With 2023 coming to an end, we’ve been reflecting on the year and the ways in which it was challenging, diverse, and unpredictable.
For most businesses, including ours, it was a turbulent one to navigate — there was an overwhelming ere for caution throughout the first three quarters. Case in point; commercial property supply in Australia decreased significantly from $90 billion in 2022 to just above $20 billion for 2023.
Rising interest rates saw investors hold still and increasing construction costs put a halt on developers. However, owner-occupiers and tenants remained strong with overwhelming demand for vacant possession buildings — particularly industrial — topping the charts. We even saw vacancy levels reach as low as under 1% in some regions, which are still holding the lowest vacancy rate anywhere in the world.
The last quarter of 2023 saw a resurgence in transaction volumes lifting significantly — a welcome result for vendors that went to market and achieved better than expected results. With a continued degree of caution, 2024 will unlock exciting opportunities for those with capital reserves to deploy.
Our 2024 prediction point: The levelling out of interest rates and yields in the next quarter should see investors aggressively re-enter the market, as well as occupiers and tenants continuing to drive the market forward. The perfect time for vendors to go to market who have been sitting on the sidelines.
Regardless of where you sit, we welcome the opportunity to talk with you about your commercial property ambitions in 2024.
