Insider Tips to Help You Discover How to Succeed with Commercial Property
CBD Office Vacancies
The current state of the various CBD office markets is probably your best barometer of future activity for two reasons. First, the Property Council of Australia (PCA) conducts six-monthly surveys to establish the CBD vacancy rates right around Australia.
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Earlier this year, you read about a funding crisis pending for Property Trusts and Institutional buyers. And this is not helped by the RuddBank failing to materialise.
With a surge in the Share Market since March, several recent capital raisings have helped some of these larger property owners.
However, with the latest hiccup in Share Market confidence, you’re unlikely to see much more capital raised in this way.
Capital Gap
As you can appreciate, the financiers are proving to be rather difficult.
Therefore, over the next two years, you could see a gap of up to $30 billion emerge, between properly valuations and what bank are prepared to fund.
But these problems seem to relate mostly to commercial properties worth more than $20 million.
Because, for properties less than $10 million … the market appears conservatively geared, and is experiencing strong demand — especially for properties in Melbourne, priced under $5 million.
So it is somewhat a two-tiered market … with a number of good opportunities starting to emerge.
An earlier post outlined my view on how the various CBD Office Markets would perform around Australia.
Future CBD Office Vacancies
Interestingly, their take on the level of vacancies is that it will not reach anything as bad as the 1990s.
But Perth, Brisbane and Sydney will be the most affected … and slowest to recover.
Queensland seems to have been hardest hit. And in particular the Gold Coast, where vacancy levels have soared to around 18%.
But the difficulties confronting Queensland (and fellow mining State WA) are not necessarily reflected Australia-wide.
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Even though things may be slowing in Queensland and over in the West … the Melbourne CBD Office market seems to be travelling quite well.
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Will things really change all that much, now that Australia has wall-to-wall Labor governments across the country?
You’d better believe it!
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But first, just watch this short video to gain a quick understanding of these three essential elements that form the foundation of every negotiation.
If you’re new to investing, you might be wondering if it’s possible to manage your own commercial property. The short answer is “yes”, but only if you know what you’re doing.
It’s important to note that owning a commercial property comes with certain legal responsibilities, particularly when it comes to compliance with Essential Services requirements under current Building Regulations.
The current trends in the business have made it clear that office landlords have to cater to the needs and preferences of their tenants. Building owners and managers (who understand and meet these demands) will be able to command higher rents and reduce vacancy rates.
To expand on this, here are four key tips to help attract quality tenants.
