THE residential sector is providing the best returns in the short term, as reflected in the interest shown by Perth’s major property developers, a property review by valuation firm Herron Todd White said.
Projects including in-fill sub-divisions, apartment developments, and refurbishment of older style accommodation are also resulting in strong returns, the review said.
“The market for single residential dwellings also appears to be continuing its slow but steady increase with real estate agents reporting increasing enquiry rates.”
Recent sales include 13.5 hectares of Forrest Lakes Estate in Thornlie by the Perron Group for $5.4 million which is to yield 153 lots.
In South Perth notable sales include a property at 85 Mill Point Road which sold for $1.2 million. It will be developed into eleven apartments, reflecting a yield of $109,000 per unit site. A twenty-one residential unit development at 35 Angelo Street sold for $1.81 million.
On the industrial front, speculative over-development has resulted in some secondary areas experiencing long leasing periods and low levels of demand while prime industrial precincts are still strongly sought after, the review said.
Recent industrial sales include 140 Balcatta Road for $1.5 million, a 2,360 square metre office warehouse at 18 Hasler Road, Herdsman for $1.925 million and a 1,871 square metre office warehouse at 222 Welshpool Road, Queens Park which sold for $1.5 million.
Herron Todd Whites’ review stated demand in the retail property market is also strong as evidenced by the high sales price of the former Busselton Primary School to Foodland Associated Limited.
A strata title supermarket at 225 Illawarra Cresent, Ballajura sold for $3.9 million and shops at 92-94 Barrack Street, Perth sold for $2.21 million or $5,600 per square metre on land area.
Commercial properties would not perform as well as other property sectors, the review said.
Two new offerings at 184-186 Saint George’s Terrace and 553 Hay Street in Perth will test the commercial market in the short term.
Increasing vacancies in West Perth could worsen with new
construction in Kings Park Road.
“Together with continued weakness in the resource sector (a major occupier of space within the locality) we anticipate little if any rental and capital growth in the short term,” the review said.
