3 Trends to Watch in Canberra’s Commercial Market

We’ve seen Canberra’s commercial property market continue to evolve over the past twelve months, with several emerging trends gaining momentum and others carrying over from the previous financial year.

Here are the key trends that every Canberra investor should have on their radar:

Growth in Services and Trades Areas

Since the start of the year, assets located in services and trades areas such as Phillip, Belconnen and Fyshwick have received strong interest from both buyers and tenants. Tenants are particularly attracted to this style of property as they generally have good access, on-site or nearby parking, and sit at a lower rental level than town centre buildings.

The ground floor spaces within these assets are generating the most interest in the leasing market, with historically high rental rates being recorded. However, level one office spaces are currently more challenging to lease due to a lack of disabled access.

Lower-Valued Properties Gaining in Popularity

From a sales perspective, we’re seeing more interest in properties that sit in the lower value ranges, particularly the $1 million to $3 million range where it’s self-managed superfund money or private individuals buying in family trusts. Fully leased buildings within this price bracket are still gaining strong inquiry from investors, however, those that are partially leased or have tenant risk are proving to be more difficult to sell.

Decreasing interest rates are also contributing to high investor demand, with buyers now able to secure debt below 6% and purchasing at yields above 6.5%.

Health and Medical Continues to Trend

“Does the purpose use include medical?” continues to be a common question we receive in our sale enquires, and we expect this to continue.

Medical assets at a suburban level will continue to be extremely popular, especially where there’s a lack of supply for medical assets. Owners who may be looking to sell should strongly consider applying for a Crown Lease Variation, which will enable medical to be added to their purpose use.

Owner-occupiers also continue to show significant interest in the medical property market, driven by the desire for long-term stability in ownership among healthcare providers.

With the end of financial year approaching, now is a great time to consider your options and align your investment strategy with the latest trends in the commercial market.

For more information, get in touch with the team directly, or explore our current sale and lease listings below.