Local commercial property opportunities still exist
While the current trend when investing in commercial property is to look to overseas markets, GDI Property Group believes the local market is still presenting attractive opportunities, especially for smaller boutique fund managers.
To this end, GDI has focused its attention on the regional areas of Queensland, Western Australia, and Tasmania.
GDI managing director Steve Gillard said: “There are plenty of regional centres with strong local economies. Yet they often have limited office supply availability and low current vacancy levels.”
“Add to that blue chip companies relocating for value and lifestyle reasons, and you have the classic case of demand outstripping supply. We’re seeing strong rental growth in many areas that larger fund managers just don’t pick up on,” he added.
According to Gillard, it is easier for boutique managers to take advantage of the opportunities on offer as the larger players tend to price themselves out of the local market because they are looking to acquire properties that are valued in excess of $40 million.
“We pick and choose specific properties in specific areas, for specific reasons. And being local, there’s no risk with currency fluctuations. We think investors should be thinking of smaller, more defined property investments at this point in the cycle. Investors need to understand all the risks behind each investment to be sure their funds are going to perform,” GDI executive chairman Tony Veale said.
The property group has used this strategy to acquire two new properties, one in Canberra and one in Tasmania, for its Total Return Fund No 27.
It is expected the new acquisitions will deliver a combined rental yield of over 8.6 per cent per annum before any possible capital growth.
Recommended for you
Global X has painted a worrying picture for active ETFs in Australia, with investor adoption proving uneven and the popularity of its low-cost index counterparts only growing stronger.
Australian equity ETFs attracted record inflows of $3.2 billion in 1Q25, while heightened volatility led to a decline in flows for global equity ETFs, according to Vanguard.
The failure of a clinical trial by biotech firm Opthea has caused shares in its backer Regal Partners to decline 52 per cent year-to-date and hit its funds under management, quarterly flows show.
GQG Partners has revealed its quarterly flows for the first three months of 2025 were up 5.8 per cent, after a difficult final quarter of 2024 as a result of institutional redemptions.
