Research

Historically there has been sizable investment into commercial assets outside of traditional metropolitan locations. Local private investors have been the greatest buyer type.

The commercial property markets have had a tough 2023, with interest rates growing at their fastest pace on record, making it difficult to obtain finance. As a result we have seen a significant reduction in investment activity.

The issue of WFH and the death of CBDs have dominated the headlines over the past few months. Office occupancy levels have taken a dive in many markets as employers grapple with hybrid working styles becoming the new norm.

Investor interest in self storage assets remains strong.

The pandemic did much to pressure the tourism market, with lockdown restrictions forcing border closures, and the grounding of planes which saw both domestic and international travel halt, hurting Australia’s tourism industry.

The reduction of staff in our CBDs has impacted other segments of the market, such as retail and car parking.

Over the last ten years we have seen a growing number of buyers invest in commercial assets. This was highlighted in particular during COVID-19 where interest rates hit rock bottom and investors looked to diversify their portfolios.

The office market has been through a tough few years, with COVID-19 changing the way tenants interact with offices, resulting in changing income profiles and demand for investment.

After a robust 2020-2022 period where sales volumes peaked for investment grade stock, the rising interest rates have put a dampener on ongoing investment across all property types.

Growing interest rates and uncertainty surrounding their movement, together with high inflation causing investors to be more considered in their property decision making, while some buyers have completely retreated from the marketplace.

After reaching a new high in sales volume in 2022 of $1.07 billion, service station investment has taken a hit in 2023 recording just $66.8 million in the first five months of the year.

With interest rates still moving upward, commercial investment activity continues to take a hit.