Top Performing Commercial Assets Of 2022

2022 was another strong year for commercial property investors on the back of strong turnover and contracting yields. According to Ray White Commercial, there were three standout performers over the course of the year:

Industrial

Demand has been growing off the back of logistics, distribution and transport, particularly last mile solutions, together with the growth in small business and local manufacturing, Ray White said.

The increased demand by users, coupled with limited supply over the past few years, has resulted in vacancies across the country in the sub-1 per cent range. Therefore, face rents have seen outstanding levels of increase. Furthermore, with little new supply on the horizon and many markets hampered by tight available developable land, the future for land values appears favourable.

Medical

According to Ray White, the medical sector was once considered a segment which catered for the very young or very old, however, we are seeing greater medical needs across all demographics. With increased demand has come improvements in leasing rates and, with limited purpose-built facilities, the readaptation of other assets such as retail to cater for the growing demand.

Childcare

The “set and forget” nature of childcare assets assured investors a secure, long-term income stream and its affordable price point make it attainable for a range of buyers, Ray White said. While yields have been at a low rate for a long time, there is an expectation these will increase given the increased cost of finance. Despite this, the anticipated increases in government subsidies will do much to further spur on this sector in terms of demand and likely growth in returns.