Melbourne Commercial & Industrial Property Market Review - August 2023
“These industrial sales illustrate the
resilience of this defensive
asset class.”
The final quarter for FY23 has seen a shift in activity in all commercial asset classes. Several Vendors have decided to act in the changing rate environment, and we have enjoyed some stunning industrial land and building sales in the last 60 days. These industrial sales illustrate the resilience of this defensive asset class.
The gap between capital values and rental returns has seen yields for secondary grade assets soften and we don’t see that changing in the short to medium term. However, the continued lack of supply for prime and A grade industrial assets should see industrial rentals continue their growth over the short term as construction costs and land values remain comparatively high in 2023. Opportunities to regenerate a number of Melbourne’s older industrial areas will remain a focus for developers as green field opportunities remain expensive to develop.
Overall investors and occupiers alike are trying to read the market and this by its nature will lead to some consternation and stultification.
Mark Bond, Facey Property