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Market Wrap

Commercial Real Estate 2020 Forecast

As 2019 draws to a close we look at where the commercial real estate sector is heading. The low interest rates are certainly a contributing factor and something to keep in mind as we move into a new decade as these will continue to impact returns.

Commercial versus residential yields

Commercial yields are currently quite low, with some strip retail assets sitting at approximately two to three per cent – but these are still more attractive than the returns an investor would get on a residential property.

“As with any investment, it’s important to do your research. One key thing to consider with commercial real estate is the asset class, or property type, as this plays into the returns,” says hockingstuart Commercial Director Nick Mavrodoglos.

Other types of commercial properties to watch for

One asset class worth considering in 2020 is industrial space. This comes off the rise in e-commerce and logistics, fuelling the need for quality and sizeable warehouse space. We expect to see many of the industrial properties in the outer suburbs of Melbourne get snapped up. The same rings true for well-positioned mid-sized commercial space.

If you’re considering commercial real estate investment, make an enquiry with our commercial team today.

market wrap , Commercial , commercial real estate