Western Australia’s thriving commercial real estate market has become a magnet for savvy investors. From what we are experiencing at Perth Commercial Property, the second half of the year shows no sign of slowing down.
This offers significant opportunity for investors and occupiers alike.
Whether you’re considering selling or leasing a commercial building, or land, making a first-time investment or looking to expand your commercial property portfolio – we’ve got the inside scoop on the sectors most in demand.
Industrial Sector: Where Growth Meets Opportunity
Western Australia’s industrial property market has recorded significant growth in recent years. Demand for leasing warehouse has often outweighed supply by a large margin in some segments of the market, this is reflected by Perth’s industrial rental growth reported to be 28.8% over the last 12 months.
As the epicentre of Australia’s resource sector and supporting industries, our State’s strategic location, along with the recent low interest rates, has caught the eye of both local and international investors. Our recent trip to Port Hedland reinforced this.
Growth in the Pilbara is set to continue with $125 billion worth of projects under consideration, committed or under construction in the region (Pilbara Development Commission PDC). Despite this growth, large industrial assets are in incredibly high demand presenting a huge opportunity for industrial property owners looking to sell or lease.
Back in Perth, the rise of e-commerce has increased the need for efficient supply chain solutions, warehouses, distribution centres, and manufacturing facilities. Further, huge demand from contractors in the building, engineering and manufacturing industries has fuelled demand in a post-COVID world. These properties have attracted the highest rate of enquiry at our office over the past 12 months.
Office Spaces: An evolving sector
The office sector in Western Australia has undergone a remarkable transformation since the start of the pandemic, powered by changing work dynamics and evolving corporate cultures.
Modern businesses are seeking dynamic workspaces that foster creativity, collaboration, and productivity. As a result, the demand for flexible office spaces with cutting-edge amenities and end-of-trip facilities has surged, coming off the back of a challenging period.
The shift towards hybrid work models has only strengthened the demand for well-designed, technologically advanced office spaces. More than ever businesses are trying to form desirable hubs to encourage employees back to the office.
Well positioned offices that are ripe for renovating and/or repositioning may suit those seeking counter cyclical investment opportunities, though most of the activity we are seeing in the office sector is from owner-occupiers.
Recession proof assets – Convenience & Quick Service Restaurants (QSR)
Sales in WA’s QSR space continue a trend that emerged last year with private investors preferring long leases to major brands, over investment in equities or the residential housing market. Big chains like McDonald’s, KFC, Hungry Jacks and Guzman Y Gomez have been considered some of the safest investments, according to a recent article in The Australian Financial Review.
It makes sense, consumers crave convenience and on-the-go dining options. With steady demand for affordable takeaway options, investors can capitalise on the growing popularity of renowned QSR chains.
Childcare Facilities – Investing in the Future
According to Cushman & Wakefield‘s 2023 report, demand for childcare services and competition for quality locations has seen rents rise 47% across Australia in the last decade.
As required social infrastructure, childcare centres are known for their recession proof qualities. With typically stable tenants and long-term leases of up to 15+ years these assets have strong investment fundamentals.
The $4.7 billion in federal government funding announced earlier this year has boosted demand for available childcare places further driving the need for new centres. As expected, investors are jumping to secure these properties with newly developed centres most highly sought-after in the WA market.
Service Stations – Fuelling Investment Portfolios
In the first half of 2023 over $66.8 million was invested in the Australian service station sector. Known for their ‘set and forget’ qualities, these assets continue to prove incredibly popular, despite a slight drop off in the past year.
Financing costs have played into this trend, forcing some smaller first-time buyers to sell their assets. That said the volume of investment is still 47% higher than its previous peak in 2019 with experienced investors leading the charge.
Which commercial property investment opportunity is right for you?
As the commercial property market in Western Australia continues to flourish, the industrial, office, and retail sectors stand out as the stars of the investment landscape.
At Perth Commercial Property, we pride ourselves on being your trusted compass to navigate which opportunities are right for you. Connect with our team today, for a confidential discussion.