As the year begins, we sit down with each of our teams to get their thoughts on what 2018 will hold for the commercial property sector:
Access to major freeways and ring roads will significantly impact which suburbs will strengthen within the commercial property sector in the coming months.
We expect Tullamarine to continue growing due to the ease of access to Melbourne International Airport, rail links and all major freeways, and expect the Campbellfield, Somerton and Epping areas to continue to grow and develop. Again, this is due to the freeway and Ring Road, along with the availability of land, which will allow for both residential and commercial growth.
The suburbs of Ravenhall, Truganina and Tarneit are located within what is regarded as one of Melbourne’s largest and fastest growth corridors and we expect this will be no different in 2018 as the area continues to develop.
Investors should consider industrial investments this year, following strong growth within the sector – these types of investments require very little maintenance and offer a high yield.
Across the board, we have seen industrial land rates increase by over 21 per cent through the southeast band of Melbourne and we expect to see an increase in demand across a number of suburbs, including:
• Moorabbin and Cheltenham – these areas have a serious lack of lease and sale stock and projects coming through for development, which will result in continued demand.
• Braeside – we expect to see a price increase in land values and end product rates due to the lack of available stock. The number of large land parcels recently sold at a high level are likely to be sub-divided, and come to the market at an even higher price.
• Noble Park – we believe this suburb could be a possible dark horse this year as it has not been hit with a price increase (unlike Mulgrave, Clayton and Clayton South) and, as a result, owner-occupiers may look to this suburb as the next industrial pocket to place their business.
Investors should look to these suburbs for future opportunities and to invest in freehold retail with development potential if they are chasing long-term capital growth. They should also consider strata titled office properties, as they are easy to lease and deliver higher yields that retail, showrooms and other asset classes.
In Melbourne’s east there has been a $66million upgrade to Ringwood Train Station and a $665million expansion of Eastland Shopping Centre, which we believe will translate into strong opportunities within the Ringwood area. Ringwood is also located on the fringe of Eastlink and anchored by strong surrounding amenities, which is allowing it to become a multilevel friendly suburb, increasing commercial opportunities.
With low interest rates still in vogue, all sectors of the commercial and industrial market shall continue to see steady demand in 2018. Clients have now adjusted to the trend of lower yields for established tenants with a long lease commitment and adequate security.
We believe inner city freehold retail with redevelopment potential is the strongest investment sector in the Eastern Region.
For more details on any of Melbourne’s suburbs and to discuss leasing & sales opportunities, please contact one of our agents - http://www.cva.melbourne/contact-us