Commercial property offers an interesting, alternative long-term wealth creation opportunity for Australians and, based on figures from the most recent financial year, it is more profitable than ever. Since June last year, Australia recorded $69.7 billion in commercial transactions; the largest sectors contributing to this were office, industrial, and retail. There were over 9,300 major transactions for properties greater than $2 million and $12 billion worth of transactions for properties less than $2 million.
Such figures illustrate the popularity of and current growth within the commercial sector, and also demonstrate why investing in commercial property can be a profitable decision for those who may otherwise have only considered residential property. Investors can reap the benefits of increasing property values and rental income over time, as different industries and sectors across the country continually grow.
As the country recovers from the impact of the pandemic, one sector that is showing considerable resilience is the pub and hotel sector which has been bouncing back as domestic travel and business ramp up again. Activity in these two sectors has doubled in the last financial year, which is a positive indication that these previously struggling sectors are flourishing once again.
Other commercial sectors including service stations and childcare have recorded an increase of 122% in turnover. These two assets are popular with private investors and offer reliable investment opportunities with long-term rental income. The continuous expansion of the medical industry makes the medical and health sciences sector another area to watch out for during the next financial year.
We believe that investment in commercial properties offer a better hedge against the increasing RBA interest rates as the commercial rent review mechanisms offer more timely based opportunities to increase rents to reflect market and investment conditions. In addition, many clients are choosing to buy commercial property within their Self Managed Super Funds in order to provide both diversification and control over this often untapped aspect of capital.
All of the above demonstrates the growth being experienced within the commercial sectors. With a variety of options available to choose from when it comes to selecting a commercial investment property, it helps to enlist the expertise of an experienced commercial agent. First National Commercial agents can assist in building your property portfolio as a secure means of investment for your future, by offering local knowledge and advice suited to you. A good agent will aid in negotiating a lease, screening applicants, establishing a rental value, arranging insurance, conducting inspections, and more.
The process of owning a commercial investment property may seem daunting, but a First National Commercial agent can provide expertise to simplify the process for you. As the industry continues to grow, now is a more suitable time than ever to enter the commercial market and start generating returns for your future.
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The following advice is of a general nature only and intended as a broad guide. The advice should not be regarded as legal, financial, or real estate advice. You should make your own inquiries and obtain independent professional advice tailored to your specific circumstances before making any legal, financial, or real estate decisions. Click here for full Terms of Use.