Commercial Property Fundamentals
Continue to Improve for Investors


The mid-year report from the Property Council of Australia (PCA) has confirmed a tightening of all major Office markets — except for Sydney and the Gold Coast.

As you can see from the graph, Sydney’s vacancy rate actually increased from 8.3% to 9.3% during the six months to July 2011.

For the remainder of Australia’s office markets, there was an overall improvement — as demand for space exceeded supply, and yields began to firm.

According to Peter Verwer (PCA’s chief executive): “This is a good result, especially now with a lot of uncertainty about Australia’s economic resilience … demand and absorption are well above the historical average, except for the orphan Sydney.”

From this second graph, you will also notice that the Melbourne Office market has been consistently outgrowing Sydney, since about July 2004.

Furthermore, because of Sydney’s heavy dependence upon the financial sector … this growth trend is unlikely to change any time soon.

Melbourne, on the other hand, has its Office demand spread across a wide number of sectors. And therefore, has been far less exposed to the recent global turmoil.

Bottom Line: Despite all the stock market gloom, the underlying fundamentals for Commercial property are strong — particularly in Melbourne.

And historically, it is in times like these when shrewd investors have laid the foundation for their extraordinary fortunes in Commercial property.

 

Smart Investor Seminar

Just quickly …

On Saturday 27 August, I have been asked to take the Session on Commercial Property Investing … at this Smart Investor Seminar.

And I simply thought you may have some interest in knowing what’s also being covered at the same time. [Read more…]

Commercial Property:
Pricing Your Finance – Part 2

Last week, you looked at the reasons why lenders view Commercial property in a different league to Residential property, when it comes to finance.

Many things can affect the Pricing of your LoanAnd then, we moved to the various aspects Commercial lenders look at as far as Risk is concerned.

More importantly, just how these aspects will determine whether or not they will actually lend against the actual property you are looking to purchase.

However, what you really want to know is … [Read more…]

Commercial Property:
Arranging Your Finance – Part 1

Commercial property finance is one of those aspects probably the least understood — and therefore, can lead to some are rather poor decisions by investors.

Take care when arranging your Commercial LoanThe most important thing you need to grasp is that there are basically no hard and fast rules about the various factors like … the leverage that is available … costs associated with Commercial loans or … the actual lending criteria most financiers and adopt.

When it comes to Commercial finance, everything has to be viewed in relation to the strength and size of each particular deal. [Read more…]

Grasping the Nettle

Last week’s article entitled: “OK … What’s Really Going On?” seemed to capture the interest of quite a few readers.

You have to ask whySo, tell me … how many people have you spoken with lately, who are fearful about the European and US debt problems?

And have you stopped to find out how few of them realise that the problems confronting those countries may actually be GOOD news for Australia.

Perhaps it is worth explaining how that could possibly be — because there are several things you need to appreciate. [Read more…]

Trusted Consultants ~ Part 2:
Financing the Deal

LAST WEEK, I promised to reveal those key Consultants to whom I’d be prepared to entrust my own property deals. So, let’s progress a little further with that.

Perry Finance are problem solversNo doubt you will have experienced your share of problems, when it comes to arranging the finance for a recent purchase you may have finalised.

As you’re probably aware, most vendors are unwilling to enter into a contract in the current market, containing a “subject to finance” clause. Because it would simply tie up their Commercial property, without any certainty of a sale. [Read more…]

Depreciation : 4 Myths Keeping You From
Maximising Your Secret Tax Advantage

Capture The Benefits

Capture The Benefits

Depreciation is probably the most under-used weapon to legitimately shelter a significant portion of your property income.

And as a Commercial Investor, you really do have an unfair advantage over somebody investing in only residential property.

Therefore, let’s now set about dispelling a few of the common Myths concerning Depreciation.
[Read more…]