Australian Industrials Well Positioned For Another Strong Year: Dexus
Jan 29, 2023 – Australia’s industrial sector performance is expected to stay strong in 2023 due to rent growth and tight vacancy, according to a report by Dexus.
In the office market, demand has been mixed across the capital cities over the past year with rising face rents supported by higher incentives, it said. Retail turnover growth was strong over the Christmas period, however, sales growth is expected to slow in the first half of 2023 as cost-of-living pressures mount. The report added that the healthcare sector is likely to benefit from increasing investment in life sciences research and pent-up demand from delayed elective surgeries.
A theme for 2023 office real estate investment is flight to quality, it said. Based on Dexus’s research on the office sector over the past 15 years, the take-up of prime office space has far outstripped secondary assets. Total returns for the premium office (7.2% p.a.) have exceeded secondary (5.9% pa) in times of high vacancy, it added.