Insider Tips to Help You Discover How to Succeed with Commercial Property
The Queensland economy may be slow to recover from all its natural disasters. But it’s Industrial property sector has been quick out of the blocks.
The boom in Queensland gas now has Brisbane with the lowest vacancy rate for Industrial property.
Next comes Melbourne — with Sydney well back in 3rd place, according to a recent survey by Knight Frank.
And increasing demand will put further upwards pressure on rentals … thereby, encouraging more developers into the market. [Read more…]
The Commercial property market is driven mainly by supply and demand — especially Offices.
And therefore, with …
… this means a looming shortage of Office space around Australia — with rentals poised to rise sharply. [Read more…]
Last week’s inflation figures were certainly much better than expected.
As such, there had been considerable political pressure placed on the RBA from by the government to cut interest rates this week.
Retailers were virtually pleading with the RBA to do so. Plus, homeowners were also looking for some relief in the run up to Christmas.
However, this is probably the last interest rate cut by the RBA for quite some time. To understand why, you need to cast your mind back to when the GFC began in 2008.
At the time, business investment was falling.
This is unlikely to occur from now on — because planned mining investment (at $430 billion) is three times greater than in 2008, representing about a third of Australian’s GDP.
And overall, Australia is said to have around $900 billion of business investment in the pipeline.
Furthermore, our main trading partner (China) is now far less dependent upon Western countries for its growth.
In 2008, China’s 12% per annum growth in GDP reflected a 3% to 4% component of exports to the West. While this year’s 9.5% growth in GDP was basically driven by domestic demand — with virtually no exports involved.
Overall, there is said to be around $900 billion of business investment in the pipeline. Add to that the improved stability of Australian banks, with their reduced offshore exposure and improved domestic deposits. Plus, an increase in the Tier 1 capital ratios.
Finally you also need to remember the RBA’s cash rate has now fallen from 7.25% in 2008 to its current level of 4.5% today.
Bottom Line: Apart from the current turmoil in Europe, Australia’s underlying fundamentals are solid. And these augur well for strong growth in Commercial property over the next 5 years.
To reduce interest rates any further would only serve to artificially inflate asset prices — rather than allow the market to grow organically … based upon genuine, sustainable demand.
Last week, to the IMF gave the Australian economy a positive report card — with a projected growth of 1.8% for 2011, and 3.3% for the ensuing 12 months.
Clearly there is international concern about the state of affairs within Europe and the US.
However, that belies the positive impact being provided by the rest of the world.
Although China’s growth is slowing, it still remains at a healthy 9% per annum; and India is not too far behind at 7.5% per annum.
When you add to that Latin America at 4%, and parts of Africa at close to 6% … you then start to see the northern Atlantic problems in some perspective. [Read more…]
The market for Industrial property in Melbourne has remained strong over the past 12 months — enjoying a solid demand from tenants, owner occupiers and potential investors alike.
According to Savills Australia, leasing activity for the twelve months to 30 June this year was up by more than 7% on the five-year average for Melbourne.
The dominant tenants clearly came from the retail and logistics sectors — with over 740,000 square metres being leased. And of that amount, just over 200,000 square metres was by way of pre-commitment.
And according to recent research by Colliers International, the current level of rentals and capital values showed increases of between 5% and 18% across the Metropolitan area, during the last financial year. [Read more…]
The RBA appears to be performing a rather fine balancing act.
Its Board knows rising inflation is about to emerge. And this is only temporarily masked by a poor March quarter, following the nation’s flooding earlier in the year. [Read more…]
YOU WOULD no doubt be aware of the benefits of “Negative Gearing”. But most investors have a very poor understanding of how much more money Depreciation can actually put back into your pocket.
Even if the Commercial property you plan to purchase might not be brand-new … you are able to “up value” the various components within the building, to reflect their actual current-day value.
By doing that, you are then in a position re-depreciate them, and gain the maximum tax benefit for your bottom-line. [Read more…]
Size-wise, as a proportion of Australia’s economy … Manufacturing and Mining contribute more or less the same output.
However, Mining’s investment spend is currently more than three times that being spent by the Manufacturing sector.
All the media attention has mainly been focused upon this disparity. But that doesn’t really tell you the complete story — as you can see from the first of these graphs. [Read more…]
Yesterday, the Reserve Bank left the cash rate unchanged at 4.75%. And these graphs will help to explain their current dilemma.
For the time being, the RBA’s focus is upon “inflation excluding volatile items” — mainly because of the various natural disasters, both here and overseas. [Read more…]
Around Australia, Commercial clearance rates at auction are now about on par with Residential property — averaging at around 50%.
Victoria seems to be leading the way, with Commercial clearance rates for some types of property approaching 70%.
New South Wales is running about six months behind at? around 60%, with firming yields. And Queensland is probably a further 12 to 18 months away in its recovery. [Read more…]
Late last year, Citigroup published this chart depicting Australia’s reliance upon export markets within the Asian region.
Clearly, Australia is running well ahead of other western countries, with our exports representing over 6% of GDP to emerging Asia. And this is twice the level it was just six years ago.
[Read more…]
WHETHER YOU ARE an investor or an owner-occupier, there are important factors to consider when purchasing a commercial property.
In a previous article, I mentioned a helpful App to assist in shortlisting potential properties.
INDUSTRIAL ESTATES are often strong investments due to their versatility and spaciousness, making them ideal for accommodating diverse industries and businesses.
Not only are industrial properties lucrative investments, but they also generate significant depreciation deductions.
Even seemingly ‘empty’ properties hold valuable deductions – which is why this article delves into industrial estates and highlights hidden deductions.
SO, YOU HAVE decided to take the plunge into Commercial property investing. Smart move! But where do you start?
Well, as any serious investor will tell you, having a team of trusted experts by your side is essential for success. These are the people who will guide you and help you navigate the complex world of property investment.
AS THE COMMERCIAL LANDSCAPE is constantly changing, it’s essential for businesses to remain up-to-date with the latest policy developments that may impact their financial strategies.
On 30 June 2030, temporary full expensing ended. Consequently, the Small Business Energy Incentive was introduced and the Instant Asset Write-Off was temporarily extended to a lower level.
FOR WHAT IT’S WORTH … my view is that there is growing evidence to suggest inflation will not be as sticky as many pundits would have you believe.
Despite a recent surge in residential rentals, Australia’s inflation seems to have reached its peak and is expected to rapidly recede.
And that’s evidenced by the June figures just out, showing that inflation has fallen from 7% to 6% per annum, over the last quarter.
AI IS POISED TO HAVE a significant impact on commercial property investing by revolutionising various aspects of the industry.
Here are 7 ways in which AI is expected to affect commercial property investing.
“SUSTAINABILITY” IS NO LONGER a buzzword, but a vital element of any responsible business practice.
In this article, we’ll discuss how businesses and owners of commercial buildings can improve their sustainability and use depreciation deductions to help recoup costs.
