A Growing Economy is Good For Commercial Property

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Homemaker-Centre

HAVE YOU NOTICED how people are generally now acting in a far more positive manner. And that’s simply because they are starting to feel “wealthy” again. [Read more…]

Commercial Property Yields Firm As Activity Improves

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Commecrial-Property-Investing

FURTHER EVIDENCE of an underlying strength in the Commercial property market is now provided by the latest IPD/Property Council index.

PCA-Cap-RtaesDuring 2013, you saw investors (both local and overseas) stride out from the shadows of the Global Financial Crisis. And as this graph confirms, every sector has displayed a healthy improvement in selling yields. [Read more…]

Surge in Confidence Bodes Well for Commercial Property

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Commercial-Property-Confidence

COMMERCIAL PROPERTY stands to benefit from the recent improved business trading figures — which have soared to a 2-year high. And these now fall into line with the NAB Survey’s confidence levels.

As such, many forecasters believe these latest figures (together with the growth in house prices over the past 12 months) now reflect the underlying strength of Australia’s post-mining economy.

Therefore, further interest rate reductions expected by the RBA are unlikely to occur any time soon — if at all. [Read more…]

With Commercial Property … Balance Wins the Day

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Sub-Lease-Space-L

THIS CHART APPEARED as part of a recent article in the Financial Review, by Mercedes Ruhl (30 October, page 41).

The article reassured investors that the anticipated short-term surge in sublease space (within Australia’s CBD Office markets) has simply not eventuated.

“Sublease space spikes at times when the economy is weak and business confidence is low because companies are restructuring and downsizing.”

Furthermore, the article suggests the overall amount of sublease space is expected to fall sharply over the next few months — following the post-election improvement in business confidence.

And of all the capital cities, the CBRE research shows Melbourne has provided the greatest improvement over the past year. [Read more…]

Commercial Property Investors are Relishing the Current Drift

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Confusion
EVER SINCE Julia Gillard announced the September election in February … the ensuring political hiatus has meant almost everything (including our thinking) has simply been moving sideways.

Neither up, nor down … just drifting!

And that is completely understandable — because, when uncertainty reigns … people tend to do nothing.

What are the Experts saying? [Read more…]

Never Cross Collateralize Your Loan Arrangements

Cross-Collateralizing
Part 1: Don’t be easily Swayed by your Bank.

A COMMON piece of advice given by mortgage brokers to Commercial property investors — at least, by astute brokers — is to keep securities for each loan separate. In other words, any form of Cross Collaterization (as it’s known) is to be avoided at all costs.

So, just what is Cross Collaterization; and why is it so bad?

Put simply, it is the combining of one mortgage registered against two or more properties (or sometimes even your business) as security. [Read more…]

Industrial Property Starts to Makes Sense

Industrial-Property
INTERESTINGLY, the Industrial property market in metropolitan Melbourne still remains the largest in Australia.

The market has evolved significantly over the last two decades — largely underpinned by the strong growth in supply chain sectors (ie: the transport, logistics and distributions sectors).

In addition, there has been significant infrastructure investment, population and workforce growth … along with the entry of major institutions and developers. [Read more…]

Melbourne Office Market is Holding Its Own

Melbourne-OfficesMELBOURNE is Australia’s second-largest office market, and has remained relatively resilient since 2010.

A range of factors supported this, including … limited new supply and growth in absorption (driven by Australia’s economic recovery during that period).

Underlying Strength

On the demand side in particular, the size and diversity of Melbourne’s white-collar workforce was a key reason supporting the market’s resilience, although on-going staff reductions in the finance and government sectors is lessening demand. [Read more…]

How Will the Global Scene Impact Commercial Property?

The disparity in global Office Yields makes Australian Commercial property very appealing to overseas investors.YOU NEED to look “behind the curtain” … and not allow yourself to become concerned by the recent headlines. Just remember: Media companies need to make sure their newspapers sell.

Last week, share market speculators drew breath rather sharply … as China’s 3-month growth in GDP to March, came in at “just 7.7%”.

True, this was down from the expected 7.9%; but it was still in line with China’s overall growth, throughout 2012.

However, let’s get real: Compared with anywhere else in the world, 7.7% is clearly an enviable figure. [Read more…]

Commercial Property: The Interest Rate Dilemma

Interest-RatesSHOULD YOU be fixing the interest rate for the term of your investment loan … or simply running with the best variable rate?

Lurking behind that question is another concern: Will interest rates fall any further; and if so, by how much?

The Case FOR a further Interest Rate Cut [Read more…]

Does a Solid Sales Increase in February Mean the Retail Sector is Now Back?

Strip Centres are still strugglingYOU WILL quickly find that there are two different schools of thought:

  1. After much hibernation, Retail property is set to surge again.
  2. With the high dollar, and growth in online shopping, the Retailing has much catching up to do.

Despite Australia having been mostly sheltered from the global financial crisis, retailers (especially in strip shopping centres) have been doing it rather tough.

Before the GFC, Retail property yields had plummeted. In some cases, as low as 3.5% per annum — with investors clamouring for what they saw as “sexy property”. And they believed values would always increased dramatically. [Read more…]