Industrial property investors flock to nation's capital

by YIP22 Feb 2017
Industrial units and developments in Canberra and neighbouring Queanbeyan are attracting many investors and owner-occupiers, states a new report from the Domain Group.

A key factor in the growing popularity of these two locations is their relative affordability. For as little as $100,000, an investor can enter the local market, said Brett Barton, principal of Fyshwick-based sector specialists Barton Molloy.  

“That’s attractive for a lot of buyers with self-managed super funds who are looking for solid returns,” he said. “For instance, a $600,000 industrial property may return a rental of say, 6%, which in most cases is going to be far superior to the rental return on a residential property of the same value.”

While yields are attractive, the capital gains tend to be lower in the industrial sector.

Barton offered these key tips for those looking for a successful industrial property investment: a great location, solid lease strength, and a stable building condition.

“And something that is well-regarded – just harder to find in the ACT – is a yard. Businesses like to have a yard for vehicles, plant and just general security,” he said. “ACT land values usually mean that yard space is sacrificed because building size is what returns are based on.”

Fyshwick, Mitchell, and Queanbeyan continue to deliver solid returns as established industrial hubs, while Hume is rapidly growing in profile, especially now that greater connectivity is enabled by access to the Monaro Highway.

“Fyshwick’s character has changed somewhat over the years as we’ve seen more businesses with a retail focus move into the area,” said Barton. “But it’s still the first destination that many businesses look to when establishing an ACT presence.”

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