September 16, 2016

QUARTERLY MARKET REPORT April – June 2016

Welcome to our quarterly report.  This report provides analysis of all sales, leases and lease renewals by Nichols Crowder and Nixon Industrial, from April to June 2016. (Q4 2015-2016)

In summary the key insights were:

BIG ACTIVITY IN SMALL SPACES

  • 92% of all sales and leasing transactions in Q4 were for properties under 1,000m2
  • The market was cautious in Q4, with 60% of all transactions being for new leases
  • Limited selling stock and the long wind-up to the federal election contributed to the cautious market

SALES ACTIVITY

  • Industrial sales accounted for 77.5% of all sales transactions in Q4, at an average price of $516,000
  • Low interest rates have made it cheaper to buy than to rent, while SMSFs make up a large proportion of lower-priced property sales
  • Sales were strongest in the outer industrial market, such as Carrum Downs, Frankston and Mornington

LEASING ACTIVITY

  • 57% of new leases and lease renewals had an annual rental of less than $30,000
  • Around 19,000m2 of new industrial leasing occurred in Q4, at an average of $78.70psm
  • Average new lease rates for office and retail properties were higher than average lease renewal rates

VACANCY RATE

  • The overall vacancy rate across the portfolio was just 2.9% in Q4
  • This is good for owners as rental returns remain high
  • However, a tight leasing market provides fewer opportunities for businesses to expand

For further information do not hesitate to contact:

Matt Nichols
Moorabbin office
9559 3888

Michael Crowder
Carrum Downs office
9775 1535