Sales
Sales during the last 6 months has been steady but not spectacular. By our count there have been approximately 22 bona-fide sales over the last 6 months (Click on Link to view sales), a feature of these sale is the sale of 3 leasehold properties. Yields for the sales varied from 5.29% to approximately 12% but this property had a large residential income component upstairs. Of the recorded sale we think 5 were sold as investments, and the balance being sold to owner occupiers or developers. One notable sale was the sale of a large industrial block on Portobello Road at $525m2.
We believe the market will remain much the same for the remainder of this year with sales occurring to owner occupiers intermingled with the odd sale to investors. There seems to be a very casual attitude from investors when offering property for sale. The price must be attractive to the buyer, or there is a rent review due with the hope of some rent increase.
Listings are still in very short supply and this is evidenced with low sales volume.
It seems our mortgage rates are going to remain at similar levels for the next 2 years. This may continue to keep the market subdued until mortgage rates start falling.
Leasing
§ General Overview: Leasing Enquiries have been relatively quiet across the board, with many deals both leasing and sales having long negotiation periods with interested parties shopping around.
Industrial Leasing:
§ Recent Activity: Approximately 6 Industrial Properties have been successfully leased in the past quarter. Tidy Industrial Warehousing are leasing at around $150 per m2 plus Outgoings. The older premises are leasing for around the $80 to $95 per m2 plus Outgoings. We have just completed a lease for over 1000m2 industrial premises over $100K Gross including ground rent. The industrial market is still strong with few premises available especially the 200m2 to 500m2 range. We believe the shortage of space will continue while the new hospital build is in the pipeline.
Office Leasing:
§ Recent Activity: The office leasing sector has been relatively subdued with a few entry level spaces and a handful of A-Grade offices been leased. Rentals for A-Grade offices have pushed through the $300 per m2 ceiling (Gross). Lots of enquiries for the C-Grade offices, $100m2 to $130m2 Gross, but many are reluctant to put pen to paper once they have decided on the best property to lease.
Retail Leasing:
§ Recent Activity: In the first quarter of this year, around eight retail spaces have been leased, primarily to entry level businesses with premises below the $20,000 plus GST threshold. There seems to be a few more vacancies since Adam has completed his survey. Click on the link to view Adams latest survey results. (Click on Link)
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