A changing market

Changed economic and market conditions mean there is a need to change aspects of the way we do business.
For inspiration into what those changes may be, we can look back to the past, and we can look globally to other markets. Plus we can also look to other industries to see how change has evolved.
 
In the current industrial property market we know that there are some major obstacles to concluding transactions. Banks are reducing their funding for property purchases. Inflation is still excessive. Interest rates are higher than they have been for some years. The economy is slowing. The government is putting the brakes on spending. And most significantly, business decision makers are uncertain as to what to do. There is an uncertainly as to where interest rates, build costs, and yields will go. Forget FOMO, there is now a fear that whatever decision is made, the market, and all the factors influencing the market, will conspire to make that decision look like the wrong one. Which means that for many, it is easier to do nothing than make a decision.
 
What are the factors within our control which we can bring into play to enable transactions?

The most important one as a vendor is flexibility. It is true that 18 months ago we could say that the price is the price. That’s no longer true, and if we want to get a deal done, then price elasticity is important.
As are terms. Looking back to the GFC, and the recovery years afterwards, we were transacting deals that included “lease to own” provisions. We were providing vendor finance in some cases. There were times when we were capitalising fitout.

There is certainly an argument that some, if not all, of that flexibility needs to be  re-introduced into our discussion.

A part of being flexible also means that there is more than one way to do a deal.  The heat in the market can move quickly from owner-occupiers to leasing to tenanted investments, which means that if to sell a vacant property means we need to lease it, and then sell as a tenanted investment, then let’s take the blinkers off and do it that way.

We congratulate those agents who know that “same same” won’t cut it in this market, and are thinking innovatively in order to get deals done. As a vendor and a purchaser, we are doing the same.