Investors are cashing in on the increasing demand for commercial real estate, with vendors selling their properties well over reserve.
Raine & Horne executive chairman Angus Raine said commercial assets priced between $1 million and $3 million are increasingly popular with yield-hungry, self-managed super fund trustees, which is paying off for vendors.
“Low cash rates are also helping the smart money find its way into commercial real estate, which is producing some good sales results for vendors,” he said.
The real estate group cited a recent sale in Sydney’s North , which sold for 29 per cent above the vendor’s reserve figure – ultimately going for $1,525,000 at auction.
In addition, a retail building in Marrickville sold under the hammer for $2,305,000 – $355,000 above the vendor’s initial reserve.
Jason Beveridge, principal of Raine & Horne Commercial Victoria, said 2015 has been a consistent year for industrial property markets.
“It’s been a stock standard year for the sub-$1 million markets, and we expect a reasonable amount of activity for industrial assets in the run-up to Christmas,” he said.
“We’ve seen some tenants upgrading to owner-occupiers, which makes a lot of sense in the current low interest rate environment.”