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Strong sale confirms investors prefer commercial property to shares and bonds

August 26, 2019

The $11.1 million sale of an office building in the Newcastle region is a strong sign the smart money is seeking quality commercial assets with strong returns, according to Steve Dick, Director Raine & Horne Commercial Newcastle. Steve sold the site on behalf of a well-known local family business.

The three-storey building is home to five commercial tenants. More significantly, it attracted 66 enquiries and 11 expressions of interest. “Share market volatility caused by the Trump trade wars and negligible bond returns are encouraging investors to seek out commercial investments with excellent long-term tenants,” said Steve.

Steve also sold a smaller commercial building on the NSW mid-north coast for $300,000 above reserve and 15 days before the auction. He added, “Most of the enquiries for both properties came directly from our database, and it proves there is significant money starting to float around looking for a home.

“As bond yields continue to drop and share volatility ramps up, we expect more money to find its way into Newcastle’s office and industrial markets.”

On the industrial front, there was a slight increase in the vacancy rate. “However, with a vacancy rate of 4.87%, Newcastle is massively under the national average,” Steve said. “While coal might be a dirty word, the much-maligned resource is driving demand for industrial space in this region.”