Commercial Property Going Forward in 2023

WITH A CLEARER OUTLOOK for interest rates, Commercial property is expected to bounce back in 2023. Particularly, with several pundits suggesting the RBA could well start to ease rates again later this year.

Understanding the facts

There will be some investors, who may initially take a cautious approach.

However, according to Savills Research, most will fail to appreciate that the current leveraging by major investors presently sits at an average LVR of about 35% – compared with a 60% to 65% peak LVR, during the GFC.

Plus, falling bond yields will see Commercial property yields start to firm again for well-leased, well-located quality properties.

The impact of COVID

Clearly, this has had (and continues to have) an impact on Office occupancy levels – especially within the CBD.

However, workers are now choosing to spend more time in their offices.

This is mainly because they miss interacting with their colleagues. But also to remain visible to their bosses, and enhance their chances for promotion.

With a four-day week being trialed by a growing number of firms, fewer employees will end up choosing to work from home. And those returning to the office will now occupy a greater “footprint” – progressively absorbing the interim vacancy caused by COVID.

Speak Your Mind