SA MARKET OVERVIEW
SOUTH AUSTRALIA
Ryan Mills - Director – Capital Transactions – Savills
Looking ahead to 2024, what’s your outlook for the commercial property sector. Overall, many investors who have largely sat on the sidelines throughout 2023 now have the liquidity to act when the right opportunities present. We are experiencing stability back in the interest rate environment which will provide confidence across the sectors. I believe we will see an increase in transactional activity, particularly in the second half of the year. Reflecting on conversations with buy-side clients, what’s their sentiment & what’s the profile of buyers you’re expecting to be most active this year. The most active purchasers this year will be high net worth privates and to a lesser extent syndicators. These purchasers remain highly selective on assets however believe now is a good time to enter back into the market with yields beginning to reset, generating higher returns. What are the fundamentals investors are looking for prior to deploying capital in 2024 & which asset classes do you anticipate will drive transaction activity. Many clients are looking for assets with an angle - value add, future upside or ‘pop’ at some stage. That could be in the form of capital upgrades, rental growth or a change of use. Many purchases at present are not chasing vanilla set and forget assets, the focus has moved somewhat to growth and higher returns. However, one exception to this is retail shopping centres within South Australia, they are tightly held and highly sought after. In terms of asset class – industrial and retail will continue to drive transactional activity throughout 2024. And then from a developer’s perspective, what opportunities exist in your market & how should they be positioning themselves to capitalise on these opportunities. We are seeing opportunities exist in the value add / repurpose of existing buildings. Build-to- rent, residential and land lease communities are also all strong opportunities within the Adelaide development market. Developers who build strong relationships with agents will be best placed to capitalise on off market opportunities when they arise.
RYAN MILLS
98 – February /March 2024
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