New South Wales | 19 Anthony Bouteris of Commercial Sutherland Shire says yields in the Shire are around 4-5% for industrial property, and closer to 5% for retail and office space. Anthony expects retail yields to fall, saying “Retail Investors are now looking for a minimum 5% net return”, though office and industrial yields are expected to hold firm as the cost of debt rises. Across the region, vacancy rates are in the order of 5% for office and industrial space, rising to 10% for retail property. Anthony observes that “Owner occupiers still driving demand for industrial property and office space”. He adds, “The majority of our industrial enquiries for sale and lease are companies looking for more space to expand into for storage and distribution.” However, rising interest rates are having an impact. “We are now finding that finance is a big factor in getting deals over the line,” says Anthony. “Banks are tightening on lending, and the majority of owner occupiers are purchasing through self-managed super funds. The majority of big banks tend not to lend to this scenario, so buyers are resorting to second tier lenders, which tend to have higher rates.” As rates rise, Anthony says, “We are starting to get called into more properties, with owners now starting to feel the bite of increased interest rates”. This could see an increase in the volume of commercial properties – across all sectors, come on to the market over the next couple of months. Anthony Bouteris anthony@rhmiranda.com.au Sutherland Shire
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