Strong volume as average leasing rates rise.
The first quarter of the financial year was particularly busy in the sub 600m2 factory range which continued the trend of the last 12 months.
Sub 600m2 transactions accounted for 84% and 71% of the sales and leasing factory market respectively. Average leasing rates pushed past the $90 per m2 driven by the volume of new smaller stock being transacted.
Investment sales continued at a similar volume however the average price increased substantially, almost doubling, from our previously reported quarter. Yields pushed out to over 6% due to some regional stock transactions.
As we navigate through an increasing tight land market sales volumes remained low driven by a lack of supply coupled with record rates per m2. As previously mentioned smaller industrial/mixed use lots moved towards and beyond $500 per m2 within the corridor.
Continual commentary about a contracting market were not represented in our figures as over 200 transactions points to a very active market.
• A large volume of Cranbourne and Clyde land sales settle over the next 6 months. Initial enquiry for both purchasing and leasing is sound so demand for end product should be strong.
• Smaller factory sales and rates will stabilise as the market takes up an historic oversupply. This product remains popular but will plateau as it pushes to saturation combined with a tightening of lending regulations.
Overall our market remains buoyant and active as the South East market continues its march forward. A decrease on the supply side coupled with an increased cautiousness should create a balancing effect as we move neutrally through the next few quarters.
As always our Market Update provides a general snap shot of overall conditions. Please make contact if you need more specific information to your circumstance.