time. This is giving business owners an opportunity to invest in their premises as it is often cheaper to own rather than lease commercial space. Relaxation of credit laws fromMarch 2021 is expected to further support the trend to commercial property ownership . Tight supply The boom in residential property values over recent years has seen a number of commercial properties make way for residential developments. Coupledwith limited development of new industrial estates, many Raine &Horne Commercial experts are reporting a significant undersupply of commercial properties, especially industrial assets, driven by high levels of buyer demand. Given the time taken to expand the supply of new stock, this supply/demand imbalance looks set to continue for some time.