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As the residential property market continues to soften due to the tightening of banks’ lending requirements and the increase of their respective interest rates, investors’ eyes turn to the commercial property market in search of favourable income streams and value-add opportunities to bolster their property portfolios.
Commercial property yields have fallen from 7.3% to 5.25% since 2009, according to a report in the Australian Property Journal earlier this year. In some cases, we have witnessed property values double in the past three years post acquisition, particularly in the CBD and North Sydney markets.
The commercial real estate market in Sydney remains a highly contested market for offshore capital due to its robust economic rudiments, transparency and enhanced returns compared to other global property investment markets.
Owing to significant increase in both office and retail rents, coupled with all-time low vacancy rates in the Sydney CBD and North Sydney markets, we are seeing a shift from occupiers and investors moving to fringe metro areas close to new and improved transport and roads infrastructure projects, in search of a more affordable alternative.
Here at CI Australia, we continually strive to understand market drivers, and look for future trends and opportunities which will unlock real value for our clients. That's why we are driven to help our clients understand what this current cycle means for your assets. If you would like to chat with one of our expert property consultants, don't hesitate to contact our passionate team on 02 9925 0000 (North Sydney) or 02 8238 0000 (Sydney CBD).