Commercial property is back in business. Interest in commercial investment has been reignited on the back of the confidence in the residential market. So where is this money coming from? Investment in the commercial sector has been riven by a range of investors, these include individuals with cash deposits, sydnicates as well as self-managed super funds - which have become increasingly popular in the recent years. Similar to the residential market, the commercial investment market has been driven by a mix of local and foreign investors.
The commercial investment market kicked in at the start of 2014 and is now buoyant. Properties are selling on net annual yields from 2.5% to 8%. The banks renewed confidence in the commercial investment market has helped substantially. Ever since the GC in 2007 the banks have had no appetite for commercial property. At the time businesses were visibly struggling so banks did not have confidence in lending into the commercial market. Now that there has been an improvement in the NSW market things have changed in Sydney and the regions of NSW.
Source: REINSW - September 9 2014