Busy time ahead for commercial, industrial

THE commercial and industrial sector is heading for a flurry of activity leading up to May and June says Stanton Hillier Parker managing director Geoff Potter.

A possible slowdown will then follow coinciding with the introduction of the GST.

“Investors nearly always react to change whether GST or interest rate movements,” Mr Potter said.

“Property will continue to be a good investment vehicle and wealth will be created for parties involved in the transactions, with the new capital gains tax being a big plus for the market,” he said.

“We may see some exciting times as increases in inflation seem to be inevitable in the next year or so,” Mr Potter said.

Stanton Hillier Parker associate director Andrew McKerracher says that “should interest rates rise between 1 per cent and 1.5 per cent there will be a change of focus in the market which will see upward pressure placed on rental rates.”

“Prime industrial real estate in good locations will experience a substantial rise in value,” Mr McKerracher said.

“Properties on main roads such as Albany and Great Eastern Highways will enjoy better than average appreciation,” he said.

Stanton Hillier Parker predicts the suburbs of Belmont and Bibra Lake will experience a strong increase in demand due to large developments in both suburbs.

The eastern industrial suburbs are still regarded as Perth’s premier industrial region, housing many of Perth’s national and international industrial companies.

Mr McKerracher believes this region’s popularity will be further enhanced with the opening of the Burswood Bridge and the Orrong Road upgrade which will greatly improve accessibility.

Stanton Hillier Parker retail leasing manager Conray Passaris sees continued strong flow-on effects of leasing activity into 2000.

“Indicators point to buoyant retail leasing activity in the Perth CBD, particularly in dominant sales sectors of high fashion, clothing and soft goods retailing and luxury items,” Mr Passaris said.

Mr Passaris explained that, despite a survey undertaken by the Real Estate Institute of WA showing pedestrian traffic in the CBD had declined 2 per cent over the past twelve months, the new year could well see the street veins being injected with new blood, bringing a revival to city shopping.

He says this may be achieved by the reintroduction of David Jones to the CBD and the proposed Woolworths development.

“We receive steady enquiries on the limited space available in this location and higher rates are expected to be achieved for owners in the immediate vicinity,” he said.

“The future must accommodate a diversity of shopping experiences at different scales and locations,” Mr Passaris said.

“The growth in warehouse format retailing (bulky goods) is a response to consumer demand,” he said.

The office market, while not overly optimistic, is showing signs indicating an improvement in the sector in 2000 according to Stanton Hillier Parker office market leasing negotiator Tom Nattrass.

“The Perth CBD office leasing market is showing signs of increased activity following the negative takeup rate for the first six months of 1999,” Mr Nattrass said.

However, “it may take up to two years to reach an acceptable take up level of between 25,000 to 30,000 square metres per annum,” he said.

“There is strong activity with tenants of 200-400 square metres in the CBD and this should continue through 2000,” he said.

“Leasing activity is gathering momentum in West Perth and is set to continue in the new year,” Mr Nattrass said.

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