Despite some sectors of the property market suffering downturns during COVID (Shopping centers, tourism, dine in restaurants) several sectors have seen solid increases in yield and price. Small industrial, warehousing, logistics, supermarkets, chemists, take-away food have all performed well and are in high demand. Investing in small commercial properties is becoming more common and accessible for single investors, self-managed super funds and business owners.
Sydney rents per square meter for industrial properties are presently between $123 (Outer) and $206 (South), Yield is between 4.7% and 5.3% and capital value per square meter between $2460 (Outer) and $4400 (South). Source. LJ Hooker Commercial 2020 Market monitor
There are several lenders who have an appetite for lending to investors and owner occupiers and offering very favourable terms not too dissimilar from residential loans. Rates can range from 2.9% to 7.5% depending on type of property, borrower type, deposit etc. Recent commercial transactions we have settled on include a Yoga studio operator purchasing their own premises and an established building company purchasing a small warehouse in their self-managed super fund (SMSF).