Keeping your Eye on Building Costs

Every six months, you’ll find Rider Levett Bucknall publish their “Oceania Construction Cost Commentary”. In this posting, you’ll find an extract from their July 2007 publication — which covers both the Australian and New Zealand markets.
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When Your Tenants Leave …

Depending upon what your Lease specifies upon termination, the cost to “make good” the property can vary dramatically. Furthermore, the tenancy fit-out (and original condition) of the property can also impact on that cost.
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Site Contamination Needs to be Addressed

Whenever you acquire a Commercial property, you would normally investigate this as part of your Due Diligence — depending upon the current use made of the property.
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How Hot is the Market?

Every now and then, I’ll have a client call to check just how the market is traveling relative to the 1980s. And there is no question that it’s strong — but you do need to place it into context.

In the last eBulletin, I tried to give you an overview of where things stood. Recently, the ANZ Bank’s research team put out a report — and an extract from that reads …
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Australia’s Skills Shortage — Relief in Sight

You would have seen a fair amount of publicity about there being a looming skills shortage. And with the Construction industry, it still remains a dominant concern.

However, a recent survey conducted by Davis Langdon suggests there is a “glimmer of hope, with varying degrees of easing recorded across all trades.”
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Commercial Property Sales for 2006

As you have probably gathered, the demand for Commercial Property last year was strong.

In a recent article in the Financial Review, a report by CB Richard Ellis calculated that a record of $14 billion worth of Office, Retail, Industrial and Hotel property changed hands in Australia in 2006.

The accompanying table will give you a comparative summary of sales activity over the past 10 years.
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The G+L December eBulletin

By now you are probably winding down, and getting ready for a well-earned Christmas break.

As you’re aware, the purpose of the postings on this site is to give you quick updates on events affecting you as a Commercial property investor.

However, our regular eBulletins are still designed to give you a more in-depth analysis of Market trends — but on a quarterly basis.

The current eBulletin takes a look at where you are in the Property Cycle; and what it is you need to consider.

You can now go to our main website for the complete picture.

“Will there be another Crash?”:http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Thinking-Ahead-3.html

“If there is to be a Crash … When?”:http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Thinking-Ahead-3.html#when

“How widespread will the Crash be?”:http://www.gal.com.au/FREE-eBulletins/Current-eBulletins/Thinking-Ahead-3.html#spread

Understanding the Commercial Markets

You have seen strong growth and investor activity over the past 12 months; but neither of these have been very consistent — whether you look across the nation, or within each of the Commercial sectors.

Let’s take a quick look at each sector; and also consider the likely impact that further interest rate rises may have on your Investment Strategy.
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Commercial Yields are Firming

Property Investment Research estimates that yields on Retail property have sunk to 5.75%, on Office property 6.75% and on Industrial property 7.5%. And some of the major players are starting to look off shore to satisfy the expectations of the members of the Funds. “Read more”:http://www.his-best.biz/files/CommercialYieldsFirm2.pdf …

In an earlier eBulletin, we also gave you an analysis of how “Commercial yields”:http://www.gal.com.au/rsl/private/show/archive/eb2002-12.html vary over time.