Dexus: Outlook for commercial property remains positive despite lockdowns

20 October 2021

Dexus Research today released the Australian Real Estate Quarterly Review Q4 2021 pointing to improved outlook for commercial property as lockdown conditions ease in NSW and Victoria.

This report describes the outlook for Australia’s main property markets. The key highlights include:

  • Lead indicators for the office sector are positive with business confidence running at high levels and take-up of office space in the major CBD office markets the highest it has been since 2018
  • Ecommerce continues to have a positive influence on the industrial sector with demand running at more than double the average level in Sydney and Melbourne, and rents increasing by more than 4% per annum
  • Investor interest in healthcare real estate has continued to firm as the sector proves resilient to cyclical economic movements
  • Returns for unlisted property funds have turned the corner and are now trending up

Peter Studley, Dexus Head of Research said: “Conditions for real estate are generally expected to improve over the next year.

“While lockdowns in New South Wales and Victoria caused a contraction in economic growth, much of the lost ground is expected to be recovered over the remainder of FY22.

“Leasing markets are expected to improve in all sectors, helped by positive business conditions.

“In addition, investment demand and capital flows for real estate are likely to remain supported by low interest rates.”