Industrial Property Holding Up

Despite the slowdown in the commercial property sector, industrial property continues to buck the trend.

According to Ray White Commercial, increasing interest rates have caused growth in commercial assets to stagnate, however, industrial property continues to hold its ground on the back of tight supply and low vacancies putting upward pressure on rents.

They said total returns for the sector were 12.7% in March 2023 according to the recent PCA/MSCI All Property Digest, with capital returns at 8.6%, having peaked at 24.7% in December 2021.

Ray White said that sales volumes across the commercial sector have declined and are expected to stay subdued for the rest of the year.

However, industrial property in Sydney and Perth had a positive outlook given the supply and demand imbalance.