NSW MARKET OVERVIEW
NEW SOUTH WALES
NSW Market Overview with Terry Hassan, Julian Monteleone & Nick Trencevski.
TERRY HASSAN Managing Director WR Partners
Reflecting on 2022, what were some of the prevailing trends that you noticed and how did they play out in the market? The COVID-19 pandemic accelerated the adoption of remote work and digital transformation. Many companies implemented remote work policies, leading to increased demand for collaboration tools, video conferencing platforms, and cloud-based services. Companies that provided remote work solutions experienced significant growth. Booming industrial market fueled by the limited supply of industrial land, increasing rents and huge growth of the E-commerce sector has created the perfect storm for the asset class. Market-wise, what are you forecasting in the first half of 2023 and how will increased lending costs impact the various markets? Higher lending costs, such as increased mortgage interest rates, can affect the various markets. It may lead to less aggressive approach from purchasers and a very cautious sentiment across the general market. However, the impact will depend on the magnitude and pace of interest rate increases, as well as other factors like property supply and local market dynamics. What market sectors do you anticipate being most in demand over the next six months? We see the industrial sector to continue to grow and be most in demand asset class due to the shortage of industrial stock and the e-commerce sector has seen significant growth in recent
years, driven by changing consumer preferences and the shift to online shopping. The demand for e-commerce platforms, logistics and delivery services, and digital marketing solutions is expected to persist. In our portfolio alone we have witnessed 20% - 30% increase in face rent in the industrial space. Do you feel that associated factors like building costs, supply-chain challenges and market sentiment will improve for developers over the next 6-12 months? For instance, have building costs already peaked? Construction price escalation has been a major concern in the property industry over the last couple of years, but signs that material cost increases are easing are giving cause for hope. Building material costs where most of the price escalation was occurring in 2021 and 2022. The positive side now is that supply chain disruptions are now easing, we saw a lot of those disruptions start to abate over 2022. Material costs have probably reached their peak or are getting close to the peak, we could see some softening across a range of different building materials. I think the worst of it is behind us now. What are some of the most significant or rewarding projects that the team have been involved in and why? WR Partners have put together some of the largest and record breaking transactions in South West Sydney and Western Sydney
JULIAN MONTELEONE Director WR Partners
NICK TRENCEVSKI Director WR Partners
22 – May / June 2023
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