Research

The construction sector continues to be tough despite some moderation in costs seen more recently.

Industrial has been the commercial investors go-to in recent years. High demand for stock coupled with a limited supply pipeline and availability of vacant zoned land has resulted in strong increases in rents.

Recent data from the Foreign Investment Review Board shows a change in activity from offshore investors into the Australian commercial property market.

Recent data from Foreign Investment Review Board for June 2022, highlights foreign ownership of agricultural land has reduced the last two consecutive years.

There is no mistaking the difficulty across the CBD office markets in Australia, notably Sydney and Melbourne, with prolonged high vacancies of 11.5 per cent and 15 per cent respectively which are not tipped to improve quickly.

Commercial property investment has been limited in 2023 across most asset classes and regions around the country. However, across the tourism sector, we have seen an inverse response to investment activity.

Over the last three years there has been a significant increase in new business starts across the country.

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.