While demand for prime office investment remains strong, negative sentiment in the resource sector is affecting the commercial market.
Real estate agent Herron Todd White director Garrick Smith said evidence of the strong trend in investment was demonstrated by BT Office Trust’s purchase of the remaining 50 per cent share of QV1 for $1.30 million.
“While the Property Council’s recent office survey placed vacancy rates at 11.3 per cent — the lowest in a decade — the continuing rationalisation and downsizing in the resource sector is likely to have an adverse impact on the requirement for office space in the short term,” he said.
In the retail sector, there has been little change in the market, although several district centres such Bull Creek and Thornlie are currently being offered.
Mr Smith said the only sale of note was of Sorrento Key for $l6 million, currently producing a net income of $1.55 million and reflecting a yield of 9.69 per cent on the purchase price.
This site includes 34 retail shops, restaurants and entertainment outlets as well as a boat harbour, and has potential for further development.
“In the industrial sector, desire for secure and stable income flow continues to dominate the industrial market sector with little evidence of speculative development,” Mr Smith said.
Sales include 503 Abernethy Road, Kewdale, which was sold for $2.73 million by Pacific Dunlop offering a 10 year lease back with an income of $250,000 per annum, reflecting a yield of 9.16 per cent and 33 Walters Drive, Herdsman, comprising an area of 772 square metres and 17 car bays which sold for $975,000, returning an initial yield of 9.5 per cent.
