Powered by MOMENTUM MEDIA

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Investors eyeing new property markets

Strong rental returns and low interest rates are driving traditional residential investors to seek yield in the industrial property market, new data suggests.

Sydney-based sales and asset management company Bawdens Industrial said the NSW capital can expect rental increases of between 35 and 45 per cent over the next three to five years due to an undersupply of industrial property.

Managing director Barry Cawthorn said the low interest rate environment and falling cost of money domestically is creating ideal conditions for investors.

"The owners of residential property and developers with land banks who have made strong returns in recent years are cashing in and now moving into industrial property to capitalise on higher returns," Mr Cawthorn said.

Advertisement
Advertisement

"We are witnessing a shift towards investors purchasing industrial property in their self-managed super funds to generate an income for life."

According to Mr Cawthorn, Sydney investors are discovering that a small industrial strata offers significant advantages compared to a residential investment.

"The security bond is usually bigger (three months), leases are longer – typically three to five years – less capital outlay is required for smaller units and rental yields are generally higher," he said.

Bawdens also noted that the most recent Property Council/IPD Australia All Property Index showed the average annual return of industrial property was 15 per cent in the 12 months to 31 March, while property shares saw a return of 9.2 per cent, bonds recorded a 1.6 per cent return and balanced share portfolios went backwards by 11.3 per cent.

The average rental income yield for industrial property was 6.6 per cent, plus 7.0 per cent capital growth, the best it has been since 2008.

 

Investors eyeing new property markets
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
confused - are these pre or post tax being deducted? It talks about take-home pay so just want to clarify....
Anonymous - The problem is massive over-metroplitanisation. Income tax and GST bias businesses to locate where they can get customers and workers for less effort.......
Skeptic - Having money squirrelled away in superannuation is comforting in some ways, but I am concerned that Australians have nearly three trillion dollars in.......
Dr Livingston - Not so long ago, 5% unemployment was the sought after quantification by the RBA that the economy was doing well. This chase to zero sends unnecessary.......