2012 Global Market report - NAI Global

Melbourne, Australia
Perth, Australia
Contact
NAI Harcourts Melbourne
+61 3 9621 3300
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
2,969,907
3.5%
$1,297.83
$57,661.88
3.0%
5.1%
4.8%
22.508
Melbourne is said to be the most active commercial market
in Australia and the most attractive to offshore investors,
with new clients trying to get into the market everyday.
Commercial property sales throughout Australia over the Q2
2011 have jumped significantly with offshore buyers
accounting for approximately 42% of the investment capital.
More than half of this investor money has flowed into
Melbourne.
The vacancy rate within the Melbourne CBD has continued
to reduce as office supply is not readily available yet the
demand still remains high. No new office supply is expected
to be delivered throughout the remainder of 2011. The
effects of the global credit crisis on development have
started to abate with new supply scheduled from 2012
onwards. Solid tenant demand is expected to support
rents around current levels over the next twelve months.
Unemployment sits at 5.1% in Victoria, which is in line with
the Australian percentage.
Melbourne currently leads the retail property market in
Australia. The CBD remains the most favored location
for retail property, with most categories in Melbourne
outperforming the other cities. Melbourne’s retail market
has maintained its status quo during the first half of 2011,
however, improvement throughout the remainder of 2011
is unlikely. June retail figures show consumers have
remained cautious which has led to a slight rise in vacancy
levels, particularly with strip shops heavily fashion
orientated. There will be a limit on new supply available for
the remainder of 2011 with the majority of new centers
opening in 2012 – 2013. Although strip shops have
managed to keep their yields and rents stable for the first
half of 2011, the second half will see the retail market come
under increasing pressure as consumers opt to maintain a
cautious approach towards discretionary spending.
Over the past twelve months the industrial market has
remained stable and is likely to firm towards the end of
2011. There is currently a limit on the availability of quality
stock as little development is currently taking place due
to financial constraints. With a limited amount of stock
available and high demand from tenants, this should result
in a further decrease in vacancy rates keeping the pressure
on rents to increase for prime assets.
Contact
NAI Harcourts
Metropolitan Perth
+61 8 9388 6600
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
2,969,907
3.5%
$1,297.83
$57,661.88
3.0%
5.1%
4.8%
22.508
While the global economy continues to display nervousness
in the US and European regions, the west Australian
economy continues to grow on the back of the resources
boom. Perth commercial property owners have experienced
falling vacancy rates as rents continue to rise. The market
continues to be active as companies battle for space
particularly on St. Georges Terrace.
The office leasing market in the CBD, particularly in the
premium sector, has continued to tighten and vacancies are
more or less non existent at the top end of the market. There
is a reasonable level of new stock coming on stream but
much of this will be pre-committed before it is completed.
Rents are rising and vacancies falling and tenants with
leases expiring in the next 24 months and who require
more space need to start their search well in advance. This
tightness at the top end of the market is having a knock
on effect to lower tiers as some tenants are having to
compromise on quality to stay within budgets. The suburban
market is of course equally as active and vacancy levels are
also tightening significantly as activity continues. It is
expected that more tenants will look to pre-committing to
suburban stock as rents rise in the CBD, fueling office
development in the suburbs.
On the investment front, institutions, foreign funds and
private buyers are all active although change in yields in this
sector have not been noticed at this stage, possibly a sign
of the weakness in the global economy and the new supply
expected in the next 12 to 24 months to enter the market.
The industrial investment sector remains relatively buoyant
and activity levels in all price ranges continue to be well
supported. Industrial leasing also remains stable and small
and large requirements come to the market consistently.
The retail market should be seen to be the most fragile
where there is more evidence of shoppers looking rather
than spending and this is affecting the turnover and
therefore performance of many of the retailers. This
has translated into affecting rental levels, and the retail
investment market also would be considered quieter than
the office and industrial sectors.
Melbourne At A Glance
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YEAR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
deVeloPment land
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
AUD 500.00 AUD 550.00 $ 47.89 $ 52.68 3.00%
AUD 400.00 AUD 500.00 $ 38.31 $ 47.89 4.00%
AUD 300.00 AUD 350.00 $ 28.73 $ 33.52 4.00%
AUD 270.00 AUD 300.00 $ 25.86 $ 28.73 3.00%
AUD 270.00 AUD 280.00 $ 25.86 $ 26.82 2.00%
AUD 220.00 AUD 220.00 $ 21.07 $ 21.07 5.00%
AUD 150.00 AUD 160.00 $ 14.37 $ 15.32 5.00%
AUD 130.00 AUD 140.00 $ 12.45 $ 13.41 8.00%
AUD 160.00 AUD 160.00 $ 15.32 $ 15.32 2.00%
AUD 800.00 AUD 900.00 $ 76.62 $ 86.20 3.00%
AUD 550.00 AUD 600.00 $ 52.68 $ 57.47 4.00%
N/A N/A N/A N/A N/A
AUD 700.00 AUD 750.00 $ 63.76 $ 68.31 3.00%
N/A N/A N/A N/A N/A
low/m 2 High/m 2 low/acre High/acre
N/A N/A N/A N/A
AUD 150.00 AUD 160.00 $ 595,126.86 $ 634,801.99
AUD 130.00 AUD 150.00 $ 515,776.61 $ 595,126.86
AUD 120.00 AUD 130.00 $ 476,101.49 $ 515,776.61
AUD 1,000.00 AUD 1,200.00 $ 4,172,023.37 $ 5,006,428.05
AUD 1,300.00 AUD 1,400.00 $ 5,423,630.38 $ 5,840,832.72
Perth At A Glance
conversion 0.97 aud = 1 us$ RENT/M 2 /YR US$ RENT/SF/YR
low High low High Vacancy
doWntoWn offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
AUD
AUD
AUD
AUD
AUD
AUD
550.00 AUD
500.00 AUD
450.00 AUD
500.00 AUD
400.00 AUD
300.00 AUD
850.00
750.00
500.00
600.00
500.00
350.00
$ 52.68
$ 47.89
$ 43.10
$ 47.89
$ 38.31
$ 28.73
$ 81.41
$ 71.83
$ 47.89
$ 57.47
$ 47.89
$ 33.52
8.00%
6.00%
10.00%
5.00%
5.00%
6.00%
Bulk Warehouse
Manufacturing
AUD
AUD
90.00 AUD
90.00 AUD
100.00
100.00
$
$
8.62
8.62
$
$
9.58
9.58
N/A
N/A
High Tech/R&D
retaIl
AUD 100.00 AUD 110.00 $ 9.58 $ 10.54 N/A
Downtown
AUD1,000.00 AUD3,500.00 $ 95.78 $ 335.21 N/A
Neighborhood Service Centers
Community Power Center
Regional Malls
Solus Food Stores
AUD
AUD
350.00 AUD
N/A
250.00 AUD
N/A
600.00
N/A
400.00
N/A
$ 33.52
N/A
$ 23.94
N/A
$ 57.47
N/A
$ 38.31
N/A
N/A
N/A
N/A
N/A
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
N/A N/A N/A N/A
AUD 350.00 AUD 500.00 $ 1,460,208.18 $ 2,086,011.69
AUD 160.00 AUD 550.00 $ 667,523.74 $ 2,294,612.85
AUD 300.00 AUD 550.00 $ 1,251,607.01 $ 2,294,612.85
AUD 1,500.00 AUD 3,000.00 $ 6,258,035.06 $12,516,070.11
N/A N/A N/A N/A
2012 Global Market Report n www.naiglobal.com 31