As we head into August and businesses are wrapping up their activity for the previous year, the 2010-2011 financial year is finally well and truly underway. Experts have been predicting that this will be a strong year for recovery, with many sectors including commercial real estate, poised to regain many of its losses from the previous years.
So how are businesses and property shaping up in 2011?
Commercial Property for sale
Throughout Australia, vendors are putting up quite a number of commercial properties for sale, with a reported $13 billion worth of office space listed. Plenty of big names are on the block including a $1.5 billion portfolio of Direct Factory Outlets and a number of other notable properties including the Ayers Rock Resort and the Ark Tower in North Sydney.
In early July, forecasters had their fingers crossed that major developments in the Sydney area would pick up some steam - it looks like their prayers may be answered. Rob Stanton from JP Morgan told Sydney Morning Herald that the total volume of major property sales during July (above $5 million in value of the asset) was $961.7 million, which is a significant sequential increase of 30 per cent.
High on the list of notable commercial property purchases set to be complete is the sale of 179 Elizabeth Street in the Sydney CBD to Echo Partners. Meanwhile, overseas investment in Sydney commercial real estate has been streaming in, with Singapore's K-REIT purchase of 77 King Street for $121 million following a South Korean pension fund's recent purchase of Aurora Place at 88 Phillip Street for $685 million late last year.
New projects driving growth
New projects are also underway as construction for major commercial developments are scheduled to begin. Victorian and Tasmanian markets are expected to gain a substantial boost from construction through 2011, with development projects across both states reaching a cumulative $4.5 billion, which includes the slated $800 million redevelopment of the former Carlton Brewery in Melbourne.