Are Offices “The Go”?

Just take a look around your capital city CBD. And tell me, how many cranes to currently see on the skyline?

Sydney Skyline

Sydney Skyline

In most cities, you could count them on one hand — as there is minimal speculative development occurring right now.
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Where to Invest … Right Now!

Last week, you are given a quick overview of the CBD Office scene around Australia. But one of the tightest spots at the moment is the south-eastern Office market in Melbourne.

A recent study by Jones Lang LaSalle revealed there is only 12,200 m2 of space currently under construction — mainly as a result of cautious financiers not being prepared to support speculative development.

As such, vacancies will fall significantly over the next year or so.
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“Doing Nothing Will Cost You!”

Whenever Investors are confused … the Property Market tends to do nothing and simply moves sideways.

Confusion Reigns

Confusion Reigns


You observed that when the GFC first struck.

People simply put their buying decisions ‘on hold’. And then, frantically played catch-up over the last 12 months … as soon as they realised things were still okay here in Australia.

Over that period, you have seen most Commercial markets around the country showing good growth — particularly in Melbourne.
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Can You Afford to Miss Out?

The other day, we took a look at Commercial property cycles, and where the various Australian CBD office markets might sit.

Currently, Melbourne seems to be “leading the pack”. But you might be interested to explore exactly why that is.

Melbourne Office Market

Melbourne Office Market


Some recent research by Jones Lang LaSalle indicates that Melbourne’s Office vacancy is likely to fall to around 5.4% by 2013.

Several pundits are suggesting it could be even lower.

h3. And the reason why?
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“Cycles Ain’t Cycles”

Overall, Australia has sailed through the Global Financial Crisis more or less unscathed. And from all accounts, Victoria and enjoys the standout economy of all the States.

The Traditional Cycle Has Been Interrupted

Last week, you explored the traditional cycle for CBD Offices — being 18 years from peak to peak. And over that same period, Retail and Industrial properties tend to go through several cycles.

Commercial Property Cycles

However, given Australia’s privileged position within the global scene … my view is you are now at the upswing in the cycle for the Office market. In other words, you are already at the halfway point in the traditional Cycle.
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Commercial Property Cycles

How do you ever understand them?

Before talking to you about Commercial property, let’s take a quick look at Investment Cycles in general.

Investment CycleA recent AFR article contained this rather clever chart … showing an Investor’s mood at different points throughout the Cycle.

My reading would be that Australia is currently at the “Optimism” stage of the upturn — perhaps with some capital cities, a little more so than others. But generally, that’s about where most of us are at the moment.
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“Capture Your Firm’s Full Value”

Last week, we talked about what you could be missing out on … when you find the need to move.

Whenever you decide to relocate to new Headquarters, what are the key things you are seeking to achieve? [Read more…]

Is Negative Gearing for You?

Buying and negatively gearing a Commercial investment property is not forever in one — particularly, with interest rates on the rise.

And if you already have high personal debt … adding to that wouldn’t be a smart move on your part.

Make Borrowing just one of your Tools

Negative Gearing

Negative Gearing

Any gearing you decide to take on, should be viewed as part of your overall strategy — and not there simply to minimise your tax bill.
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Interest Rate Rises …
Are they a Good Sign?

The RBA’s decision on interest rates yesterday came about because of what’s happening here in Australia, rather than in Europe.

It has been made against the backdrop of our exporters having recently extracted massive price hikes for iron or in coal, as a result of China’s strong growth.

Since the global turmoil started in 2008, the $A has climbed by nearly 55% against the $US — and just over 40% against our other key trading partners.

RBA Logic

RBA Logic

This has more or less offset the rise in Australia’s local retail prices, through a sharp decline in the cost of imported items — like electrical goods, clothing, footwear and furniture.

As a result, the NAB’s business confidence index stands firmly positive for the third consecutive quarter. And even more importantly, actually improved throughout the last quarter.

h2. How will this affect Commercial Property?
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Your Baby-Boomer Opportunity!

Whenever you go through a major structural change within society or the economy … opportunities will always emerge.

But you’ll find that Baby Boomers won’t be retiring — well, not in the conventional sense. Most will leave their long-time employment, to establish some type of small consultancy business.

In the past, many well-known firms simply evolved as a result of one generation following the next into the family business.

Traditional Family Business

Traditional Family Business

Invariably, sons (and even daughters) left school to join their parent’s firm. It was a handy way to ensure easy succession; and stood Australia in good stead throughout the 1900s. [Read more…]

“How Baby Boomers affect
your Commercial Property”

Last week, you hopefully gained a clearer understanding of the timing (and impact) Baby Boomers will have on Residential property, until around 2025.

Most people probably feel all this would have little or no impact on Commercial property.

And for some of you, that might be true. But I suspect there are many Boomers, where the effect could be quite devastating.

And here is the reason why [Read more…]