Improved Confidence In Illawara Industrial Market

Confidence in the industrial market in the Illawarra region has returned post GFC with a lift in volume and sales in recent years, according to Ray White Commercial.

Ray White Commercial Head of Research Vanessa Rader said activity in the sub $5 million industrial market across local government areas in the region had been steady with annual sales averaging just over $75 million for the past four years.

Ms Rader said in 2014 total investment reached $76.885 million with the bulk of the activity ($49.319 million or 64.15 per cent) in the Wollongong LGA.

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"The suburbs to the north including Coniston, Woonona, Unanderra and Helensburgh witnessed the highest sales volumes with the average sale price growing to $900,000," Ms Rader said in the Between the Lines - Wollongong Industrial Market (sub $5 million) report June 2015.

"These properties have been well recieved by owner occupier businesses together with local investors looking to diversify from residential assets which are achieving a strong yield.

"However, the investor market - either self-managed superannuation funds or private investors - are seeking quality assets with a strong lease covenant. Secondary grade stock with uncertainty around vacancy remains on the market longer term unless substantial discounting is made."Ray White Commercial NSW (Illawarra) Director Ben Mostyn said quality investment stock has been scarce in the market and assets which enter the market with longer tenancies are in strong demand.

"Encouraging for the industrial market has been the improvement in trading conditions across the region," Mr Mostyn said.

"Manufacturing has been on the improve over the last six months with the IRIS Trading Conditions Index growing 16 per cent in the last quarter while the construction and transport sector has had positive yet more mixed outcomes."Mr Mostyn said limited availability of stock had meant there had only been a handful of industrial transactions so far in 2015.

"The expectation is that further sales will filter through during the year, particularly given the improved confidence and business conditions as well as the record low interest rate environment," he said.