Suburban Office Space: The Investment Space to be in?

In an era where the CBD may not be as popular with office workers as they once were, investors can find good opportunities in suburban office spaces.

When will office workers return en masse? In uncertain times commercial opportunities may be found in suburban landscapes.

According to the Financial Review:

Institutional investors are seeing good value in inner-city and suburban office buildings, even those partially vacant, at a time of uncertainty about how CBD office towers will perform when office workers return en masse.

and

"Investors know [suburban office buildings] are secure investments, but they are still unsure about how many people will return to the CBD."

Recent deals cited in the article include:

• A five-level office building in Hawthorn sold to a real estate fund manager for $17.5 million on a 5.4% yield.

• A five-level office building in Rosebery sold for $29 million with a one-year WALE and a 32% vacancy rate.

• A two-level office building in Alexandria sold for $29.7 million, with a yield of 4.3%.

Meanwhile:

Grant Atchison, managing director of Freehold, told The Australian Financial Review while there was still value in premium CBD assets despite their expensive pricing, city fringe and suburban properties were benefiting as companies needed to have a way to be able to continue operating if there was a shutdown in the CBD, as the pandemic showed could easily happen. "If you have a large workforce, can you separate them into different buildings and continue to operate during a shutdown? That's going to be a risk management element [for corporates]," Mr Atchison said. In addition, he said there was already an established pre-COVID trend of corporates disaggregating their office needs by putting some components of their business, such as their back offices into the "Parramattas of the world".

Read the article in its entirety here.

Please let us know if we can help in any way to get your commercial property finance needs taken care of.

Are you looking to purchase commercial or industrial property within Australia and require private financing?

CapStack can help.

Are you a property developer looking for project finance to get your site moving? We can help assist you source finance. Are you a or property investor looking to purchase your next asset?

Start here to connect with is and send though some basic information to get the ball rolling or email us directly. We work with lenders Australia-wide ready to fund investments and development projects.

This is where CapStack comes in.

CapStack works alongside Australia's most active lenders from across the board. We help developers and investors fill their capital stack by providing access to the capital puzzle piece they are missing.

CapStack works directly with developers and investors who need access to capital markets.

How can we help you with your finance needs or those of your clients?

Give us a call or start here. We're ready for you!