Commercial property — Critical for your investment portfolio in 2021
It is a fact that commercial property currently offers the highest cash flow you will find in Australian real estate. At Rethink Investing, they are currently securing 6–9 per cent net yields on the high-quality commercial properties they’re buying for our clients. However, when you look at the returns on your initial cash investment, the numbers are even better. They’re talking 25 per cent to 40 per cent cash-on-cash returns — something they’ve not seen in Australia since 2012. These numbers are the reason commercial property has caught the eye of sophisticated investors, not only in our own backyard but internationally, and has become a luring incentive for new entrants to the commercial property scene.
The perfect storm
The post-covid climate in Australia has supercharged commercial property. Interest rates are low so cash is cheap, high-quality commercial assets are now scarce due to increased demand (people have more savings because they’ve been forced to stay home and are now looking to put their money to work). All of these factors have contributed to a tightening of the market and have resulted in yield compression for commercial property (capital growth), and is the reason that commercial property is far outweighing the ROI that residential property can deliver.
Read the full article here: https://www.smartpropertyinvestment.com.au/research/22361-why-commercial-property-is-critical-for-your-portfolio-in-2021
About Greg Huxley
Greg Huxley has extensive experience in property, finance, business law, insolvency, & management, with a strong, disciplined finance & accounting perspective. For more about Greg Huxley and Huxley Corporate visit https://huxleycorporate.com/
