Market Comment June 2017

Jun 01, 2017

There certainly seems to be a tightening in availability of bank finance. The media would have us believe that this is primarily due to the Australian banks taking their capital back to Australia. But whatever the reason, anecdotally we are hearing of instances where banks have backed away from financing deals which 6 months ago they would have been falling over themselves for. That impact seems to be greater with regard to investors than owner-occupiers.

But having said that there still appears to be ample finance in most cases where the deal is well structured – particularly with regard to small and medium size  owner-occupiers. The very positive aspect coming out of this is that generally when buyers make a move, they have all their ducks in a row with regard to understanding the financing process.

Eighteen months ago there seemed to be a parade of hopefuls and wannabes. They wanted to buy. But they had not done their homework, and didn’t understand the basics of owning industrial property. But that parade appears to have stopped, and now (mostly) the would-be buyers understand the process, and the financial structure. Which saves everyone time and frustration.

Decision making times have stretched out marginally. As they always do when the market does not have the urgency it did just a few months ago.

Perhaps the most noticeable change over recent months is the willingness to be flexible with regard to location on the part of both buyers and tenants. Availability (or lack of it in certain areas) and traffic congestion are forcing decision makers to consider industrial areas that 12 months ago would have been summarily dismissed.

And very often that flexibility can be to their ultimate advantage – with regard to the type of property available, price and access to labour.


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