Newspaper article The Chronicle (Toowoomba, Australia)

Private Investors Refuelling Australia's Industrial Market

Newspaper article The Chronicle (Toowoomba, Australia)

Private Investors Refuelling Australia's Industrial Market

Article excerpt

A wave of private investors, private syndicates and owner occupiers are refuelling Australia's industrial property market, with new research showing sales increasing during second quarter 2009.

The latest quarterly Colliers International Industrial Market Indicators Reports - Spring show, although still down on the previous 12 months, sales have lifted in Sydney, Melbourne, Brisbane and Adelaide.

Malcom Tyson, managing director of industrial property, said market perception revealed we were cresting the bottom of the property cycle, and private investors were leading the charge with sales sub $15 million dominating second quarter 2009.

"In Sydney alone, over 80% of sales activity since the onset of the year has been in this price category and only one sale to date has exceeded $25 million," he said.

"About 75% of these buyers have been private investors with the balance made up of owner occupiers and private syndicates.

"The research also tracked a similar number of industrial vacant possession sales in the market, finding 75% of sales had been less than $5 million each in value and more than 85% of sales were again to owner occupiers and private syndicates."

Felice Spark, national director of commercial research, said yields across the board began to stabilise heading into second quarter 2009 and are now expected to hold steady for the short to medium term.

"Prime grade yields in Sydney are averaging 8.5%, compared to secondary grade yields of 9.25%, while on the Gold Coast the majority of assets that have traded over the last six months are demonstrating yields between 8% and 9%, representing a softening of around 150 basis points from the yield peak recorded during the second half of 2007," she said.

"Initial yields for prime assets in Melbourne have softened by about 50 basis points since the beginning of the year, while investment yields in Perth shifted into the long term average range of 8% to 9.5%.

"Yields in Brisbane are currently achieving 8% to 10% and are expected to stabilise over the short term."

The second quarter of 2009 has revealed a number of significant major sales, with a private investor snapping up a property on Lockwood Road in Erskine Park, Sydney for $43,800,000 in July, a yield of 8. …

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