TOP PREDICTIONS FOR 2023 FOR AUSTRALIAN COMMERCIAL PROPERTY
1 . Private investors converge on value-add assets
Sales volumes are expected to remain subdued throughout 2023 given the increased cost of finance . While many buyer types will retreat , savvy investors will capitalise on increased yields or even vacant assets , albeit at the right price . Those buyers who see development upside in an asset or are willing to reposition or repurpose an asset to capitalise on future income and capital returns will be rewarded . Remember that commercial property markets historically have shown much volatility , however over the longer term can yield an investor quality returns .
2 . More buyers will follow the population
Over the last year , strong interstate population flows from Sydney and Melbourne into Queensland , and to some extent Western Australia , have grown the popularity of investment into these states . Growing population has had a positive impact on occupancy levels and returns for some asset classes due to increased demand . This is notable across the full spectrum of assets , from industrial property via increased logistic and transport needs , a larger workforce descending on retail and office assets , our desire for fast food , and need for childcare . Savvy investors will follow these population movements to aid in keeping vacancies low and income return more favourable .
3 . The transformation of the retail asset class
This market has been in an evolution phase since well before COVID-19 ; with online trade changing the way consumers interact with retail assets . Services will continue to move into our retail strips with uses like medical becoming more prevalent , together with our growing appetite for hospitality assets . Centres will continue to evolve , offering more entertainment options outside of the traditional uses ; think Ninja Warrior and e-sports ! Food will continue to be an attractor however uses like childcare and co-working office space may take up some larger holes if and when vacations occur .
4 . Work from home continues to pressure our major office markets
Markets such as Sydney and Melbourne continue to have a hard time enticing their staff back into the office on a full time basis . Many employers accept this change in working conditions , given the difficulty in attracting talent and
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