The West Australian economy has been one of the strongest performers nationally. The industrial real estate sector has been the asset class to emerge unscathed by the COVID-19 crisis.
Wayne is observing that “Demand for well leased industrial assets continues to run unabated, with a lack of supply leading to yield compression with prime yields presently around 6-7% in WA”.
“With record low interest rates fuelling demand of freehold property, owner occupiers are taking advantage of lower repayments.” Mr Chorley said. Similarly, tenants are taking advantage of the lower repayments compared to rental when buying freehold.
“Although the leasing market is still a tenant’s market, we have seen an uptick in enquiry levels and leasing deals in the past couple of months which has substantially reduced the amount of vacancy.”
“There are currently very few institutional grade large warehouses in Perth available for lease.” Mr Chorley said.
Realmark Commercial’s Executive Director, Mike Rowe, also acknowledged that “The industrial sector has seen some paradigm shifts in the market post-lockdown, with food, logistics and e-commerce in high demand.”
“Food processing facilities with cold storages once seen as being too specialised are now sought after and are being driven by food retailers and pharmaceutical suppliers.” Mr Rowe said.
As a result, the Perth industrial property market is currently suffering from a considerable shortage in supply of large, modern, high truss and clear span warehouse space leading to speculative developments of 8,000sqm.
Mr Chorley said that “Investors are now scrambling to re-evaluate their portfolios, with the industrial market now seen as the preferred asset class for property investors”.
If you’re looking re-evaluate your industrial property or if you’d like further details on how Realmark Commercial can achieve the best result in sales or leasing for you, contact Wayne Chorley on 0423 252 253 or Mike Rowe on 0408 470 074.