Research

After a strong second half of 2019, what does 2020 have in store for buyers and investors in the commercial property market?

Competitive e-sports spaces, VR experiences and a quick commute to a co-working space could become part of your shopping experience as malls look to fill the gap created by department store downsizing.

Commercial property transactions are on track to top last year’s record annual total of $37.8 billion, as volumes are driven higher by ever-larger portfolio deals and a slew of big-ticket individual transactions.

This has been another good year for commercial property markets. Continued inflow of funds searching for yield as bond rates fell further has driven a tendency for yields to continue to firm. And it’s not just property. This applies to asset markets across the board, both unlisted and listed.

Want to know what will work for retailing in the future?

As our cities grow, governments and planners like to provide facilities that make their cities good places to live and work. And we like to encourage workplaces close to where people live, both to reduce the transport task and to reduce travel times. Hence planning and zoning to provide sites for buildings and infrastructure to underwrite that growth.

The steep rise in commercial property values could place the creditworthiness of some real estate investment trusts under pressure, according to Moody’s Investors Service.

The struggles of US retailers cannot be directly translated to the Australian market as American cities are swamped with physical retail space while retail space in local capitals is still constrained.

“Is it too late to invest in the Sydney and Melbourne office markets? Is it too early for Brisbane and Perth?”