As 2017 kicks into gear NAI Harcourts in Epping and Thomastown in Melbourne’s north has hit the ground running.
The year has started off with a very busy January. Already, three small leasing deals and four sales ranging in size from $350,000 to $1,980,000 have been achieved. “This is uncommon for this time of year as most businesses in the industrial and construction sector don’t really open until the end of January,” says John Georgiou, Director of NAI Harcourts in Epping and Thomastown.
“In the current market place, we have an owner occupiers market which is solid but we have a very limited supply of leasing stock. A large amount of stock is coming on board from my builder developer clients. Many of these are multi-unit developments coming from some of the larger developers”, says Georgiou.
The properties in demand by purchasers are for new off the plan buildings that can be tailored to the clients’ needs, ranging in size from 700m2 to 3000 m2. The Northern suburbs of Melbourne are performing very strongly with some large land estates selling out and most new developments selling off the plan to both owner occupiers and investors.
Low interest rates are making it attractive to owner occupiers which has resulted in many transactions taking place, however because of this the leasing market has slowed down considerably.
“Most stock we have is industrial and new. Many of the premium locations are performing very well so I would be suggesting investors explore developments from off the plan, as many investors are buying modern office warehouses with all the features that would make them appealing to the leasing market”.
“Areas that are performing strongest are main road development sites which are hotly contested. We sold a property at auction in December on a 2.95% yield that was a huge surprise. Also, industrial land is selling very quickly.”
“The predominant transactions in the region is industrial land and it is often sold by making a few phone calls. Many of the regular industrial builder developers are looking to landbank as a direct result of our success in off the plan sales to owner occupiers,” says Georgiou.
Georgiou’s advice to vendors is to spend money on advertising. “The old days of putting up a board and waiting for the calls to come in is not relevant in today’s market - this no longer works. Interest rates are low - take advantage of this as we do have a shortage of stock.”