Expert tips tough times, but private capital to return

One of the region’s leading commercial property experts is tipping tough times ahead, but hopes easing restrictions will drive return.

CBRE's Rem Rafter.

ONE of the region’s leading commercial property experts is tipping tough times ahead, but hopeful easing restrictions will drive a return to strength.

CBRE Sunshine Coast managing director Rem Rafter, in the latest Coast market update, said demand remained strong for premium property investments, but tipped lower commercial property rents and higher vacancies as a result of the impacts of coronavirus, particularly in the retail sector.

Mr Rafter said the region’s economy was well positioned before the pandemic, and the stimulus packages offered by governments and banks, as well as low interest rates, would soften the impacts of the virus.

He said there was little indication of a price setback in the residential sector, but in the short-to-medium term, effects would be “driven by higher unemployment, weaker business revenue and profits, higher vacancy and general caution in the market”.

“There is so much private capital in the market that is starved of a return,” Mr Rafter said.

“This will start flowing back as the economy recovers.”

The firm tipped up to 15 per cent of discretionary retailers may not reopen after the pandemic, and CBRE Sunshine Coast director Brendan Robins expected retail rents could drop by as much as 20 per cent.

The industrial sector was expected to have a bright future, as more and more businesses turned to online platforms and used industrial facilities, as large-scale retailers in shopping malls faced difficulties.

The region’s heavy reliance on domestic tourism was also expected to hold it in good stead, given the expected restrictions on international travel.

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