The commercial market experienced some very interesting twists and turns throughout 2023. Namely the increase in land tax coming into effect in January coupled with five interest rate rises between February and November.
Primarily the interest rate increases have undoubtedly created a more measured approach to investment propositions throughout the year, with yields naturally softening in correlation with the rise in the rates. However, it is important to highlight that quality properties are always keenly sought, irrespective of market conditions.
Some results worthy of note include:
9 Livingstone Street, Ivanhoe situated directly opposite Ivanhoe Plaza has sold for $3.520 million. With 1,130 sq metres of General Residential zoned land and a 5 plus 5 year lease to a medical centre, it was keenly contested, representing a 4.3% yield and potential for further development at a later stage.
From a retail perspective, 121 Burgundy Street, Heidelberg a Commercial 1 zoned listing successfully sold on a 3.1% yield, for $1.410 million. An excellent result for a compact allotment of 185 sq metres, and a long-term lease to a dry-cleaning business. A solid investment with plenty of potential and an annual income of $44,000 plus outgoings.
The rental market from an Industrial viewpoint commenced the year at full momentum and currently appears to be in a state of equilibrium, where supply meets demand, with modest but not significant increases in market reviews. The demand for retail and office rentals remains steady, and there are still enticing incentives accessible for high-quality businesses in key commercial areas.
Finally, we are delighted to announce that Miles have acquired the Love Commercial portfolio. This acquisition has significantly increased our overall commercial rent roll. As a result, our team has grown, and we have strengthened and expanded our market share in key geographic locations.
A challenging year now coming to a close – with another interesting year ahead. In 2024, the commercial and industrial sector will continue to be influenced by the land tax increases from 1st January. This will undoubtedly shift the landscape again – however, there will also be some great opportunities ahead both on and off market.
We would be delighted to assist with any real estate questions by calling us on 03 9497 3222, or visit our website for more information and current listings.
Thank you for your business in 2023 and best wishes for a well-earned break over the holiday season.
