Four Property Sectors to Watch in 2021

The new year is creating a wide range of both challenges and opportunities as investors take advantage of the latest property market trends.

Head of lending and property assets at Trilogy, Clinton Arentz has made note of four major sectors to watch including residential, retail, industrial and commercial and predicted what we could expect in 2021.

Residential and industrial sectors are expected to continue making headway with increasing buyer demand set to continue.

“The residential sector is showing further strength with both capital cities and key regional areas seeing price growth,” Arentz said.

“There’s also an anticipated infrastructure boom creating connectivity between these communities and cities."

The sector is driven by a strong uptake of new homes as Corelogic research shows house prices are at record highs along the east coast and apartment values are expected to soon follow.

The industrial sector is gaining momentum with leasing activity at the highest level since early 2015 according to real estate company Jones Lang LaSalle (JLL).

Despite a near-record supply, this elevated demand has supported the stability of the rental market creating an attractive prospect for developers.

“There’s a demand for quality industrial assets as the yield compression demonstrates there are currently more buyers than sellers,” Arentz said.

Meanwhile retail properties are still in some distress with the increase in e-commerce further bolstering the industrial sector.

According to Arentz, commercial markets have also been in a hiatus and emerging work-from-home practices are still evolving.

“New supply and subdued leasing market conditions may see vacancy continue to rise,” Arentz said.

The latest figures from JLL show the national office market vacancy rate increased again by 1.1 percentage points in the final quarter of 2020.

Arentz said there are many developers taking advantage of these pandemic-driven trends and this was shown in the uptake of new loans.

In December 2020 alone, Trilogy settled seven new development and construction loans across Queensland and New South Wales totalling an approved loan amount of $56 million.

As at 31 December 2020, there were 90 loans making up the Trilogy Monthly Income Trust loan book.

“We are pleased to report that our loan book remained open throughout the entirety of 2020 and every drawdown was met,” Arentz said.

Trilogy’s lending team proactively sources loans for construction and development purposes secured by first mortgages held over Australian property including but not limited to residential townhouses, apartment buildings and industrial complexes.

To discuss property trends and your next project’s needs contact Trilogy’s head of lending & property assets, Clinton Arentz.

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