As a result of the recent interest rate reduction, investors are set to purchase more industrial assets throughout New South Wales, according to Colliers International.
Gavin Bishop, National Director of Industrial at Colliers International, expects there will be a number of industrial portfolios that will come to the market this year due to a reduction in price for industrial assets.
According to Gavin Bishop, purchases in the industrial property market are being driven by the increasing difficulty of acquiring large land banks in Sydney and a trend towards owner-occupiers.
“We expect to see an increase in demand from owner occupiers and developers,” Mr Bishop said.
“Some tenants will become owner-occupiers as they will find it more cost effective to own rather than lease. An increase in activity from industrial strata developers is likely, due to a forecast increase in industrial unit demand.”
Gavin Bishop purports that strong investment demand will continue and prime and secondary grade yields will tighten further throughout this year with a number of industrial portfolios coming to the market.
The pre-lease market has already started the year well and an improvement in leasing demand is predicted for the rest of the year.
Gavin Bishop predicts that WALE and covenant strength will continue to be the main focus for most investors.
The key industrial areas expected to see strong capital growth for investors include: