Interest rates drive commercial market

Low interest rates coupled with a low inflationary environment are driving current interest in the Perth commercial property market, according to agents Knight Frank.

Knight Frank director of investment sales John Corbett said lowered interest rates, low inflation and stock market volatility have resulted in a healthy property investment climate.

“These combined factors have led to vendors being willing to accept lower yields which has in turn increased property values,” he said.

“Over the past six months we have experienced very strong demand for investment properties and, in many cases, public tender processes and auctions have been highly competitive.”

Properties under $10 million are receiving the most interest from both private investors and syndicates.

Knight Frank’s recent campaign for the sale of 179 St George’s Terrace generated five offers in a short period of time. The prospective purchaser is currently undertaking due diligence prior to settlement.

“Given current interest rates of between 6.5

per cent and 7.5 per cent, properties are showing positive cashflows,” Mr Corbett said.

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