Savills : Industrial Sales Up 60% in South-East in 12mths
July 31, 2015 at 05:06 am EDT
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Industrial property sales have hit a post GFC record breaking year in Melbourne's South-East industrial market with year to June figures revealing sales of $616 million, up nearly 60 percent on the previous 12 month period and 75 percent on the five year average, according to Savills research.
Savills Notting Hill office director, Lynton Williams said the figures were in line with anecdotal evidence of a pick up in the market over the last six to eight months.
"The data revealed 80 properties (over $2 million) sold in the 12 months to June, an 86 percent rise on the 43 properties sold across the South-East market in the previous 12 months and 70 percent up on the five year average of 47.
"We were expecting a rise on last year based on our anecdotal evidence, but these figures are surprising and great news for the south-eastern market," Mr Williams said.
According to Savills Victorian Head of Research, Glenn Lampard , the 80 properties sold in the south-east comprised more than half of the 144 properties sold across Melbourne.
"The south-east was a significant contributor to the $1,422 million in Victorian industrial sales in the year to June which was up from the $1,305 million in the previous year and significantly up on the five year average of $950 million," Mr Lampard said.
Key South-East sales included: (all agents deals)
4 Kingsway Crt, Moorabbin - $22.6 million
13-15 Joel Crt, Moorabbin - $19 million
215 Browns Rd, Noble Park - $20.8 million
495 Blackburn Rd, Mt Waverley - $63 million
Estate One, Danendong South - $39.25 million
Kingston Distribution Centre, Braeside - $36.6 million
Mr Lampard said while private investors had been the most active in the South-East market with 27 percent of the stock reported sold and the highest number of transactions at 38, owner-occupiers had also been prominent players with the market recording the highest percentage of owner-occupier sales across Melbourne at 19 percent compared with a total market average of 12 percent, with low interest rates a significant contributing factor.
"It is no secret that the investment market generally has been very good over the last couple of years with low interest rates and yield the key drivers and in the South-East industrial market owner-occupiers have been more than conspicuous participants," Mr Lampard said.
Mr Williams said the robust market had seen investment yields for prime industrial property in the South-East fall 50 to 100 basis points over the last twelve months to a current range of 6.75 to 7.75 percent.
"Industrial yields are firming however they continue to offer some of the best returns of any asset class to investors while providing owner-occupiers with a premises with the potential to add to the business bottom line," Mr Williams said.
The Australian commercial property market delivered investment returns of 10.7 percent for the year to March, according to investment advisor, MSCI, led by the industrial sector with annualised returns of 12.4 percent.
Savills plc is a United Kingdom-based global real estate services company. The Company operates through a network of offices in the United Kingdom, Europe, Asia Pacific, North America, Africa and the Middle East. The Company's range of services covers various segments, which include residential, office, industrial, retail, leisure, healthcare, rural and hotel property, and mixed-use development schemes. Its businesses include Transaction Advisory, Consultancy, Property and Facilities Management and Investment Management. The Transaction Advisory business stream comprises commercial, residential, leisure and agricultural leasing, tenant representation and investment advice on purchases and sales. Its Property and Facilities Management business includes management of commercial, residential, leisure and agricultural property for owners. Its Consultancy business includes a range of professional property services, including valuation, project management and housing consultancy, and other.