What happens when you bring the state’s real estate market leaders together in one room for two hours of interviews? You hear an in-depth analysis of the biggest problem affecting the industry and, more importantly, their innovative solutions. Westpac Group hosted this think tank with Business News in October and here we are sharing a series of articles generated from this forum focusing on emerging trends in the Washington State real estate market.
We are open for business
There is no doubt that nationally the real estate market is in turmoil with unprecedented increases in some areas and declines in others. In WA, retail and business values may have fallen, but are being offset by home values which are rising dramatically. CBRE Senior Director Ben Styles said COVID-19 has also been particularly kind to the state’s industrial sector with more than $ 2 billion in transactions in WA this year, significantly higher than before.
There has been a strong depth of buyers across the industrial market, but particularly in the institutional space.
Westpac has a significant investment in supporting the real estate industry, currently over $ 67 billion. Which makes it one of the country’s biggest participants in the sector.
Westpac National Managing Director Martin Green says business activity is at the highest levels we’ve seen since GFC, with expected growth this year deemed to be significant.
While post-Covid 19 trends are still emerging, there is much more investment activity and focus on our small capitals as investors and developers see these city proposals getting stronger in terms of quality of life and incremental economic growth.
Trends show that in Western Australia, major regional destinations are growing as pandemic-accelerated remote working options allow professionals to make ‘sea changes’ and ‘tree changes’ just once. the field of retirees.
However, Mr Green says the backbone of growth, perhaps surprisingly, is the renaissance of private business groups and private unions making big strides confident they can thrive in a turbulent market. .
“We are seeing that private enterprise is increasingly active in our commercial markets, particularly on the east coast, where investors are making very different decisions than they made two or three years ago,” he said.
Westpac Regional State Property Manager WA Matt Kenny says Westpac is ‘open for business’. Our message is simple: We continue to support Australia’s commercial real estate industry and help investors and developers return to growth. With a nationwide reopening around the corner, commercial real estate will continue to play a central role in the future of our cities.
He says investors are focusing on two small projects across all asset classes, especially commercial and industrial assets.
The Bank looks to continue to drive its residential construction portfolio, we are very focused on supporting proven developers with strong development proposals where we take a balanced approach to all fundamental risks, not just pre-sales. The banks’ risk management framework is realigned to this approach and supports the market as it recovers with higher activity and lower supply in most cities.
Baron Vanilla Management Director Miles Ashton says it’s encouraging to see banks with a good appetite for investing.
“On the equity side, in terms of increasing equity, it’s insatiable right now, so the problem is finding a property,” he says.
Jason Fenner, senior director of appraisals for CBRE Perth, said local groups based in WA are being supported by the “influx of money” into well-leased properties. He says unlike some based in the east, the local knowledge and presence to start from scratch, find locations and search for occupants in both a tough rental market and a market where access travel has been uneven is invaluable. This is a particular trend in industrial property and large format retail that he plans to continue over the next 12 to 24 months.
“We have a very strong base in WA of local knowledge, and there are a lot of local developers and high net worth individuals who have confidence given that the end product is currently very liquid and at record returns,” he says.
Mr Fenner says the benefit of having a WA presence also plays out in newer daycares, gas stations, medical centers where groups can “stand in front of active occupants” to enter into rental agreements to get started. projects. “Managing the risk associated with construction costs over the next 12 months will be the most difficult task. ”