Investors shifting toward commercial property

Malcolm Gunning, of Gunning Commercial, says the agency is witnessing rising interest in suburban Sydney commercial property from local buyers in reaction to recent changes involving investor home loan rates and state zoning laws.

“We believe local investors are now moving away from residential properties and are seeking suburban commercial and retail investments which have good returns with development upside, resulting from the Baird government’s changes to zoning for many of the established suburban retail strips,” Mr Gunning said.

“These properties have been a sleeper in comparison to residential properties, and their appeal has activated due to rezoning of areas like Rockdale, Kingsgrove, Revesby and Bankstown to B4 Mixed Use that allows retail, office and residential development.”

As a result of these zoning changes, Mr Gunning said sites have been amalgamated to host ground floor retail businesses and upper level residential apartments.

“These strips are in close proximity to the new improved public transport hubs, and after the upgrade to the railway lines, they are very desirable because the infrastructure is already in place,” he said.

“Buyers are looking for properties with a 4 per cent yield and potential growth.”

[Related: Lenders to regain hunger for investors]