Wollongong industrial property to remain its strongest market in 2020: HTW Industrial

The industrial sector has been the best performing real estate asset class in the region over the past two years and we expect this performance to continue throughout 2020, according to the February 2020 report from valuation firm Herron Todd White.

The property valuation firm found that the main risk in this sector will be one of overheating.

Most of the activity in the industrial market is being driven by the Port of Port Kembla with logistics a rapidly developing sector particularly in new vehicle transportation.

The very tight supply and escalating values and rents of industrial property throughout Sydney (notably south-western Sydney) is also impacting on the local market given its proximity to Australia’s largest city.

HTW valuers said, "given recent performance, current momentum, interest rate cuts and a strong performing local economy, we expect to see continued downward pressure on investment yields, although the challenge for investors in 2020 will be the availability of assets to purchase."

"Outside of small to medium sized strata warehouses, owner-occupiers may also struggle to find suitable premises and industrial land supply is limited at present."

"For better quality properties where demand exceeds supply, we expect there to be upward pressure being placed on rents and it will be interesting to see where market rents set for tenants who exercise options in 2020, and of course for tenants entering into new lease agreements," they concluded.