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next five years

Commercial Property: Green Vs Not-So-Green

Your Green-Star Rating can affect your Building's ValueA week or so ago, I briefly explained to you the NABERS “green rating” system, as it relates to Commercial property.

Recent research (undertaken by the Universities of Western Sydney & Maastricht in the Netherlands) has been released by the Australian Property Institute & Property Funds Association of Australia, under the title of Building Better Returns. [Read more…]

Suburban Offices Set to Surge

Over the past few weeks, you have been reading articles about the various Office markets around Australia.

As such, you would now be aware of how each capital City compares, in relation to its … Vacancy rates … Rental levels … and expected Capital growth.

 You can expect definite Rental Growth in the city fringe.However, most of that commentary has been focused upon CBD Offices. And as a result, people have been enquiring about just how the Suburban Office markets are also likely to perform, over the next few years.

Clearly, a rent differential exists between the City and Suburban Office markets. And obviously, that rental gap will also vary, as you move around Australia. [Read more…]

Asian Thrust will Prove Good for
Australian Commercial Property


Following the global financial crisis, the extent of trade imbalances has eased somewhat between Advanced Western economies and the Emerging Asian economies.

The gap between China’s huge current-account surpluses and America is out-of-control deficits may have temporarily narrowed. But the IMF believes the massive disparity will return, as world economic activity improves.

The ups and downs of exchange rates and capital movements are seen by the US and the Western economies as a method of ensuring a proper allocation of resources.

Whereas, it seems Asian countries view exchange rate movements as an annoying distraction from controlled expansion of their “home” economies. And amassing foreign currencies is seen as the best protection against a re-occurrence of the 1997 Asian financial crisis.

How will this affect Commercial Property Investment?

China’s stated goal of 7% growth over the next five years (plus its dependence upon coal, iron ore, LNG and nickel) will provide enormous economic upside for Australia.

On this basis, China’s contribution to global economic output will rival that of the European Union within five years; and even the US, within the next 10 years.

While Australia’s mining boom may help to create a “two-speed economy” … the flow-through benefits will be felt by everyone — to a greater or lesser extent.

Clearly, the growing mining (and mining-related) sector will need to be physically accommodated.

Similarly, the support services and businesses like … accountants, lawyers and the merchant bankers … will all need to engage more staff. And that means we’ll need to construct more office buildings to house them.

Bottom Line: Until we do that (which can take between 3 to 5 years), rentals for both CBD and suburban Office space will continue to escalate those capital cities where the vacancy rates currently sit at around 7%, or below.

Therefore, right now, that means you should be looking to snap up something in Melbourne, Sydney or Perth. And then, ride the current growth cycle through to 2018.

 

Can You Afford to Miss Out?

The other day, we took a look at Commercial property cycles, and where the various Australian CBD office markets might sit.

Currently, Melbourne seems to be “leading the pack”. But you might be interested to explore exactly why that is.

Melbourne Office Market

Melbourne Office Market


Some recent research by Jones Lang LaSalle indicates that Melbourne’s Office vacancy is likely to fall to around 5.4% by 2013.

Several pundits are suggesting it could be even lower.

h3. And the reason why?
[Read more…]