The commercial market has certainly experienced some ebbs and flows throughout 2022.
With a relatively quiet start, the market had a phenomenal 7-8 months between February and September with some exceptional results, particularly within the Industrial sector that saw competitive bidding from multiple parties at auctions and some off-market transactions highlighting the demand for vacant possession warehouse propositions.
With eight interest rate rises in eight months, including another .25 points this week for the RBA December meeting, naturally there is going to be an impact in buyer demand within the marketplace, particularly reflecting on yield sales as investors stop to consider decisions regarding acquisitions.
However, the run through to the end of 2022 has been fairly relatively steady and consistent over the past two months.
Notable sales include:
59 St Hellier Street, Heidelberg Heights which sold in October at auction for approx. $3.3 million with an existing income stream and long-term potential.
147 Northern Road, Heidelberg West sold a few weeks ago with four bidders for $856,000, reflecting a 5.9% yield
3/18-20 Redland Drive, Mitcham also sold strongly under auction conditions with four bidders and a sale price of $765,000
We have a number of vendors who have elected to wait and launch campaigns in early 2023, including an exceptional industrial site in Malua Street, Reservoir. 3,200 sq metres of land of 6,000 sq metres and we anticipate interest between $5.5 and $6 million.
Industrial leasing remains remarkably robust solid with a limited supply of stock resulting in a lift in rental rates, whilst retail leasing is better than anticipated, but remains challenging with strong incentives offered to quality tenants.
164-166 Burgundy Street in Heidelberg has seen four parties submit offers in the past fortnight and we are now proceeding to leases with a semi-Government tenant on excellent terms.
We look forward to a strong start in 2023 with several campaigns preparing to go to market.
Please don’t hesitate to contact myself or one of our team if we can assist with any queries regarding the market or ongoing management assistance with your commercial portfolio.
Best wishes for a very healthy and happy festive season from all of us at Miles.
