With the interest rate hikes and rising inflation continuing on from 2022, confidence across the board has been rocked, including within the Australian commercial property market. So, what commercial property trends we can expect for 2023?
Here at Broadway, we came across an interesting article by industry publication The Urban Developer, where industry experts have outlined the commercial property trends they predict will present this year. You can take a look at the whole story here, but here are our chosen highlights.
- A stronger focus on alternative commercial property opportunities, including healthcare, agriculture and real estate credit.
- More office assets will be brought to market.
- There will be more positive sentiment across the domestic market once we reach peak inflation and interest rates stabilise, and, this in turn, will generate more investor interest in listed REITs and unlisted property investment opportunities.
- High-quality assets will be more resilient, and we will start to see a widening of the prime/secondary yield spread across most sectors and geographies.
- The repositioning of commercial assets will be an important opportunity to suit a lifestyle work environment in CBD locations.
- Tenants and purchasers alike are looking to invest in the most sustainable and technologically advanced buildings with premium amenities.
- Rising interest rates will likely slow local investment but internationally, confidence will remain high due to the increased demand for quality assets.
- Consumers will seek out properties that form part of collaborative work environments, gravitating toward collectives of like-minded businesses and individuals—as leaders continue to usher their teams back to some form of a centralised location
It will be interesting to revisit this article at the end of 2023 to see if the commercial property trends all came to fruition, but for now, let’s look forward and be prepared for the year as much as we can.