Despite that environment, the demand for retail investment has remained strong. This is especially true for neighbourhood centres and properties within Perth.
As we move towards 2020 at a rapid rate, research from Knight Frank has provided positive commentary around the Australian commercial real estate market’s future. Forecasts from the group have outlined that capital values and strong returns are on the horizon.
Businesses can be thanking the impact of lower interest rates creating yield compression in the market. Ben Burston, Chief Economist at Knight Frank, has explained that the with a high chance of interest rates lowering even further in 2020, and the possibility of quantitative easing, it is possible to expect the investment market to grow to new heights. This expectation runs in line with the residential forecasts of prolonged resurgence.
It has been documented that the sentiment towards both on-shore and off-shore investors is gaining throughout the Australia investor market. The Perth office market has benefited from a continual run of positive absorption, which in turn has reduced vacancy rates and prime stock. While the overall numbers remained at a higher rate, the market has begun to show signs of early improvement.
Over the coming two years, Perth will experience construction of 61,740 square meters of retails space. Gemma Alexander, research manager of CBRE, has said “Private investment bottomed out during 2018 and is forecast to modestly improve during 2019, before experiencing greater growth during 2020 as new resource-sector projects ramp up, and a state government fortified by stronger iron ore royalties and GST distribution payments can commence slated new infrastructure projects.”
It appears that the commercial investments market in Perth is primed for opportunity. With availability tightening, and finance options easing this may very well be the time to take action. Find your next opportunity here.