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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In earlier postings and eBulletins, we have given you a fairly detailed look at the Office markets in the various capital cities. And this is primarily because they represent the largest component of total Commercial Sales.

However, we feel you would probably appreciate a quick overview of both the Industrial and Retail Sectors as well (courtesy of Charter Keck Cramer).

h3=. Industrial Sector in 2006

|^{width:20%}. _Brisbane_ | $589 million transacted in 118 deals – where Owner Occupiers accounted for over 60% of these. Investment activity was up by 26% on 2005.|
|^. _Sydney_| $1,079 million transacted in 87 deals. 2006 was down 16.4% on 2005, and 10.4% on 2004. And Owner Occupiers were down on 2005 to $139 million.|
|^. _Melbourne_| $660 million transacted in 98 deals. Prime investment demand was strong — with yields firming to between 6.75% to 8% (averaging at 7.25%).|

h3=. Retail Sector in 2006

|^{width:20%}. _Brisbane_ | $845 million transacted in 40 deals. Neighbourhood centres represented nearly 60%. While investment activity slowed, yields firmed for lower-priced property.|
|^. _Sydney_ | $1.690 million transacted in 33 deals. Sub-Regional centre sales were strong — representing about 45% of the total. Overall spending was up on 2005; but it was well below 2004 ($2.189 million).|
|^. _Melbourne_ | $985 million transacted in 18 deals, over $5 million. However, Super Regional (Highpoint City) represented $621.2 million of this figure. Total sales numbers were up 50% on 2005, as investors responded to lower yields — plus the uncertainty with interest rates and petrol prices.|

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