Welcome to this week’s Property News.
Back to a fairly normal week, other than for the ongoing COVID locks downs which continue to supress movements in Sydney, Melbourne, and regional areas of NSW and VIC.
As NSW enters Week 12 of lockdown and Victoria endures its 32nd week in total, it is fitting to stop and ask R U OK ? Last Thursday, was the annual R U OK day, designed to raise discussion about mental health at your work place. If you work alone, let me ask you Are You Really OK ? Let us know if you need help.
This year, COVID is having little impact on activity levels in the Australian Property Market, with most people reporting business as usual, or even busier than usual conditions. Investment and leasing demand continues to be strong across most sectors with retail leasing the key exception. Recent REIT announcements by shopping centre owners confirmed that negative leasing spreads were still evident.
Suburban office asset values have held their ground well, somewhat shielded from the challenges that their CBD counterparts face.
This week, Centuria acquired a 50% interest in a prime asset in St Leonards at a 5.75% cap rate and a Port Adelaide office block for $68m with an initial yield of 4.6%. Both assets were fully leased with long WALEs.
A record price for a suburban asset is also about to be paid with the AIM’s APAC REIT the confirming their intention to acquire the Woolworths HQ in Norwest, Sydney in a deal worth about $450m, reflecting a yield of just over 5%.
Overall, commercial property transactions this week were higher than usual topping $1.2bn.
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Until next week