Sydney industrial steady as she goes

Sydney industrial steady as she goesSydney’s industrial property market has continued its strong performance over the first six months of 2015, according to m3property’s latest report, which predicts the outlook for the sector will remain positive over the next few years.In its Winter 2015 report, m3property says industrial supply and vacancy levels in Sydney both remain low. Rents were largely stable and yields have firmed over the past six months. Sales activity in the sector started strongly in 2015, and is expected to remain strong over the second half of the year. According to the report, the outlook for the industrial property market in Sydney will remain positive over the next few years. Growth is likely to be largely driven by the high volume of export and import sales, which are expected over the short term. Improving economic growth and strengthening residential construction and retail markets are also expected to benefit the sector in the short term.Supply of industrial property, after increasing over recent years, has started to slow. The strong level of development activity in 2014, combined with the gentrification of areas in the South and Inner West submarkets, are likely to result in supply being restricted over the next few years.Demand for industrial property is likely to improve over the short to medium term, says the report. In particular, the merchandise trade, construction and manufacturing sectors are likely to result in growth in demand for processing, logistics and storage facilities within Sydney.Rental growth, while expected to remain subdued in line with historical averages, should improve slightly over the short term, in selected submarkets for certain facilities.Activity in the investment market is expected to remain strong over the short term despite many landlords looking to hold on to assets. The report predicts investment yields will tighten by 25 to basis points across the Sydney submarkets over the next 12 months.To read the report click here.