The commercial property market didn’t experience any major changes in 2017 and it seems as though the current year is going to be similar.
Property investment in the commercial market is expected to remain strong, despite a decrease in the number of Chinese investors. The Chinese government recently listed property as a restriction for investors, and local changes to taxes is also drawing them to other overseas markets. According to the investment bank UBS, 78% of overseas property transactions by the Chinese occurred in the past five years. London was the first real estate market to be targeted by Chinese investors, followed by Australia. Capital gains tax exemptions, previously available to overseas buyers, were removed in the 2017 budget, making it harder for investors from overseas to purchase.
The Biggest Market
As online retailing continues to increase, local retailers are feeling the pinch. As such, the retail market is expecting to see some major store closures in 2018 – starting with Mountain Designs who recently announced the closure of almost 50% of their retail stores. Demand for space at shopping centres is also expected to decrease and the sale of the Westfield enterprise has come as a major shock to many in the property industry.
Demand for industrial property is expected to increase though, benefiting directly from online retailing. Technology companies in particular will find that their business improves, leading to more leasing of warehouses and distribution centres.
It’s expected that Brisbane will see tightening in leasing for the office market, much like the rest of the country. Demand for space is optimistic, and office investment should remain strong thanks to attractive net face rents fixed with high yields.